Innovation Project Portfolio Management: A Qualitative Analysis

Abstract

Doing the right innovation projects is critical to firm's success; therefore, academics and practitioners are striving for optimizing innovation project portfolio management (IPPM). Although some research on certain issues in IPPM has been conducted so far, valid empirical evidence on the use, outcomes, and most important success drivers of portfolio methods in innovation management is rare. We aim at discovering the cause-and-effects of IPPM performance. This paper shows that performance of IPPM may be better understood if it is considered as an integrated system of portfolio balance, strategic alignment, and value maximization simultaneously. Using in-depth data from 29 interviews in 12 companies, we use a grounded theory approach to develop a general model of what drives IPPM in detail and how these causes are related to effects on both project performance and firm performance. According to the findings from these qualitative data, effective IPPM is the result of three constructs: usage of IPPM methods, IPPM design, and project characteristics. These cause-and-effects are moderated by management perception and satisfaction with IPPM.Index Terms-Innovation project characteristics, innovation project portfolio, portfolio balance, portfolio methods, qualitative study.

Governing the Portfolio Management Process for Product Innovation—A Quantitative Analysis on the Relationship Between Portfolio Management Governance, Portfolio Innovativeness, and Firm Performance

“…The management of new product portfolios constitutes as a strategic management task [12], [22], [24], [25]. Therefore, we draw on theory on the dynamic capabilities approach to explain the performance and innovation effects of PM governance.…”

“…Following [12] and [18] with findings from extant PM literature [3], [16], [48], [49], PM governance is analyzed in terms of four central elements: 1) formality and explicitness; 2) review frequency; 3) decision transparency; and 4) information support. They represent crucial parameters top management can influence in order to shape a firm's PM process.…”

“…Since PM governance has not explicitly been addressed in empirical research so far, we combined results from Lerch and Spieth [12] with findings from the extant PM literature. PM governance was measured with 15 items distributed among the four dimensions of formality and explicitness, review frequency, decision transparency, and information support.…”

Performance measurement and the prediction of capital project failure

“…Using in-depth data from 29 interviews in 12 companies, Lerch and Spieth (2013) qualitatively examine the impacts of human factors on innovation project performance and conclude that management's perception and satisfaction, and project characteristics significantly affect project performance throughout the project life cycle. Based on the perspective of the overall project life cycle, Chen (2014) analyzes 121 capital projects using hierarchical robust regression analyses.…”

“…One recent finding, for example, is that management's perception and satisfaction, and project characteristics significantly affect project performance (Lerch and Spieth, 2013). Another finding is that an ambiguous project scope and unclear project goals are the primary risk factors for project performance (Huang and Li, 2012).…”