Managing Disruptive Innovation by Value-Oriented Portfolio Planning

Abstract

Innovation portfolio management (IPM) aims at selecting ideas with regard to their potential for innovation and measuring them considering customer and business value. The evaluation of benefits and risk is especially challenging for disruptive innovation (DI) due to their characteristics such as low comparability to existing technologies and uncertain customer reactions. This paper highlights the lack of approaches to managing DI in IPM and addresses it through a framework that expands the understanding of value-orientation in IPM, allowing for the inclusion of DI.

Methodology for Managing Disruptive Innovation by Value-Oriented Portfolio Planning

“…In retrospect, Ko made the wrong decision in IPM to dismiss the digital camera as a potentially disrup product idea and instead stuck to the further improvement of the analog camera wit ecosystem of film rolls and photographic paper, which had been lucrative until then Against this background, the question arises of how DI can also be integrated IPM; in other words, how could the Kodak ® managers have been supported in ord pursue the launch of the digital camera in addition to the further development of the alog camera? In this context, the literature and practice demand new approaches fo integration of DI in IPM [6,7]. Against this background, this paper presents a new m odology in the form of a methodologically supported process model that can be u especially by established companies, to proactively generate DI as part of their IPM specific terms, the methodology aims to identify the disruptive potential of well-foun product ideas in order to evaluate and pursue the product ideas according to their po tial in specific and appropriate procedures.…”

“…Besides this threat, there is also the opportunity for companies to develop DI themselves in order to proactively influence market development [5][6][7]. The approach of innovation portfolio management (IPM) provides support in the proactive planning of product innovations [8].…”

“…The approach of innovation portfolio management (IPM) provides support in the proactive planning of product innovations [8]. Due to the holistic focus in IPM, it is important that companies not only concentrate on high-risk DI, but simultaneously also implement lower-risk product ideas, for example, as an incremental improvement of existing products [6,7].…”

“…Against this background, the question arises of how DI can also be integrated into IPM; in other words, how could the Kodak ® managers have been supported in order to pursue the launch of the digital camera in addition to the further development of the analog camera? In this context, the literature and practice demand new approaches for the integration of DI in IPM [6,7]. Against this background, this paper presents a new methodology in the form of a methodologically supported process model that can be used, especially by established companies, to proactively generate DI as part of their IPM.…”

Development of Decision–Model and Strategies for Allaying Biased Choices in Design and Development Processes

“…Based on a product's complexity classification, the according release strategy dimensions-e.g., rhythm-and their characteristics-e.g., cyclic, feature-based-can be defined (2) and consequently determined (3). The automotive industry, for example, follows highly fixed release strategies with predefined release types-e.g., facelift-of low frequency and cyclically predefined releases [36]. As the example indicates, the release strategy forms the planning process.…”