What Keeps Managers Away from a Losing Course of Action? Go/Stop Decisions in New Product Development

Behrens, Judith; Ernst, Holger

doi:10.1111/jpim.12100

Cited by 42 publications

(30 citation statements)

References 59 publications

(133 reference statements)

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“…Transparent but tough decisions also allow for uncomfortable changes such as the termination of innovation projects (Behrens and Ernst, ). For example, Unger et al () show that firms making rigorous termination decisions achieve a better strategic fit of their portfolio, because they can more quickly reallocate resources and refocus the portfolio.…”

Section: Hypothesesmentioning

confidence: 99%

Antecedents to Decision‐Making Quality and Agility in Innovation Portfolio Management

Kock

Gemünden²

2016

J of Product Innov Manag

110

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Innovation portfolio management (IPM) is a dynamic decision‐making process, in which projects are evaluated and selected, and resources are allocated. Previous research has developed an understanding of IPM success and its influencing factors. However, little research investigated the quality of the decision‐making process and the ability to quickly adapt the portfolio. This study focuses on the antecedents of decision‐making quality and agility (i.e., responsiveness to changes in the environment). Based on a decision‐making framework, five structural and cultural IPM components are derived as important antecedents of decision‐making quality, which in turn influences agility. The structural components (1) clarity of strategic goals, (2) formality of the IPM processes, and (3) controlling intensity serve a coordinating function. The cultural components (4) innovation climate and (5) risk climate serve a motivating function in IPM. An analysis of a sample of 179 firms and their innovation portfolios through structural equation modeling using a double‐informant design documents that these five components all positively influence portfolio decision‐making quality, which in turn positively influences agility. Results further show that environmental turbulence moderates some of these relationships. While the positive effect of process formality is weakened under increasing turbulence, the effects of controlling intensity and climate for innovation are strengthened by environmental turbulence. The findings have theoretical implications for the understanding of IPM as a dynamic capability and practical implications for the management of portfolios in turbulent environments.

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Section: Hypothesesmentioning

confidence: 99%

Antecedents to Decision‐Making Quality and Agility in Innovation Portfolio Management

Kock

Gemünden²

2016

J of Product Innov Manag

110

View full text Add to dashboard Cite

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“…Two exceptions are Green et al (2003), who found that projects were less likely to be terminated when they enjoyed greater levels of management advocacy, and Shepherd et al (2014), whose study reveals the complex dynamics around project termination timing-showing both positive and negative consequence of delayed termination. Nevertheless, most studies on project termination have been experimental (e.g., Behrens and Ernst, 2014;Biyalogorsky et al, 2006;Boulding et al, 1997;Eliëns et al, 2018;McNally et al, 2013;Schmidt and Calantone, 1998). Using a unique data set on drug development, we aim to fill this void.…”

Section: Introductionmentioning

confidence: 99%

The role of intellectual capital in new product development: Can it become a liability?

Subramanian

Vrande

2019

J of Ops Management

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Given the increasingly high cost of new product development (NPD), it is important for firms to terminate unsuccessful NPD projects as soon as possible. This article investigates the role of intellectual capital in the discontinuation of NPD projects. The three dimensions of intellectual capital (human, structural, and social capital) are posited to decrease the likelihood of discontinuation of NPD projects, while contextual factors such as the firm's discontinuation experience and the size of the drug development portfolio are expected to affect this relationship. The research model is tested using a unique data set of 1,168 drug discovery and development projects. The results suggest that NPD projects rich in all three dimensions of intellectual capital are less likely to be discontinued. The size of the firm's drug development portfolio, however, is found to mitigate these effects, while discontinuation experience enhances the relationship between intellectual capital and discontinuation duration. As only a fraction of new product development initiatives result in success, timely discontinuation of unsuccessful projects is critical for sustained performance of organizations. Our findings make an important contribution to this stream of work. By highlighting the role of intellectual capital in the discontinuation process, we offer an interesting twist to the literature that invariably assumes intellectual capital to be important for innovation.

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“…Even innovation projects that fare well are often terminated before they are completed because of strategic portfolio management considerations (Krishnan and Ulrich, 2001). Such terminations may be of managerial necessity in order to avoid unnecessary losses, to release resources from unpromising endeavors, or to align the innovation project portfolio with the overarching strategy (Behrens and Ernst, 2014;Krishnan and Ulrich, 2001). However, despite these beneficial aspects, terminating innovation projects can have strong and detrimental effects on the innovators involved (Shepherd, Haynie, and Patzelt, 2013;Shepherd, Patzelt, and Wolfe, 2011;V€ alikangas, Hoegl, and Gibbert, 2009).…”

Section: Introductionmentioning

confidence: 99%

Mitigating Negative Side Effects of Innovation Project Terminations: The Role of Resilience and Social Support

Todt¹,

Weiß²,

Hoegl³

2017

J of Product Innov Manag

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A substantial portion of innovation projects are terminated before their successful completion. However, how specifically innovators can be supported given the experience of a project termination is not well understood. Innovator resilience potential (IRP) has been proposed to be important for future innovative behavior and coping and is suspected to be influenced by project terminations and their characteristics. Building on these assumptions, three sources of social support are examined, as such the support from family and friends, from the leader, from the organization, and their relationship with IRP. Moreover, it is argued that IRP, in turn, is an important facilitator of the project commitment of innovators, who have experienced an innovation project termination. The authors examine these theoretical expectations based on two empirical studies. After probing the newly developed measure of IRP based on a sample of 146 software developers from a European software company, the authors test the hypotheses on a survey‐based sample of 238 innovators, of whom 180 had experienced an innovation project termination. The results indicate that IRP positively relates to innovators’ current project commitment, particularly when they had experienced an innovation project termination before. Moreover, it is found that experiencing social support from the leader and the organization in the context of the termination positively relates to IRP, while no such a relationship was found for social support from family and friends. This hints at ways as to how to support innovators during and after an innovation project termination, showing that social support from work‐related sources is most important in such situations.

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What Keeps Managers Away from a Losing Course of Action? Go/Stop Decisions in New Product Development

Cited by 42 publications

References 59 publications

Antecedents to Decision‐Making Quality and Agility in Innovation Portfolio Management

Antecedents to Decision‐Making Quality and Agility in Innovation Portfolio Management

The role of intellectual capital in new product development: Can it become a liability?

Mitigating Negative Side Effects of Innovation Project Terminations: The Role of Resilience and Social Support

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