Innovation Portfolio Management Research Articles

Innovation portfolio management for the public non-profit research and development sector: What can we learn from the private sector?

ABSTRACT Innovation Portfolio Management refers to the systems, processes and mechanisms to intentionally manage innovation investments and decisions within an organization against its mission or strategy. This approach to managing and optimizing innovation and scaling investments is rarely used by public non-profit R&D organizations. This study draws lessons from innovation portfolio management in private sector organizations. Private sector invests in innovation portfolio management to: (i) enhance transparent and evidence-based decision-making, (ii) strengthen organizational agility and mission-orientedness, (iii) facilitate monitoring, risk management and prioritization and (iv) improve overall organizational performance and learning. These innovation portfolio management benefits are equally relevant for the public non-profit R&D sector, where innovation performance and outcomes are for societal impact. Public non-profit R&D can and should manage their innovation portfolios more intentionally, and can learn from private sector successes and challenges. Embracing the opportunities, whilst managing the challenges and risks requires investment in methods, mechanisms and mindsets for effective innovation portfolio management.

Backcasting supports cross-sectoral collaboration and social-technical innovation bundling: case studies in agri-food systems

There is a clear and urgent call to transform our food systems as a critical nexus to tackle ongoing global climate, biodiversity, equity, and nutrition crises. Many food and agricultural innovations are being developed and scaled but these innovations often target sector-specific problems and remain disconnected from the more complex demand for transformative change at scale. To bridge this demand for systemic change within the innovation ecosystem, initiatives are applying various approaches such as visioning, holistic assessments, innovation portfolio management and multistakeholder co-creation. Here we report on insights from applying a food systems tailored backcasting approach in a diversity of settings since 2021, including a national food system dialogue, a youth business innovation challenge, a landscape multi-stakeholder platform, a public-private sector co-learning session, an agroecological transitions program, and a hybrid food systems university course for graduate students and global professionals. We thereby build on existing literature and case studies of how change happens (or does not happen) and aim to use those insights to support food systems change makers. Across these settings, the backcasting approach asks participants to connect innovations with broader systems-change visions, to anticipate tradeoffs for multiple food system outcomes and population groups, and to cross sectoral boundaries. The use cases demonstrate that the backcasting process contributes to changes in views, practices and structures that participants work with. Specifically, it supports moving beyond “silver bullet” innovation approaches, the bundling of social and technical innovations, and building action-oriented cross-sectoral bridges. Food systems change is complex and innovations alone are insufficient to address its complexity. But innovations can play a positive role if connected to more holistic systems-change processes and goals. Considering strengths and limitations of the backcasting approach, the diversity of practical applications supports its potential to connect innovations to holistic food systems visions, to strengthen cross-sectoral collaboration and to bundle social and technical innovations for desirable food systems change.

Incongruities in Innovation: Exploring Inconsistencies in Business Innovation Strategies

This research explores the phenomenon of incongruities in business innovation strategy through a systematic literature review. Analysis of the current literature reveals different types of incongruities, their causal factors, and their impact on innovation performance. Findings show that strategy-implementation gaps, culture-innovation misalignment, and resource allocation inconsistencies are the most common types of incongruities. Factors such as short-term performance pressure and resistance to change contribute significantly to the occurrence of incongruities. Their impact on innovation performance includes innovation portfolio imbalance and failure in radical innovation. Strategies to overcome incongruities include the development of ambidextrous leadership, balanced innovation portfolio management, and enhancement of organizational dynamic capabilities. This research highlights the importance of a holistic approach in innovation management and provides directions for future research.

EFFECTIVENESS OF THE INNOVATION PORTFOLIO IN POLISH ENTERPRISES – RESEARCH RESULTS

A single innovation project has a low probability of success, while the company’s chances of gaining a competitive advantage are low. Only a properly diversified innovation portfolio gives a chance for market success. The aim of the article is to analyze the issue of the effectiveness of innovation portfolio management in Polish enterprises, due to various external and internal factors, and also to identify clues determining the success of the innovation portfolio among enterprises in the future. For this purpose, a literature review in the area of the innovation portfolio was conducted. Also the method of analysis and criticism of the literature was applied. In the research process, empirical articles and Statistics Poland reports were analyzed. As a result of the analyses, effective ways to build innovation portfolio efficiency were identified by pointing out factors that can contribute to key optimization decisions (e.g., proper planning and diversification of the innovation project portfolio). Enterprises, in order to achieve innovation portfolio efficiency in difficult market conditions, should reallocate their resources to less risky innovation projects, and at the same time accepting the risks associated with introducing a transformational innovation.

Reducing the gap between rhetoric and reality: Use of Digital Service Standards for public service innovation through digital transformation in Australia

AbstractNearly a decade ago, the Australian Federal Government introduced a Digital Service Standard (DSS) for new and redesigned government services. This was an opportunity to encourage digital services and disruptive innovations to help the government improve citizens outcomes, and indeed there was a significant uptake in the digital services assessments offered by the program with key government agencies across health, human services, taxation, and education on board. However, by the 2020s the number of publicly visible assessments had significantly reduced. The initial broad adoption and recent reduction in numbers present an opportunity to explore the effectiveness of this government innovation management program that was ahead of its time. This paper reviews the impact of the DSS in fostering public service innovation and presents lessons learnt from the program. To perform this analysis, this research evaluates to what extent the DSS applied common private sector innovation management approaches of Innovation Process Management and Innovation Portfolio Management in the public sector. It also looks at the impact of these programs in encouraging specific types of modern digital innovations. The analysis draws on DSS assessments from 2015 to 2021 and considers how the program demonstrated public sector innovation leadership. This paper proposes a framework to improve the DSS by tailoring its approach for new and existing services, adopting specific standards to encourage incremental and disruptive innovations, and promoting more transparent reporting and funding of innovation management programs. This evaluation found that the DSS exemplifies Innovation Process Management in its use of stages and gates, and Innovation Portfolio Management in its use of targeted assessment criteria across innovation portfolios of various government agencies. The analysis also identified design limitations in the DSS as a whole of government innovation management approach due to its limited uptake in multiple large agencies and lack of specific standards to encourage different types of innovation. The impact of this research is to increase the adoption of the DSS and increase the innovation outcomes delivered by this government program. We conclude by reflecting some of the unique considerations in applying private sector innovation management practices in the public sector.Points for practitioners Innovation management techniques are emerging but remain immature in the public sector. Australia has shown leadership in Government Innovation Process and Portfolio Management. Government must remain committed to innovation management programs and sharing the outputs of these programs. Government Innovation Management Programs should build in flexibility to encourage different types of innovation.

Embracing paradox and contingency: integration mechanisms for ambidextrous innovation portfolio management

PurposeThe purpose of this paper is to explore how organizations manage and integrate exploration and exploitation across the innovation project portfolio. Such ambidextrous capabilities are required for organizations to innovate and succeed in today's rapidly changing competitive environment. Understanding how exploration and exploitation projects are integrated can illustrate ways to enhance ambidexterity and boost learning for the benefit of both approaches.Design/methodology/approachA multiple-case study approach was used to explore innovation portfolio management in six large organizations that emphasize innovation in their strategies.FindingsThe findings draw upon concepts of paradox and contingency to reveal that the inherent tension between formality and flexibility in managing innovation project portfolios is aligned with the need for organizational ambidexterity that maintains effective exploitative innovation while supporting explorative innovation capabilities. Four integration mechanisms are identified that enhance ambidexterity across the innovation portfolio by embedding processes for transition from exploration to exploitation and cross-fertilizing knowledge to build innovation capability across both exploration and exploitation.Practical implicationsManagers may find inspiration on ways to enhance learning by bridging exploration and exploitation projects from the four types of integration mechanisms. Recognizing the paradoxical nature of the tension between formality and flexibility in project and portfolio management may also help guide organizations to effectively develop ambidextrous approaches to enhance overall innovation outcomes.Originality/valueIn contrast to perspectives which suggest that paradox and contingency approaches represent disparate perspectives, the authors demonstrate how they can complement each other and work together through innovation portfolio management to support ambidexterity at the portfolio and project levels.

Circular ecosystem innovation portfolio management

The prominence of the circular ecosystem raises questions about how firms innovate by creating and enhancing circular ecosystems. Using multiple case studies of seven companies and their circular ecosystems, we propose a new framework which we refer to as circular ecosystem innovation portfolio management. This new type of portfolio management addresses three different variations on circular innovation projects: new circular ecosystem innovation, architectural circular ecosystem innovation, and incremental circular ecosystem innovation. To deal with these projects, focal firms deal with four fundamental strategic decisions: internalizing, co-developing, inducing, and synchronizing. Three different strategic orientations explain how firms interpreted and dealt with their own needs and the circular ecosystem needs: circular egosystem, circular dominance, and circular health. The critical theoretical insight is circular ecosystem innovation portfolio management represents a new type of innovation process involving a new type of innovation project which increases our understanding of circular ecosystem heterogeneity and management.

Managing innovation portfolios: From project selection to portfolio design

As innovation is critical in driving growth and competitiveness, companies establish innovation (or new product) portfolio processes to select the “right” innovation projects that are allocated the necessary resources. These processes have attracted considerable interest from both academics and practice. However, the results of innovation portfolio management processes are widely perceived as unsatisfactory. This study provides a systematic overview of portfolio management approaches and research advances of the past decades, and it explores the root causes of innovation portfolio management challenges. We propose that the problem is a result of an overemphasis on project selection (from an assumed available list of reasonable candidates), which has led to a focus on analytical methods of portfolio evaluation that are applied generically (not customized to the specific strategy of the organization). As a result, the creation or assembly of initiatives that cover the strategic innovation goals of the organization, in other words, portfolio design as a creative process, has been neglected. The result has been sophistication but little alignment with the specific strategic aims of the organization. We propose that a focus on portfolio design, followed by portfolio evaluation and management (with iteration feedback) may at least mitigate the widely observed challenges. We illustrate with a case example how the process might work. This proposal asks for new empirical research.

How Innovation Is Created: A Conceptual Framework From a Knowledge-based View

Based on the knowledge-based view (KBV), knowledge is the most significant strategic resource of an organization. From a strategic management standpoint, connecting knowledge and performance is one of the most vital undertakings of any knowledge-based theory of an organization. However, most existing studies in this field left many questions unanswered. Although many researchers have recognized the importance of knowledge production in generating an organization’s competitive advantage, they have failed to establish a solid causality between organizational behaviors in knowledge creation and firm performance, and hence the mechanisms remain unclear. This study argues that the innovation process is characterized by the generation of new knowledge, where creative problem solving and new product development can occur and yield innovation results. Idea management and intellectual property, innovation process, and innovation portfolio and project management represent broad innovation processes. Thus, this study proposes a new conceptual framework to investigate the link between broad innovation processes and Small and Medium Enterprise (SME) performance. This novel perspective sheds light on how new knowledge generation, i.e., innovation, in the innovation process directly impacts SME performance, thereby connecting knowledge and firm performance via innovation processes.

Methodology for Managing Disruptive Innovation by Value-Oriented Portfolio Planning

Disruptive innovations (DI) have the potential to fundamentally change markets and their power relations: Specifically, established companies are confronted with the threat of being forced out of the market by DI. At the same time, companies also have the opportunity to control the market’s development by developing DI themselves. This raises the question of how a proactive management of DI can be systematized. Here, the approach of innovation portfolio management (IPM) provides support by identifying, evaluating, and selecting a company’s most promising product ideas. The management of DI is challenging due to their characteristics, such as diversity, high uncertainty, especially with regard to customer acceptance, difficult comparability with existing products, potential for cannibalization, and substitution of existing products. For this reason, new approaches to managing DI are required in literature and practice. This paper presents a novel methodology to support—especially established—companies in proactively generating DI via existing processes in their IPM. For this purpose, the methodology supports the early identification of the product idea’s disruptive potential so that these can be handled appropriately in the further course of the process, such as the evaluation of all product ideas in the company during IPM. Thus, the risk can be minimized that promising DI are not rejected due to unsuitable procedures, but are brought to market maturity. The methodology contributes to the literature by showing how DI can be pursued embedded in existing corporate structures and also in competition with other product ideas in the company—in existing approaches, DI is primarily considered singularly and detached from the existing corporate context. The methodology is validated by the example of the digital camera, which disrupted the photo industry, as well as through interviews in a practical context.

Strategic and cultural contexts of real options reasoning in innovation portfolios

AbstractDecision makers find creating an innovation portfolio challenging, because more innovative projects are associated with a higher degree of uncertainty. In this study, we investigate the potential benefits of applying real options reasoning (ROR) in innovation portfolio management from an attention‐based view. Using a sample of 137 innovation portfolios with multiple informants, we investigate ROR's influence on portfolio innovativeness and, ultimately, on portfolio success in a mediated model. Further, we analyze the moderating influence of an innovation portfolio's organizational context—entrepreneurial orientation and innovation climate—on ROR's application. The results support ROR's positive relationship to portfolio innovativeness and portfolio success. The analysis also supports the positive interaction between entrepreneurial orientation and ROR with respect to portfolio innovativeness. This study contributes to the literature by demonstrating the relationship between ROR and portfolio success, mediated by portfolio innovativeness. In addition, the study's analysis offers an explanation of previously mixed findings regarding ROR's benefits by considering the firm's strategic and cultural innovation contexts. The findings underline the relevance of strategic support for ROR's effectiveness in innovation portfolio management. Furthermore, the findings encourage managers to implement ROR, but also stress the essential contribution an entrepreneurial orientation makes when the managers do so.

Innovation portfolio management: a systematic review and research agenda in regards to digital service innovations

Innovation portfolio management: a systematic review and research agenda in regards to digital service innovations

How to manage disruptive innovation - a conceptual methodology for value-oriented portfolio planning

Markets and industries are currently characterized by high dynamics, leading to diverse and volatile customer requirements. This complex market environment fosters the appearance of innovations with high novelty and uncertainty. As a result, the probability of disruptive innovations (DI) increases, which have the potential to change markets in the long-term and represent an existential threat especially to established companies. Against this background, the question arises if companies can proactively create DI. For this reason, innovation portfolio management (IPM) aims to identify the most promising new product ideas. However, the identification of DI is challenging because of their characteristics such as low comparability with existing products and uncertain customer reactions. For this reason, the literature highlights that no approaches exist that integrate and consider DI in IPM.This paper introduces a practical concept methodology to implement DI in IPM that can be placed in the early phase of product development, focusing on the potential evaluation of diverse product ideas. The concept provides a five-step approach, which can be roughly divided into the anticipation of the product idea’s disruptive potential and the holistic evaluation of the product ideas. For the application of the concept, suitable methods are proposed and developed, whereby the specifics of DI are consistently considered.

Uticaj strateškog opredeljenja na odnos između upravljanja inovacionim portfoliom i uspeha

Modern businesses emphasize the significance of intellectual property and knowledge as key factors that contribute to achieving competitive advantage. This requires new approaches in management and there is more talk about knowledge management as a process that will raise business efficiency. In a knowledge-based economy, many companies create, acquire and maintain a competitive advantage in a turbulent market with the help of innovation. Innovation Project Portfolio Management is a powerful tool for achieving innovation strategy and it is extremely important that existing knowledge is used in companies and new ones are created based on them. The paper tests the findings of a reference survey conducted in Germany in 2016, which analyzes the impact of strategic orientation on the relationship between innovation portfolio management and business success. The obtained knowledge from the reference research was tested through a questionnaire answered by companies from the Republic of Serbia in order to see their application in business processes and business success.

Innovation Portfolio Management for Small-medium Enterprises

For small and medium sized enterprises, portfolio management can be a difficult exercise; especially when the available paths forwards are shrouded in mystery. To overcome this, they are required to research and decide upon the path to follow, but this can be difficult when the information to gather is unclear, leading to ad-hoc processes and inconsistency. The motivation for this project originated from a small and medium sized enterprise experiencing this problem of unknown critical information and a technological portfolio with significant potential. With no procedure or method in place, they conducted the research in an ad-hoc way resulting in uncertainty and low repeatability of decisions. To tackle this problem, innovation structuring frameworks were synthesised with appropriate risks and context to pose a new structure for information capture. The resulting structure was tested within the small and medium sized enterprise to investigate the repeatability of the information capture and the subsequent ranking. The proposed structure was also analysed by — process experts for its wider applicability. For the small and medium sized enterprise, this led to a consistent and repeatable method that delivered increased confidence about selecting a path forwards for its portfolio. In addition, it was found to be applicable to external organisations increasing the model’s worth and applicability. The implications of this work have led to a change in the operational procedure of the small and medium sized enterprise to utilise the defined process for researching new ideas for their portfolio which can lead to repeatable and trustworthy decisions. This also has applicability to other similar companies and could lead them through a repeatable process as presented here.

Managerial Political Behavior in Innovation Portfolio Management: A Sensegiving and Sensebreaking Process

By applying formalized innovation portfolio management systems, firms seek to ensure an alignment of their goals and strategy with their employees' different abilities, actions, and outcomes. However, research indicates that nonrational, political behavior also determines formalized innovation portfolio management decision‐making processes. Research on political behavior in respect of innovation portfolio management usually conceptualizes political behavior as a set of self‐serving activities, such as negotiation, bargaining, coalition building, and acquiring power, aimed at protecting, maintaining, or promoting an actor's self‐interest and power. Consequently, extant research tends to focus on political behavior's dysfunctional impacts on decision‐making processes and their subsequent outcomes. This paper challenges this negativity bias by exploring a novel, neutral specification of political behavior and its relation to innovation portfolio management decision‐making processes. By conducting an automotive industry case study focusing on the innovation portfolio management decision‐making processes, the paper analyzed the data from 43 interviewees. The conceptual model shows that managers' political capabilities determine their ability to behave politically. According to the results, political behavior comprises the activities that prepare the stage and orchestrate others in order to form a political coalition. Furthermore, results show that political behavior functions as a sensegiving and a sensebreaking process, with managers seeking to shape an innovation project's understanding according to their interests and to influence portfolio decisions. The resulting novel specification of political behavior extends the construct's scope and validity by investigating their functional and dysfunctional aspects, and by indicating that a political sensemaking process complements formalized innovation portfolio management decision‐making processes.

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

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.

INNOVATION PORTFOLIO MANAGEMENT NOW AND IN THE FUTURE

Leader to LeaderVolume 2015, Issue 78 p. 63-64 FROM THE FRONT LINES INNOVATION PORTFOLIO MANAGEMENT NOW AND IN THE FUTURE First published: 08 September 2015 https://doi.org/10.1002/ltl.20208Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat No abstract is available for this article. Volume2015, Issue78Fall 2015Pages 63-64 RelatedInformation

Innovation Portfolio Management: A Synthesis and Research Agenda

Innovation portfolio management (IPM) addresses the resource allocation across a firm's portfolio of new product development projects consistent with corporate strategy. The paper provides a comprehensive review of IPM research and offers new conceptual arguments by systematizing prior findings in the following four categories: optimization perspective, strategic perspective, decision‐making perspective and organizational perspective. These different approaches to IPM have been largely disconnected so far, but they can complement one another to provide new theoretical insights into a critical topic in innovation research. The different approaches are therefore integrated into an overarching perspective and a detailed research agenda is proposed.

Strategic innovation portfolio management

In knowledge-based economy, strategic innovation portfolio management becomes more and more important and critical factor of enterprise's success. Value creation for all the participants in value chain is more successful if it is based on efficient resource allocation and improvement of innovation performances. Numerous researches have shown that companies with best position on the market found their competitiveness on efficient development and exploitation of innovations. In decision making process, enterprise's management is constantly faced with challenge to allocate resources and capabilities as efficiently as possible, in both short and long term. In this paper authors present preliminary results of realized empirical research related to strategic innovation portfolio management in ten chosen enterprises in Serbia. The structure of the paper includes the following parts: theoretical background, explanation of research purpose and methodology, discussion of the results and concluding remarks, including limitations and directions for further research.