Benchmarking innovation portfolio management practices: methods and outcomes

Effective management of the innovation project portfolio is increasingly important to organizational survival. Large sums are invested in innovation projects, however a major proportion of these do not result in successful new products. Portfolio Management (PM) methods aim to ensure that resources are most effectively allocated among projects to ultimately improve success rates and increase the value of the innovation portfolio to the organization. This paper presents the results of research into innovation project PM practices and new product success levels. This benchmarking study used a research survey to collect information about PM methods, attitudes, satisfaction levels, portfolio performance and new product success levels. The results show that PM practices in Australasia and North America are surprisingly similar indicating that the findings in one region are likely to be relevant in the other. New product success measures correlated highly with established PM processes in Australasia suggesting that improving PM practices could boost innovation performance. The selection of the right number of projects for organizational resources was confirmed as one of the biggest PM challenges. Financial and strategic methods and criteria dominate PM decision-making, however strategic methods and portfolio maps have the strongest positive influence on portfolio performance measures.