Benchmarking Innovation Portfolio Management Practices: Methods and Outcomes

Effective management of the innovation project portfolio is increasingly importantto organizational survival. Large sums are invested in innovation projects, howevera significant proportion of these do not result in successful new products. PortfolioManagement (PM) methods aim to ensure that resources are most effectivelyallocated among projects to ultimately improve success rates and increase the valueof the innovation portfolio to the organization. This paper presents the results ofresearch into innovation project PM practices and new product success levels. Thebenchmarking study used a research survey to collect information about PMmethods, attitudes, satisfaction levels, portfolio performance and new productsuccess levels. The results show that PM practices in Australasia and NorthAmerica are surprisingly similar indicating that thefindings in one region are likelyto be relevant in the other. New product success measures correlated highly withestablished PM processes in Australasia suggesting that improving PM practicescould boost innovation performance. The selection of the right number of projectsfor 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 influenceon portfolio performance measures.