Innovation Portfolio Management for Small-medium Enterprises

Abstract

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.

Keywords

Portfolio management / directed research / decision support / small-medium enterprise

References

[1] Abbassi M, Ashrafi M, Sharifi Tashnizi E. Selecting balanced portfolios of R&D projects with interdependencies: A cross-entropy based methodology. Technovation, 2014, 34(1): 54-63.

[2] Autio E, Kenney M, Mustar P, Siegel D, Wright M. Entrepreneurial innovation: The importance of context. Research Policy, 2014, 43(7): 1097-1108.

[3] Behrens J. A lack of insight: An experimental analysis of s managers’ decision making in innovation portfolio management. Creativity and Innovation Management, 2016, 25(2): 239-250.

[4] Bellantuono N, Pontrandolfo P, Scozzi B s. Different practices for open innovation: A context-based approach. Journal of Knowledge Management, 2013, 17(4): 558-568.

[5] Blake M K, Hanson S. Rethinking innovation: Context and gender. Environment and Planning A, 2005, 37(4): 681-701.

[6] Brem A, Voigt K I. Integration of market pull and technology push in the corporate front end and innovation management-Insights from the German software industry. Technovation, 2009, 29(5): 351-367.

[7] Brink T. Governance of innovation and growth in SME networks. International Journal of Innovation Management, 2016, 20(3): 1650052.

[8] Chesbrough HW. The era of open innovation. MIT Sloan Management Review, 2003, 44(3): 35-41.

[9] Chiesa V, Frattini F. Commercializing technological innovation: Learning from failures in high-tech markets. Journal of Product Innovation Management, 2011, 28(4): 437-454.

[10] Harvey J F, Cohendet P, Simon L, Borzillo S. Knowing communities in the front end of innovation. Research-Technology Management, 2015 46-54.

[11] Coldrick S, Longhurst P, Ivey P, Hannis J. An R&D options selection model for investment decisions. Technovation, 2005, 25(3): 185-193.

[12] Conway S, Steward F. Managing and Shaping Innovation, 2009, Oxford: OUP

[13] Cooper R G. Where are all the breakthrough new products? Using portfolio management to boost innovation. Research-Technology Management, 2013, 56(5): 25-33.

[14] Cormican K, O’Sullivan D. Auditing best practice for effective product innovation management. Technovation, 2004, 24(10): 819-829.

[15] Costantino F, Di Gravio G, Nonino F. Project selection in project portfolio management: An artificial neural network model based on critical success factors. International Journal of Project Management, 2015, 33(8): 1744-1754.

[16] Jorge C-G, Pedro L-S, Jose Emilio N-L, Miriam D-V. Open search strategies and firm performance: The different moderating role of technological environmental dynamism. Technovation, 2015, 35: 32-45.

[17] Daniel E M, Ward J M, Franken A. A dynamic capabilities perspective of IS project portfolio management. Journal of Strategic Information Systems, 2014, 23(2): 95-111.

[18] Van Der Duin P a, Ortt J R, Aarts W T M. Contextual innovation management using a stage-gate platform: The case of philips shaving and beauty. Journal of Product Innovation Management, 2014, 31(3): 489-500.

[19] Eilat H, Golany B, Shtub A. Constructing and evaluating balanced portfolios of R&D projects with interactions: A DEA based methodology. European Journal of Operational Research, 2006, 172(3): 1018-1039.

[20] Garud R, Gehman J, Giuliani A P. Contextualizing entrepreneurial innovation: A narrative perspective. Research Policy, 2014, 43(7): 1177-1188.

[21] Gupta S, Maltz E. Interdependency, dynamism, and variety (IDV) nsetwork modeling to explain knowledge diffusion at the fuzzy front-end of innovation. Journal of Business Research, 2015, 68(11): 2434-2442.

[22] Henriksen A D, Traynor A J. A practical R&D project-selection scoring tool. IEEE Transactions on Engineering Management, 1999, 46(2): 158-170.

[23] Herskovits R, Grijalbo M, Tafur J. Understanding the main drivers of value creation in an open innovation program. International Entrepreneurship and Management Journal, 2013, 9(4): 631-640.

[24] Hoarau H, Kline C. Science and industry: Sharing knowledge for innovation. Annals of Tourism Research, 2014, 46: 44-61.

[25] Ignatius J, Leen J Y A, Ramayah T, Hin C K, Jantan M. The impact of technological learning on NPD outcomes: The moderating effect of project complexity. Technovation, 2012, 32(7–8): 452-463.

[26] Kaiser M G, Arbi F E, Ahlemann F. Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment. International Journal of Project Management, 2015, 33(1): 126-139.

[27] Kashimura K, Tsukada Y, Kawasaki T, Kitagawa H, Maruyama Y. Design approach based on social science for social innovation business. Hitachi Rev, 2014, 63(9): 548-559.

[28] Kester L, Hultink E J, Griffin A. An empirical investigation of the antecedents and outcomes of NPD portfolio success. Journal of Product Innovation Management, 2014, 31(6): 1199-1213.

[29] Khurum M, Fricker S, Gorschek T. The contextual nature of innovation — An empirical investigation of three software intensive products. Information and Software Technology, 2014, 57: 595-613.

[30] Kihlander I, Ritzen S. Compatibility before completeness — Identifying intrinsic conflicts in concept decision making for technical systems. Technovation, 2012, 32(2): 79-89.

[31] Kock A, Heising W, Gemunden H G. How ideation portfolio management influences front-end success. Journal of Product Innovation Management, 2015, 32(4): 539-555.

[32] Koen P, Bertels H M J, Kleinschmidt E J. Managing the front end of innovation-part II: Results from a threeyear study. Research Technology Management, 2014, 57(3): 25-35.

[33] Kokshagina O, Le Masson P W ^, Cogez P. Portfolio management in double unknown situations: Technological platforms and the role of cross-application managers. Creativity and Innovation Management, 2016, 25(2): 270-291.

[34] Kollmer H, Dowling M. Licensing as a commercialisation strategy for newtechnology-based firms. Research Policy, 2004, 33(8): 1141-1151.

[35] Laforet S. Organizational innovation outcomes in SMEs: Effects of age, size, and sector. Journal of World Business, 2013, 48(4): 490-502.

[36] Lamb C W, Hair J F, McDaniel C D. Essentials of Marketing, 2009

[37] Lee N, Sameen H, Cowling M. Access to finance for innovative SMEs since the financial crisis. Research Policy, 2015, 44(2): 370-380.

[38] Leithold N, Jan K, Tino W, Heiko Haase. Optimising NPD in SMEs: A best practice approach. Benchmarking: An International Journal, 2016, 23(1): 262-284.

[39] Liao Y, Barnes J. Knowledge acquisition and product innovation flexibility in SMEs. Business Process Management Journal, 2015, 21(6): 1257-1278.

[40] Markman G. Research and technology commercialization. Journal of Management Studies, 2008, 45(Dec.): 1401-1423.

[41] Markman G D, Gianiodis P T, Phan P H. Supply-Side Innovation and Technology Commercialization. Journal of Management Studies, 2009, 46(4): 625-649.

[42] Martinsuo M. Project portfolio management in practice and in context. International Journal of Project Management, 2013, 31(6): 794-803.

[43] Martinsuo M, Poskela J. Use of evaluation criteria and innovation performance in the front end of innovation BT. Journal of Product Innovation Management, 2011, 28(6): 896-914.

[44] McAdam R, O’Hare T, Moffett S. Collaborative knowledge sharing in composite new product development: An aerospace study. Technovation, 2008, 28(5): 245-256.

[45] McAdam R, Reid R, Shevlin M. Determinants for innovation implementation at SME and inter SME levels within peripheral regions. International Journal Entrepreneurship Behavior Research, 2014, 20(1): 66-90.

[46] McNally R C, Durmučoğlu S S, Calantone R J. New product portfolio management decisions: Antecedents and consequences. Journal of Product Innovation Management, 2013, 30(2): 245-261.

[47] Meifort A. Innovation portfolio management: A synthesis and research agenda. Creativity & Innovation Management, 2015, 25(2): 251-269.

[48] Mishly M A, Tereso A. Preliminary research plan towards a project and portfolio management framework to support innovation-driven SMEs. Proceedings of 3rd International Conference on Project Evaluation, 2016 247-253.

[49] Mitchell R, Phaal R, Athanassopoulou N. Scoring methods for prioritizing and selecting innovation projects. Proceedings of PICMET 2014 — Portland International Center for Management of Engineering and Technology: Infrastructure and Service Integration, 2014 907-920.

[50] O’Connor G C, Rice M P. Acomprehensive model of uncertainty associated with radical innovation. Journal of Product Innovation Management, 2013, 30: 2-18.

[51] Ortt J R, Duin P a V D. The evolution of innovation management towards contextual innovation. European Journal of Innovation Management, 2008, 11(4): 522-538.

[52] Partanen J, Moeller K, Westerlund M, Rajala R, Rajala A. Social capital in the growth of science-andtechnology-based SMEs. Industrial Marketing Management, 2008, 37(5): 513-522.

[53] Pashley D, Tryfonas T, Crossley A, Setchell C. Journal on Advances in Intelligent Systems, 2017, 10(3/4): 327-344.

[54] Patanakul P. Key drivers of effectiveness in managing a group of multiple projects. IEEE Transactions on Engineering Management, 2013, 60(1): 4-17.

[55] Pink S, DylanTutt Dainty A, AlistairGibb. Ethnographic methodologies for construction research: knowing, practice and interventions. Building Research & Information, 2010, 38(6): 647-659.

[56] Poirier E, Staub-French S, Forgues D. Embedded contexts of innovation. Construction Innovation, 2015, 15(1): 42-65.

[57] Poorkavoos M, Duan Y, Edwards J S, Ramanathan R. Identifying the configurational paths to innovation in SMEs: A fuzzy-set qualitative comparative analysis. Journal of Business Research, 2016, 69(12): 5843-5854.

[58] Reidolf M. Knowledge, Innovation and technology across borders knowledge networks and the nature of knowledge relationships of innovative rural SMEs. European Journal of Innovation Management, 2016, 19(3): 317-336.

[59] Sperry R, Jetter A. Theoretical framework for managing the front end of innovation under uncertainty. Proceedings of PICMET: Portland International Center for Management of Engineering and Technology, 2009 2021-2028.

[60] Staniewski M W, Nowacki R, Awruk K. Entrepreneurship and innovativeness of small and medium-sized construction enterprises. International Entrepreneurship and Management Journal, 2016, 12(3): 861-877.

[61] Stevens E. Fuzzy front-end learning strategies: Exploration of a high-tech company. Technovation, 2014, 34(8): 431-440.

[62] Tian Q, Ma J, Liang J, Kwok R C W, Liu O. An organizational decision support system for effective R&D project selection. Decision Support Systems, 2005, 39(3): 403-413.

[63] Tidd J, Bessant J. Managing Innovation: Integrating Technological, Market and Organizational Change, 2013

[64] Trotter P J. A new modified total front end framework for innovation: New insights from health related industries. International Journal of Innovation Management, 2011, 15(5): 1013-1041.

[65] Westland J C. Global Innovation Management: A Strategic Approach, 2008