Integrating sustainability into innovation project portfolio management – A strategic perspective

Project portfolio management in relation to innovation has increasingly gained the attention of practitioners and academics during the last decade. While significant progress has been made in the pursuit of a process approach to achieve an effective project portfolio management, limited attention has been paid to the issue of how to integrate sustainability into innovation portfolio management decision making. The literature is lacking insights on how to manage the innovation project portfolio throughout the strategic analysis phase to the monitoring of the portfolio performance in relation to sustainability during the development phase of projects. This paper presents a 5-step framework for integrating sustainability in the innovation project portfolio management process in the field of product development. The framework can be applied for the management of a portfolio of three project categories that involve breakthrough projects, platform projects and derivative projects. It is based on the assessment of various methods of project evaluation and selection, and a case analysis in the automotive industry. It enables the integration of the three dimensions of sustainability into the innovation project portfolio management process within firms. The three dimensions of sustainability involve ecological sustainability, social sustainability and economic sustainability. Another benefit is enhancing the ability of firms to achieve an effective balance of investment between the three dimensions of sustainability, taking the competitive approach of a firm toward the marketplace into account.