It is widely accepted that successful product innovation involves the development of ‘something new’, but the innovation must also be desirable to the customer, technically feasible and economically viable as illustrated below Keeley, Pikkel et al. (2013) define innovation as “the creation of a viable new offering”. An idea or invention must be desirable, feasible and viable to have merit as an innovation. Technology or market innovations aren’t considered successful innovations on their own, they must also add value to the firm as expressed by a range of practitioners and academics since Schumpeter (1911).

Innovation is one of the most powerful drivers of business growth. Between 70 and 75 percent of senior executives responding to innovation surveys said that innovation is one of their top three priorities. Yet research by Wagner, Taylor et al. (2014) showed that 70 percent of executives rated their firm’s innovation capabilities as average and 13 percent saw them as weak. In another international survey, 1600 executives and senior managers in 40 countries responded that an average of 72 percent of their new products do not meet their revenue targets, and that very few new offerings met their profitability goals. Thus, practitioners advocate for increased skills in managing uncertainty in terms of user desirability and financial viability Evidence suggests that familiar management techniques work poorly when applied in the context of high uncertainty and, in particular, when dealing with radical innovation projects. However, there is limited research on how project managers deal with the challenges of important contingencies such as uncertainty, especially in the business dimension, and how they develop practical project strategies to address them. For example, research shows that under conditions of uncertainty in terms of (i) user desirability, (ii) technology feasibility or (iii) business viability, traditional planning approaches simply do not work and new approaches are required.

Product innovation is particularly important to established firms operating in highly competitive, uncertain and/or fast-moving environments as many of these firms rely on fast renewal of their product portfolios through ‘incremental’ and ‘radical’ product innovation due to short product life cycles. Incremental innovation is focused on ‘doing what we do but better’, whereas radical innovation is focused on ‘doing differently’. A meta analysis by Kock, Gemünden et al. (2011) found that radical PIPs had less likelihood of commercial success due to increased project challenges and complexity. Their research indicated that PIPs toward the radical end of the innovation continuum are frequently incompatible with the firm they are part of in terms of: the firm’s existing strategy, product categories, business models, capabilities, resources and competencies. It is thus important for managers of PIPs to understand this gap between the project and the firm, which can be expressed as project–firm compatibility. SPM and project strategy for radical product innovation in highly competitive industries is therefore of particular interest to this paper.

Firms are continuously looking for ways to improve their capabilities to increase commercialisation success rates of their new product innovations. Research has primarily focused on firm-level capabilities. For example, focused on firm-level portfolio management skills as an opportunity to improve the chance of PIP success. This research focuses on project management of individual projects as an opportunity to increase the likelihood of PIP success, with a particular focus on SPM and project strategy as the means to develop appropriate capabilities within the project.

Many PIPs do not have an effective project strategy and suggests a way forward for project managers to address important business and capability issues crucial to the project’s overall success. Project business and project capability are both emerging fields of research. The project business view focuses on the commercial and financial aspects of managing projects, while the project capabilities view focuses on the knowledge, experience and skills required to establish, coordinate and execute projects successfully.