The product innovation literature demonstrates that many innovation developments are driven through project-based approaches. However, many of these Product Innovation Projects (PIPs) do not adequately develop an effective project strategy. This leads to misalignment between project characteristics, organisational systems and firm and industry contexts, contributing to poor project and business outcomes. Unfortunately, historical data show that many product concepts and more
than 50 percent of launched products fail, particularly at the more radical end of the innovation continuum.Indeed, professional project management organisations such as the Project Management Institute (PMI) recognise that project managers need to advance their skills beyond the traditional technical engineering and project management competencies in order to lead successful projects. Based on surveys sponsored by PMI, skills in leadership, strategic management and business management are now regarded as important to project managers. As a result, PMI now includes these topics into project management education and certification requirements for its more than 700,000 members. This reinforces the growing importance of Strategic Project Management (SPM) and sound project strategies as a key driver of product innovation success.

In this light, it is striking that business and strategic level thinking is rarely examined in detail in the project management literature. Compared to the amount of literature addressing the applicability of strategy and business concepts to firm-level management, there is a very limited research that addresses the application of these concepts to project-level management. Publications by Shenhar, Milosevic et al. (2007) and Morris, Pinto et al. (2011) summarise past research contributions and provide guidance for future research directions to address this deficit. Since these publications, Patanakul, Shenhar et al. (2012) and Patanakul, Shenhar et al. (2012) have investigated the applicability of Mintzberg’s five Ps to strategic project management for PIPs, and Yang (2012) has investigated the impact of four generic strategies (differentiation, cost, operational and quality) on PIP success. Most authors agree that very little research has been done on the practical application of SPM and project strategy, particularly in the area of PIPs.

This paper argues that a practical and theoretically well-founded SPM framework for PIPs is required to facilitate the work of both project management practitioners and researchers. The project management literature provides limited guidance on the theoretical foundation and practical application of SPM to form project strategies. For example, existing literature on SPM and project strategy does not clarify the relationships between project strategy and concepts such as firm strategy, project contingencies, project capability and project business. The research problem and research questions developed as part of this research address this gap.

Managing PIPs strategically is a complex task. To reflect this complexity, and to be of value to practising project managers, an SPM framework must integrate important complementary perspectives from project, strategic and business management. The more an SPM framework supports and stands up to scrutiny from multiple perspectives that are important to project strategy, the stronger its validity. Yet, the perspectives selected to clarify the relationships between the concepts of firm strategy, project contingencies, project capability and project business have their origin in the well-published and well-researched analytical, rational and objective firm-level ‘design school-of-thought’. Indeed, the design school-of-thought dominates contemporary education on firm strategy and business. Mintzberg, Ahlstrand et al. (1998) identified and coined the design school as one of ten schools-of-thought on firm strategy. At its simplest, the design school proposes a model of strategy making that seeks to attain a match, or fit, between internal capabilities and external opportunities and constraints. However, publications that integrate contemporary perspectives of the design school into an SPM framework that can guide the formation and implementation of project strategy have not been identified.

The aim of this research is to address this lack of theoretical and applied research regarding strategic project management in product innovation projects. Thus, the overarching research problem for this paper is: How can strategic project management and its project strategy outcomes contribute to improved success rates in product innovation projects? This problem is investigated through the following research questions:

RQ 1: What is the role of strategic project management and project strategy in product innovation projects?

RQ 2: What theory, frameworks and procedures are appropriate for strategic project management and project strategy in product innovation projects?

RQ 3: How does strategic project management and project strategy contribute to the development of an appropriate project capability?

RQ4: How does strategic project management and project strategy contribute to identification and application of an appropriate project methodology?