As innovation is critical in driving growth and competitiveness, companies establish innovation (or new product) portfolio processes to select the “right” innovation projects and allocate the necessary resources. These processes have attracted considerable interest from both academics and practice. However, results of innovation portfolio management processes are widely perceived as unsatisfactory. This study provides a systematic overview of portfolio management approaches and research advances of the past decades, and it explores the root causes of innovation portfolio management challenges. We propose that the problem is a result of an overemphasis on project selection (from an assumed available list of reasonable candidates), which has led to a focus on analytical methods of portfolio evaluation that are applied generically (not customized to the specific strategy of the organization). As a result, the creation or assembly of initiatives that cover the strategic innovation goals of the organization, in other word, portfolio design as a creative process, has been neglected. The result has been sophistication but little alignment with the specific strategic aims of the organization. We propose that a focus on portfolio design, followed by portfolio evaluation and management (with iteration feedback) may at least mitigate the widely observed challenges. We illustrate with a case example how the process might work. This proposal asks for new empirical research.