Daily Archives: January 30, 2013

Innovation Management vs. Project Management


innovation PicProject management skills are in great demand today.  We all know the consequences of being weak at this important skill.  I can think of a number of projects where my teams came in over budget AND failed to meet expected performance requirements.   I can recall projects we completed where the end-user was largely unimpressed by the outcomes which did not meet user expectations.  I can also speak to a natural tendency in my R&D and engineering functions to over-design products, making them better in subtle ways important to our engineers – but not necessarily to any of our customers.  All these things need to be managed with some reasonable level of discipline.

OK. So we need to be more efficient, and more disciplined.  We get it.  But more and more people are recognizing the need to be more innovative as well.  As we get good at the art of project management, we also create barriers to innovation.  While it is an extreme case – just watch this NASA project management training video to see what I mean.

The idea of innovation and project management, to some seems an oxymoron.    This may be especially so if your idea of innovation is something that should be disruptive, game changing, or breakthrough in nature.  We do live in a world where we need cost cutting, efficiency, speed and focus as much as at any previous time.   We hear the rallying cries at the office: “Define the requirements precisely!”; “We need to guard against ‘scope-creep!’”; “Don’t over design this!”; “We must hit our milestone dates!”; “The user defines how much quality they are willing to pay for.”; “Time is money!” and so forth.

So how on earth are we supposed to innovate in that environment?  Innovation requires exploration, insight, divergent thinking, occasional blind alleys, and sometimes trial-and-error.  These seem incompatible with conventional Project Management thinking and training.

If one of the first steps in the project management process is to “define the requirements”, one key problem is that customers do not always know how to describe what they want.  I discussed this briefly in my article on Apple’s amazing market success with the iPOD.  The Apple device’s predecessor was the MP3 player.  At the time, these were expensive and lacked memory.   But Apple’s focus was much broader than designing a better, cheaper MP3 player.  They recognized that loading music content into MP3’s was awkward.  They saw that without an applications store (iTunes had not yet been invented – but was about to be), the MP3 movement would never win over mainstream users.   If you asked users what they wanted in their playback device, they may not have described iTunes as a need.  Why would they, they had no prior experience with such a marketplace.   We are all limited by our own life experiences and knowledge to what is possible when we set out trying to imagine anything new.   Defining requirements with an Innovation mind-set requires a different perspective.

In his intriguing article (see below), Jeff Belding argues that managing innovation projects does require a whole different approach – which is pretty similar to the Creative Problem Solving and Design Thinking methodologies taught by the Sarasota Center for Innovation.   In the table below, here are differences between what Belding calls INNOVATION MANAGEMENT as compared to traditional PROJECT MANAGEMENT:

Five Key Factors of Successful Project Execution

Key PM Factors

This innovation management approach is a fundamentally different way of thinking.  The main difference is in the SEARCHING and EXPLORING phases (essentially the problem definition – and requirements definition work) is considerably longer and more expansive that we traditionally consider.  Innovation management requires looking for new perspectives, divergent thinking, and multiple levels of problem defining.

While this may seem more energy-consuming (more costly), I think I would argue that a quick mediocre solution is less advantageous to a slower one that delivers much better outcomes.

I suppose it is possible to conclude that not all projects require innovative solutions, and perhaps more traditional project management methods may work just fine.  But if your project “problems” have to do with developing products, services, improving customer experiences or creating new business models – then the Innovation Management approach may be very useful.

Two other project management thinkers, from Delft University in The Netherlands also suggest that “radical innovation” is fundamentally different and must be managed differently.   In the table below, Sergey Filippov and Herman Mooi argue that a percentage of your projects call for breakthrough R&D, even if they involve more uncertainty and broad/vague project goals. 

Innovation Strategy

The implications of their paper (to me at least) suggests that if we have a wide array of projects on our to-do list, some portion of these call for an Innovation Management approach.  This is sort of the same conclusion reached by Professor Vijay Govindarajan, from Dartmouth’s Tuck School (read more in:  Three-Box System: Balancing Break-through Innovation with the Short-term).  He argues that organizations need three distinctly different sets of projects – hence the three boxes.   Projects in box 1 are about improving what we already do today.  The 2nd box, perhaps the most difficult, is about pruning away (killing) the projects products or even business segments that are chronic under performers.  (At Apple, one of Steve Jobs favorite sayings was “you have to be willing to ‘knife the baby’”.  And Apple repeatedly demonstrates a willingness to drop or cannibalize its own products that don’t live up to expectations, choosing instead to try introducing something else they hope will be better.)   The 3rd box is about creating the future and calls for bold innovation.

The Leadership factor

In addition to using an Innovation Management process, one more thing has to be in place.   We need a suitable leadership culture.

In my article Looking for Breakthrough Innovation I tell the story of one project, led by an inexperienced summer intern.  His internal customer was our operations department which was looking for a new process for achieving rapid die changes (as was being introduced with awesome results by the Japanese).   The intern, however, saw that by changing our manufacturing process design approach he could completely eliminate the need for die changes at all!  This was an innovative idea that ultimately produced substantial increases in productivity.   The problem was, his client didn’t want any part of it (at first).  They felt engineering wouldn’t support it, customers would not approve, and so on.   But the intern persisted and wrote his own set of requirements over the objections of his sponsor.

When to controversy was brewing – and our operations leader was expressing doubts about burning precious time and resources exploring a solution that would not be viable.  I weighed in and encouraged the innovation experiment.   Now, as CEO, my vote counted more than everyone else’s but without providing my support for the experimentation of this intern, we would never have achieved the innovation results.  True, it might have failed, and in that case my vote of support for this approach absolved everyone else of the responsibility for a failure or budget overrun.  Without this, I do not believe the innovation would have occurred.

Sometimes we as leaders need to set an expectation that we need to occasionally be bold, try the untested, and see what happens.   We as leaders need to create the cultural environment where innovation can thrive.

Other Resources

Change Must Be Pulled from the Top, Pushed from Below, by Len Brzozowski

Looking for Breakthrough Innovation, by Len Brzozowski

The Project Manager’s Approach to Innovation, by Paul R. Williams

Innovation Project Management: A Research Agenda, By Sergey Filippov and Herman Mooi, Delft University of Technology, Department Of Innovation Systems (The Netherlands)

Project Management and Innovation, by Jeff Belding 

Barriers to Innovation in Project Management, from PM Student.com

 

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