Innovation

Project
Management
 PART 1:
INTRODUCTION TO
INNOVATION

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Why We Need Innovation
Companies cannot
grow simply through
cost reduction and
reengineering efforts.
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Why We Need Innovation
Companies are recognizing that
brand loyalty accompanied by a
higher level of quality does not
always equate to customer
retention without possible
innovations. 4
 A Quote
•According to management
guru Peter Drucker, there
are only two sources for
growth: marketing and
innovation [Drucker, 2008].
•Innovation is the “Holy
Grail” of business. 5
 Generic Reasons for Innovation
• To produce new products or services
with long-term profitable growth
potential
• To produce long-term profitable
improvements to existing products
and services
• To produce scientific knowledge
which can lead to new opportunities,
better ways to conduct business or
problem-solving 6
Three Critical Innovation Interactions

Markets Technology

Organization (Delivery System)

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Successful innovation must
be targeted, and this is the
weakest link because it
requires a good information
system and knowledge
about the company’s long-
term business strategy. 8
There must be a “line
of sight” from the top
down concerning
strategy and strategic
objectives
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Stockholder Pressure Placed Upon Innovation
• Shorter product life-cycles
• Increase in competitiveness
• Faster time-to-market
• Execution with fewer people
• Higher performance require.
• Better quality
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 An Innovation Risk

Stockholder pressure to
shorten development
time must not be at the
expense of product
liability.
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 Defining Innovation Management
1/2
• Innovation management,
in its purest form, is a
combination of the
management of innovation
processes and change
management. 12
 Defining Innovation Management
2/2
• Innovation refers to
products, services, business
processes and accompanying
transformational needs
whereby the organization
must change the way they
conduct their business. 13
 The Danger
While the goal of successful
innovation is to add value, the
effect can be negative or even
destructive if it results in an
unfavorable cultural change or
a radical departure from
existing ways of doing work. 14
 The Innovation Struggle
•“It isn’t the incompetent who
destroy an organization. The
incompetent never get into a
position to destroy it. It is those
who achieved something and want
to rest upon their achievements
who are forever clogging things
up.” F. M. Young
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 The Innovation Struggle 1/2
• “Past success is no guarantee of
future performance.”

• “The failure of success” occurs

when companies become so
successful that they refuse to
challenge results. 16
 The Innovation Struggle 2/2

• You can go from “best in

class” to “worst in class”
with a loss of innovation
capability.
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 PART 2:
INTRODUCTION TO
INNOVATION PROJECT
MANAGEMENT

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The Need for Innovation Project Management
• Converting a creative idea into reality
requires projects and some form of
project management. Unfortunately,
innovation projects may not be able
to be managed using the traditional
project management philosophy we
teach in our project management
courses. 19
The Need for Innovation Project Management

• Innovation varies from industry to

industry and even companies
within the same industry cannot
come to an agreement on how
innovation project management
should work.
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 The Historical View
• Traditional project management is
often seen as standardized processes
for planning, scheduling, controlling
and sometimes risk management. The
standardized processes are based upon
rigid policies and procedures that
everyone must follow regardless of the
unique characteristics of the projects.
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 The Historical View
•Some people regard
traditional project
management as obedience
to regulations, policies and
authority [Geraldi et al.,
2008].
22
 Understanding Innovation Project
Management

•IPM is not a single

phenomenon where
one size fits all types
of innovation in all
companies.
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 The Need for Change
• “Managers need to recognize the
type of project at the start, resist
institutional pressure to adapt
traditional ‘rational’ approaches
to all projects and apply an
appropriate approach – one
tailored for the type of project.”
[Lenfle & Loch, 2010]. 24
 Specialized IPM Knowledge
• Feel comfortable with
ambiguity and uncertainty
• See the “big” picture
• Must know and relate to the
team and the firm’s growth
objectives
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 Specialized IPM Knowledge
• Must know the firm’s tangible
and intangible assets
(capabilities and resources)

• Get close enough to the

customers to know what they
will buy 26
 Defining the Requirements
Traditional Project Innovation Project
Management Management
Project requirements Project requirements
are usually well- are ill-defined and
defined from the based upon high-
start. Project level business goals
objectives are known that are subject to
and may not be change throughout
subject to change. the project.
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 Time Constraint
Traditional Project Innovation Project
Management Management

Reasonably well known Time constraint is a guess

and may not be able to and can change. We
be changed. cannot predict how long it
will take to make a
technical breakthrough.
We will use progressive or
moving window planning
and scheduling.
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 Cost Constraint
Traditional Project Innovation Project
Management Management

Reasonably well Generally unknown.

known except for
possible scope
changes and
unknowns.
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 Scope Constraint
Traditional Project Innovation Project
Management Management
Planning is initiated Generally defined
from a well-defined using high level goals
business case and that are subject to
statement of work. change. Innovators
prefer weak
specifications for the
freedom to be creative.
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 Work Breakdown Structure
Traditional Project Innovation Project
Management Management
May be able to create May have only high-
a highly detailed level activities
WBS that will remain identified and need
in tact for the to use rolling wave
project’s duration. or progressive
elaboration as the
project progresses. 31
 Resources Needed
Traditional Project Innovation Project
Management Management

Skill level of the Skill level of the

resources needed is resources required may
generally predictable not be known until well
and the resources may into the project and
remain for the duration may change based
of the project. upon changes in the
marketplace and
enterprise env. Factors.32
 Metrics
Traditional Project Innovation Project
Management Management

Usually the same Both business-

performance metrics related and
are used, such as performance metrics
time, cost and are needed and they
scope, and fixed for can change over the
the duration of the project’s life-cycle.
project. 33
 Methodology
Traditional Project Innovation Project
Management Management
Usually an inflexible Need for a great deal
enterprise project of flexibility and use
management of innovation
methodology. management rather
than traditional
tools.
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Enterprise Environmental Factors
Influencing Innovation Goals
• Geographical markets
• Market size
• Market share
• Company size
• Dependence on suppliers
• Dependence on a limited customer base
• Profitability and return on investment
• Bond market rating 35
 Literature Weaknesses
• What is missing in the literature are
articles that identify innovation
competencies that project managers
must possess as well as articles that
bridge the gap between innovation,
project management and business
strategy. There is no simple model in
existence that bridges these gaps.
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 PART 3:

CLASSIFICATION OR
TYPES OF INNOVATION &
INNOVATION PROJECTS

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Traditional Definition of Projects
• Grass roots
• Bootlegged
• Basic research
• Applied research
• Advanced development
• Full-scale engineering
development
• Production support 38
 Bootlegged Innovation
• Bootlegged projects are done in
secrecy because in most companies
there is competition for funding and
resources for other innovation
projects. There may also be turf
wars. Companies cannot fund or
support all the ideas that come
forth.
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Defining the Types of Innovation Projects
Innovation Type
Complex
Systems Radical
Technology Innovation
Breakthrough
Next
Generation Incremental Innovation
Add-ons
Low Risk High Risk
Risk Level

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•Products
•Processes
•Organizations
•Marketing
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•Incremental innovation
•Radical innovation
•Disruptive innovation
•Closed source innovation
•Open source innovation
•Business model innovation
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 Winner Loser
Apple Record companies (i.e. Tower
records)
Amazon Bookstores (i.e. Borders)
Google Encyclopedias and libraries
Craigslist Local newspapers
Online education Colleges and universities
E-mail United States Postal Service
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•Value-added innovation
•Financial innovation
•Hidden innovation
•Offensive & defensive
innovation
•Crisis innovation
•Social innovation
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Public service innovations include
social responsibility such as:
• Reducing poverty
• Providing low-cost housing
• Providing startup capital
• Reducing unemployment
• Reducing resource depletion
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 Public Sector Innovation Opportunities

• Other areas of innovation

opportunities:
• Improve economic
performance
• Health and safety issues
• Environmental issues
• Welfare issues 46
 Examples of Linkage Tools

•The Balanced Scorecard

•The Strategic Map
•Human Capital Analytics

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Categories of Benefits and Values

Financial Future
Benefits Benefits
and Values and Values
Customer-
Internal
Related
Benefits
Benefits
and Values
and Values
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 Strategy Maps
•Strategy maps align
processes, people,
systems, and innovation
to shared strategic goals
and objectives.
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 Strategy Maps

•The maps identify clear

cause-and-effect
relationships and how the
strategy will bring about
change to the outcomes of
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the organization.
•If human capital analytics
are to be effectives, we
must show how they affect
organizational outcomes.

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•Traditionally, we just reported
the number of new people hired,
employee training dollars,
number of new applications for
employment, employee turnover,
etc. All of these are just
snapshots in time to justify an
investment in HR.
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 Human Capital Analytics: Image
How important is the corporate image
and will it overrule all other decisions?
•We must attract talented technical
people
•We must allow technical personnel
the opportunity to be creative
•This will increase public confidence
in the quality of the product
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•Customer relations
management
•Thinking and working
visually
•Design thinking
•Brainstorming
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•Tell stories and share
experiences
•Experimentation &
prototyping
•Embrace uncertainty

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