Chapter 27: Managing Technological Innovation Projects - The Quest for a Universal Language

Bob Mills, Ph.D.University of Waikato
Alan Langdon, Ph.D.University of Waikato
Chris Kirk, Ph.D.Massey University
Janis Swan, Ph.D.University of Waikato

Introduction

Innovation creates a benefit from an idea, a concept, an invention, or the application of a new technology. Technological innovation may involve "blue-skies" research, developing new products and new processes, and/or improvements to current products and processes.

Innovation projects are different than most other projects. Innovation projects will probably be stopped or fail, whereas practically all other projects are expected to be completed (Economist 1999). Success does not follow from compliance with predetermined objectives of cost, schedule, and quality, but instead from achieving profitable business outcomes. Further, the current value, health, and welfare of innovation projects cannot sensibly be judged against project prescriptions; they can only be assessed in relation to the remaining cost and effort and their updated predicted benefit. Innovation projects can expect continued support only if they maintain the promise of adequate return. Business purposes, therefore, overwhelm innovation project processes (Bartlett and Ghoshal 1994). Traditional project management tools, which make comparisons with plans and schedules, consequently appear to be largely irrelevant for monitoring and control.

The logic and simplicity of Gantt (bar) and program review and evaluation technique (PERT) network charts have made them enduring project management tools. However, in the 1970s and 1980s, "stage-gate" methods became popular for monitoring and controlling new product development (NPD) (Cooper 1993). More recently project portfolio appraisal systems provide a mechanism for regular and appropriate strategic decision-making by executive management (Cooper, Edgett, and Kleinschmidt 1998). Further, "Rapid Application Development" was introduced in the software industry in the 1990s (Mimno 1991). Traditional hierarchical and prescriptive innovation project management tools have therefore been perceived as ponderous in the context of today's organic business structures and are being challenged.

Other features of innovation projects also make the use of traditional tools impractical. For example, new technology and new market information may validly contribute to innovation project activities right up to the launch date, dramatically changing the shape of the project, making it difficult for documentation to keep pace. As well, individuals involved in the innovation process are often delegated high levels of responsibility and freedom. They might best be "self-managed" and monitored at regular intervals, rather than "directed" on the basis of a schedule of activities, and may also optimize resources better than specialist planners.

Technological innovation often changes "ownership" and focus within organizations and across them. For example, an innovation project can move from fundamental science and development in one company to production, sales, and marketing in another. While change of ownership may change scope and prospects, the essential idea may remain, as might the ultimate goal.

The traditional role of marketing, at the crossroad between the operational arm of organizational structure and the forces of disruption (research and development) and standardization (quality systems), is being diffused (Mintzberg 1979, 1989). Therefore, innovation project team members find themselves directly involved in ensuring their outputs profitably satisfy real and current customer need. Innovation program and project management must therefore be a transparent process to those responsible for setting the purpose of the organization, as well as for all the people involved in making it happen.

A widely understood process and format, more relevant to modern organizations is needed to meet the shortfalls of traditional project management. Bernaxo et al. (1999) and Englund and Graham (1999), however, warn of the many problems in implementing organizational change in the innovation project process. Intellectual support does not ensure change. A first requirement is for a universal language, integrative within and across organizations, and useful within and across functions. A second requirement is a means for successful implementation.

The innovation project management practices of twenty-five program and project managers from four research and development (R&D) purchasers, three R&D providers, and six successful New Zealand companies involved in the electronics, food, and forestry sectors were investigated. Without exception interviewees were actively seeking to improve monitoring and control processes. A new project and portfolio approach (called Time-Block Innovation Project System or TIPS) using sequenced blocks of time, rather than sequenced blocks of activities, was conceptualized to better meet managers needs.

TIPS uses a spreadsheet (Microsoft Excel to regularly update forecasts of future cost, future benefits, and the likelihood of meeting customer needs by the scheduled date. At the end of each weekly, monthly, or quarterly time-block, past costs, schedules, and deliverables are replaced by revised projections arising from new technological and market knowledge gained in the preceding time-block.

The original interviewees reacted positively to the TIPS concept. A three-month TIPS pilot trial on six projects, three in each of two of the original trial companies, was therefore conducted. Iterative action research was used to simultaneously refine and implement TIPS, and a questionnaire was used to indicate its potential usefulness and value to the companies. Participant managers indicated that the project management information collected by TIPS was adequately comprehensive and very useful. Participants agreed that TIPS was better than existing arrangements at drawing early attention for corrective action. However, one third of the participants thought TIPS might be better implemented in dedicated software.

TIPS methodology was rated very highly by one of the companies, six project managers, and five technical managers. The second company rated the value of implementing TIPS as moderate. Respondents felt that TIPS could be implemented in their companies within twelve months. The pilot trial incidentally indicated potential improvements to the innovation processes in both companies.

TIPS may lead to a practical and more universal approach for monitoring and controlling small-scale innovation processes in wealth creating organizations.