Actionable tools, processes and metrics for successfully managing innovation projects
Conventional project management methods are oftentimes insufficient for managing innovation projects. Innovation is lost under the pre-determined scope and forecasted environments of traditional project management. There is tremendous pressure on organizations to innovate, and the project managers responsible for managing these innovation projects do not have the training or tools to do their jobs effectively. Innovation Project Management provides the tools, insights, and metrics needed to successfully manage innovation projects - helping readers identify problems in their organization, conceive elegant solutions, and, when necessary, promote changes to their organizational culture.
There are several kinds of innovation - ranging from incremental changes to existing products to wholly original processes that emerge from market-disrupting new technology - that possess different characteristics and often require different tools. Best-selling author and project management expert Harold Kerzner integrates innovation, project management, and strategic planning to offer students and practicing professionals the essential tools and processes to analyze innovation from all sides. Innovation Project Management deconstructs traditional project management methods and explains why and how innovation projects should be managed differently. This invaluable resource:
- Provides practical advice and actionable tools for effectively managing innovation projects
- Offers value-based project management metrics and guidance on how to establish a metrics management program
- Shares exclusive insights from project managers at world-class organizations such as Airbus, Boeing, Hitachi, IBM, and Siemens on how they manage innovation projects
- Explores a variety of types of innovation including co-creation, value-driven, agile, open versus closed, and more
- Instructors have access to PowerPoint lecture slides by chapter through the book’s companion website
Innovation Project Management: Methods, Case Studies, and Tools for Managing Innovation Projects is an essential text for professional project managers, corporate managers, innovation team members, as well as students in project management, innovation and entrepreneurship programs.
Table of Contents
Preface xv
1 Introduction to Innovation Project Management 1
Introduction 1
Definitions for Innovation 2
The Business Need 4
Innovation Literature 7
Project Management Literature 8
Innovation Benchmarking 9
Value: The Missing Link 10
Innovation Targeting 12
Timeline for Innovation Targeting 13
Innovation in Small Companies 14
Seven Critical Dimensions for Scaling Project Management Innovation 14
Implications and Issues for Project Managers and Innovation Personnel 17
2 Types of Innovation 19
Introduction 19
Incremental versus Radical Innovation 20
Understanding Innovation Differences 21
Product Development Innovation Categories 21
Closed and Open Innovation 23
Crowdsourcing 26
Co-Creation Innovation 27
Open Innovation in Action: Airbus and Co-creation Partnerships 33
Value (or Value-Driven) Innovation 35
Agile Innovation 36
Agile Innovation in Action: Deloitte 37
Agile Innovation in Action: Star Alliance 46
Government Innovation 48
Humanitarian/Social Innovation 51
Social Innovation in Action: Hitachi 52
Nontechnical Innovation in Action 54
Other Categories of Innovation 56
Role of the Board of Directors 59
Finding an Innovation Project Sponsor 60
Implications and Issues for Project Managers and Innovation Personnel 60
3 Innovation and Strategic Planning 63
Introduction 63
Role of the Innovation Project Manager in Strategic Planning 64
Role of the Portfolio PMO 64
Types of Strategies 65
Role of Innovation in Strategic Planning 66
Role of Marketing in Strategic Innovation Planning 67
Product Portfolio Analysis 68
Identifying Core Competencies Using SWOT Analysis 74
Innovation Project Management Competency Models in Action: Eli Lilly 77
Marketing’s Involvement with Innovation Project Managers 88
Product Life Cycles 91
Classification of R&D Projects 91
Research versus Development 92
The Research and Development Ratio 93
Offensive versus Defensive Innovation 95
Modeling the R&D Planning Function 96
Priority Setting 99
Contract R&D 101
Nondisclosure Agreements, Secrecy Agreements, and Confidentiality Agreements 103
Government Influence 103
Sources for Innovation Technology 104
Sources of Ideas 105
Project Selection Issues 107
Economic Evaluation of Projects 108
Project Readjustments 111
Project Termination 112
Implications and Issues for Project Managers and Innovation Personnel 113
4 Innovation Tools and Processes 115
Introduction 115
New Product Development 116
The Fuzzy Front End 117
Line of Sight 119
Risk Management 119
The Innovation Culture 123
Innovative Cultures and Corporate Leadership 126
Idea Generation 127
Spinoff Innovations 128
Understanding Reward Systems 129
Innovation Leadership in Action: Medtronic 130
IPM Skills Needed 133
Design Thinking 135
Brainstorming 138
Prototypes 141
Creativity and Innovation Fears 143
Innovation Governance 144
Transformational Governance 145
Balanced Scorecard 146
Strategy Maps 147
Innovation Portfolio Management 148
Innovation Sponsorship 151
The Innovation Team 151
Virtual versus Co-located Innovation Teams 152
The Need for PM 2.0 and PM 3.0 153
Implications and Issues for Project Managers and Innovation Personnel 156
5 From Traditional to Innovation Project Management Thinking 159
Introduction 159
Information Warehouses 160
Innovation Planning Overview 163
Innovation Assumptions 167
Validating the Objectives 169
Life-Cycle Phases 171
Work Breakdown Structure 175
Budgeting 175
Scheduling 176
Scope Change Control 176
Communication 178
Communication Innovation in Action: Arcadis 179
Innovation in Action: NTT Data 187
Solution Innovation in Action: Philips Business Group Monitoring and Analytics and Therapeutic Care Services 190
Innovation in Action: Dubai Customs and the Accelerated Exploratory Lab 202
Innovation in Action: Merck 207
Innovation in Action: Repsol 210
Staffing Innovation Projects 213
Implications and Issues for Project Managers and Innovation Personnel 217
6 Innovation Management Software 219
Introduction 219
Origin and Benefits of Innovation Software 220
Software Innovation in Action: Ideascale 222
Software Innovation in Action: Qmarkets 225
Software Innovation in Action: Hype Innovation 230
Software and Open Innovation 241
Implications and Issues for Project Managers and Innovation Personnel 241
7 Value-Based Innovation Project Management Metrics 243
Introduction 243
Value over the Years 245
Value and Leadership 246
Combining Benefits and Value 248
Recognizing the Need for Value Metrics 249
The Need for Effective Measurement Techniques 252
Customer/Stakeholder Impact on Value Metrics 257
Customer Value Management Programs 258
The Relationship between Project Management and Value 261
Selecting the Right Metrics 264
The Failure of Traditional Metrics and KPIs 266
The Need for Value Metrics 266
Creating Value Metrics 267
Industry Examples of Innovation Value Metrics 273
Alignment to Strategic Business Objectives 275
Metrics for Innovation Governance 277
Innovation Metrics in Action: Innovationlabs 278
The Dark Side of Innovation Metrics 288
Establishing a Metrics Management Program 290
Implications and Issues for Project Managers and Innovation Personnel 292
8 Business Models 295
Introduction 295
From Project Manager to Designer 297
Business Models and Value 298
Business Model Characteristics 299
Strategic Partnerships 300
Business Intelligence 300
Skills for the Business Model Innovator 301
Business Model Enhancements 303
Types of Business Models 305
Business Models and Strategic Alliances 308
Identifying Business Model Threats 308
Business Model Failure 310
Business Models and Lawsuits 310
Implications and Issues for Project Managers and Innovation Personnel 313
9 Disruptive Innovation 315
Introduction 315
Early Understanding of Disruption 316
Innovation and the Business Model Disruption 317
Categories of Disruptive Innovations 319
The Dark Side of Disruptive Innovation 321
Using Integrated Product/Project Teams 321
Disruptive Innovation in Action 324
Implications and Issues for Project Managers and Innovation Personnel 326
10 Innovation Roadblocks 329
Introduction 329
The Failure of Success 329
One Size Fits All 330
Insufficient Line of Sight 330
Failing to Search for Ideas 331
Sense of Urgency 331
Working with Prima Donnas 332
Lack of Collaboration 332
Politics 332
Project Workloads 332
Intellectual Property Rights 333
Not Understanding the Relationship between Creativity and Innovation 334
Too Many Assumptions 334
Innovation Funding 335
Cash Flow and Financial Uncertainty 335
Control, Control, and Control 335
Analysis-Paralysis 336
Innovation in Action: Naviair 336
Innovation in Action: Overcoming the Roadblocks 349
11 Defining Innovation Success and Failure 353
Introduction 353
The Business Side of Traditional Project Success 354
Defining Project Success: The Early Years 355
Redefining Project Success: Approaching the Twenty-First Century 357
Degrees of Success and Failure 358
Defining Success at the Beginning of the Project 359
The Role of Marketing in Defining Innovation Success 360
The Business Side of Innovation Success 363
Prioritization of the Success Factors 365
Innovation Project Success and Core Competencies 366
Innovation Project Success and Business Models 368
Causes of Innovation Project Failure 368
Identifying the Success and Failure Criteria 371
Implications and Issues for Project Managers and Innovation Personnel 373
12 Innovation in Action 375
Introduction 375
Innovation in Action: Apple 375
Innovation in Action: Facebook 377
Innovation in Action: IBM 378
Innovation in Action: Texas Instruments 382
Innovation in Action: 3M 384
Innovation in Action: Motorola 385
Innovation in Action: Zurich North America 386
Innovation in Action: UNICEF USA 388
Innovation in Action: Samsung 392
Agile Innovation in Action: Integrated Computer Solutions, Inc. 392
Innovation in Action: COMAU 400
Innovation in Action: Tokio Marine and Nichido Systems 408
Innovation in Action: GEA 410
Innovation in Action: Airbus Space and Defence 418
Innovation in Action: thyssenkrupp 421
Innovation in Action: Wärtsilä Energy Solutions 424
Working Together: ABC Training Software Development Project Revival 427
Critical Issues 430
13 Case Studies 431
Disney (A): Innovation Project Management Skills at Disney 431
Disney (B): Creating Innovation: Disney’s Haunted Mansion 441
Disney (C): Impact of Culture on Global Innovation Opportunities 456
Disney (D): The Partnership Side of Global Business Model Innovation 476
Case Study: Boeing 787 Dreamliner: Managing Innovation Risks with a New Business Model 489
Case Study: The Sydney Australia Opera House 496
Case Study: Ampore Faucet Company: Managing Different Views on Innovation 503
Case Study: The Innovation Sponsors 506
Case Study: The Rise, Fall, and Resurrection of Iridium: When an Innovation Business Model Fails 508
Index 539
