Project Management Institute

A brighter lightbulb

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BY CAROL HILDEBRAND

Ten years ago, Walt Disney Co. was the only game in town when it came to animated movies. Building on a long string of classics, Disney's animated film division employed hundreds of animators who tackled each film project by laboriously hand-drawing classics from “Cinderella” to “Aladdin.”

Then came Pixar, the studio that circumvented the industry norms by employing computer-generated animation and automating many processes. Millions of dollars in profits later, it's generally accepted that Pixar has rewritten the animated film process.

This breathtaking innovation came from outside the mainstream movie industry— an industry generally viewed as project-oriented. And it raises a question worth thinking about: Could the mainstream animation houses, with their mature project-driven processes in place, have pulled off that kind of innovation? Or does working within the structured framework of project management stifle the creativity and innovation necessary to keep businesses successful?

executive summary

There are two schools of thought when it comes to project management innovation; some believe it hurts, while others know it helps.

Traditionalists believe that the rigor of project management slows innovation, while others understand that a project management framework frees a team to brainstorm creative solutions.

If the team focuses on five key learnings, innovation can thrive within a project management environment.

The Drawing Board

There are traditionalists—those who believe project management's one true value rests only in structured, consistent delivery. “Structuring innovation is a no-win situation,” says John Rahiya, PMP, senior vice president of Novations Project Management, a project management consultancy based in Atlanta, Ga., USA. “The things that will bring about innovation are the very things that project management is not about. Project management is about process and risk management, and that's the absolute antithesis of innovation.”

 

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PROJECT MANAGEMENT IS ABOUT PROCESS AND RISK MANAGEMENT, AND THAT’S THE ABSOLUTE ANTITHESIS OF INNOVATION.

John Rahiya, PMP,
Senior Vice President, Novations Project Management
Atlanta, Ga., USA

Indeed, recent research from Stanford University shows that working within a project framework does have an effect on how quickly new ideas and innovations are embraced. John Taylor, the Gerald J. Lieberman Graduate Fellow at Stanford University in Stanford, Calif., USA, has studied the way that innovations are spread across heavily project-driven industries such as construction, pharmaceuticals and aerospace/defense. In these industries, rich in specialized disciplines and mature processes and structure, it's more difficult to disseminate what Mr. Taylor calls a systemic innovation— one that can change the way entire segments of an industry work together. “Those systemic kinds of innovations are the kind that lead to the biggest changes in productivity.”

Mr. Taylor gives the example of two innovations within the home-building industry. The first is the concept of prefabricating walls into trusses, which are just tied together and set up on the house site. Some construction companies took that notion one step farther, pre-installing plumbing, electrical and HVAC components into the walls. “But that required significant changes in how plumbers, electricians and HVAC technicians did their work,” he says. “So it diffused across the industry four times slower than prefab trusses did.”

As project-driven industries mature and start to develop specialized outsourced areas, the industry is locked into a macro structure, says Raymond E. Levitt, Ph.D., professor of civil and environmental engineering and director of the Collaboratory for Research on Global Projects at Stanford. And that makes it difficult to innovate.

Scope for Imagination

But while industries that rely heavily on a project framework risk a slower acceptance of innovative techniques in the largest sense, the fact is, these industries still come up with plenty of new and creative ideas. In fact, many experts argue that creating a standardized project management environment means that content experts don't have to sweat the details, leaving them free to concentrate on the things they do best.

“It is one of the great fallacies that project management stifles innovation,” says Darrel A. Raynor, PMP, managing director of Data Analysis and Results Inc., a project management consultant in Austin, Texas, USA. “What it does is take away many of the myriad decisions that people don't need to make. As a project manager, my goal is to use planning to take away the churn of making unnecessary decisions so [project managers] can concentrate on the important ones.”

In fact, John Kocon, PMP, the project management officer for the Information Technology Group at the Oregon Health & Science University (OHSU) in Portland, Ore., USA, says separating roles and responsibilities actually frees people to be more creative. Mr. Kocon has several levels of project management process that his group assigns based on the level of project complexity. Smaller projects don't tend to have a full-time project manager assigned, relying instead on a content expert who also has project management skills. “I’ve noticed that those projects give people less time for brain-storming because they have to do more project work themselves,” he says. In contrast, he says that assigning a full-time project manager lets the subject matter experts concentrate on the areas in which they excel.

Innovation can flourish within a project management framework as long as the team focuses on five key learnings.

1. Tie projects to business goals.

Successful projects help an organization achieve its business goals, including increasing revenue or improving customer satisfaction. So companies that tie each project's value to its chance of attaining a corporate strategic target run a better chance of fielding an innovative project portfolio. “It's a more flexible approach that moves in the direction of not just projects, but programs and portfolios,” Dr. Levitt says.

Curt Edgar, senior manager of advanced technology portfolio management at the Chrysler Group of Daimler-Chrysler, Auburn Hills, Mich., USA, applies a portfolio management process to each of the 100 or so research projects that he green-lights each year. Mr. Edgar's groups research and fund new ideas in 15 automotive areas ranging from safety to power trains, and he has to winnow the field from more than 300 possibilities each year. Mr. Edgar uses portfolio management software to help him evaluate each prospective project for its value to the company, all within a holistic portfolio framework. “Our portfolio management process describes how much focus we want on certain fields and measures the value of prospective projects against our strategy,” he says. “It helps us put the right ideas to work.”

It also helps Mr. Edgar drive innovation through the project management process. “Project management doesn't stifle innovation if you have a strong strategy up front and have leeway to come up with solutions,” he says. “It can be complex, but when you're trying to manage millions in investments, you want to get the greatest return possible.”

2. Build innovation into early project stages.

The Chrysler Group also encourages project innovation by avoiding too much granularity in its request for proposals. When Mr. Edgar sends out a request for proposal for a particular project, be it to Chrysler Group's internal research unit, suppliers or independent organizations, he is careful to define the prospective project in terms of the problem, not the solution. “We don't describe the project, we describe our need.” The result, he says, is that each responding team is free to innovate in terms of how they could best solve the problem, and his team can then evaluate each approach in terms of how it best meets the company's strategic goals.

3. Consider long-term repercussions.

As Mr. Taylor and Dr. Levitt discovered, project managers must consider the possible impact that an early stage innovation can have on later parts of the project.

Mr. Taylor gives the example of a Finnish shipbuilding project in which the project plumber and deck contractor collaborated on a different placement of the plumbing pipes within the deck floor. While the change improved productivity within that phase of the task, there was a huge impact farther down the project, as companies in charge of painting and polyurethane coating had to change the way they got the job done because of the new building twist. “It slowed productivity overall,” Mr. Taylor says.

One way to answer this concern is to step away from awarding parts of a project to the lowest bidding subcontractor, instead building relationships with a small group of contractors that have been taught to work with a particular innovation. “It reduces the amount of overall training time and narrows the knowledge accumulation gap,” Mr. Taylor says. As a result, the original innovation has a better chance of delivering the benefits originally intended.

4. Micro-innovate within the project process.

While macro innovations that move across swathes of a project could run into resistance that slows the intended benefits, innovations within the project process itself often are quite successful.

For example, Mr. Kocon modified the phases of the standard project life cycle to better reflect OHSU’s culture and business requirements. As a result, steps and processes that traditionally are buried deep within a standard systems development life cycle have been elevated to mirror his organization's priorities, expanding a five-phase life cycle to an 11-phase process. Establishing a performance measurement baseline is bumped up in importance, as are customer approval processes.

“It builds innovation into the process and gets people brainstorming at a good time, thinking about things that need to be done,” Mr. Kocon says. “The project management process is not a one-size-fits-all recipe.”

5. Institutionalize project innovations across corporate functions.

Find a way to spread project management innovation across an organization. Mr. Edgar works regularly with his counterparts at the Mercedes Group of Daimler Chrysler in Stuttgart, Germany. “We share what we're doing and talk about the right technical approach,” he says. As a result, the company is able to accelerate the adoption of advanced technology from the Mercedes group through the fleet into the lower-end Chrysler Group. “We work hard to cascade innovation across business units before the competition gets it,” he says.

Project teams problem-solve and innovate better when the team members have developed a sense of trust, according to Roxanne Zolin, assistant professor at the Naval Postgraduate School's Graduate School of Business and Public Policy in Monterey, Calif., USA. For example, Ms. Zolin studied teams of people in the design/build industry, measuring each team member on trust-related characteristics, such as task follow through. She also had project managers assess the overall performance of each team member. “We found that the people who were more trusting of their team members rated higher for problem-solving and creativity,” she says. “If you're a trusting person, you've developed the skill of trust, and know when to trust and when not to. That means you feel more comfortable collaborating and sharing information, and consequently, can be more creative.”

human nature

PM Network recently spoke with John Bessant, professor of Innovation Management at Cranfield University, Bedford, U.K., and author of Managing Innovation [John Wiley & Sons, 2001], which was awarded the best book prize by the European Association for Creativity and Innovation in 2001.

Does project management stifle creativity and innovation?

The structures and procedures which a good project manager puts in place to ensure a job gets done will increasingly act as a block on the wider, more open-ended forms of creativity—but they provide a perfect environment within which problem-solving creativity can be expressed around themes like cost reduction, time compression and quality enhancement. You need to balance creativity with control. Project management, when applied thoughtfully, doesn't need to conflict with creativity and can certainly help innovation.

Do you think about managing innovation differently in a project management environment?

Project management offers a powerful approach and toolkit to getting things done on time and within budget, but the problem with innovation is the amount of uncertainty in the process. Quite simply, at the outset you don't know whether or not the project is feasible in terms of likely market or technological success. The only way you will find out is by beginning the project.

What are some best innovation practices within the project management environment?

I would highlight clear selection routines at the front end—portfolio methods that decide which projects to back on the basis of more than just financial or payback criteria, and which allow a mixed strategic portfolio to be followed. And stage gates where there is the chance to review and decide on a go/no-go basis to manage the inherent risk in innovation projects. But people have to buy into the criteria and make sure the system works.

 

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PROJECT MANAGEMENT DOESN’T STIFLE INNOVATION IF YOU HAVE A STRONG STRATEGY UP FRONT AND HAVE LEEWAY TO COME UP WITH SOLUTIONS.

Curt Edgar,
Senior Manager, Advanced Technology
Portfolio Management, Chrysler Group,
Auburn Hills, Mich., USA

In the end, there always will be an argument as to whether project management really does engender an innovative environment. No matter how many ingenious changes or fixes come up in the project management framework, it's not easy to prove that these ideas represent business creativity. “Once project management is underway, whether these ideas are innovation or just project problem-solving is difficult to tell,” Mr. Rahiya says. PM

Carol Hildebrand is a business and technology writer based in Wellesley, Mass., USA. Her work has appeared in publications such as CIO, SearchCIO.com and Computerworld.

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK | MAY 2005 | WWW.PMI.ORG

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