Project Management Institute

Innovative Outliers

When an Organization's Strategy Shifts or Expands, the Portfolio must Follow Suit

BY NOVID PARSI

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Uber's electric bikes for rent, called Jump

STATIC STRATEGIES DON'T LAST FOREVER.

Earlier this year, Uber expanded its strategy from ride-sharing to autonomous bikes and scooters. Beauty subscription service Birchbox developed and rolled out a physical “beauty bar” within existing brick-and-mortar stores across the United States. And in 2018, global hotel brand Marriott— in a bid to compete with the growing market for bookable hospitality “experiences”—launched a curated series of thousands of hands-on activities and excursions that guests can buy to supplement their traditional hotel stay.

When a company's strategic goals do shift—either due to market pressures or competitive survival—it can push those tasked with managing the portfolio into uncharted territory. Although innovative outliers, by definition, promise to take organizations into new and bold strategic directions, these projects and their teams can achieve success only if they follow well-established project management processes.

“Innovative” should never be a synonym for “undisciplined,” says Linda Szmyt, PMP, PfMP, project management office director at ticketing software company AudienceView, Toronto, Ontario, Canada. “Organizations often think of innovation as fast and dirty: Let's slap a prototype together very quickly,” she says. “But innovative initiatives require the same project management processes as the rest of the portfolio.”

FACING CHANGE

One of the biggest challenges in managing an outlier, says Ms. Szmyt, is convincing the team “that it shouldn't be treated any differently than any other project.”

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BEAUTY SUBSCRIPTION SERVICE BIRCHBOX DEVELOPED AND ROLLED OUT A PHYSICAL “BEAUTY BAR” WITHIN EXISTING BRICK-AND-MORTAR STORES ACROSS THE UNITED STATES.

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Still, outlier projects represent change—and thus require change management. “At the outset of a cutting-edge project, the project leader has to assess its impacts on other projects within the portfolio,” says Sridhar Peddisetty, PMP, PgMP, PfMP, vice president, global delivery for IT services company ProKarma, Portland, Oregon, USA.

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—Sridhar Peddisetty, PMP, PgMP, PfMP, ProKarma, Portland, Oregon, USA

For one, outlier projects often affect resources that are already at their limits. On digital transformation projects at his organization, Omur Benek, PMP, senior project and portfolio manager, Turkish Airlines, Istanbul, Turkey, works on securing their three legs of support: executive backing, clear communication and change management. “As part of my portfolio management of outlier projects, I have to consider the risk of how they affect other projects—for example, if they require the same resources during the same timeline,” says Mr. Benek.

Project leaders need to regularly assess their changing resource needs. Then with rigorous governance, often through governance boards, resources across the portfolio can be properly prioritized and managed. “By doing that, you limit over- or under-allocation of resources,” says John Donohoe, PMP, PgMP, PfMP, director of project management and change management, Star Alliance, Frankfurt, Germany.

These projects often necessitate pulling in members from other teams and departments so they can contribute their subject matter expertise—in addition to shouldering their usual workloads. To address that challenge, project managers have to identify the team members they will need, how long they will need them and at what points in the project they will tap them, Mr. Peddisetty says. “An organization's key people are always its busiest people,” he says. “You have to involve them at a minimal level. You can't waste their time by pulling them into too many meetings. You have to be aware that time is a constraint for everyone.”

On a US$2.5 million project to digitize and automate previously manual human resources processes, which launched in mid-2018 and is slated for completion later this year, Mr. Peddisetty decided that some of the project's key team members comprised talent acquisition employees. Rather than pulling those team members into the project from the start and then expecting them to remain engaged throughout the project, he took a phased approach, he says. “We didn't have a fixed team from the beginning; it progressed as the project went along.” Once the project was scaled up and integrated into the organization, those subject matter experts then served as its champions.

SCALING UP

A phased approach helps determine how and when to scale the project. Star Alliance has been executing a new strategy to develop its digital services in order to better help air passengers traveling with different airlines do so seamlessly. “That has involved a transformation from a more traditional development approach to a more iterative one,” Mr. Donohoe says. To make that transformation a reality, Star Alliance may launch a pilot project with an eye on when and how it can be scaled. “From day one with each project, we look at how it will benefit the airline alliance passengers and the 28 member airlines,” he says.

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“Don't call [innovative outlier projects and their teams] special or secret. That goes against a culture of fairness and transparency.”

—Linda Szmyt, PMP, PfMP, AudienceView, Toronto, Ontario, Canada

Now, for instance, if a flight arrives late and the passenger risks missing a connection, the alliance sends someone to meet the passenger at the gate and take them to the connecting flight. Star Alliance is currently piloting an initiative that would digitize that assistance, allowing passengers to see on their mobile devices how to quickly make it to the next gate and to receive a voucher allowing them to skip the queue. “Once the pilot phases are complete, we'll roll it out in a limited scale, then test and retest until we can decide to do a global rollout,” Mr. Donohoe says.

OPEN SECRETS

Organizations might be tempted to treat innovative outlier projects—and their teams—as separate from the rest of the organization. They should resist that impulse, Ms. Szmyt says. “Don't call them special or secret. That goes against a culture of fairness and transparency.” It also goes against the ultimate aim: making the outlier project a successful part of the overall enterprise.

Too often, Ms. Szmyt says, a team tasked with developing an innovative tool or product is treated as special and distinct from the rest of the organization and its project management standards. Only once the product is ready to be scaled and commercialized is it handed over to other departments—which haven't been involved in the project. “That can create a real it-was-not-invented-here mentality,” she says.

Instead, organizations should integrate their innovation teams and projects within the larger culture. That unifying approach will help ensure that project outliers aren't project aberrations—but instead adhere to project management standards for success. “The idea part of innovative outliers is fun,” Ms. Szmyt says. “But they're also hard work, like any other project.” PM

TESTING THE OUTER LIMITS

Some organizations are pushing the portfolio boundaries to stay innovative.

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UBER

Uber has become synonymous with ride-sharing. In 2018, as part of the CEO's strategy to become “the Amazon of transportation,” Uber entered the two-wheel market: bicycle and scooter rentals. This year, the transportation network company announced the creation of a new division: microbility robotics. It will explore projects that turn Uber's bikes and scooters into autonomous driving vehicles that can get themselves to the spots where users need them—eliminating costly distribution operations.
Challenges: Uber's initiatives to develop self-driving scooters and bicycles face the perennial technological challenge for self-driving vehicles: navigating road and pedestrian obstacles. But the company also has to design two-wheelers that don't tip over when human riders aren't onboard. And it has to do that without incurring the high costs typically associated with self-driving tech.

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BIRCHBOX

Founded in 2010, Birchbox, which mails makeup and other beauty products to customers on a monthly subscription basis, now boasts 2.5 million subscribers. In 2018, the online retailer partnered with U.S. pharmacy Walgreens to launch a brick-and-mortar project: a physical “beauty bar” in Walgreens locations across the United States.
Challenges: The Birchbox pilot stems from a larger strategy at Walgreens to address growing competitive threats by trying out various collaborations, such as a partnership with Humana to offer senior-focused clinics. But while each Birchbox shop-within-a-shop can be quickly installed, the project poses the same challenge presented by other innovative outliers: The realization of benefits doesn't happen overnight. “It will take years” to transform Walgreens stores, Stefano Pessina, CEO, Walgreens Boots Alliance, told analysts. “Whether this will be three or five is difficult to say, because many of these tests take a lot of time to come to a real fruition.”

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MARRIOTT

Hotel chains are having to up their game as they compete with Airbnb for customers and revenue. This year, Marriott unveiled its new rewards program Marriott Bonvoy, which includes a curated series of more than 120,000 experiences and excursions that guests can buy—from a food market in Marrakech, Morocco to dog-sledding in Juneau, Alaska, USA.
Challenges: Marriott will need to show that its new venture learned some difficult lessons from a previous project—in particular, adequately testing the pilot before launching it. In 2016, Marriott purchased two other hotel chains, then merged the three hotels’ loyalty programs. But after the two-year project, which ended in 2018, customers still had difficulties accessing their loyalty accounts.

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.

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