How to Create a Culture of Innovation

A strong innovation culture can transform organizations—seeding a first-mover mindset that empowers teams to discover whole new ways of thinking. We explore this with:

Jack Casaccio, PMP, director of IT project delivery, PMO, American Medical Association, Chicago: Casaccio discusses the PMO’s role in fostering a culture of innovation, how he seeds innovation within project teams and how innovation initiatives drive real value.

André Gonçalves, PMP, innovation ecosystem lead, EDP, Lisbon: Gonçalves talks about the competitive advantages an innovation culture can create, how he and other project leaders scale an innovative mindset across teams and business units at EDP, ways to create an environment that encourages team members to innovate—and develop new skills.

STEVE HENDERSHOT
A culture of innovation: It’s what every company seeks to nurture in our disruptive project environment. Today, let’s hear from two project leaders who are doing just that—empowering team members to explore new ways of working, pushing tech boundaries to boost efficiency and forging an ethos that helps project professionals grow into genuine difference-makers.

In today’s fast-paced and complex business landscape, project professionals lead the way, delivering value while tackling critical challenges and embracing innovative ways of working. On Projectified^®, we bring you insights from the project management community to help you thrive in this evolving world of work through real-world stories and strategies, inspiring you to advance your career and make a positive impact.

This is Projectified. I’m Steve Hendershot.

A strong culture of innovation can transform organizations. It seeds a future-focused mindset that drives new ways of thinking and doing—to achieve breakthroughs that can forge a competitive edge. And many organizations are seizing the moment: More than half report increasing investments in innovation in 2024, according to a survey by Deloitte and Fast Company.

Those in project management offices (PMOs) and other project leaders play a crucial role in building and sustaining a culture of innovation. They are uniquely positioned to help teams cultivate big ideas—and shepherd them to deliver deep impact. Of course, PMI has a great collection of innovation resources for project professionals—head to PMI.org/podcast and click on the transcript for this episode.

Today, we’re speaking with project leaders who spearhead innovation efforts. First is Jack Casaccio, director of the PMO at the nonprofit American Medical Association. Jack’s in Palatine, Illinois, in the United States. He built the AMA’s PMO from scratch—and told us how he worked to embed innovation from the start.

MUSICAL TRANSITION

The PMO’s role in fostering a culture of innovation

STEVE HENDERSHOT
Thanks for joining us, Jack. You’ve worked in PMOs for a long time. How have you seen the role of the PMO being a driver for innovation change over your career?

JACK CASACCIO
It has absolutely been a rising component of the PMO, and a lot of it has to do with the environment that you’re working within. If I were to look back, say, 10, 15 years ago, my role was a bit different. I have been in a middle management, leadership-type role within the project delivery space for quite a while, but in much different-sized organizations compared to where I am today. What I have found is, being in a much, much larger organization, you don’t necessarily have the amount of runway and ability, I think, to explore innovation as you would in a smaller organization. So that’s been a very, very refreshing change.

STEVE HENDERSHOT
Innovation is critical for every organization, but why is it valuable to have the PMO play a big role in fostering innovation?

JACK CASACCIO
I think it helps keep skill sets sharpened and always advancing, and I look at that both from a personal standpoint but also within the organization. Selfishly, to some degree, you do want to make sure that you’re always sharpening your toolkit, and you are able to work on any sort of project task at hand both within your current role and, if you decide to make a change or the environment does change, you can then transfer that outside to something new and keep reinventing yourself, which is really, really important.

I think it also mitigates the risk of stagnation or becoming institutionalized. We’ve all worked in organizations where you have people that have been there 10, 15, 20 years—you tend to get, for lack of a better word, institutionalized: “We’ve always done it that way. That’s how we do it. We don’t want to change.” That is not the way you want to be looking at things.

STEVE HENDERSHOT
There could be some tension between a PMO and that innovative mindset—innovation takes resources and time, and there isn’t a ton of extra to go around. So how does that affect how you’re cultivating an innovation culture at AMA? And how has leadership responded to these efforts?

JACK CASACCIO
We just, fairly recently, have gotten some new senior leadership within the organization that are very, very supportive of innovation and trying things, “fail faster.” So that is going to be a huge, huge component to be able to drive innovation within your own team. 

The way I’ve driven innovation is organically within the team itself. So you have to create a sense of team, and you can do that in a number of ways. Formally, I did decide to go ahead and charter the purpose, charter our function, charter the team itself. So what is it? Who are we? What do we do? What’s our menu of services that we’re going to be providing to folks? We had people that hadn’t even met each other serving as project management or in the project delivery role, had been working in the same organization for a number of years but had never had a conversation. So by clearly defining what the role of the team itself is and creating that sense of brotherhood, I guess you could say, is fundamental with getting that set up. We wanted to provide a foundation to support consistent, repeatable delivery practices. We wanted to clearly articulate our suite of services. We wanted to solidify the concept of team, and just keeping in mind, too, that our success is really derived just from the success of our customers. 

STEVE HENDERSHOT
Did you bake innovation specifically into that charter? How did you think about making sure that value is enshrined?

JACK CASACCIO
We have something very appropriately called the innovation list. The innovation list could be anything, big or small, whether it’s revision of a template, creation of a template, major snafus we’re experiencing with process changes, anything and everything. The team is always encouraged to raise that to the group. It’s funny. When I institutionalized this, or brought this into play upon joining the organization, within a very short time, we identified 36 items. We then rank them. We take a look at the level of effort, low, medium and high, and then we take a look at the benefit, again ranking it low, medium and high, and then that way, we can take a holistic view and prioritize this work.

And it’s not just a single person working on it. If it’s a minor enhancement, we’re looking for people to raise their hand and get involved, take ownership of it. Some of the innovation items or efforts, there might be three, four, five people within the team addressing it. Within that first year of 36 items, we did complete 29 of them, and they were structured around people, process and technology, right? So are they people changes, or is it something related to a process that’s broken that we can enhance, or is it, in fact, something possibly tool- or tech-related that we may be able to influence?

STEVE HENDERSHOT
Is that innovation list generated by your team? Is it coming from feedback elsewhere in the organization or customer feedback? Where does it start, and how do you decide which items to address? 

JACK CASACCIO
All of the above. It’s items coming from within our team itself. It’s from peers. It’s from other folks in IT, our business partners, our customers. It is a running list. Everybody is encouraged to add to that at any point in time, and then we periodically do review that, and as I mentioned, we collectively take a look at the level of effort and what the perceived benefit is, and we also have to relay that out, of course, on bandwidth, right? Just to make sure we do have the right folks with some level of allocation to address it, but it is done very democratically.

STEVE HENDERSHOT
How do you ensure these innovations are delivering value? And how do you make sure people are staying engaged? 

JACK CASACCIO
There [are] a few ways that we have folks energized and engaged for this. Number one is the one nobody wants to hear: We do incorporate this as part of everybody’s annual goals. Team members are on the hook to provide one to two innovation advancements or items that will enhance how either they are effective in executing or share that with the team as a whole. They have ownership. They have skin in the game. So that’s exciting, that’s energizing. So it’s really, really important to keep that energy and engagement front and center. We have 12 project managers. Not every project manager is going to be front and center and wanting to raise their hand and wanting to incite change. I typically find we have about a third of the team that is really ready and raring to go. And as we work through these items, as we deliver them and we do see the fruits of the labor, folks do get excited and I think it does spread, and then we have people that are less afraid to engage. A lot of it comes down to really creating this environment that’s just where folks are going to be comfortable. They feel like their voice is heard. They feel that they’re valued and they can try new things. And it’s very powerful.

STEVE HENDERSHOT
Now, what about things that can hinder an innovation culture? What should PMO or organizational leaders avoid that could hurt that environment? 

JACK CASACCIO
I would say being shortsighted and thinking potential ideas are insignificant or not important. I never want to discount something that is being brought to the table as a potential idea. Sometimes it’s just not saying no, it’s just saying, “Not right now. It might not be the best time to do that.” And I think if you’re open and honest with the team or individuals about that, they should understand if you can articulate why—there are no bad ideas, and you don’t want to shut folks down by saying, “No, no, no.” Then, eventually, they’re going to stop coming to the table and bringing those thoughts and ideas. So just being cautious of prioritizing timing as a factor, considering other work on the table or what might be going on in the organization is really important to keep in mind.

The other thing that can be harmful is if you’re not sharing what it is you’re doing from an innovation perspective with the rest of the organization. So whether it’s me having a conversation with my direct manager, connecting with our CIO and just keeping them informed of some of the things we are trying and what the progress is. I never want folks to be blindsided and think, “Well, why were you spending time on that? We have other more important things to do.” So if you’re transparent, upfront and talking about the progress of it, there are no surprises and they’ll embrace it.

STEVE HENDERSHOT
Is that wins only? In other words, don’t talk about it unless you can point to some dramatic improvement? Or is that of value—we just talk about what we’re doing whether it pans out or not?

JACK CASACCIO
Absolutely not, no. Definitely talk about the failures. This is just from a project management lens, but how many folks have been on a really challenging project, right? Whether it’s bad stakeholders, whether it’s just out of control scope, whatever it is, those are the initiatives and those are the times where you learn the most. So, no, absolutely talk about the quote-unquote failures, because that’s going to allow you to pivot, and it’s part of that whole fail faster-type process, right? So you pick up the pieces, navigate—you might turn 10 degrees to the left, and you try again. Very important.

Advice for PMO leaders on how to encourage innovation

STEVE HENDERSHOT
Okay, one last question—what’s your advice to other PMO leaders who are starting to foster a culture of innovation or those who are improving the one they have?

JACK CASACCIO
Don’t get discouraged. Be patient. Recognize that you will not be able to do it on your own, so leverage your team, leverage your peers. Look to people outside of your organization. I’ve had many, many conversations with folks in my role outside of this organization just to bounce stuff off them. Join a networking group of project management professionals and really take it seriously. Take it as a chance to really meet people that are either very similar or have similar roles to you or are very, very different, and just keep in mind that there are many, many different perspectives, and it might give you a new idea. It might give you a great way to approach a problem that you might have. And I just think open-mindedness is going to be key, too, whether it’s just working with other people, whether it’s exploring new ideas—keep an open mind, and it’s also important to remember you have to be the cheerleader. Not every innovation that you’re working on is going to be a walk in the park. So you have to be that leader and keep the goal or the prize in sight at all times.

MUSICAL TRANSITION

STEVE HENDERSHOT
Are you enjoying this episode? Please leave us a rating or review on Apple Podcasts, Spotify, or wherever you listen. Your feedback helps us keep making this show. Now, let’s go to our next conversation.

Some organizations create a separate entity to develop a culture of innovation—and ensure that it’s scaled across the enterprise. That’s the case for our next guest. André Gonçalves is the innovation ecosystem lead at utilities company EDP in Lisbon. André and his team are part of EDP Innovation, a group that focuses on elevating innovation within company business units and teams. He spoke with Projectified’s Hannah LaBelle about how building buy-in from team members brings innovation to life.

MUSICAL TRANSITION

HANNAH LABELLE
André, first, what are the biggest benefits to building a culture of innovation within an organization?

ANDRÉ GONÇALVES
Innovation has to create a competitive advantage. This means that building this culture of innovation allows you to have a first-mover advantage: getting access to innovation first, provide your business teams multiple opportunities, growing avenues in the way that they develop their businesses, in the way that they streamline operation, with increased efficiencies, with continuous improvements; and especially today, if we look at how companies are structuring their investment, there is a growing CapEx (capital expenditures), growing OpEx (operational expenditures), but there is also a higher cost of capital, mostly due to inflation.

If you start looking at some other layers, you can clearly see that, on one side, it allows you to have a more motivated workforce because everyone loves to work on innovation. So if your co-workers, your employees, feel that their ideas are heard, they are actually contributing to something new, they are happier, and they are more satisfied with the way that they are working. So this motivated workforce also allows you to attract and retain talent. 

HANNAH LABELLE
Let’s kind of dive into your role as the innovation ecosystem lead. Tell us a little bit about what your work entails and how you’re linking project management with innovation at the organization.

ANDRÉ GONÇALVES
My current role at EDP has three major areas: So on one side, leveraging our open innovation programs. On the other side, promoting the adoption of new technologies. This is done mostly through startups and scale-ups. And then on the other side, to develop a strong partner ecosystem, where my organization can learn, develop new projects. What my job does, it’s really to provide these tools for the company to have access to innovation. But at the same time, create its own culture of innovation by understanding what’s out there and how can we learn with the external ecosystem.

Project management is really an integral approach of what we do. We basically pick both waterfall, agile processes, and we tailor-make them to our specific needs. Some examples of this are on one side, what we call the portfolio management strategies, where we can have a more, let’s say, rigorous control over our key initiatives, trying to understand are we fitting our strategic objectives? Are we manag[ing] our resources efficiently? But then, on the other side, more project management techniques to really manage what we call pilots, meaning the way that we are testing the technologies and the way that we want to scale them on a systematic way. So when we implement project management, we can streamline our operations. Communication is key. So we really enhance collaboration. We optimize our processes, and we make project management not just a background tool but something that we actually use on an everyday basis.

HANNAH LABELLE
So the innovation team is working with business units and teams at EDP to help them innovate. How does this collaboration affect the innovation mindset across the company? 

ANDRÉ GONÇALVES
There are different configurations and different ways that you can organize your innovation teams, and they have pros and cons. If you have an organization that is separate from your main company, it probably provides you agility, some risk-taking mindset. When you have the innovation team sitting within the business, they tend to be more aware of the business challenges, but at the same time, they are not as keen to risk as they would be if they would be outside the key business unit. Regardless of your innovation structure, as long as you are able to communicate what you want to achieve, you are able to understand what are the different channels that you can use to communicate innovation, what are the different avenues that you can use to deliver innovation.

You have corporate venture building, where you can create your own let’s call it startups, innovation initiatives. You have the corporate venture client, which is looking at the market out there, startups that are creating innovation and that you can onboard in your company and then work with them, have a commercial agreement, have a sort of M&A (mergers and acquisitions) process where you acquire them. And then you have the corporate venture capital, where you actually invest in these startups. You tend to see startups as an innovation source from the technology standpoint. They are bringing new technologies that you don’t have within your organization. But there is a side benefit of this, which is a time to market. Startups innovate faster than corporates, or at least they tend to. So by working with startups, you are communicating to your organization that you want to fail faster, you want to learn faster and you want to adopt new technologies faster. And I think that’s important even for everything else that you do within your organization because you start to bring the startup mindset to the way that you work. And I think that’s quite a powerful message inside an organization.

HANNAH LABELLE
How are you creating a culture of innovation? What are some of the key strategies or practices you use to do this effectively?

ANDRÉ GONÇALVES
I would say there are three key areas where we bet to develop this innovation culture. One is clearly understand what is innovation and how is that different from technologies, new products, everything related with product development. The other is to really understand who are our key stakeholders and nurture this relationship to them on a professional basis, on a personal basis, on understanding exactly their needs. And then the final one is to show business value of our work. And going to each one of these, and looking at the fact that innovation is not about technology. Technology is really an enabler for what we do, and it’s key for our job. Be it software, hardware, they are all a means to innovation, but they are not innovation. Experimentation is not innovation. It’s part of innovation, but it’s not innovation. Productizing is not innovation. We see a lot of organizations that look at innovation from a marketing perspective, or productizing something that already exists with new flavors. And what we really wanted to avoid is to fall in this trap of innovation tourism, or innovation theater, where in the end you really get bored because you are not creating any impact. 

HANNAH LABELLE
When it comes to stakeholders, you have a few groups to consider: You have business units that have their own customers; you have corporate business services like finance and IT; and then external partners, including startups, accelerators, venture capital funds and corporate partners. As your teams understand their needs and work with them to innovate, how are you showing these efforts are delivering real value? 

ANDRÉ GONÇALVES
Innovation teams don’t exist just to make great events, great hackathons, to make everyone feel good and happy. Innovation teams exist to actually challenge the status quo. And when we do that, we have to deliver value. So every time that we are looking at innovation projects, we are looking at ways to measure the work that we do. It’s always about how are we showing value. It can mean new revenues for the company, new efficiency opportunities. Every time we have a project finishing with an innovation, there is always an analysis on the value that we are generating. Not everything goes until the end. But the endgame of our innovation projects should be its adoption by our business units or even the creation of a new business unit. So going to the culture, all these pieces of the puzzle start to fit together, and you feel that you have a good culture innovation when you are actually able to promote all these inside your organization.

HANNAH LABELLE
How do you create a psychologically safe space so team members feel encouraged to embrace that “fail faster, learn and adapt” mindset? 

ANDRÉ GONÇALVES
I would say there are three or four things that we need to be aware of. One is the sense of belonging, the feeling that you are contributing to something. The other is the learning environment where your innovators can grow. And then the other is to create a de-risking process where there is space to test without the fear of being judged. That’s also where I think project management kicks in. If you have the de-risked process in a stage gate approach, you are telling your organization, “Yeah, there is this framework where you can innovate. You can take risks because at some point, there are triggers that if you’re taking too much of a risk or if it’s not going well, there is a way that we can help you either [by] killing the project or adjusting the project, changing it into a different scope.” I fully acknowledge that it’s not easy to create this space, and it differs a lot, a safe space inside an innovation team and a safe space inside a business team. The innovation teams are born to disrupt and to take risks. So they have this safe space by default. It’s much easier for them to feel the sense of belonging, the learning cycle, it’s already built for them. For the second type of teams, the business teams, it’s way harder. And the type of resources that you need to commit, it’s also way more time-consuming.

What we were doing with our teams was to introduce all these small changes step by step. My innovation team, we work a lot with the business units. Every now and then we have events, boot camps. If you expose them to innovation methodologies like design thinking, strategic foresight, lean startup, and you give them the opportunity to drive innovation themselves, they start to feel, as I was saying, this sense of belonging. They feel that they are learning. They are understanding these outside perspectives. They are leading their own initiatives. And all these combined, I think it helps a lot with creating these safe spaces for innovation.

HANNAH LABELLE
How have team members and leadership responded to the innovation culture you’re fostering? Did you have to build buy-in to get folks to accept more risk to get benefits like that faster-to-market speed? 

ANDRÉ GONÇALVES
Most companies that I have worked with have this innovation DNA and were always aware that innovation matters. So buy-in was there from day zero. In my case, it was a lot about keeping the buy-in. It’s about keeping this innovation momentum. It’s easy to make innovation become a second priority or third priority or a fifth priority. 

To secure this support of top management, there are two aspects that I believe are key: on one side, crafting a compelling vision for the future, and on the other side, mastering the execution process. By mastering this execution process, you are actually bringing the team members to respond positively to this culture of change. You create the buy-in from your top management, and you have your team members understanding, “Wait. There’s buy-in from top management. I have the space to do this. And we are aware that this has risks.”

The other thing is that you start as you against the world, but then you have one friend, one champion in a business unit. You bring a solution. This solution has a small pilot. It proves its value. Then you work with these teams to scale the solution. When everyone starts to see value, then it’s easier to have this cultural change. Of course, it takes time. Pilots take time. Rolling out these solutions and scaling them takes time. So you also need top management to understand that innovation requires a level of patience, a level of resiliency. So if you have resilient team members, if you have a resilient innovation team and if you have a board that understands that innovation takes time, I think those are the right ingredients to actually leverage innovation inside your organization.

Ways to create psychologically safe spaces for faster innovation

HANNAH LABELLE
Can you share an example of a pilot or innovation that benefitted one of your organizations? What was the project, and how did it improve outcomes, boost efficiency, things like that? 

ANDRÉ GONÇALVES
[A] few years ago, I worked in a Portuguese unicorn company, and they had this efficiency challenge about our financial process. So you need to process invoices. We wanted to have technology as an enabler to improve efficiency. And everyone was saying, “Look, there are no solutions out there that can solve this issue. We will need to do this manually for quite a long time. There is a Portuguese regulation that doesn’t allow you to do this.” We knew that, especially with the finance teams, we had to create the business case. So we start asking for data, like, “How long do you take to process those invoices manually? How many invoices are there? How does the system work?” And what everyone told us was, “We don’t have any data. There is no way we can find data to support that business case.”

So the first thing that we did was sit with the finance team for a week and see how the process is. I measured the time they would take to process the invoices, the time they would take to use the platforms. After that, I said, “Look, we are taking this amount of time. There is an opportunity there to improve the process.” We gathered a different team within the technology area and we told them, “Is there any technology out there that can help us with this?” And we did the benchmark. We find several companies that could help us doing this, and then what we did was, “Okay, let’s try to pilot this technology. Let’s do a short test and see if we can actually improve.” And within less than three months, we were able to map out the process. We were able to figure out how could we move this manual process to a technological-based process. And less than a year afterwards, we were implementing the technology at the group level.

Must-have skills for a culture of innovation

HANNAH LABELLE
Let’s wrap up with skills—say project professionals want to have this innovation mindset or they want to lead innovation-focused initiatives. What skills do project professionals or team members need to thrive in a culture of innovation?

ANDRÉ GONÇALVES
The ability to set up a vision. The resiliency to execute it. And then the power to build this narrative. And I think these are three vital skills if you want to thrive in an innovation culture. So you need to spend a lot of your time setting up this vision. This allows you to have this buy-in from your top management, from your peers, so understanding this vision, where you want to deliver innovation and this culture of innovation, it’s quite relevant. Then the resiliency to execute. It’s all about understanding business processes, understanding what are the bottlenecks that you have and how can you overcome those? And then, if you’re doing all these jobs but you are communicating it poorly, it’s quite hard to thrive in an innovation culture. Building these compelling narratives and understanding how are you telling the story. If you start small, try to understand the quick wins that you want to leverage, the low-hanging fruits that you have, then you build this vision. You master the execution, and then you communicate these for the broader organization.

And maybe on top of these I would add two things. One is to understand who are your champions internally. You need to understand who are the persons that help you when you are actually delivering innovation. And the other is a concept about the minimum viable ecosystem, which is how can you create the ecosystem with the minimum amount of players, of resources, of skills, that allows you to have a good collaboration. And this minimum viable ecosystem, as you start to execute it, it gets broader and broader, and you start to add in other players, you start to expand your ecosystem. But instead of trying to build everything from scratch, try to understand the same way that we do with technology with the minimum viable product—in innovation, you need to try to understand what’s your minimum viable ecosystem, and then you build from there.

STEVE HENDERSHOT
Thanks for listening to Projectified. Like what you heard? Subscribe to the show on your favorite podcast platform and leave us a rating or review. Your feedback matters a lot—it helps us get the support we need to continue making this show. And be sure to visit us online at PMI.org/podcast, where you’ll find the full transcripts for episodes as well as links to related content like useful tools and templates, the latest research reports, and more. Catch you next time!