From Innovation to P..

Copyright Aaron J. Shenhar, 2008

Everyone’s Business:

From Innovation to

Project Management

Aaron J. ShenharStevens Institute of Technology

[email protected]

Rutgers University – April 9, 2008


Operations

Projects

1800s

Agricultural society

1900s

Industrial society

2000s

Information society

Time Industries,Companies,Society

The Increasing Share of Projects


Outline

Introduction What is Innovation Connecting Innovation to Projects The Adaptive and Flexible Approach The Strategic Approach Summary


What is Innovation?

Is it an Idea?

Is it Something New?

It is a Commercialization of an Idea


Innovation

Basic distinction between» Discovery, Invention, Innovation

Types of Innovation:

» Incremental, Radical, System» In Market, In Technology» Product, Process, Service» Customer Adoption Cycle, Innovator’s Dilemma

Sources of Innovation:» Market pull, Technology push» Jointly driven


Managing the Innovation Process

Idea Commercialization


Innovation as a Screening Process

#

100

13

6

20

80 Screening

Development

ProductionIntroduction

Success

Time


InnovationA Series of Connections

The process of innovation involves a series of connections between problems and solutions.

Ignited and energized by technology, but driven by needs and opportunities.

In its natural state, the connections are random. The process can be “managed” by increasing the

number of connections and selectively reinforcing those of most value.


The Innovation Process

IdeaGeneration

IdeaTesting

PreparingProposal

ApprovalProject

Management

Formality

Market

Technology

Championing


Basic Question

How do you manage different types of

innovation?

It’s all in the Project


Examples

Denver Airport

Segway

Airbus A380, Boeing 787


Project Management - The Two + One Processes

When are you shooting?

Technical Process

Product Definition Process

Managerial Process


Definition Planning Execution Termination

Revise Definition

Revise Plans

Classical Project Phases


The Project Diamond


Four Dimensions for Distinction Among Project Types

Novelty – How new is the product to customers and users» Derivative, Platform, Breakthrough

Technology – How much new technology is used» Low-tech, Medium-tech, High-tech, Super High-tech

Complexity – How complex is the system and its subsystems» Assembly, System, Array

Pace – How Critical is the Time frame» Regular, Fast/Competitive, Time-Critical, Blitz


Project Type Impact on Project Management

Novelty

Complexity

Technology

Pace

Design and development. Later design freeze

Formality

Autonomy

Less market data.Later requirement freeze

System engineering.System integration


Array System Assembly

Complexity

Novelty

Technology

Pace

Derivative Platform Breakthrough

Super-High Tech

High-Tech

Medium-Tech

Low-Tech

Regular

Fast/ Competitive

Time-Critical

Blitz

Denver International Airport Project

Automatic Bag –Handling System

Airport Construction

Project


Figure 4-2 The Segway Project


Complexity

Novelty

Technology

Pace


Super-High Tech

High-Tech

Medium-Tech

Low-Tech

Regular

Fast/ Competitive

Time-Critical

Blitz

Dr = (Br, HT, Sy, -)Da = (Pl, HT, Sy, -)

Required style

Actual style


Stevens Replaces Traditional Project Management with

An Adaptive and Strategic Approach

Budget

Time

Performance

Strategy

ToolsProcesses

Spirit Organization

NoveltyComplexity

Technology

Pace

Traditional PM

Adaptive Approach

Strategic Approach

Company Strategy

1 2 3


The Project Manager’s Assets

Project Requirements - System requirements - Operational, Functional, Specifications

Commitments - Contract, Milestones, SOW, Payments, Ts &Cs

Resources - Budget, Personnel, Equipment

Strategy Spirit Organization Processes Tools


Project Strategy The Missing Link

Project StrategyProject Strategy

ImplementationImplementation

Project PlanProject Plan

Business StrategyBusiness Strategy

The Missing Link

The Missing Link

Project Strategy:

What to do and How to do it - to achieve the highest Competitive Advantage and the best Value from the project

Strategy is the way chosen to win with the project.

Strategy Is not the Plan - It is what drives the plan.


Outline

Introduction What is Innovation Connecting Innovation to Projects The Adaptive and Flexible Approach The Strategic Approach Summary


Reinventing Project Management:

The Diamond Approach to Successful Growth and Innovation

Aaron J. Shenhar and Dov Dvir

Harvard Business School Press

August 2007

New Book


Requirements Planning Complete

Revise Requirements

Revise Plans

Entire Adaptive Iterative Approach

SpecsDesign &

BuildTest

Revise Design

Freeze Requirements Freeze Design

Adaptive Approach Traditional PM


What Impacts Project Type?

EnvironmentProduct

Task

Project

UCP NTCP

Novelty

Pace

Complexity

Technology


“New to the World” Products

Markets that don’t exist cannot be analyzed Business plans are typically wrong

» Define a range of outcomes and keep updating

Flexible product development» Fast prototyping, obtain market feedback ASAP» Accept many changes, Freeze requirements late

Strive for market share, not financial goals Invest aggressively in marketing If no market share after 4-6 years, pull out


Technology

A Type - Low-Tech - No new technology – Construction, Roadwork, “Build to Print”B Type - Medium Tech - Some new technology – Automobiles, AppliancesC Type - High-Tech - All new, but existing technologies – Computers, Telecommunication, DefenseD Type - Super High Tech - Non-existing technologies – Moon landing, SDI

Complexity

Assembly - A subsystem, a stand-alone product performing a simple function – Power Supply, CD playerSystem - A collection of elements and subsystems performing a complex set of functions – Automobile, Aircraft, BuildingArray - A widely dispersed collection of systems with a common mission – Air Traffic Control, City, Internet

Definitions and Examples

Air fleet

Aircraft

Wing Monitor

Novelty

Pace

Complexity

Technology


The Pace Dimension:Available Timeframe

Pace

Regular

Fast/Competitive

Pace

Regular -A clear timeframe, delays not critical(Public, Govt., Internal)

Fast/CompetitiveTime to market is a competitive advantage

Time-CriticalCompletion time is critical to success(Window of opportunity – Y2K, Space)

BlitzCrisis project(War, natural disaster, Industrial crisis)

Time-Critical

Blitz

Novelty

Pace

Complexity

Technology


A: 1

B: 1-2

C: 2-3

D: N+3

DC

BA

Project ScheduledCompletion

ProjectInitiation

Resources

Time

Planned Resources

Possible time Ranges for design freeze

Risk AreasPossible time ranges for design freeze, number of design cycles ,

and risk areas for project outcomes

Legend:

A- Low-TechB- Medium-TechC- High-TechD- Super High-Tech

B: 1-2 – Number of Design Cycles

N – No. of cycles required to choose

the final technologies

The Impact of Technology on Risk and Design


The Space Shuttle Program


Complexity

Novelty

Technology

Pace


Super-High Tech

High-Tech

Medium-Tech

Low-Tech

Regular

Fast/ Competitive

Time-Critical

Blitz

Required style

Actual style

Dr = (Br, SHT, Sy, Re)Da = (Pl, HT, Sy, FC)


Innovation Categories and Project Types

IncrementalMarket Innovation

IncrementalTechnological Innovation

RadicalTechnological Innovation

Modular Innovation

Architectural Innovation


Complexity

Novelty

Technology

Pace


Super-High Tech

High-Tech

Medium-Tech

Low-Tech

Regular

Fast/ Competitive

Time-Critical

Blitz

RadicalMarket Innovation


Time

Pro

du

ct P

erfo

rman

ce

Low-end demand

High-end demand

Sustaining

progress

Disruptiv

e progre

ss

Manage by Platform Projects

Manage by Breakthrough Projects

The Innovator’s Dilemma and Project Management


Novelty Breakthrough Platform Derivative Derivative Platform

Technology Medium to Medium- Medium- Medium to Super-High-Tech Tech Tech Low-Tech

Goal Strategic Strategic Operational Operational

The Customer Adoption Cycle and Project Management


A Framework for

Strategic Project Leadership®

SpiritVisionCultureValuesFun

StrategyCompetitive AdvantageBusiness Success GoalsStrategic Focus

OrganizationStructureTeamsPeople

ProcessesPlanning MonitoringControlling

Tools Schedule Budget Documentation


Strategy Components

ObjectiveObjective

Strategic FocusStrategic Focus

Project DefinitionProject Definition

Project

Product

Success and Failure CriteriaSuccess and Failure Criteria

Product Definition Product Definition

Competitive Advantage/ValueCompetitive Advantage/Value

Why would the customer buy?

Business PerspectiveBusiness Perspective

Copyright Aaron J. Shenhar 2005

Why? W

hat?

How?


Project Charter» By Business to Project Team – Jointly Written

» Need, Product, Project, Business Perspective

» Responsibility, Authority

Project Initiation Document» By Project Team to Business – Jointly Written

» Strategy, Spirit, Organization, Processes, Tools

» SPL Hierarchical Plan – SPL Matrix

Project Traditional Plans» Scope, WBS, Authority, Schedule, Budget, Risk, etc.

ProjectCharter

Project Initiation Document

Project Plans

SPL Project Integrated Planning


Project Strategy

Elements

Question Details

Business Perspective Why do we do it? Customer/User, Need

How to address the need?

Business opportunity

Objective What do we want to achieve? What is the Business Objective?

Product What is produced? Product definition

Functional requirements

Technical specifications

Competitive Advantage/Value How good is it?

Why is it better?

Why will they buy it?

Advantage over: competitors, previous products, alternatives.

Product cost/effectiveness

How would we benefit?

Success and Failure Criteria What to expect?

How to assess success?

Success dimensions

Business plan

Project Definition How do we do it?

What is the project?

Project scope, Deliverables

Project type

Resources – time, $, PM, Team

Strategic Focus How to behave for the best CA/V

Relentless pursuit of CA/V

Guidelines for behavior

Policy on leveraging: Competencies, expertise, synergy, alliances

The Seven Parts of Project Strategy

Why?

From Innovation to P..

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