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.

HAROLD KERZNER, PhD is Senior Executive Director for Project Management at the International Institute for Learning (IIL), a global learning solutions company offering professional training and consulting services worldwide. Dr. Kerzner's profound effect on the project management industry inspired IIL to establish the Kerzner International Project Manager of the Year Award, which is presented to a distinguished PMP^® credential holder or global equivalent each year. He is author of several respected books on project management, including Project Management: A Systems Approach to Planning, Scheduling, and Controlling and Project Management Best Practices: Achieving Global Excellence.

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

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Innovation Project Management Methods, Case Studies, and Tools for Managing Innovation Projects

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