Innovate through project management

posted in: Management | 2

‘Project management’ should be an opportunity to innovate, but this requires managers to loosen the reins. Smaller exploratory projects can advance strategic initiatives through a more flexible, seemingly ‘out-of-control’ approach.

Business team analyzing a financial report.

Companies, consultants and business schools alike tend to rely on the term “project management” to describe oversight of a particular initiative, task or process modification that has never done before (at least not in just this way, which means it lies outside the organisation’s current procedures). Viewed in this way, projects should be an institutional way to make innovations, or renewal, happen.

But that’s not how most companies use projects – and as a result, they are missing big opportunities for innovation.

Instead, firms use projects as execution devices to do something just a tiny bit outside of what they are doing now. They analyse and plan so tightly at the outset so managers can demand delivery of the result, on budget and on schedule (because “we need people in this company who deliver!”). Used in this way, projects become execution devices rather than innovation enablers.

In an organisation with such a project philosophy, innovation either does not happen – the innovative project looks too wild, too unpredictable, and without the desired guarantees – and this violates one of the deep managerial cravings, namely control. So the innovative project does not go ahead.

Or, the project does happen (possibly because some of the wildness was “played down” in the approval process), and then all hell breaks loose: “You promised this, and now what happened is that!” The project does not conform to the milestone delivery and control protocols, looks out of control, and is stopped (and the people involved punished). I have seen this happen many times: the reasons are not necessarily that the projects are bad, but rather that the organisation misinterprets project novelty (or innovativeness) and applies planning and control protocols that are too rigid.

Of course, the opposite happens too: in large scale projects where billions are at stake and thousands of activities form a complex web, new and untested elements are introduced, and then some of the new elements go wrong and the resulting changes ripple like a spreading disease throughout the entire complex undertaking. For example, new trains in London’s Crossrail project had not been reconciled with signalling technology, which quickly turned this huge project from a media darling into a public relations nightmare that claimed the CEO’s head. It is these horror stories that make managers recoil when they see new elements in projects.

However, this is the wrong conclusion. If you want to use projects to their full potential as a weapon to foster innovation, you need to set them up differently: as small, exploratory projects (that’s the label that is now emerging) that are proceeding experimentally, with parallel trials of alternatives (to get results fast) and a series of experimentations that are measured not in “progress milestones” but by “learning what robustly works (or not)”.

These projects also must be managed in a different way, because learning outcomes require different actions and need to be evaluated differently from traditional “progress” (meeting planned outcomes). This is hard, because the supervising management needs to learn how to “give up control”: the learning outcomes may be different than what was predicted, and in some organisations this is simply intolerable and will over time wither away.

Yet creating this capability may well be worth a lot for your organisation, in strategic capability of creating new opportunities. It does not even require huge amounts of money: exploratory projects can be kept small and, when enough has been learned that a scale-up can be robustly planned, traditional project management can come to the fore. But it requires a culture change of allowing strategic initiatives to go ahead with a more flexible, seemingly “out-of-control” approach.

The ideas in this blog are explored in an article co-authored by Christoph Loch – “The Tension Between Flexible Goals and Managerial Control in Exploratory Projects” – forthcoming in the Project Management Journal.

2 Responses

  1. Stuart Heyworth

    This resonates well with anyone that has anything to do with project management, particularly in a large organisation.

    Two enablers can possibly be addressed to support innovation in the environments you mention:
    1) Top-down buy-in: Often those in the trenches see see the need for the ‘out of control’ approach but this needs buy in right from the top where KPIs and incentives are based on the “controlled” approach. The sentiment is there for the cultural change you speak of but needs endorsement from executive leadership.
    2) Balance of control: By providing some level of assurance to executive leaders that key outcomes are not being breached (e.g., financials, security), executive leaders can rest easy that their ‘out of control’ projects are actually within tolerance and this should avoid further controlling and limiting measures interfering with the innovation.

  2. Imtiyaz Rahaman

    Great points by CL and SH’s feedback. Some points that came up in convo this week:
    – is there enough visibility at senior level or are they ‘protected’ by a levels of management from understanding the ‘gemba’/ shopfloor?
    – are the right incentives and controls in place to encourage (the right sort of) risk taking
    – is enough capacity (made) available within project and client teams to invest in co-learning and co-creation

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