Rutgers University – April 9, 2008
Everyone’s Business:
From Innovation
to
Project Management
Aaron J. Shenhar
Stevens Institute of Technology
ashenhar@stevens.edu
201-323-3246
Copyright Aaron J. Shenhar, 2008
Copyright Aaron J. Shenhar, 2008
The Increasing Share of Projects
Projects
Operations
Time
1800s
1900s
2000s
Agricultural
society
Industrial
society
Information
society
Copyright Aaron J. Shenhar, 2008
Industries,
Companies,
Society
Innovation
Copyright Aaron J. Shenhar, 2008
Project
Outline






Introduction
What is Innovation
Connecting Innovation to Projects
The Adaptive and Flexible Approach
The Strategic Approach
Summary
Copyright Aaron J. Shenhar, 2008
What is Innovation?

Is it an Idea?

Is it Something New?

It is a Commercialization of an Idea
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
Copyright Aaron J. Shenhar, 2008
Managing the Innovation
Process
Idea
Copyright Aaron J. Shenhar, 2008
Commercialization
Innovation as a Screening Process
#
100
80
Screening
20
Development
6
Production
3
1
Introduction
Success
Time
Copyright Aaron J. Shenhar, 2008
Copyright Aaron J. Shenhar, 2008
Innovation
A 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.
Copyright Aaron J. Shenhar, 2008
The Innovation Process
Market
Idea
Generation
Idea
Testing
Preparing
Proposal
Approval
Championing
Formality
Technology
Copyright Aaron J. Shenhar, 2008
Project
Management
Basic Question
How do you manage
different types of
innovation?
It’s all in the Project
Copyright Aaron J. Shenhar, 2008
Examples

Denver Airport

Segway

Airbus A380, Boeing 787
Copyright Aaron J. Shenhar, 2008
Project Management The Two + One Processes
Product Definition Process
Managerial Process
Technical Process
When are you shooting?
Copyright Aaron J. Shenhar, 2008
Classical Project Phases
Definition
Planning
Revise Plans
Revise Definition
Copyright Aaron J. Shenhar, 2008
Execution
Termination
The Project Diamond
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
Project Type Impact
on Project Management
Technology
Design and development.
Later design freeze
System engineering.
System integration
Novelty
Formality
Complexity
Less market data.
Later requirement freeze
Autonomy
Pace
Copyright Aaron J. Shenhar, 2008
Denver International Airport Project
Technology
Super-High
Tech
Automatic Bag –
Handling System
High-Tech
Medium-Tech
Array
System
Assembly
Low-Tech
Novelty
Derivative Platform Breakthrough
Complexity
Regular
Airport
Construction
Project
Fast/
Competitive
Time-Critical
Blitz
Pace
Copyright Aaron J. Shenhar, 2008
Technology
Super-High
Tech
High-Tech
Medium-Tech
Low-Tech
Array
System
Novelty
Assembly
Derivative Platform Breakthrough
Complexity
Regular
Fast/
Competitive
Required style
Time-Critical
Dr = (Br, HT, Sy, -)
Da = (Pl, HT, Sy, -)
Actual style
Blitz
Pace
Figure 4-2 The Segway Project
Copyright Aaron J. Shenhar, 2008
Stevens Replaces Traditional Project Management with
An Adaptive and Strategic Approach
Company Strategy
1
2
Strategy
3
Technology
Spirit
Processes
Time
Performance
Traditional PM
Copyright Aaron J. Shenhar, 2008
Tools
Complexity
Novelty
Pace
Budget
Organization
Adaptive Approach
Strategic Approach
The Project Manager’s Assets

Project Requirements


Commitments






- Contract, Milestones, SOW, Payments, Ts &Cs
Resources


- System requirements - Operational, Functional, Specifications
- Budget, Personnel, Equipment
Strategy
Spirit
Organization
Processes
Tools
Copyright Aaron J. Shenhar, 2008
Project Strategy The Missing Link
Strategy Is not the Plan - It is what drives the plan.
Business Strategy
The Missing
Link
Project Strategy
Project Plan
Project Strategy:
Implementation
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.
Copyright Aaron J. Shenhar, 2008
Outline






Introduction
What is Innovation
Connecting Innovation to Projects
The Adaptive and Flexible Approach
The Strategic Approach
Summary
Copyright Aaron J. Shenhar, 2008
New Book
Reinventing Project
Management:
The Diamond Approach to Successful
Growth and Innovation
Aaron J. Shenhar and Dov Dvir
Harvard Business School Press
August 2007
Copyright Aaron J. Shenhar, 2008
Entire Adaptive Iterative Approach
Freeze Requirements
Requirements
Planning
Freeze Design
Design &
Build
Specs
Test
Complete
Revise Design
Revise Plans
Revise Requirements
Adaptive Approach
Copyright Aaron J. Shenhar, 2008
Traditional PM
What Impacts Project Type?
Environment
Product
Project
UCP
Task
NTCP
Technology
Complexity
Novelty
Pace
Copyright Aaron J. Shenhar, 2008
“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
Copyright Aaron J. Shenhar, 2008
Definitions and Examples
Technology
Technology
A Type - Low-Tech
Complexity
- No new technology – Construction, Roadwork, “Build to Print”
B Type - Medium Tech
- Some new technology – Automobiles, Appliances
C Type - High-Tech
- All new, but existing technologies – Computers, Telecommunication, Defense
D 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 player
System - A collection of elements
Wing
and subsystems performing a complex
set of functions – Automobile, Aircraft, Building
Array - A widely dispersed collection
of systems with a common mission – Air Traffic Control, City, Internet
Copyright Aaron J. Shenhar, 2008
Novelty
Pace
Air fleet
Aircraft
Monitor
The Pace Dimension:
Available Timeframe
Technology
Pace
Complexity
Novelty
Regular
Fast/Competitive
Pace
Regular -
A clear timeframe,
delays not critical
(Public, Govt., Internal)
Fast/Competitive
Time to market is
a competitive advantage
Time-Critical
Blitz
Pace
Time-Critical
Completion time is critical to success
(Window of opportunity – Y2K, Space)
Blitz
Crisis project
(War, natural disaster, Industrial crisis)
Copyright Aaron J. Shenhar, 2008
The Impact of Technology on Risk and Design
Resources
D
C
A- Low-Tech
B- Medium-Tech
C- High-Tech
D- Super High-Tech
B
D: N+3
Planned
Resources
Legend:
A
B: 1-2 – Number of
Design Cycles
C: 2-3
N – No. of cycles
required to choose
the final
technologies
B: 1-2
A: 1
Time
Project
Initiation
Project Scheduled
Completion
Possible time ranges for design freeze, number of design cycles,
and risk areas for project outcomes
Copyright Aaron J. Shenhar, 2008
Possible time
Ranges for
design freeze
Risk Areas
The Space Shuttle Program
Technology
Super-High
Tech
High-Tech
Medium-Tech
Array
System
Assembly
Low-Tech
Novelty
Derivative Platform Breakthrough
Complexity
Regular
Fast/
Competitive
Dr = (Br, SHT, Sy, Re)
Da = (Pl, HT, Sy, FC)
Required style
Actual style
Time-Critical
Blitz
Pace
Copyright Aaron J. Shenhar, 2008
Innovation Categories and Project Types
Technology
Radical
Technological
Innovation
Super-High
Tech
High-Tech
Incremental
Technological
Innovation
Medium-Tech
Incremental
Market
Innovation
Low-Tech
Array
System
Novelty
Assembly
Derivative Platform Breakthrough
Complexity
Regular
Architectural
Innovation
Modular
Innovation
Fast/
Competitive
Radical
Market
Innovation
Time-Critical
Blitz
Copyright Aaron J. Shenhar, 2008
Pace
Product Performance
The Innovator’s Dilemma
and Project Management
Manage by
Breakthrough
Projects
Manage by
Platform
Projects
Time
Copyright Aaron J. Shenhar, 2008
The Customer Adoption Cycle
and Project Management
Novelty
Breakthrough
Platform
Derivative
Platform
Derivative
Technology
Medium to
Super-High-Tech
MediumTech
MediumTech
Medium to
Low-Tech
Goal
Strategic
Strategic
Operational
Operational
Copyright Aaron J. Shenhar, 2008
A Framework for
Strategic Project Leadership®
Strategy
Competitive Advantage
Business Success Goals
Strategic Focus
Spirit
Vision
Culture
Values
Fun
Processes
Planning
Monitoring
Controlling
Copyright Aaron J. Shenhar, 2008
Organization
Structure
Teams
People
Tools
Schedule
Budget
Documentation
Strategy Components
Project
Business Perspective
Product
Objective
Product Definition
Competitive Advantage/Value
Why would the
customer buy?
Success and Failure Criteria
Project Definition
Strategic Focus
Copyright Aaron J. Shenhar, 2008
Copyright Aaron J. Shenhar 2005
SPL Project Integrated Planning

Project Charter
» By Business to Project Team – Jointly Written
» Need, Product, Project, Business Perspective
Project
Charter
» Responsibility, Authority

Project Initiation Document
» By Project Team to Business – Jointly Written
Project
Initiation
Document
» Strategy, Spirit, Organization, Processes, Tools
» SPL Hierarchical Plan – SPL Matrix

Project Traditional Plans
Project
Plans
» Scope, WBS, Authority, Schedule, Budget, Risk, etc.
Copyright Aaron J. Shenhar, 2008
Why?
The Seven Parts of Project Strategy
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
Copyright Aaron J. Shenhar, 2008