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Copyright Aaron J. Shenhar, 2008
Everyone’s Business:
From Innovation to
Project Management
Aaron J. ShenharStevens Institute of Technology
ashenhar@stevens.edu201-323-3246
Rutgers University – April 9, 2008
Copyright Aaron J. Shenhar, 2008
Copyright Aaron J. Shenhar, 2008
Operations
Projects
1800s
Agricultural society
1900s
Industrial society
2000s
Information society
Time Industries,Companies,Society
The Increasing Share of Projects
Copyright Aaron J. Shenhar, 2008
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
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 Commercialization
Copyright Aaron J. Shenhar, 2008
Innovation as a Screening Process
#
100
13
6
20
80 Screening
Development
ProductionIntroduction
Success
Time
Copyright Aaron J. Shenhar, 2008
Copyright Aaron J. Shenhar, 2008
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.
Copyright Aaron J. Shenhar, 2008
The Innovation Process
IdeaGeneration
IdeaTesting
PreparingProposal
ApprovalProject
Management
Formality
Market
Technology
Championing
Copyright Aaron J. Shenhar, 2008
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
When are you shooting?
Technical Process
Product Definition Process
Managerial Process
Copyright Aaron J. Shenhar, 2008
Definition Planning Execution Termination
Revise Definition
Revise Plans
Classical Project Phases
Copyright Aaron J. Shenhar, 2008
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
Novelty
Complexity
Technology
Pace
Design and development. Later design freeze
Formality
Autonomy
Less market data.Later requirement freeze
System engineering.System integration
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
Figure 4-2 The Segway Project
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
Dr = (Br, HT, Sy, -)Da = (Pl, HT, Sy, -)
Required style
Actual style
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
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.
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
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
Copyright Aaron J. Shenhar, 2008
Requirements Planning Complete
Revise Requirements
Revise Plans
Entire Adaptive Iterative Approach
SpecsDesign &
BuildTest
Revise Design
Freeze Requirements Freeze Design
Adaptive Approach Traditional PM
Copyright Aaron J. Shenhar, 2008
What Impacts Project Type?
EnvironmentProduct
Task
Project
UCP NTCP
Novelty
Pace
Complexity
Technology
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
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
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
The Space Shuttle Program
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
Required style
Actual style
Dr = (Br, SHT, Sy, Re)Da = (Pl, HT, Sy, FC)
Copyright Aaron J. Shenhar, 2008
Innovation Categories and Project Types
IncrementalMarket Innovation
IncrementalTechnological Innovation
RadicalTechnological Innovation
Modular Innovation
Architectural Innovation
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
RadicalMarket Innovation
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
A Framework for
Strategic Project Leadership®
SpiritVisionCultureValuesFun
StrategyCompetitive AdvantageBusiness Success GoalsStrategic Focus
OrganizationStructureTeamsPeople
ProcessesPlanning MonitoringControlling
Tools Schedule Budget Documentation
Copyright Aaron J. Shenhar, 2008
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?
Copyright Aaron J. Shenhar, 2008
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
Copyright Aaron J. Shenhar, 2008
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?