Aspects of the Future of Innovative Projects Management

Russell D. Archibald, PhD (Hon), MSc, Fellow PMI, Honorary Fellow APM, PMP

Abstract

This paper proposes a working definition of 'innovative projects' and describes the

differences between these efforts and those projects that do not fall within this

definition. The impact is discussed of these differences on the planning, scheduling, risk

assessment, monitoring and controlling methods used to manage these different classes

of projects and programs, and the reasons that it is important to recognize these

differences within specific organizations are stated. Several recommendations and

conclusions based on these factors are then presented, and a challenge to the Conference

participants is presented regarding the future of innovative projects management.The

paper deals with efforts that convert innovative ideas into reality but does not explore

the sources of those innovative ideas. (The author gratefully acknowledges the

important comments provided by Stanslav Gasik on an earlier draft of this paper.)

Innovative Projects and Programs

Some people might argue that all projects and programs are “innovative”, since one

generally accepted definition of a project is “a temporary endeavor undertaken to create

a unique product service, or result” (PMI 2008 p. 442.) Programs are “a group of related

projects” (Ibid), but in recent years the concept of strategic transformational programs

includes both projects and operations within their scope.

Innovation is an important topic in economics, business, entrepreneurship,

design, technology, sociology, engineering – and project management. “Innovation” is

used to refer to both a process and the output or product of a process. Since a project is

an integrated collection of processes, an “innovative project” can earn that title by using

innovative processes and also by creating an innovative product or result.

The word “innovative” indicates newness or change that produces improvement

in either the process or the result. However, not every small change or improvement

deserves the label of “innovative.” The challenge here is to identify an improvement

1

that is sufficiently important to be able to say that it is truly innovative. It is often stated

that “beauty is in the eye of the beholder,” and I believe that the same principle applies

here. A project (or program) can be labeled “innovative” when either 1) the

internal processes being used in its creation and execution, or 2) the result that is

produced, comprise significant changes and improvements compared to previous

processes or results.

This working definition of an innovative project or program focuses obviously

on the meaning of the word “significant.” One definition of significant is “having

meaning or effect,” and the best way to determine if a project is innovative is to

determine if the change it includes will have an effect on others. Will other project

managers adopt the new process? Will the improved results find more buyers or users?

Will the process or product improvements be adopted and used for future projects or

products?

Innovative Strategic Transformative versus Routine Programs and

Projects

It is necessary to recognize the differences between:

1. Innovative strategic transformative programs and projects that are intended to

produce significant changes and improvements in the organization, its processes,

or its products and services, including significant changes required by new laws

or regulations, and

2. Routine “delivery”, “commercial”, or “incremental process, service, or product

improvement” programs and projects that generate income and profit, reduce

cost, otherwise incrementally improve the services or products provided to the

enterprise‟s customers or constituents, within the enterprise‟s established

strategic vision and objectives, without creating significant changes within or for

the enterprise itself.

Pfeiffer (2004) describes an interesting approach to differentiating between what he

calls „deployment‟ and „development‟ projects. Table 1 shows his comparison of these

two project types.

2

Basic Differences of Project Types

Deployment Project Development Project

Civil construction.

Installation of a system.

Development of new products.

Organization of social change.

Advance measured by products.

“Final Product” relatively clear.

Advance aimed at reducing uncertainties, measured

by indicators.

Life Cycle generally in form of cascade. Various life cycles possible.

Leadership style based on command and control. Leadership style focused on learning.

Highly structured information system. Less formal communication system.

Task oriented organization of Human Resources. Human Resources need to adapt and evolve in

order to respond to changes.

Progress relatively linear. Processes very dynamic.

Table 1. Basic Differences of Project Types. Source: Pfeiffer 2004, p 5.

Innovative strategic transformative programs: While the early definition of a

program as “consisting of a group of related projects” is still widely used in many

industries and governmental agencies, in recent years many authorities observe that

program management has evolved in many organizations to encompass a broader range

of activities with broader objectives. The PMI PMBOK (2008, p. 442) presents these

definitions:

“Program: A group of related projects managed in a coordinated way to obtain

benefits and control not available from managing them separately. Programs

may include elements of related work outside the scope of the discrete projects

in a program.”

“Program Management: The centralized coordinated management of a

program to achieve the program‟s strategic objectives and benefits.”

It is necessary to be clear when using these terms to know whether one is referring to

the more traditional (going back to the 1960s) meaning of “program” (as a group of

related projects) and “program management” and the newer, broader understanding that

a program can include both projects and operations, and rather than simply delivering

the benefits of a group of projects, a program can be innovative, strategic, and

transformative in nature. To assure clarity I prefer to use the term innovative strategic

transformative program to refer to such efforts. This valid, new definition shows us

that a strategic transformative program is truly an enterprise within the parent

enterprise, whereas a project, with its limited scope, time, and well-defined objectives

3

and deliverables, is just that: a project. There can of course be large, major projects – in

addition to strategic programs – that are truly strategic and transformational in nature.

Several delivery projects grouped together do not usually make a strategic program, in

this latest understanding of what an enterprise-changing program is.

Many enterprises continue to use the earlier “traditional” definition of a

program, if that suits the situation within their enterprise. For example, an

engineering/construction company may have a contract consisting of 12 projects to

design, construct, and install fixed equipment in as many retail strip malls for one of its

major customers, a land/real estate development company. The seller of these 12

projects will probably not consider this to be a strategic program, but rather just another

commercial (or delivery) program (or perhaps a portfolio of projects) that is part of their

on-going business in compliance with their established business strategies. This contract

will not change the engineering/construction company in any significant way, since they

have designed and built many such shopping malls, although they may have to add

skilled people to their staff to execute this program. The company may consider the

buyer of these facilities to be one of their strategic clients, however, from a business

point of view. The customer, on the other hand, may consider this contract to be part of

an important strategic transformative program within their organization, as it probably

will require substantial changes within its on-going operational departments, especially,

for example, if these malls are located in a new geographic area in which the company

has not previously operated.

Innovative Process Improvement Projects

Is it possible and desirable to identify innovative projects prior to their completion? I

believe it is. If a project is truly innovative then it will involve significant changes, and

we can expect to encounter significant barriers to those changes. The purpose of

identifying the innovations is to anticipate those barriers and include in the project

methods for overcoming them.

Since there are two classes of innovative projects – process improvement and

product/result improvement – let us look at each of these separately. There are major

four areas in which project management process improvements can be carried out:

4

1. Strategic project and program portfolio management,

2. Management development and training,

3. Organization of responsibilities, and

4. Integrative systems, tools, methods, and procedures. (Archibald, 2003, pp. 70-

72.)

Innovation and improvements can be applied or tested using innovative projects in all

four of these areas. It is usually recommended that major innovations in all of these

areas be tested using a pilot (innovative, if the improvements are „significant‟) project to

discover any unforeseen difficulties and prove out the expected benefits from the

innovations. Of course the entire enterprise – and not only the project management

discipline – provides opportunities for innovative process improvement in how the

enterprise conducts its business.

How to create an innovative project for process improvement? Let‟s use the

project life cycle management system/PLCMS as an example. The following approach

to introduce innovative improvements in this system is recommended (Archibald 2003,

pp. 73-5.).

Document the PLCMS for each project category: Once the life cycle process has

been designed and documented for each category or subcategory of projects (Table 2) it

is then possible to define and document the project life cycle management system for

each project category. Only when such documentation exists can the system be

improved on a systematic basis.

To establish a total quality management and innovative approach using systems

thinking to an organization‟s project management capabilities, and to avoid sub-optimal

improvements being introduced on a disjointed, piece-meal basis:

1. Document and describe the Project Life Cycle Management System

(PLCMS) for each project category within the organization. (For further

discussion of project categorization go to http://russarchibald.com/recent-papers-

presentations/categorizing-projects/.)

2. Define the life cycle phases for the project category.

5

3. Identify the gates or decision/approval points between the life cycle phases.

4. Describe and define the process flow within each project phase and identify the

intermediate and final deliverables for each phase.

5. Identify and inter-relate the existing risk analysis, planning and control

processes and related documents and approvals within each phase. Use the

„storyboard‟ approach shown in Figure 1.

Re-Engineer the Integrated Process:

6. Apply appropriate re-engineering methods to each category’s PLCMS to:

a. Identify system constraints, gaps and weaknesses.

b. Relate the undesirable project results and possible causes to the PLCMS

wherever possible.

c. Redesign the PLCMS beginning with the most obvious constraints, gaps

and weaknesses and document the results.

7. Obtain needed agreements and conduct appropriate tests or analyses to prove out

the validity and feasibility of the proposed system revisions.

8. Plan, approve and execute the innovative improvement project to implement the

revised PLCMS after successful pilot testing.

9. Repeat the steps as required until an optimum achievable PLCMS has been

implemented.

6

Project Categories: Each having similar life cycle phases and one unique

project management process

Examples

1. Administrative and Organizational Change

Projects

Re-engineered administrative process.

Office relocation.

2. Aerospace/Defense Projects

2.1 Systems acquisition

2.2 Space vehicle

2.3 Nuclear Non-Proliferation

New weapon system.

Major system upgrade.

Satellite development and launch.

Space station modification.

Nuclear weapons control and disposition

Global Threat Reduction Initiative (GTRI)

3. Communication Systems Projects New wired voice/data system.

4th generation wireless communication system.

4. Event Projects 2014 Winter Olympics Sochi

2016 Summer Olympics Rio de Janeiro

5. Facilities Projects

5.1 Facility decommissioning

5.2 Facility demolition

5.3 Facility maintenance and modification

5.4 Facility design/procurement/construction

Civil

Environmental

Industrial

Commercial

Residential

Closure of nuclear power station.

Demolition of high rise building.

Process plant maintenance turnaround.

Flood control dam, road interchange.

Nuclear production facilities cleanup..

New gas-fired power generation plant.

New shopping center, office building.

New sub-division development.

6. Information Systems (Software) Projects New project management information system.

(Information system hardware is considered to be

in the product development category.)

7. International Development Projects 7.1 Agriculture/rural development

7.2 Education

7.3 Health

7.4 Nutrition

7.5 Population

7.6 Small-scale enterprise

7.7 Infrastructure: energy (oil, gas, coal, power

generation and distribution), industrial,

telecommunications, transportation, urbanization,

water supply and sewage, irrigation)

People and process intensive projects

in developing countries funded by The World

Bank, regional development banks, US AID,

UNIDO, other UN, and government agencies; and

Capital/civil works intensive projects— often somewhat different from 5. Facility Projects

as they may include, as part of the project, creating

an organizational entity to operate and maintain the

facility, and lending agencies impose their project

life cycle and reporting requirements.

8. Product and Service Development Projects

8.1 Industrial product

8.2 Consumer product

8.3 Pharmaceutical product

8.4 Service (financial, other)

New earth-moving machine.

New automobile, new food product.

New cholesterol-lowering drug.

New life insurance/annuity offering.

9. Research and Development Projects

9.1 Environmental

9.2 Industrial

9.3 Economic development

9.4 Medical

9.5 Scientific

Measure changes in the ozone layer.

How to reduce pollutant emission.

Determine best crop for sub-Sahara Africa.

Test new treatment for breast cancer.

Determine the possibility of life on Mars.

10. Other Project Categories? Medical/Health, Disaster Recovery

Table 2. Recommended project categories, with each category (or subcategory)

having similar project life cycle phases. (Source: Adapted from Archibald 2003, pp.

35-6.)

7

Figure 1. Storyboard Portrayal of a Complex Management Process

Using Specific Documents and Flowchart Symbols.

(Source: Humphreys and Associates.)

Example of Innovation in Project Management Processes: Agile IT

Project Life Cycle Management System

Over the past ten years we have seen major project management process innovations in

the development of Agile PM methods, mainly applied to IT development projects. The

fundamental concepts (from CADRE5 see http://www.cadre5.com/ ) of the Agile

approach are:

o Work as one team to build trust

o Work in short iterations to mitigate risk

o Deliver working software with each iteration to build a track record of

success

o Focus on business priorities to build customer satisfaction

o Review and adapt to continually improve.

An overview of the Agile concepts is shown in Figure 2. This is a significant innovation

compared to the traditional waterfall model that underlies most project management life

cycle management systems.

8

Figure 2. Overview of Agile Approach with 2 to 4 Week Sprints.

The use of this approach on the development of the G2 Program Management

Information System by the Oak Ridge National Laboratory and CADRE5 for the U. S.

Department of Energy‟s Global Threat Reduction Initiative (GTRI) Program (see Figure

3) led to its being given the PMI 2010 Distinguished Project Award (Figure 4.) For

information on the GTRI Program that is managing over 1,000 projects in 130 countries

go to http://russarchibald.com/current-projects/gtri/nuclear-risk-reduction/.

The GTRI G2 IT development project not only used innovative PM processes

but it also produced innovative system characteristics that are important for its wide

variety of system users.

9

Figure 3. Dashboard of the GTRI G2 Information System.

2010 PMI Distinguished Project Award

16 Figure 4. GTRI‟s G2 Project Management Information System Project

Wins 2010 PMI Distinguished Project Award.

10

Innovative Products/Services/Results Development Projects

This second type of innovative projects creates new or significantly improved products,

services, or other end results. These results may also include new organizations, moving

into new markets with existing products, and adopting new technologies to improve

existing products or services, to name just a few examples. In fact, there are usually

major differences in the PLCMS for each of the sub-categories shown in Figure 2.

Innovative projects are found within all the project categories listed in Table 2, although

„product and service development projects‟ and „research and development projects‟ are

actually innovative project categories themselves.

Essentially all new product and new service projects are innovative in nature,

and as a result many of these projects are terminated prior to their final completion,

since there is great uncertainty associated with most product or service innovations, and

these must be tested as a part of the project itself. When the innovation fails to produce

the expected results the project is either modified or cancelled. Figure 5 shows a well-

known project life cycle process for product development; the project may be cancelled

at any of the Stage Gates shown if the results up to that point do not meet expectations.

Even when the new product or service is actually launched it may actually fail in the

marketplace. In that case it cannot be called innovative after all.

Figure 5. Overview of a typical Stage-Gate

TM process.

(Source: Cooper et al 2001, p 272. Stage-Gate is a registered trademark of R. G. Cooper

& Associates Consultant, Inc., a member company of the Product Development

Institute.)

11

Conclusions and Recommendations

From this discussion the following conclusions and recommendations are put forth:

1. Identifying innovative projects and programs: Two classes of innovative

projects and programs exist within any project category: process innovation and

product/services/results innovation.

Recommendation: During the conception and authorization phases of any

proposed project or program, those that are expected to be truly innovative must

be identified so that they will be planned and managed appropriately and

effectively.

2. Identifying and overcoming the anticipated barriers to innovations:

Significant innovations will generally be met with resistance to the changes they

involve, but these barriers can be minimized or overcome when properly

anticipated.

Recommendation: Include in the innovative project plans appropriate actions to

overcome or avoid the expected barriers to change that will be erected by key

project stakeholders in response to the innovations.

3. Managing the innovative risks: Innovative projects and programs will have

different and usually greater uncertainties and risks associated with them

compared to delivery or commercial projects, including a greater risk of

cancellation prior to completion.

Recommendation: In addition to the usual risks associated with the category of

the project, identify the special innovative risks that are involved and include

these in the project risk management plan.

4. Developing and applying „innovative projects‟ management methods: The

differences between innovative projects and programs and the more routine

„delivery‟ or „commercial‟ projects and programs must be recognized and

accommodated in the project management principles and practices that are

12

applied in each case, as well as in the qualifications of the assigned project

managers.

Recommendation: Augment your standard project management methods with

the enhancements needed to effectively define, plan, schedule, monitor and

control the innovative projects in your project inventory. This includes selecting

and training qualified project managers and assuring that the Executive

Sponsors for these projects are properly briefed on the special characteristics of

your innovative projects.

A Challenge Regarding the Future of Innovative Projects Management

What can each of us actually do to encourage and promulgate innovation in our daily

lives and jobs? Here are a few possibilities:

Think “outside the box”: Much has been written about this. If you Google this

phrase you will be referred to this web site, which presents a useful introduction

and many references to the subject of innovation:

http://en.wikipedia.org/wiki/Innovation.

“Poke the Box”: Take action – do not just think about it. (Godin 2011.)

Build a storyboard so that you can see the whole situation and then ask “Why do

we do this in this particular way?” “Is there a better, simpler, innovative way?”

“Make waves.” Stir things up in your personal life and where you earn your

living.

Add your own ideas here: __________________________________________

_______________________________________________________________

_______________________________________________________________

Each of us has the ability and opportunity to be an innovator!

13

References

Archibald, Russell D., Managing High-Technology Programs and Projects, 3rd

ed.

New York: John Wiley & Sons, 2003.

Cooper, Robert G., and Elko J. Kleinschmidt, “Stage-Gate Systems for New Product

Success,” Marketing Management. I (4), 20-29. 1993. See www.prod-dev.com .

Godin, Seth, Poke the Box: When was the last time you did something for the first

time?”, USA: Do You Zoom, Inc., 2011. www.thedominoproject.com .

Pfeiffer, Peter, “Environmental Project Management in Brazilian Municipalities.

Experiences of a Brazil-Germany Technical Cooperation Project,” V Encontro de

Gerenciamento de Projetos, PMI do Distrito Federal/II Foro Latino Americano de

Governo, July 2004.

PMI Guide to the Project Management Body of Knowledge, 4th

ed., Project

Management Institute, Newtown Squarw, PA USA, 2008.

14