In this extract from his Guide To Managing Innovative Projects, David Richmond from Richmond Innovation looks at what sets an innovation project apart and explains how it embraces uncertainty, risk, change, agility and collaboration.
Using a broad definition of innovation, we might say that innovation is the delivery of something new or breaking new ground in some way. More specifically innovation is often related to the delivery of products or services that have a restricted time window in which to deliver value. Organisations and individuals innovate to stay ahead of the competition and transform creative and conceptual ideas into concrete products, services and processes that add value in some way. Non-innovative projects might not have the same critical time window, there is more certainty about the final product, less risk in terms of value elicitation and more conventional means to plan and deliver the project. In contrast, innovative projects must embrace uncertainty, risk, change, agility and collaboration. Let's take a look at each area in more detail.
When delivering innovative projects there is a lot that we do not know. We don't know how the market will react to the product, we don't know how the product will perform, we don't know what issues will emerge during delivery and we don't know what other unknowns there are (we don't know what we don't know). This uncertainty is far greater with innovative projects than with non-innovative projects and the uncertainty must be managed accordingly.
The creative process doesn't stop once the project scope is agreed. With an innovative project the scope can be base-lined, but the baseline should be at a high enough level to provide some project direction, but not so high level that there is no clarity on what the project is trying to achieve. Due to uncertainties, delivery teams must be open to continuous change to scope. This could be in response to new ideas, changing market
conditions or the emergence of new information.
"Innovation cannot be delivered in isolation or in organisational silos"
When base-lining a project, focus should be given to the expected value rather than the actual solution. The solution will likely change as more information is uncovered. Even the expected value can change as the project progresses and new information emerges. During project delivery a completely new value proposition might be uncovered that exceeds the original scope and purpose of the project. There must be a mechanism to enable these changes to be fed back into the project without having to restart or threaten the entire project. This means that an expedited re-justification process will be needed where project direction can quickly be assessed and re-approved as and when new information emerges that impacts the baseline.
Uncertainty also introduces more risk into projects. There is a risk that the project will cost more and over-run as there is limited prior experience on which to base a plan. There is a risk that the project will not deliver the expected benefits as it is breaking new ground. If a project environment or business is risk averse then innovative projects will encounter challenges with justification. Innovation is inherently risky but can also deliver significant rewards. Much like investing in the stock market, riskier ventures such as small company funds in emerging markets can sometimes result in huge losses, but they can also provide large rewards, far in advance of diversified index tracker funds. There are ways to manage risk and reduce uncertainty but some level of risk must be embraced in order to benefit from elevated returns.
One way to reduce risk is to reduce time, deliver incrementally and learn continuously. 'Agile' is a philosophy to project delivery that encompasses a number of frameworks, concepts, and techniques that are highly relevant to innovative projects. While Agile is not only for the purpose of delivering innovation it does provide an environment that is conducive to projects that have high levels of uncertainty. Agile projects embrace speed
of delivery, customer feedback, continual change and low levels of bureaucratic process, all of which are necessary to deliver innovation projects effectively.
Innovation cannot be delivered in isolation or in organisational silos. The concept of many minds or the 'wisdom of crowds' means that innovation is more effectively delivered using collective wisdom. The ability for teams to work together in an open and supportive environment will improve the success of an innovative project. Being open and honest about risks, issues and opportunities and collaborating on solutions will not only improve project success but it will enhance team dynamics and create a sense of ownership for the project. Working and collaborating with a wide group of stakeholders will provide insight to projects that are uncertain and risky.
The Guide To Managing Innovative Projects is available as a free download from Richmond Innovation. The full document covers a range of subjects including agile project delivery and approaches, innovation project risk management, people factors in innovation projects, planning and the project manager, innovation portfolio management, and where project management fits into the idea management process.