How do we plan with certainty when we are working in an disruptive environment that requires rapid, innovative thinking? How does an organisation’s business and innovation context affect the way it approaches project management?
We talk a lot about Project Management structure, processes and practices – these are put forward as a way of providing stability and certainty. But how do these stable, predictable practices hold up in a disruptive environment shaped by rapid, emergent change?
Shenhar and Dvir (2007) pose an interesting argument about innovation in a project management context. Their thing is the idea that different types of innovation require different approaches to project management.
Taking this forward, we can think of innovation as coming from different sources and by extension, that these sources change over time. This means that it is critical for the organisation to understand its innovation context, both at the outset and over time – Where are the innovation opportunities? Where are the constraints or blockers that are preventing innovation thinking? Where are our innovation priorities?
How do different innovation opportunities shape our project management approach?
Understanding the Innovative Context
It feels to me as if literature on innovation thinking and practice is generally more advanced than project management literature.
Plenty has been written on innovation thinking – the classical distinction between incremental (evolutionary) and radical (revolutionary) innovation is well covered, with different variations including architectural vs modular, organic vs mechanistic and sustaining vs. disruptive.
But on the other hand, project management literature hasn’t really progressed to explain how an organisation should adapt its way of delivering change in response to different types of innovation.
When we talk about innovative context, we need to differentiate between platform and breakthrough opportunities.
- Platform opportunities – changes required to maintain the business.
- Breakthrough opportunities – changes that will open up new markets.
Christensen (2003) talks about the difference between disruptive and sustaining innovation and argues that companies may fail when they encounter “the Investor’s Dilemma”.
If the company remains focused on platform initiatives and fails to recognize the disruptive potential within its business, it risks losing the potential market presence and revenue that can come with that.
This idea says that companies that rely on sustaining innovation often build their products and deliver changes at a pace that customers come to expect. By contrast, disruptive innovation allows smaller companies to come into the market under the radar, with products that may perform poorly at the beginning but then outperform the market as they take hold. By the time larger companies and investors notice these new entrants, their disruptive innovation may be outperforming sustaining technologies, allowing them to quickly take over market share.
The company needs to recognize its innovative context so that it can put the right project management systems and practices in place, to tap into disruptive and sustaining opportunities.
Let’s think of platform projects as the vehicle for delivering sustaining innovation and breakthrough projects as the vehicle for disruptive innovation.
Platform projects are a known quantity and can be planned and balanced “as normal”. These are our “bread and butter” projects; they deliver outcomes that allow the company to consistently build the business and deliver change in a way that meets customers’ expectations. These projects are often built on extensive customer feedback, market research and incremental improvements to what’s worked in the past.
Think of your smart phone. The supplier will bring out a new release every couple of years with new features and improvements that build on the existing product platform – these changes often reflect the voice of customers who are happy to talk about what they want to see. This is the thing about sustaining innovation delivered through platform products – customers understand the value that the changes deliver and are happy to sign up for the new product.
By contrast, disruptive innovation delivered by breakthrough projects is driven by intuition and over-the-horizon vision. Breakthrough projects need a different approach – based on quick thinking, flexible funding and governance, different expectations around business benefits.
The challenge is to help customers see the value in breakthrough changes – in many respects, this is a marketing rather than a technical challenge – how do we get the message across to our users and explain the benefits of the breakthrough product?
How do you change the minds of customers who really enjoy their existing technology, so that they can see the value in a disruptive alternative that may, at that early point in time, be not-quite-ready for the mass market?
Here’s the thing about the Investor’s Dilemma. If the company remains focused on platform initiatives and fails to recognize the disruptive potential within its business, it risks losing the potential market presence and revenue that can come with that.
“Crossing the Chasm”
What will drive changes in project management approach? Changes in our end users.
Moore (1991) talked about customers evolving through 5 types, as a product matures. Although he was writing about new technology, we can use this same sort of thinking to cover breakthrough projects; we can think of Innovators and Early Adopters as our initial breakthrough project end users.
- Innovators – “techies”, people who actively seek out new products before they become mainstream; these users are important for providing early feedback.
- Early Adopters – visionaries, people who understand the benefits of the new product and how it can help their daily lives; these people are the key to opening up new market segments.
- Early Majority – these people provide the biggest leap forward, they relate to technology but are driven by practicality; they see how other people use the product before making their buying decision. Get these customers on board and you start building real market share.
- Late Majority – these people tend to wait until the product is accepted as a mainstream solution before jumping on board.
- Laggards – don’t want anything to do with new technology and only adopt it when they are forced to or when the new product is part of their existing product.
The big challenge comes when the product is maturing from breakthrough to platform – when it is broadening its appeal from the niche innovators and early adopters to the majority users. Moore calls this “the Chasm” – the critical leap from niche to mainstream.
Shenhar and Dvir use the development of the microwave oven as a case study and note that it took 20+ years to bridge the chasm and produce a product that had mainstream appeal. Just imagine the creative approach that must have been required to encourage stakeholders to continue investing and persevering during this time!
For project management, this is crunch time. Everything changes at that moment when our delivery approach moves from Breakthrough to Platform.
Governance, funding, risks, scope, timing, benefits, stakeholders. Everything changes. We need to be ready to call out and help the business manage those changes.
Project Management impacts
In my mind, the big project management challenge is to help the business generate and maintain stakeholder support and momentum during the early disruptive phase.
How do we keep our stakeholders happy and interested during the early period when costs may be high and the benefits are thin?
We need to help the business cross the chasm and move towards a mainstream, platform delivery structure.
We need to be thinking about not only how our clients are changing but also, how our delivery approach changes from breakthrough to platform.
We need to ask critical questions.
How do we move our thinking from high risk, agile thinking, innovative go-to-market, to a more sustained, mainstream approach?
How do we scale up our widget production, moving from beta or prototype to commercial volumes and techniques?
How do we identify and engage our mass market end users?
How do we connect with our stakeholders in a new way? Do their priorities, drivers and objectives change?
Christensen, C. (2003). The Innovator’s Dilemma. In Christensen C.M. and Raynor, M. E. (Eds.). The Innovator’s Solution. Harvard Business School Press. Boston USA.
Moore, G.A. (1991). Crossing the Chasm. Harper Collins. New York City USA.
Shenhar, A.J. and Dvir, D. (2007) Managing Projects for Business Innovation. Harvard Business. Accessed at https://services.hbsp.harvard.edu/api/courses/622726/items/2841BC-PDF-ENG/sclinks/17a14858ef98cd2c76f76199ab1405ad