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PM Essence
Innovation or R&D Project: How can we Manage the Conflict of Creative and Business Needs
- Soumen De, PMP

A R&D project undertaken by an enterprise will convert the idea (invention) into a commercial proposition (innovation). As the name R&D implies: R-Research is supposed to produce the new ideas or invention and DDevelopment is supposed to take the output of research and make it into a commercially viable product or service. In other words “D-Development” process converts invention into innovation.


The business context in which we operate can be best described by four terms – Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). Under this scenario if a company turnarounds research idea into a commercial proposition faster, the better it would be placed to sustain profitability.


This is only possible if the company follows a structured process to carry out innovation. A simple process to carry out innovation can be represented as shown in figure 1.


The cycle time from Phase 1 to Phase 3 is getting shorter every year because of competitive pressures and VUCA factors mentioned earlier. A good innovation project needs 'novel' ideas (and related proof of concepts) which can only be done by incorporating high level of creativity. The question then comes up, can we get original creative or innovative ideas by bounding the project team with the constraints of time and cost. Can you define the scope of the idea “upfront” and still expect to get high levels of creativity. Think of asking a famous painter to make an 'original' painting for you by defining the time and scope and you can imagine the reaction you would get from her. But business cannot afford to give the unconstrained time/scope/cost to the innovation team to come out with the most innovative product. Company will then miss the bus by the time the innovation product comes out.


Can we bring out a very creative and innovative product by managing it with project management process? Will the Project Management processes that PM will adopt accelerate Innovation or stifle Creativity? Process tells people what to do—the actions, the order, and the expected results. A good process should have built in inspection, monitoring and control system that will acknowledge deviation from the 'expected' results. If the results are not as anticipated, the process is analyzed and altered to bring its results back to acceptable values. Neither the end product nor the granular breakdown of the steps will be known at the start of a typical radical Innovation project. If the end product is known or steps are absolutely clear at the beginning, then people (both internal and external) will not trust the 'novelty' of the new product. Besides, the KPI's for Researchers are not about compliance with the processes, but about churning out a 'novel' idea. So they would not  care about the processes proposed by the PM. 

So the skeptics would say, 'Process' not only stifles creativity, but also innovation, passion, imagination and creativity—as it should; otherwise, it would fail to serve a purpose of blooming a 'novel' idea. John Scully of Apple had rightly observed: “Management and creativity might even be considered antithetical states. While management demands consensus, control, certainty, and the status quo, creativity thrives on the opposite: instinct, uncertainty, freedom and iconoclasm” [5] 
Can the “Researcher” in Phase 1 come out with a viable idea within a finite time? Can the “Engineer” in Phase 2 convert the viable idea from Phase 1, into a prototype and then pilot it quickly to demonstrate business potential? Will the “Sales and Marketing” person in Phase 3 be able to get a promising customer response by commercializing the product prototyped in Phase2?
There are no easy answers to the questions highlighted above. Matter gets more complicated, when we realize that the Key Performance Indicators (KPI's) and motivating factors of a Researcher in phase 1 (see fig 1) may be completely different from the Engineer in phase 2. It is also a fact that the educational background of Researcher (typically Masters or Phd degree) will be always different from that of Engineer (typically Bachelors or Master degree). Another layer of challenge will come from the fact that the resources (Researchers, Engineers) PM has to manage will have a dual responsibility towards the functional manager and towards the PM.
Can the Innovation be managed better by adopting PM processes?
We know that a project is temporary endeavour that it has a defined beginning and end in time, and therefore defined scope and resources. An innovation project team often includes people who don't usually work together and come from different functions across multiple geographies. This makes the team a highly matrixed team. The key to adopt a process to manage innovation is to acknowledge that the “ideas” have to move through an 'innovation funnel' to make it to commercialization. This is shown in figure 2.

In figure 2, each 'square' represents an idea with its shade representing the amount of 'lack of clarity' or 'fuzziness' in the idea (color white representing that the idea has zero clarity to black representing idea having maximum clarity). As can be seen, in Phase 1, there will be many ideas especially those ideas which lacks clarity. It will be at times Researcher's 'free-expression-of-thought' and they will be profoundly attached to their ideas. While acknowledging those biases/preferences, PM has to still maximize the number of good ideas generated in Phase 1, and then follow an effective pruning process to take one or two ideas through the funnel into Phase 2. In Phase 2, the idea needs to be rapidly prototyped and risks uncovered. If necessary, the idea can go through several rounds of iteration with the team in Phase 1. Once it is robust enough and demonstrates business potential, the idea is pushed through the funnel for mass production and commercialization.


Given the different uncertainties involved, The PM can adopt the following project management framework (Steps 1 to 6) to maximize the chances to making the innovation project a success


Step1: Generate Project Definition

The PM should first identify whether it is a business innovation or technology innovation project. This will help her to identify the key stakeholders, timing priorities and identify the 'Big Picture” of the project to keep the team together.


Business Process Innovation

This describes how company creates, sells and delivers value to the customer. Business change can produce innovation in three distinct ways.


Value proposition – What is sold and delivered to the market


Supply Chain – How it is created and delivered to the market


Target Customer – To whom it is delivered


Technology Innovation

The common perception is that a good innovation is always a technology innovation. Technology change can produce innovation in three distinct ways.


Product and Service offerings – A new product or feature to cater to a customer need


Process Technologies - A new process or improvement in existing process to manufacture the product


Enabling Technologies – A new method or tool that can be applied in a suitable way to cater to a customer need


The PM needs to then understand if this is “Push” type or a “Pull” type innovation project. The “buy-in” from top management will always be stronger for the “Pull” type of innovation project


Push Innovation: Here the Researcher goes through existing literature and presents some fuzzy or 'high-level' idea of the technology that needs to be developed for a possible business benefit and requests for organizational resources to achieve that. Here the feasibility of the new idea is not very clear and needs some time to get



Pull Innovation: Here the Management carries out some external environment scanning or competitive benchmarking and proposes development of a new technology. Here the management is already committed to the project deliverables and is ready to provide organizational resources to support the project. The feasibility of the new idea and relative documents are relatively clearer than the push method.


Step 2 - Project Organization and Staffing

Any organization will always try to deploy more resources for ongoing operations and much less for innovations as represented. So a PM needs to understand how many resources would be made available for the innovation project given the demand of organization to press more resources for 'operations' or routine work. PM needs to have a strong networking, especially with top management and influencing skills to impress the top management on the business criticality of the project, so that she gets most of her requested resources. If resources are difficult to get, PM can form a team having a mix of full timers versus part timers.


Step 3 – Project Management and Leadership

As we know the PM has to deliver the scope of the project and have the responsibility to satisfy the different needs: tasks needs, team needs and individual needs of both dedicated and shared team shown earlier in figure 4. Given the conflicting needs, PM can address them effectively by demonstrating a range of interpersonal skills such as leadership, influencing, political, trust building, negotiation etc. This is also useful for Step 2 needs. In order to accelerate the idea generation process and to make sure the idea will have less chances to 'fail' when handed over to Phase 2 team, the PM can involve the stakeholders from Phase 2 (who would  integrate the application) and Phase 3 (who would the end users of this application) early into the project. 


Step 4 – Problem Solving and Rapid Prototyping

If already not there, PM needs to generate Management “pull” in the project. Without this “pull” the PM will find herself going against the tide in trying to manage the different constraints, including need to balance the creativity and business needs. Once the 'Pull' process in enabled, the PM should be able to test out the presence of technical risk, if any by creating a flexible platform and staffing it with people who can work closely with Researchers from Phase 1. The mantra for the successful rapid prototyping would be to “Fail Early and Fail Cheap (FEFC)


Step 5 – Senior Management Review and Control

The Phase 1 stage may be internally divided into one or two more sub steps, and same may be the case with Phase 2 and Phase 3 stages. PM needs to seek Senior Management and project sponsor support through regular management review and control. Like many organization do suitable go/no decisions needs to be taken at each phase. This will make sure necessary course corrections are done if the project steers away from the management vision.


Step 6 – Real Time Monitoring and Mid- Course Control

The PM needs to continuously scan for deviations from original assumptions and investigate whether course corrections needs to happen. Small deviations can be addressed by updating project management plan. However large deviations needs to be communicated to key stakeholders and a consensus needs to be achieved on whether those deviations can be best addressed by adjustment of project management plan or by winding up the present project and starting it all over again as a new project as  shown in figure 3. 



Sometime starting all over again has more merit than providing Band- Aid fixes. But PM needs to make sure she gets to this decision point (of starting all over again) fast enough before lots of organization investment has been made. Refer FEFC mantra of Step 4.



Critics argue how one plan certainty of the R&D project outcome when the project by its very definition needs one to explore the possible results. What they don't realize is that those structures can actually enhance creativity, if the processes and the metric to measure those processes are built in the right way. The inherent uncertainty in R&D projects is more of a reason to plan than to avoid it. 


Reference- Balancing the creativity need and the business need of a R&D or Innovation project with project management [PMI National Conference 2013]