Uniqueness is a key characteristic of projects. Each project contains some innovative elements. In order to be controllable, every sort of innovation needs to be managed by means of projects.
Economist Joseph Alois Schumpeter has noted that as an enterprise’s innovative edge disappears, the profits will disappear with it. The innovative edge resulting from projects lies not in “being new” but in “value monopoly”. Enterprise profits originate from the process of trading value with stakeholders. Enterprises without value monopoly are most likely to be substituted. In trade with stakeholders, they rely either low price or high trade cost, both of which will lead to profit loss.
Reflecting on the following three questions will help us sharpen innovative edge.
Question 1: Whom will the project provide value for? If we don’t have clear answer to this basic question, we will get lost in project decision and the assessment criteria of project value will be out of the question. “People-oriented” means regarding people as the base of project goals. But in reality people are always treated as the base of project resource. The reason why many projects have failed is that they focus only on products, skills and business, not on people.
Question 2: What are their major conflicts? People’s needs change with time, which we should take into account in understanding needs. Needs come from conflicts between desire and reality. Only when we understand major conflicts, principal aspects of conflicts, and evolutionary trends of conflicts will we identify the value of innovation. Some companies fail because they stick to old rules without considering change of major conflicts for clients while others fail due to blind innovation resulting from poor understanding of conflict change. In order to be effective, innovation should fit the rhythm of clients’ conflict change.
Question 3: Which value offered by the project is monopoly? Monopoly lies in necessity and exclusiveness. “Necessity” means that the value we offer can solve the major conflicts. “Exclusiveness” means the value we offer is irreplaceable. “Exclusiveness” includes unique technical performance, unique methods and approaches, etc. It’s worth noting that there is one prerequisite for exclusiveness: time. Substitutes usually appear soon, so speed is key in innovation. Timeliness is the core of project management and control.
Innovation is a serious value creation process to make changes according to people’s major conflict development. In Great Learning, there is one sentence, “The point where to rest being known, the object of pursuit is then determined; and, that being determined, a calm unperturbedness may be attained to. To that calmness there will succeed a tranquil repose. In that repose there may be careful deliberation, and that deliberation will be followed by the attainment of the desired end.” Similarly, only when we have stable values, will we identify project opportunities, value and rhythm in fast-changing society to realize innovation in real sense.