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Harold Kerzner: Innovation PM Focuses More on Sustainable, Long-term Business Benefits and Value

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Journalist: Yu Yanjuan  |  Source: PMR  |  Updated:2020.03.09

Introduction to the interviewee:


Harold Kerzner, PhD, Professor, author, is now Executive Director for Project Management at the International Institute for Learning (IIL). Having worked in the field of Project Management for nearly 60 more than 50 years, he, as a witness of PM development, has kept pace with time. 

At the beginning of 2020, his 60th book Innovation Project Management has published. What a brilliant achievement for an individual to contribute 80 books! I’m so honored to have a chance to talk to Harold Kerzner on the topic of the book. Thanks and respect to him for generosity to share. Please explore his insightful and forward-looking ideas with me!
To read Harold Kerzner’s last interview by PMR and PMWJ: 
To buy the book: 


Interview:
Part 1: Differences between Innovation and Traditional Project Management
Q1. Congratulations on your 80th book Innovation Project Management. Why did you think of writing such a book?
Harold Kerzner: For more than three decades, project managers had been heavily involved with traditional or operational projects that had well-defined requirements and a business case. Project managers were often told not to begin project execution until all the requirements were clearly defined. Strategic projects, which include innovation, can begin with just an idea and were most often managed by functional managers because senior management trusted functional managers more than project managers to make strategic and business-related decisions.

By the turn of the century, companies started assigning project managers to innovation projects. While many of the “traditional” competencies covered in the PMBOK® Guide apply to innovation projects, there are many more competencies needed that project managers must learn before accepting an assignment as an innovation project manager.

As I began conducting research for the book, I found that there were very few articles that used the words “project management” and “innovation” in the same sentence. Even some certifications programs in innovation management do not discuss or teach project management even though project management is the vehicle by which an idea becomes reality. As such, project managers need to understand that the innovation environment is not the same as the environment in which we execute traditional or operational projects. Innovation projects usually have a “fuzzy front end” and according to my research, there are more than 25 types of innovation projects, each requiring different forms of project management. (Pls offer one or two examples: which form of innovation projects requires what management form) Incremental innovation, which are generally small changes to existing products, may follow traditional project management practices. Radical or disruptive innovation practices may require new forms of project management because of the unknowns and increased exposure to risks.

Q2. What do you expect readers to take away from the new book? Or what do you believe are the selling points of the book?
Harold Kerzner: The readers for the book are expected to be project managers that are now involved in innovation projects and are not familiar with the innovation environment. Emphasis is placed upon the differences between innovation project management and traditional project management practices as well as the new competencies that innovation project managers must learn.

Traditional project management practices focus on the creation of the deliverables defined in the statement of work. Innovation focuses more so on what happens after the deliverables are created, namely the creation of sustainable, long-term business benefits and value. This changes how we define success on a project.

Anybody can build a product that nobody will purchase. Unlike traditional projects where success is measured by the creation of a deliverable, innovation success may be dependent upon marketplace acceptance and may not be able to be determined until years after the innovation project was completed.

Part 2: Competencies and Leadership for Innovation Project Management
Q3. For project managers, what are the top competencies/qualities needed to manage innovation projects? What type of leadership is suitable for innovation project management?
Harold Kerzner: The top competencies, as I see it, would be creative problem-solving, conducting brainstorming sessions, design thinking, emotional intelligence practices, managing group diversity, rapid prototype development, market analysis and interfacing with the users of the innovation outcomes to recognize their definition of value-in-use.

Leadership in innovation is complex. Everyone understands the importance of innovation leadership but there is not much published on how it is impacted by the different types of innovation projects. Simply stated, we can define two high level types of innovation leadership. Technical leadership is needed for product innovations to determine the viability of the projects and identify possible derailments. Technical leadership is also needed to coordinate the efforts of diverse technical groups. Organization expertise, especially for change management actions may result, is needed for process innovations such as the development of a new business model.

Part 3: Measuring Success in Innovation Projects
Q4. In innovation project management, how should we measure success?
Harold Kerzner: Unlike traditional or operational projects where success is measured in terms of the triple constraints of time, cost and scope, innovation success is measured by the creation of long-term sustainable business value for the stakeholders. We are now establishing metrics that measure benefits realization and business value on innovation projects. Success measurements on traditional or operational projects use almost exclusively tangible metrics whereas innovation projects utilize both tangible and intangible metrics (specific examples?). Examples of intangible metrics might include the effectiveness of innovation governance, the firm’s innovative culture and mindset, customer satisfaction, brand image and reputation, and strategic decision-making capability.

Q5. To sum up, what are the Critical Success Factors (CSF) of innovation projects?
Harold Kerzner: With traditional projects, success is measured by how well we met the triple constraints for creating a deliverable as defined in the statement of work. Unfortunately, the deliverable we create may be regarded as a project management success but also a business failure if we cannot find customers. With innovation project management, the critical success factor might include:
• Developments in the creation and use of technology;
• Alignment to strategic business objectives;
• Customer acceptance;
• Market growth opportunities if applicable; and
• Financial factors such as ROI, IRR, profitability, etc.

Part 4: Innovation Culture
Q6. Innovation is indeed important to modern organizations’ survival. In your opinion, how can an organization establish an innovation culture? 
Harold Kerzner: Creating an innovation culture begins at the top floor of the building. Companies that believe in “doing things the same old way” are doomed to fail. As stated by F. M. Young, “It isn’t the incompetent who destroy an organization. The incompetent never get into a position to destroy it. It is those who achieved something and want to rest upon their achievements who are forever clogging things up.”
An innovation culture focuses on long-term, sustainable stakeholder value rather than short-term profitability that may impact this year’s bonus for an executive. The major components of an innovation culture include:
• A tolerance for failure without punishing people;
• Freedom to speak one’s mind without punishment or criticism;
• A willingness to experiment;
• Highly collaborative teams; and
• Having a non-hierarchical organization.

Q7. In your book, you’ve included many case studies about innovation in world-famous companies. For those innovative companies, do they have something in common?
Harold Kerzner: The three most important characteristics are:
• They have cultures that support innovation,
• They believe that everyone in the company has the potential to come up with ideas and support innovations if given the chance, and
• Innovation needs to be rewarded and this is accomplished through recognition such as in the creation of an innovation honor society rather than with solely financial rewards.

Part 5: Sponsorship in Innovation Project Management
Q8. As shown by many surveys, effective sponsorship is essential to project success. What is the project sponsor’s role in innovation project management?
Harold Kerzner: The sponsor’s role includes:
• Explaining management’s attitude toward risk-taking;
• Assisting in assessing opportunities and threats;
• Knowing the team’s strengths and weaknesses;
• Providing guidance for risk mitigation;
• Demonstrating confidence in the team’s ability, trusts the talent assigned and holds them accountable;
• Demonstrating management’s willingness and ability to assist in performing tradeoffs on time, cost, quality and scope as well as other constraints;
• Assisting with working relationships between innovation personnel and other groups such as marketing; and
• Demonstrating management’s willingness to cancel projects if necessary.

Part 6: Special PMO for Innovation Project Management
Q9. As an IPMA global survey report indicates, the age of PMO disruption is coming. So what role will PMOs play in innovation project management?
Harold Kerzner: Companies are realizing that a one-size-fits-all PMO may not be workable. Simply stated, innovation activities should not occur at the expense of running the daily operations of the firm. Companies are creating a special PMO called the Innovation Portfolio Project Management Office (IPPMO) that is dedicated to supporting the top 10 or 20 strategic innovation projects. The IPPMO focuses heavily upon the future rather than the present.

Q10. Dealing with risks in innovation project management can be challenging. What are your tips?
Harold Kerzner: Risk management is more challenging in innovation because of environmental and marketplace uncertainties. One of the functions of the IPPMO is to monitor the enterprise environmental factors that can have an impact on business-related decisions. Some of the factors that must be monitored include market size, changes in consumer tastes and behaviors, actions by the competitors, time to market and stakeholder pressure.

Part 7: Innovation and Strategy
Q11. According to a recent IPMA global survey report, projects are getting more and more strategic, so innovation activities are directly related to strategic planning efforts, right?
Harold Kerzner: Innovation and strategic planning are married. One of the most important characteristics of successful innovation practices is that there is a “line-of-sight” from the innovation project manager to senior management concerning the alignment of the innovation projects to strategic business objectives. Innovation projects that are categorized as ‘strategic’ innovation activities focus upon:
• New products;
• Enhancements in brand value;
• Additional services;
• Efficiencies and/or improved productivities;
• Improvements in quality;
• Reduction in time-to-market; 
• An increase in competitiveness; and
• An increase in market share.

Part 8: Co-creation Innovation
Q12. Co-creation has been an important trend in business world. What should we pay attention to in co-creation innovation?
Harold Kerzner: Co-creation is a necessity, not just to seek out ideas for new products & services, but for strategic partnerships throughout the life cycle of the product or service. But even though there are significant benefits, there are also risks. Many of the risks can be overcome by asking the right questions before beginning the co-creation process:
• Will co-creation allow us to find more customers?
• Will the co-creation participants function in just a support role or will it be joint innovation?
• Do we understand the cost and risks of co-creation activities?
• Who will own the intellectual property rights?
• Will there be a sharing or revenue and/or proprietary knowledge?
• Will any of the co-creation membership be unhappy and not agree to work with us in the future if the co-creation activity is a failure?


Part 9: Hi-tech and Innovation Project Management 
Q13. What role will technology such as AI, Blockchain and IoT play in innovation project management?
Harold Kerzner: Everyone knows and expects that technology will change. The result of technology can be simply an incremental change in a product’s quality, price or functionality. But the more serious role that technology plays is when the innovation outcome is creative destruction. Externally, use of technology can allow us to be more competitive with incumbents and shake up the marketplace. Internally, projects using new technologies can make existing product lines obsolete resulting in closing down obsolete product lines, laying off workers, hiring new workers with different skills, and the creation of a new business model. Simply stated, it’s not the existence of the technology that’s important, but how the technology is used.


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