Innovation between Risk and Reward Set
coordinated by
Bernard Guilhon and Sandra Montchaud
Volume 4
First published 2017 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.
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© ISTE Ltd 2017
The rights of Sandrine Fernez-Walch to be identified as the author of this work have been asserted by her in accordance with the Copyright, Designs and Patents Act 1988.
Library of Congress Control Number: 2017954176
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library
ISBN 978-1-78630-067-6
Innovation has become a key success factor for both firm and nation development and economic growth:
For these reasons, firms must innovate repeatedly and continuously, not occasionally as they used to. Innovation management has been becoming a permanent activity coexisting with the production of goods and services. Innovation has to be thought, managed and organized.
The European standard1 defines innovation management as a set of interrelated elements of an organization with the function of establishing innovation policies and objectives as well as processes to achieve those objectives. The innovation process is viewed as a management process, turning ideas into innovations. It is divided into four stages: 1) idea management aiming to discover new innovation ideas, 2) development of projects, 3) protection and exploitation and 4) market introduction.
Adopting the European point of view invites us to view innovation project management as dealing with only the second stage of the innovation process. However, in the French language, the word “projet” (translation of project) designates both a purpose and the implementation of this purpose. In 1163, when the first stone of the Notre-Dame de Paris Cathedral was placed, in the presence of Pope Alexander III, it was already three years since the bishop Maurice de Sully and the King Louis VII had made the decision to build a new cathedral in place of the Saint-Etienne Cathedral. Their purpose was to affirm the power of Paris in the French Kingdom by building a cathedral in the heart of the town, dedicated to the Virgin Mary and aiming to gather the functions of bishop church, canon church and baptistery2.
In this book, I will adopt this French perspective. I will hence define an innovation project as a non-recurrent process aiming to formalize a new idea (and purpose) and turn it into an innovation which will be diffused and accepted (or not) by its users. Managing innovation projects implies implementing activities to bring into being and successfully complete one or several innovation projects.
Consequently, this book does not only deal with managing an individual innovation project but, in a broader perspective, also with managing innovation projects in a multi-project setting.
The innovating organization can be a for-profit (firm) or non-profit or public (public administration) organization, a new venture (startup) or an established organization, a small or intermediate-sized organization or a big multidivisional group.
The purpose of the book is to explore the multiple facets of innovation project management in the 2010s. I argue that, due to major changes in the external innovation context of organizations at the beginning of the 21th Century, it is no longer relevant to manage innovation projects as before.
At the end of the 1980s and at the beginning of the 1990s, more and more firms operating in different industries and markets decided to apply a project management methodology in order to manage R&D and innovation. Project management tools and principles were implemented in R&D departments to develop new products and processes. In the 1990s, project management expanded to all the manufacturing firms, as well as service industries and public organizations. In my opinion, this tendency did not take into sufficient account the specific issues of innovation. Innovation project management was somewhat viewed as a control and monitoring system aiming to increase the new product goods and services process development. R&D departments and functions were created to be in charge of research, viewed as a support for goods and services production processes.
During the 1990s, manufacturing firms had to manage an increasing number of R&D projects, differing from each other in purpose, targeted market and provided output nature, strategic importance, growth potential, risk, deadline, etc. For instance, highly risky technological breakthrough projects aiming to create both new markets and business models (concept of disruptive innovation, [CHR 97]) and small incremental innovation projects aiming to ensure an active market coexisted. The different kinds of project competed for both financial and human resources and shared some technologies and other knowledge.
Over the 2000s, the innovation context was disrupted. Open innovation [CHE 03] became a dominant paradigm that led to major organizational changes. Innovation projects were no longer managed within a single firm. The number of cooperative innovation projects increased significantly. Innovation responsibility, today, rests with complex systems consisting of different firms operating in the same value chain: competitors, customers and suppliers. They also include firms operating in other sectors and value chains, individuals, research laboratories and financial institutions. Members of cooperative projects differ in size, legal status, culture, nationality, etc. Researchers, marketers, clients, customers, developers, designers and funders have to define common expectations relating to the project output and the ways of collaborating, sharing skills and risks, time and energy, pleasure and disappointment. New management issues emerged, or were intensified, such as knowledge sharing, social relationships and repartition of the added value.
Since the beginning of the 2010s, several public policy initiatives have been promoting sustainable development, social and societal responsibility, and hence the development of what might be called a “competitive green economy of knowledge”. R&D and innovation managers must take into account new standards and regulations, as well as social factors and ethics. This new innovation context requires significant changes in production and consumption patterns, in the way of managing natural resources and also institutional changes. It imposes further constraints on designing new products (eco-innovation) and certain terms of funding set by funders. Not only do managers have to successfully reduce the lead time to launch new products, but they also have to meet the society demand for long-term performance.
Consequently, the major issues of innovation project management are:
There are many challenges relating to innovation project management that managers have to face if they want their firm to remain or become more competitive.
This book aims to provide a transversal and global theoretical overview of innovation project management by combining three research fields which have contributed to innovation project management research: innovation management, project management and entrepreneurship. It also combines different management research disciplines, i.e. strategic management, marketing, finance, accounting and control, as well as concepts and theories belonging to sciences other than management science (economics, sociology and engineering science).
The book is based on 25 years of research experience studying and improving innovation management practices. For 25 years, I have been studying the organizing mechanisms (structural mechanisms, decision-making processes, tools and interpersonal relationships) existing in innovating organizations operating in different industries, but with a specific interest in agro-food and aeronautical industries, social and health-focused non-profit businesses, and small and intermediate sized firms. With both innovation management researchers and practitioners, I elaborated original methodologies and frameworks that were put into practice.
The book is dedicated to various types of readers:
This book is neither a handbook nor a toolbox. It reflects my research experience in order to explain the dynamics of innovation project management and the processes that affect it. It provides research results which were grounded in practice [GLA 67], i.e. elaborated with practitioners, and then compared with the theory.
I am a French researcher and in this book I will refer to semantics because the French language might explain some specificities of French innovation project management research. I decided to keep several French expressions and words (see Romon's framework aiming to describe the areas of innovation project management in practice, Chapter 2, section 1). I promote French academic research because France has a long tradition of involvement with science, technology and innovation. Has not the Encyclopedia of Diderot and D'Alembert, published from 1751 to 1772, become a main historical reference in matters of science and technology? Is it not the result of a cooperative innovation project led by two “project managers”?
Due to complexity and the specific vocabulary of the innovation project management research, I invite non-research readers to take adequate time. Every chapter can be read separately. I tried to facilitate understanding of the information by including tables and figures as much as possible. The case study of Liebherr Aerospace Toulouse (Chapter 5) is organized around all the other chapters in order to facilitate the knowledge appropriation process.
This book is not a recipe book which might be scrupulously followed. In my opinion, there is not one way of managing innovation projects but several depending on practice needs and innovation contexts. Common issues should be addressed through the specificities of each situation.