Sunday, 17 April 2011 00:00

Management Versus Innovation

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Innovation Thought Bubble

Months ago, maybe over a year, now, I was blasted for talking about innovation in the context of information technology (IT) projects. The gist of the complaint was that all IT folks think they are building some new groundbreaking, revolutionary application that requires the latest in technology's tools. I agreed with his argument, qualifying that although this seems to be a pervasive theme, IT is a discipline that needs to keep one-foot in the pioneering frontier. Regardless, I had to concede that many innovative initiatives are more about a technician playing with some new toy. Jobs like implementing ERP interfaces to manufacturing execution systems (MES) only sound new. Unfortunately, I must say, "been there done that." Most IT is neither new of innovative. To avoid squandering funds, executives must understand and direct what needs to be innovative and permeate the company's culture with that knowledge. Otherwise, the wasted time and expense will suck a company dry.

Is It Innovative?

The first step is realizing that innovative projects take a different approach. This epiphany opens the door to understanding why it is important to classify projects as such. Only apply innovation's label to initiatives that are core to the business' competitive advantage differentiating it from competitors. Innovation requires tolerance of significant risk, acceptance of inevitable failures, and implementation of methodologies to minimize the exploratory costs. A successful leader infuses this philosophy in the organization so that every person understands the impact of being a pioneering organization.

Innovative Projects Are Different

The second step is to apply the innovation label only to projects that are producing something truly ground-breaking. Especially true in IT, the "innovative" solution is often chosen to quell someone's curiosity in the newest technologies. Project executives must be critical of initiatives claiming this title. Highly repetitive, well-understood projects should be run to a pre-existing set of processes that are tuned for the specific style of project.

Innovative projects have additional challenges making them special. The primary is risk. Companies who want to be the first ones to try a new idea must have a high-risk tolerance. Many "great new ideas" turn out to be too complicated or costly to build. The time between inception and failed fruition must be minimized. Development needs to follow a methodology that surfaces this early and fails fast. This is where iterative methodologies, like agile, are critical. The customer's constant critique of the project's value allows for quick course corrections and identifying initiatives that must be stopped—the earlier these actions the lower the cost.

Portfolio of Processes

Organizations performing a mixture of repetitive and innovative projects need to have multiple, potentially very different, methodologies. Examples are in many industries.

IT organizations that support infrastructure (network pulls, computer refreshes, etc.) and develop custom software applications are one example. Iterative development is senseless for the former, while using agile for software development may be the most logical option.

The same dichotomy is occurs in hardware companies that both design new and manufacture existing products. Improvements to or building new a production line is basically repeatable and has a known endpoint. They comfortably conform to a waterfall or phased approach. New product development, where value of features and functions need to be continually evaluated, are mostly agile-esque in nature.

Innovation

Whether in sales or IT, ground-breaking inventions are critical to a company's ability to capture market share. This does not mean, however, that all initiatives must be innovative. Project executives and company leaders need to identify areas requiring the added risk of a pioneering approach. This is an executive's strategic decision, not a technician's tactical whim. It encompasses identifying areas where the risk can most benefit the company and ensuring the infrastructure is in place to facilitate the highest likelihood of success. Without executives being fully engaged, energies expended on innovative initiatives squander company assets pulling resources away from supporting strategic goals.

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