How to Create Innovation

Innovation is imperative. It is the most reliable source of growth in a mature economy. Low cost and high quality can only get you so far when there is someone in the world who can do it cheaper.

It differentiates one product or service from everything else that’s on the market. It can be an endless money pit.

Traditionally, companies have invested in innovation in the same way they manufacture products. They ask for a list of potential innovations, select a few, assign a project manager to the project, plan it, put time and money into the “innovative” project, execute and see if the results stick. It sounds good, but it doesn’t work. It ends up creating products that nobody wants. Worse it demoralizes the team that worked on it and the people who backed the project. A stigma starts to grow around “innovative” projects, luring in only the unsuspecting and naïve, pushing their budgets to the fringes of a corporation.

This is no-way to grow. The best and brightest will move to other parts of the company, parts with more stable career paths. Or, they’ll move to another company altogether. Innovation will walk out the door.

It’s no wonder this approach doesn’t work. Innovation is the creation of something new. It is high-risk, uncertain and strange looking. The traditional approach tries to control risk and uncertainty. It constrains innovation. It puts creativity in the same box as manufacturing: pick what you want to make, engineer a production line, manage the line and out comes innovation.

Innovation, though, can’t be manufactured. It is wilder than that. It can’t be measured by a project being on time, on budget or meeting requirements. It can’t be gauged by the ROI of one project. These are the wrong factors to measure or control if you want to be innovative. A quick check against these variables brings the point home.

Budget doesn’t drive innovation. If so, the wealthiest companies would be the most innovative. Microsoft, for example, would lead the world in mobile phones. Exxon-Mobile would lead in profitable alternative fuels.

Schedule performance doesn’t drive innovation. Delivering on time doesn’t matter if the product you’re delivering is not innovative. If this were the case, you’d expect that when a company, like Apple, were late delivering a new product, say a white iPhone, they’d be penalized in the market. Clearly, consumers haven’t cared.

In terms of meeting requirements, this is almost a contradiction when it comes to innovation. Meeting requirements is useless if the requirements miss the mark on innovation. Going back to the Microsoft and mobile phones, I’m sure the team that delivered the Microsoft Kin mobile phone executed perfectly and delivered what was asked of them. But they missed the boat. The Kin was not the innovative product Microsoft needed to make gains in the mobile market.

So, if you can’t manufacture innovation, how do you create it? You forget about the end product and focus on the process. You focus on growing the key factors that lead to innovation. Foster an atmosphere where the right ingredients are present, where lightening can strike and creativity can happen.

The two main factors that lead to innovation are:

  • Experimentation
  • Knowledge integration

Experimentation is the ability to try and fail -“ and try again, without being penalized. It encourages creativity and gives people breathing room to come up with unique solutions.

Implement experimentation by letting people and projects fail. In fact, expect failure. Remember, this is failure in a traditional sense, but not failure when it comes to innovation. Expect good money to go down the drain on products that will not sell. The only caveat is making sure that projects produce something. They have to ship. Stopping a project mid-stream is not an option. It is better to complete a project and ship something that fails, than not get the product out the door.

First off, innovation takes time. Sometimes the best work on a project comes at the end. You never know what you’ve built until its ready to leave the shop. Unlike a traditional project, you can’t use earned-value or mid-project performance indicators to know if the project is on track or not. You have to leave the team alone. Project should not, though, become endless endeavor with unlimited budget. On the contrary, the budget needs to be fixed and the deadline immutable. The team gets freedom but they absolutely must ship by a certain date and within a certain budget.

Secondly, making sure something is produced is the best way to build great teams. Knowledge integration, which we’ll talk about in a moment, comes down to building great teams. Studies have shown that great teams are built when they are engaged in real life tasks. Exercises do not create teams. People know it doesn’t count. They know they won’t be evaluated on the outcome of the exercise in the same way they are evaluated on their daily job performance. The same thing happens when they know an innovation project can be stopped mid-stream, that they don’t have to ship. They endure and hang on until the project gets stopped and they can return to “real” work. If it is not for real, people will phone it in.

Having mentioned knowledge integration, we’ll talk about it in more depth now. Knowledge integration is the intermingling of different subjects and areas of expertise. It broadens the scope of possible solutions and provides a broader perspective on problems. It encourages trust among a team, makes people comfortable experimenting and gives them ideas for experimental approaches.

Knowledge integration differentiates an innovative team from one that is simply competent. A great, innovative team is one that works well together, has a high degree of trust and has a high degree of knowledge integration. They don’t need to explain everything to each other all the time. While not quite an old married couple, in terms of knowing what the other person is going to say, they work well enough together, and know each other well enough, that they can work on a problem without spending time getting each other up to speed. A team with this kind of effective coordination can quickly focus on a problem and start working on solutions.

Trust allows the team to work together and let each one give their individual contribution without another person second-guessing them. Conversations become centered on the effectiveness of a particular approach rather than a second-guessing of someone’s skills or intent. There is a high degree of comfort in trying out different approaches, a willingness to experiment. Equally important, knowledge integration paves a path in which teams can experiment.

Fostering the right elements for innovation, experimentation and knowledge integration, might seem like a daunting task. It’s not. It can be done gradually and within an existing framework of traditional project management. It doesn’t require a sea-change in your corporate culture.

Here are two practical, project management directed steps, that will help build an atmosphere of creativity and allow your company to foster innovation and growth:

  1. Measure investments in innovation over time and over multiple projects, as a portfolio or separate line of business.
  2. Measure the success of any single project against the factors that lead to innovation- namely, are you building great, innovation teams.

Measure these items and encourage them. It is critical to the long-term success of your company and even your department. Innovation can propel your company to the next level or turn your IT department, for example, into a strategic asset rather than a service bureau. The ability to consistently innovate creates value and gives you a competitive advantage in an increasingly small and flat world.

Mark Phillips is the product manager and lead spokesperson at Vertabase project management software. He has presented to numerous professional groups and conferences on the subjects of software design, usability and project management. He blogs about project management at and can be reached at [email protected].