HANDBOOK ON INNOVATION AND PROJECT

MANAGEMENT
 In memory of Rémi Maniak who, through his enthusiasm and relevance,
contributed so much to the community of innovation and project researchers
Handbook on Innovation and Project
Management

Edited by
Andrew Davies
Science Policy Research Unit (SPRU), University of Sussex Business School, UK

Sylvain Lenfle
Conservatoire National des Arts et Métiers (CNAM – Department of
Innovation), France

Christoph H. Loch
Cambridge Judge Business School, University of Cambridge, UK

Christophe Midler
Centre de Recherche en Gestion-Institut Interdisciplinaire de l’Innovation,
CNRS Ecole Polytechnique, Institut Polytechnique de Paris, France

Cheltenham, UK · Northampton, MA, USA

© Andrew Davies, Sylvain Lenfle, Christoph H. Loch and Christophe Midler 2023

Cover image: The UK Pavilion “The Seed Cathedral” by Heatherwick Studio, winner of
the Shanghai 2010 World Expo. Photographed by Carsten Ullrich. Flickr license https://
creativecommons.org/licenses/by-sa/2.0/

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recording, or otherwise without the prior permission of the publisher.

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EEP BoX
Contents

List of contributors vii

Foreword by Karl T. Ulrich xiv

1 Introduction: building bridges between innovation and project management

research 1
Andrew Davies, Sylvain Lenfle, Christoph H. Loch and Christophe Midler

PART I   CONVERGING AND INTEGRATING

2 Bridging project studies and innovation studies: a meta-theoretical
approach and research agenda 36
Joana Geraldi and Jonas Söderlund

3 Corporate entrepreneurship and project management 60

Valentine Georget and Rémi Maniak

4 The converging nature of innovation and project management: process,

contingency and strategy 80
Vered Holzmann and Aaron Shenhar

5 It’s all a bit fuzzy? The front-end in project and innovation management 101
Michael A. Lewis, Joseph W. Harrison and Jens K. Roehrich

6 “A disputed project identity”: ambiguity and hybridization of exploration

and exploitation in complex projects 125
Stéphanie Tillement, Frédéric Garcias and Florence Charue-Duboc

7 Innovation projects in a global world: bridging global innovation

management and project management 149
Christophe Midler and Sihem BenMahmoud-Jouini

PART II   BUILDING AND EXTENDING

8 Corporate innovation strategies and multi-project management on lineages
and ambidextrous programmes 168
Rémi Maniak and Christophe Midler

9 Exploratory projects: the state of the art and a research agenda 186
Sylvain Lenfle

10 Managing unforeseeable uncertainty through learning 201

Christoph H. Loch, Svenja C. Sommer and Mengtong Jiang

v
vi Handbook on innovation and project management

11 Success factors of project portfolio management and their influence on

innovation success 219
Alexander Kock and Hans Georg Gemünden

12 Innovation in project-based organizations 232

Jan van den Ende and Floor Blindenbach-Driessen

PART III   IMPORTING AND CROSS-FERTILIZING

13 Collaboration and trust in innovative projects 244
Niels Noorderhaven

14 A cultural evolution theory of balancing innovative and routine projects 258

Christoph H. Loch, Stylianos Kavadias and Svenja C. Sommer

15 Organizing projects for social innovation 274

Stephan Manning and Stanislav Vavilov

16 From “lonely projects” to orchestrating project innovation ecosystems 294

Samuel C. MacAulay, Andrew Davies and Mark Dodgson

17 Value management of innovation projects: contemporary challenges and

perspectives 308
Sophie Hooge and Sylvain Lenfle

18 Blending novelty and tradition in creative projects: how robust project

design and conventionality shape the appeal of operatic productions 333
Giulia Cancellieri, Gino Cattani and Simone Ferriani

PART IV   CASES AND CONTEXTS

19 Systems engineering as foundation and target for complex system innovation 356
Stephen B. Johnson

20 Corporate innovation and agile project management 375

Kate Davis and Jeffrey K. Pinto

21 Projects, capabilities and innovation: Rome’s Jubilee as a vanguard project

for the Italian Civil Protection Department 393
Eugenia Cacciatori and Andrea Prencipe

22 Digital project capabilities and innovation: insights from the emerging use
of platforms in construction 408
Jennifer Whyte, Luigi Mosca and Shanjing (Alexander) Zhou

23 Innovation and big science projects 423

Mark Dodgson and David Gann

Index 434
Contributors

Sihem BenMahmoud-Jouini is Associate Professor at HEC Paris, France, where she teaches
innovation management, new product development and project management. Her research
focuses on organizational design for innovation and creativity, strategic management of inno-
vation, entrepreneurship and design management. She held the Orange-HEC (2012–2018)
research chair on innovation management and globalization. She has published in Creativity
Innovation Management, International Journal of Project Management, Journal of Product
Innovation Management, Management International and Project Management Journal,
among other journals. Her latest book is Management de l’Innovation et Globalisation,
Dunod, France.
Floor Blindenbach-Driessen has a PhD in management from Erasmus University in the
Netherlands. She has 25+ years of experience with bringing about innovative ideas and
has published articles in, among others, Research Policy, Journal of Product Innovation
Management and IEEE Transactions on Engineering Management. She is the founder of
Organizing4Innovation which provides a proven path to success for innovation teams. She has
guided hundreds of innovators in creating innovative solutions, leading to millions of dollars
in new revenues.
Eugenia Cacciatori is Senior Lecturer (Associate Professor) in Management at Bayes
Business School, City University of London, UK. Eugenia’s interests are in the organizational
processes of innovation, including the role of artefacts such as models, plans and procedures
in knowledge creation and exchange, and innovation in project-based contexts. Eugenia’s
research has been published in journals such as the Academy of Management Journal, Journal
of Management Studies, Organization Studies and Research Policy. She is part of the Centre
for Creativity in Professional Practice (City) and the Ethics Community of Digital Society
Initiative (UZH).
Giulia Cancellieri is Tenure Track Assistant Professor in Business Administration at the Ca’
Foscari University of Venice, Italy. Her research interests include creativity and innovation,
social processes of legitimation in cultural industries, strategic management and marketing of
cultural organizations.
Gino Cattani is Professor of Strategy and Organization Theory at the Stern Business School,
New York University, NY. His research interests include creativity and innovation, social eval-
uation and competitive sensemaking.
Florence Charue-Duboc is Professor at École Polytechnique, Palaiseau, France, and research
director at CNRS at i3-CRG. Her research work deals with technological innovation man-
agement and strategy. She has conducted empirical analysis in diverse firms in various sec-
tors (chemical and pharmaceutical, automotive industry, industrial gas). She has published
her work in international journals such as International Journal of Innovation Management,
Creativity and Innovation Management, International Journal of Project Organisation and

vii
viii Handbook on innovation and project management

Management, International Journal of Technology Management and Industry and Corporate

Change.
Andrew Davies is RM Phillips Freeman Chair and Professor of Innovation Management at
the Science Policy Research Unit, University of Sussex Business School, Adjunct Professor at
BI Norwegian Business School, Norway, Honorary Professor at UCL and Visiting Professor
at LUISS University, Rome. His book Projects: A Very Short Introduction, Oxford University
Press (2017) was awarded the 2018 Project Management Institute David I. Cleland Literature
Award. In 2020 he was awarded an Honorary Fellowship of the Association for Project
Management.
Kate Davis is Senior Lecturer at Cranfield University, UK, in the School of Management
specializing in the areas of strategic organizational project management, consultancy and
designing and delivering courses that have a real impact. She has particular expertise in the
development and implementation of modules with large student numbers, pioneering the
development and deployment of technology to improve teaching and learning. In 2016 she
completed her PhD which examines multiple stakeholder perceptions of project success.
Mark Dodgson researches innovation. He has published or edited 19 books and over
100 articles on the subject and studied it in over 60 countries. He is currently Executive-
in-Residence, Saïd Business School, University of Oxford, UK; Visiting Professor, Imperial
College London, UK; Broman Scholar, University of Gothenburg, Sweden; and Emeritus
Professor, University of Queensland, Australia. He has been on the boards of two multibillion-
dollar companies and five start-ups.
Simone Ferriani is Professor of Entrepreneurship at the University of Bologna, Italy, and at
City University of London, UK. His research interests include entrepreneurship, innovation
and social networks. He is a lifetime fellow of Clare-Hall, Cambridge University.
David Gann is Pro-Vice-Chancellor of Development and External Affairs and Professor of
Innovation and Entrepreneurship at the Saïd Business School of the University of Oxford,
UK. His publications on innovation management include books such as The Management of
Technological Innovation, The Oxford Handbook of Innovation Management, Think, Play,
Do: Technology, Innovation and Organisation and The Playful Entrepreneur: How to Adapt
and Thrive in Uncertain Times and articles in journals such as Research Policy, Organization
Science, Harvard Business Review, California Management Review, MIT Sloan Management
Review and Project Management Journal.
Frédéric Garcias is Assistant Professor of Management at the University of Lille (IAE
Lille), France, and a researcher in the LUMEN laboratory (Lille University Management).
He specializes in knowledge-based approaches to organizations and projects. He conducts
his research in collaboration with industrial companies and has notably studied the phe-
nomena of forgetting and relearning within new nuclear reactor projects. His work has been
published in journals such as M@n@gement, Project Management Journal and Nuclear
Technology.
Hans Georg Gemünden was Professor of Project Management at BI Norwegian Business
School, Norway, from 2015 to 2019 and Professor of Technology and Innovation Management
at TU Berlin, Germany, from 2000 to 2015. He has authored over 180 journal articles,
140 book chapters and five books, and published in Organization Science, Research Policy,
 Contributors  ix

Journal of Product Innovation Management, etc. He has been first or second supervisor of
19 habilitations and 165 PhDs; 18 of the first supervised became university professors.
Valentine Georget is Lecturer in Management at the Université Côte d’Azur, France, and a
researcher at GREDEG (UMR CNRS 7321). After completing her thesis at the i3-CRG labora-
tory (UMR CNRS 9217) at École Polytechnique on the individual impacts of corporate entre-
preneurship, she sought to understand how to reconcile economic profitability with positive
socio-environmental impacts for organizations. Through her research, Valentine is interested
in the reconciliation of innovation, sustainability and the individual.
Joana Geraldi is Associate Professor at Copenhagen Business School, Denmark, and an hon-
ourary Senior Researcher at University College London, UK. Joana is intrigued about how
projects shape and are shaped in firms and society. Joana advocates for integrating knowl-
edge across fields and works to create insights by bridging fields of study. Joana has pub-
lished in outlets such as the Journal of Management Studies, International Journal of Project
Management and Project Management Journal, and has led several special issues.
Joseph W. Harrison is a Doctoral Researcher at the University of Bath, School of Management,
UK. Joseph is currently researching the management of scale in major projects. Joseph is a
recipient of the Economic and Social Research Council (ESRC) doctoral scholarship (admin-
istered by the South West Doctoral Training Partnership).
Vered Holzmann is a faculty member at the School of Management and Economics in the
Academic College of Tel Aviv Yaffo, Israel, where she also serves as Director of Research,
Development and Innovation. Vered received her doctorate from the School of Management,
Tel Aviv University. Her research topics include project management, strategy, innovation,
entrepreneurship and impact management. She coordinated several international projects in
the fields of internationalization in higher education and innovative finance inclusion.
Sophie Hooge is Professor of Innovation Management and Engineering Design at Mines
Paris – PSL, France. Her research focuses on value management and performance processes
in industrial and cooperative contexts of innovation and has been built on various longitudi-
nal partnerships with strategic and operational teams of industrial firms and public institu-
tions for 15 years. She has published her works in international journals such as Journal
of Engineering and Technology Management, Creativity and Innovation Management and
Project Management Journal.
Mengtong Jiang received a PhD in Project Management from the School of Economics and
Management of Dalian University of Technology, Dalian, China. Her research interests are
in the area of project management, organizational behaviour and value management. She
has published in academic journals such as International Journal of Managing Projects in
Business, Chinese Journal of Management and Journal of Management Case Studies.
Stephen B. Johnson works on several contracts with the National Aeronautics and Space
Administration, including Space Launch System Mission and Fault Management, diagnostic
and fault management software and systems engineering. He is the general editor for System
Health Management: With Aerospace Applications (2011), the author of The Secret of Apollo:
Systems Management in American and European Space Programs (2002), and many other
articles and books on system health management, systems engineering, space economics, phi-
losophy of technology and space history.
x Handbook on innovation and project management

Stylianos (Stelios) Kavadias is the Margaret Thatcher Professor of Enterprise Studies in

Innovation and Growth at the Cambridge Judge Business School, where he serves as its Vice-
Dean for Faculty and directs its Entrepreneurship Centre. His research on the innovation and
growth challenges of organizations, has appeared in HBR, MSOM, and Management Science
where he serves as an Associate Editor. Prior to JBS, Stelios was the Steven A. Denning
Professor of Technology and Management at Georgia Tech in the USA.
Alexander Kock is Full Professor of Technology and Innovation Management at the
Technische Universität Darmstadt, Germany. His research interests include innovation and
project management, especially managing project portfolios, the front end of innovation and
open innovation. Alexander is an editor at the Project Management Journal and has published
over 100 journal and conference articles, for example, in Research Policy, Journal of Product
Innovation Management, IEEE Transactions on Engineering Management, R&D Management
and International Journal of Project Management.
Sylvain Lenfle is Professor of Project and Innovation Management at the Conservatoire
National des Arts et Métiers (CNAM, Paris). He is also Associate Researcher at the
Management Research Center (Ecole Polytechnique) and Associate Professor at the Ecole des
Mines (Paris). His works deals with the management of exploratory projects and innovation
through field research in organizations or historical research. He has published in academic
journals such as Research Policy, California Management Review, Organization Studies, and
International Journal of Project Management.
Michael A. Lewis is Professor of Operations and Supply Management at the University
of Bath, School of Management, UK. His wide-ranging interests include operations/tech-
nology strategy, governance, productivity and major projects. He also has a long-standing
interest in sustainability and healthcare. He is the author and co-author of numerous journal
articles as well as several books including a widely adopted and translated book on opera-
tions strategy.
Christoph H. Loch is Professor of Operations and Technology Management at Cambridge
Judge Business School, where he served as Dean from 2011 to 2021. Before, he was a
McKinsey consultant and then a professor at INSEAD. For 35 years he has worked on innova-
tion and project management, including innovation portfolios, management of novel projects,
and motivation of professional employees. He has a Master from the Darmstadt Technical
University, an MBA from the University of Tennessee Knoxville and a PhD from the Stanford
Graduate School of Business.
Samuel C. MacAulay is a Senior Lecturer at the University of Queensland’s Business School,
Australia. Sam’s research explores how innovation is shaped by business models, how new
products and services are created and how organizations gain and sustain competitive advan-
tage. This research has focused on industries spanning from civil engineering to advanced
manufacturing and has been published across leading international journals ranging from
Project Management Journal to Academy of Management Review.
Rémi Maniak was Professor in Innovation Management at École Polytechnique and researcher
at CRG I3 CNRS-IP Paris, France. He was Director of the master’s degree in Project Innovation
Conception and Director of the education program Innovation Enterprise and Society at the
Institut Polytechnique de Paris. He conducted research on innovation project management in
 Contributors  xi

collaboration with various companies, public organizations and think tanks. His last book, co-
authored with Nicolas Mottis, was La jungle de l’innovation, comment survivre et prospérer?,
Dunod, 2021.
Stephan Manning is Professor of Strategy and Innovation at the University of Sussex Business
School, UK. He is also a filmmaker. Stephan’s current research focuses on global societal
challenges, social innovation and entrepreneurship, and global value chains. Most recently,
he has begun studying films and related impact campaigns as vehicles for social change. His
research has been published in major journals in the field. For more information, please check
out his website: www.stephanmanning.com.
Christophe Midler is Emeritus Research Director at the Management Research Center and
Professor at Ecole Polytechnique, Paris. He is member of National Academy of Technologies
of France and Doctor Honoris Causa at Umea University, Sweden. His research topics are
product development, project and innovation strategy and management. He has explored these
topics in various industrial contexts, especially automotive industry. He has published his work
in journals as Project Management Journal, Research Policy and Industrial and Corporate
Change. His last published book is The Innovation Odyssey, Taylor and Francis (2023).
Luigi Mosca is a research associate at the Imperial College Business School and an honor-
ary researcher at the John Grill Institute for Project Leadership, University of Sydney. His
research interests include organizational configurations, digital transformation and innovative
business models, with empirical work on project-based firms, SMEs and digital platforms.
Niels Noorderhaven is Emeritus Orofessor of International Management at Tilburg University,
Netherlands, and visiting Professor at the University of Antwerp, LUISS University Rome and
Zhejiang University. His research focuses on the management of international collaboration
between firms, for instance in the form of alliances, joint ventures or mergers and acqui-
sitions. His research has mainly focused on industries like microelectronics, office equip-
ment, airlines, construction and shipbuilding. Niels is a Fellow of the European Academy of
Management and currently also serves as Chair of the Board of this association.
Jeffrey K. Pinto is the Andrew Morrow and Elizabeth Lee Black Chair in Management
Technology with the Black School of Business, Pennsylvania State University, Erie, PA. He
has authored or edited 28 books and some 200 scientific papers. He received PMI’s Research
Achievement Award in 2009 for outstanding contributions to project management research.
In 2017, Jeffrey was honoured with the International Project Management Association’s
Research Achievement Award for his research career in project management.
Andrea Prencipe is Rector as well as Professor of Organization and Innovation at Luiss
University in Rome, Italy. His research focuses on innovation-related issues in organizations
and higher education institutions and on project-based organizing. Andrea’s works have been
published in such journals as Administrative Science Quarterly, Organization Science and
California Management Review as well as with international publishers, e.g. Oxford University
Press. He sits on the editorial board of such journals as International Journal of Project
Management and Research Policy. His work regularly appears in international newspapers.
Jens K. Roehrich is Professor of Supply Chain Innovation at the University of Bath, School
of Management, UK. He has carried out research, executive education and competence
xii Handbook on innovation and project management

development activities with a wide range of public and private organizations in large projects.
His research focuses on long-term relationships across public and private organizations with a
particular emphasis on the role of contractual and relational governance mechanisms as well
as the dark side of relationships such as coordination failures and conflicts.
Aaron Shenhar is a PMI Fellow and Professor of Project Management and Leadership.
He held positions at the University of Minnesota, Tel Aviv University, Stevens Institute of
Technology and Rutgers University. For two decades, he was also an executive in the defence
industry. He holds five academic degrees in engineering and management from Stanford
University and the Technion in Israel. He was the first recipient of the Project Management
Institute Research Achievement Award and a recipient of the IEEE Engineering Manager of
the Year Award and IMPA’s Research Achievement Award.
Jonas Söderlund is a Professor of Strategy at Linköping University, Sweden, and an Adjunct
Professor at BI Norwegian Business School, Norway. He is an Associate Editor of the
Project Management Journal and a member of the editorial boards of Human Relations and
Organization Studies. He has studied project-based organizing and project-based work and
contributed to advancing theories of knowledge integration, liminality and temporality through
work published in Research Policy, Organization Studies, Human Relations, Management
Learning and the International Journal of Management Reviews.
Svenja C. Sommer is Associate Professor in the Operations Management and Information
Technology Department at HEC Paris, France, and Academic Director of the MSc in Innovation
and Entrepreneurship. Her research aims to improve our understanding of effective manage-
ment of innovation-related and product development projects. She serves as a Senior Editor
for the New Product Development, R&D, and Project Management department of POMS and
as an Associate Editor for the Entrepreneurship and Innovation department at Management
Science.
Stéphanie Tillement is Associate Professor in Sociology at IMT Atlantique, France, and
Researcher at LEMNA. She holds the RESOH Chair in Work, Organization and Industrial
Safe Performance. Favouring grounded and processual approaches, her research focuses on
complex projects’ organization and governance and the collective construction of safe perfor-
mance in inter-organizational work contexts. She has particularly investigated large-scale pro-
jects in the nuclear industry. She has co-edited several books (Springer, PUR) and published
in journals such as M@n@gement, Project Management Journal and Nuclear Technology.
Jan van den Ende is Professor of Innovation Management and Horticulture Innovation
at Rotterdam School of Management, Erasmus University, Netherlands. Jan has published
in numerous journals such as Organization Science, Harvard Business Review, Journal of
Product Innovation Management and Research Policy. He published the textbook Innovation
Management which targeted both students and practitioners (Bloomsbury/Macmillan). He is
founder of the New Business Roundtable, in which innovation managers of large companies
meet, such as Philips, ING and ASML.
Stanislav Vavilov is Assistant Professor of Management at the Dolan School of Business,
Fairfield University, CT. Stanislav’s research interests are at the intersection of entrepreneur-
ship support, international development and social entrepreneurship. In particular, he studies
the processes that underpin the emergence and formation of novel entrepreneurship support
 Contributors  xiii

infrastructures, especially in transnational contexts. His research has been published in Strategic
Organization, Journal of Cleaner Production and Journal of International Management.
Jennifer Whyte is a Professor at the University of Sydney, where she is Director of the John
Grill Institute for Project Leadership and Head of School of Project Management. Her research
explores the changing nature of organizational practices in large scale complex projects, with
empirical work on construction, major infrastructure projects, visualization and design.
Shanjing (Alexander) Zhou received his PhD at Imperial College London. His research
interests lie in innovation strategies, new business models, project management and delivery,
digitalization, industrialized construction, smart safety, productivity, and entrepreneurship.
Foreword
Karl T. Ulrich

The Elgar Handbook on Innovation and Project Management is a groundbreaking publica-

tion that explores the theoretical and practical connections between the academic disciplines
of project management and innovation studies. As often happens in research communities,
both fields have perhaps become somewhat inwardly focused. Further exacerbating the dis-
connect between the efforts of scholars has been a different relative emphasis on innovation
and project management in different global regions. This handbook is the first of its kind to
examine innovation and project management in various forms and contexts, from R&D and
new products to agile collaboration and infrastructure development.
The authors are leading scholars in the fields of innovation and project management, and
in this handbook, they introduce new theoretical and empirical research examining how
organizations can successfully launch and manage innovative projects in the 21st century.
Collectively, they argue that, in order to achieve successful outcomes, project managers must
be equipped with the tools, strategies and perspectives needed to drive innovation throughout
their projects. This means considering how to leverage emerging technologies, how to create
an environment that supports creativity and innovation and how to identify and implement
new ideas that can bring value to the project and its stakeholders.
The editors have devised an outstanding architecture for the handbook. The volume is struc-
tured in a way that makes it accessible to both innovation and project management practitioners
and students of the field. The introduction provides an overview of the current state of the pro-
ject management field and how it has become increasingly inward-focused. They then delve into
the key concepts and principles of innovation and project management, including a discussion of
how these fields interact and influence one another. Throughout the book, the contributors use
real-world examples and case studies to illustrate their points and provide practical insights into
how to implement their ideas in a variety of settings. Some of the critical topics covered include:

• The role of innovation in project management.

• The importance of creating a culture of innovation in project teams.
• Techniques for encouraging creativity and idea generation in projects.
• Approaches to measuring and assessing the impact of innovation on projects.
• Strategies for fostering collaboration and teamwork in innovation-driven projects.
• Methods for managing risk and uncertainty in innovative projects.

The Handbook is an important resource for anyone who is interested in bringing the fields of
innovation and project management back together. Whether you are a seasoned project man-
ager looking to add a new dimension to your work or a student just starting out in the field,
this book will provide you with the insights, tools and strategies you need to be successful in
today’s rapidly changing and highly competitive business environment.
Karl T. Ulrich
CIBC Endowed Professor
The Wharton School
Philadelphia, PA
xiv
1. Introduction: building bridges between
innovation and project management research
Andrew Davies, Sylvain Lenfle, Christoph H. Loch and
Christophe Midler

INTRODUCTION

This inaugural edition of the Elgar Handbook on Innovation and Project Management is
the first of its kind to explore the theoretical and practical connections between the man-
agement of innovation and projects. The Handbook examines the management of innovative
projects in various forms (e.g. R&D, new product development, agile, collaboration, trust and
ambidexterity) and diverse contexts (e.g. aerospace, defence, automotive, nuclear power, cul-
tural industries, social innovation and urban railway systems). It introduces new theoretical
and empirical research by leading scholars examining how organizations launch and manage
innovative projects to compete in global markets and tackle some of the immense economic,
social and environmental challenges facing organizations and societies in the 21st century.
In this introductory chapter, we begin by suggesting that the ability to successfully con-
ceive and execute innovative projects is increasingly important to the survival and prosperity
of organizations – firms, start-ups, government bodies, NGOs and many others – particu-
larly when conditions are increasingly uncertain, complex and rapidly changing. We then
briefly explain how project management and innovative studies emerged and developed as
two largely distinct literatures, offering quite different conceptual insights and contrasting
practical guidance on how to manage innovative projects. Next, we introduce key theoreti-
cal research developed by pioneering scholars working at the interface between innovation
and project management. We then provide a summary of the chapters in the four parts of the
Handbook and how they advance our thinking by exploring synergies and building bridges
between innovation, project management and adjacent research. We end by identifying prom-
ising new avenues of research to improve our understanding and offer practical guidance on
how to manage innovative projects in the future.

MANAGING INNOVATIVE PROJECTS: A KEY CHALLENGE FACING

ORGANIZATIONS IN THE 21ST CENTURY

Projects bring together people and other resources in a temporary organization to produce
novel, one-off or highly customized products, services, outcomes or events as diverse as air-
craft, operas, the Olympics or new processes and capabilities within an organization. But
they play an even more fundamental role as the engine of innovation – developing and imple-
menting novel ideas – in globally competitive markets. Firms depend on projects to under-
take exploratory R&D, develop novel technologies, design, test and deploy new products and

1
2 Handbook on innovation and project management

services, launch entrepreneurial start-ups and internal corporate ventures, introduce new pro-
cesses and organizational changes and implement entirely new business models. As new ideas
proliferating rapidly across the internet are more easily shared or copied, product life cycles
become shorter in some industries and others face major technological disruptions, firms rely
on projects to create new products and services before existing ones become obsolete across
industries (e.g. smart phones, aviation, electric vehicles, renewable energy and digital plat-
forms). Projects are also used to tackle sustainability strategies and the political, supply chain
and trade disruptions affecting a growing number of industries in recent years. As a result,
many firms are now run like a collection of projects to create flexible, faster and flatter struc-
tures focused on problem-solving and innovation.
Whereas projects in the private sector are undertaken by firms to gain competitive advan-
tage and increase profitability and shareholder wealth, those in the public sector are created
to maximize public welfare, create social value or address societal challenges. In many cases,
the profit and non-profit boundary is blurred in projects involving multiple public, private
and hybrid organizations (e.g. NGOs and research institutes) in developed and developing
countries. Governments, manufacturers, international bodies, universities, consultancies and
other organizations often collaborate in large, inter-organizational projects to tackle complex,
urgent and challenging social, political and ecological problems (e.g. retrofitting homes and
workplaces in cities, providing humanitarian aid or dealing with ecological disasters) and
achieve transformational societal missions (e.g. space exploration, vaccine development and
nuclear fusion).

Projects, Innovation and Operations

Until the late 20th century, many large firms became successful by improving productive
operations rather than projects (Peters and Waterman, 1982). Designed to perform standard-
ized routines in stable, predictable and growing markets, high-volume operations created
value for organizations over the past century through a stream of advances in mass produc-
tion, such as Henry Ford’s assembly line, Frederick W. Taylor’s scientific management, Total
Quality Management, lean production and mass customization (although continuous improve-
ment and gradual change have always been important competitive tools). Formal, bureaucratic
and mechanistic forms of large-scale organization were established to deal with routine opera-
tions performed by engineering, manufacturing, sales and other functional units.
Firms that had previously focused on improving their operations, however, struggled to
adapt to an increasingly volatile, rapidly changing and uncertain environment in the 1970s
and 1980s. They could no longer survive by only improving their operations and began to
focus on projects to unlock new sources of innovation and competitive advantage (Peters and
Waterman, 1982). Concepts introduced to describe project-based organizations as organic
(Burns and Stalker, 1961), adaptive (Bennis, 1966) adhocracies (Toffler, 1970; Mintzberg,
1979) were ideas borne from more turbulent conditions and the incessant pressure to innovate
and change. The project-based firm (Gann and Salter, 2000 Whitley, 2006), project-based
organization (Hobday, 2000; Lundin et al., 2015) and post-bureaucratic organization (Kellog
et al., 2006) are some of the more recent attempts to capture the variety of innovation-oriented
forms of project organizing.
It may be misleading to suggest, however, that projects are simply displacing operations
as the dominant form of organization in the 21st century, as some authors claim (Shenhar
 Introduction 3

and Dvir, 2007; Neito-Rodriguez, 2021), when projects have become even more closely cou-
pled with different types of productive operations (Benghozi et al., 2000; Le Masson et al.,
2010). As illustrated in Figure 1.1, upstream R&D projects create new knowledge of materi-
als, technologies and intangible services that are eventually incorporated downstream in new
product development projects (Imaï et al., 1985; Wheelwright and Clark, 1992). New ideas,
technologies, materials and practices are combined, tested and implemented in new product
development projects before moving further downstream into various stages of production
from low- (unit and batch) to high-volume (mass and continuous flow) operations.
From this perspective, new product and new process development projects are the “engine
of innovation” (Randolph and Posner, 1988; Bowen et al., 1994; Rosenbloom and Spencer,
1996; Midler and Navarre, 2004) driving all productive operations, and the unit stage of novel,
one-off and highly customized production is entirely based on projects (Davies and Hobday,
2005), such as capital goods, architecture, advertising, consulting and sporting events. As the
pace of innovation accelerated in the late 20th century, batch and mass production operations
supported by digital technologies had to become more flexible to produce an increasing variety
of products at lower costs. In recent years, many mass-producers – IBM, Renault and Coco-
Cola among others – have outsourced high-volume manufacturing operations and become
orchestrators of a network of external suppliers involved in product development projects.

Innovative Projects Past and Present

Until scholars began to recognize that innovation requires project forms of organization, gen-
eral management theory had surprisingly little or nothing to say about the subject. Yet projects
have always been important throughout history as the organizational form used to launch new
ventures, develop new technologies and coordinate multiple parties involved in any large-
scale endeavour, such as building the first canal, railway and telegraph networks (Scranton,
2015; Davies, 2017). In a new synthesis of public and private power, scientists, politicians,

Continuous Flow

Mass Production

Mass Customization
New Product
R&D Projects Development
Projects Large Batch

Small Batch

Unit/Project

Note:   project-based activities shaded in grey.

Figure 1.1  Projects, innovation and operations

4 Handbook on innovation and project management

engineers and contractors collaborated on construction, energy and transportation projects,

often on a gigantic scale, such as the American Pacific Railway or the Panama Canal, creating
the infrastructure underpinning the rise of modern industrial societies in the 19th and early
20th centuries (Berman, 1982).
Projects really came of age, however, during and after the Second World War when new
forms of project and matrix structures and the “systems approach” to project management
were created to develop America’s radically new weapons and space exploration technolo-
gies, such as the Manhattan Project that produced the world’s first atomic bomb in 1945,
the Atlas and Polaris ballistic missiles in the 1950s and NASA’s Apollo moon landing in the
1960s (Sayles and Chandler, 1971; Sapolsky, 1972; Johnson, 1997; Hughes, 1998). America’s
aerospace-generated systems approach to project management quickly spread since the 1960s
to most other organizations and industries elsewhere in the world involved developing innova-
tive new products and services, building complex systems, infrastructure, buildings and other
assets, and trying to solve some of the grand challenges facing societies, such as the climate
emergency and ecological destruction (Morris, 1994, 2013; Hughes, 2004). For example, the
Apple New Product Process (ANPP) for developing and bringing breakthrough innovations to
market, such as the iMac and iPhone, is based on NASA’s systems approach to project man-
agement used for the Apollo moon landing in the 1960s.
A vast array of innovative projects are behind the accelerated pace of Schumpeterian “crea-
tive destruction” in the 21st century. Established industries dominated by a few global firms
have already been transformed by revolutionary new product development projects led by
outsiders with the imagination and insight to anticipate what customers in the future might
value and desire, such as Amazon’s dominance of retail, Apple’s iPhone or the phone-based
MPESA payment system. The creation of entirely new industries (e.g. nuclear fusion, hyper-
loop transportation and hydrogen low-carbon energy) is often initiated by large, complex
inter-organizational R&D projects sharing people, resources and facilities often located in
many countries. Construction, architecture and other project-based industries that have been
less susceptible to disruption are finally being opened to up an influx of new digital tech-
nologies and practices. Frank Gehry, for example, adopted project software originally used in
aerospace to design some of the world’s most iconic buildings, starting with the Guggenheim
Museum in Bilbao, Spain. New types of project-based organizations have emerged in recent
years focused entirely on working in overlapping, collaborative projects to generate ideas,
experiment and produce novelty, such as Thomas Heatherwick’s London design studio’s inno-
vations ranging from products (e.g. London’s fuel-efficient bus) to experimental buildings (e.g.
the UK Pavilion at the 2010 World Expo in Shanghai) and urban spaces (e.g. Little Island in
New York). Most importantly, many innovative projects are underway and urgently needed to
solve some of the most pressing problems and grand challenges of our time, such as design-
ing the zero-carbon, energy-efficient infrastructure or developing vaccines at a rapid pace to
prevent the next global pandemic.

Project Society and Challenge of Innovation

“Projectification” is the term used to describe the far-reaching and ongoing transformation
of work and daily life brought about by the spread of project organizing since the mid-1960s
from traditional project-based industries (e.g. construction, civil engineering, defence and
aerospace) to almost every part of society (Midler, 1995, 2019a). More recently labels such the
 Introduction 5

“project society” (Boltanski and Chiapello, 2005; Lundin et al., 2015) and “project economy”
(Nieto-Rodriquez, 2021) have been proposed to underline the significance of this global phe-
nomenon. Although exact data is difficult to obtain, an indicator of the global economic activ-
ity undertaken as projects is fixed capital formation, which has been increasing steadily as a
percentage of global GDP. World Bank data in 2015 indicated that 23 per cent of the world’s
$114 trillion GDP is fixed capital formation (construction, infrastructure and capital goods),
which is almost entirely project-based, and in some newly industrializing countries the figure
is much higher – 31 per cent in India and 46 per cent in China (Davies, 2017). The extent of
projectification, however, is likely to be much greater as these figures fail to capture the grow-
ing share of project work in organizations involving all non-routine work with a specified
target, such as R&D, new product development, organizational change and other initiatives. In
Germany, for example, projects were estimated to account for 33 per cent of total GDP in 2013
(Schoper et al., 2018) and as much as 41 per cent in 2019 (Neito-Rodriguez, 2021).
In recent years, many innovations have been applied to improve the performance of pro-
jects in one industry before spreading to others, such as new product development in auto-
motives based on heavyweight project management and concurrent engineering (Clark and
Fujimoto, 1991), digital technologies offering a “single source of information” to coordinate
complex projects in aerospace, collaborative models of integrated project delivery in con-
struction (Whyte, 2019) and agile development in software (Boehm, 1988). Despite efforts to
increase productivity by learning from the experience of executing an ever-increasing number
of projects, surprisingly few achieve their cost, time, quality and longer-term objectives. In
their study of 600 projects in public, private and non-profit sectors, for example, Shenhar and
Dvir (2007) found that 85 per cent failed to achieve their time and cost objectives. Efforts to
improve performance are even more challenging when projects are highly innovative in rap-
idly changing and uncertain environments.
When we turn to the literature to understand how to improve the management of innovative
projects, however, we find two distinct fields of study – “project management” and “innova-
tion studies” – with entirely different scholarly motivations offering opposing interpretations
and conflicting advice. Some of the key differences between project and innovation manage-
ment are summarized in Table 1.1.

HOW “INNOVATION” IS CONCEPTUALIZED IN PROJECT

MANAGEMENT

The origins of project management can be traced back to the 1950s and 1960s when scientists,
engineers and managers working on large American defence and aerospace projects began to
articulate and codify the new systems approach comprising a cluster of interrelated develop-
ments in project management, systems engineering and operations research (Johnson, 1997;
Hughes, 1998).

Systems Approach to Project Management: Controlled Stage-Gate Process

After the great breakthrough projects of the 1950s, which produced a few spectacular suc-
cesses but also many failures, in spite of virtually unlimited budgets (Art 1972), an explic-
itly more disciplined and “professional” approach to project control was developed under the
6 Handbook on innovation and project management

Table 1.1  Comparing innovation and project management: key differences

Project management Innovation management

Theoretical Single (systems theory) Multiple (e.g. contingency theory,
foundations evolutionary theory, industrial
economics, behavioural theory of firm)
Approach Optimizing, fixed, stage-gate Adaptive, emergent, contingent
process based structure based
View of projects Projects are similar Projects differ
Goal Getting task completed on time, Achieving business results in existing
within budget and requirements for and new markets
client
Definition of success Achieving project goals, intolerance Achieving business strategy, tolerant
of failure of failure
Management style One size fits all Adapt to variation in the environment
Managerial level Middle management/project Top management
management
Tasks Predictable or plannable, linear Uncertain, complex, non-linear,
(controlled sequential stages) interdependent (sequential, concurrent
and parallel)
Planning Plan at the outset and replan as Plan, replan and adjust over time to
needed, put things back on track changes in the environment
Approach to Focus on negative risk, methods Focus on opportunities, positive risk,
uncertainty of risk management, controlling risk willingness
progress, avoiding deviations
Management focus Operational, tools and techniques Strategy, design and structures, as well
as processes and tools
Environment Minimal, detached after project is Affects projects as structure and
influence launched process during planning and execution

Secretary of Defense Robert McNamara. Project management tools, techniques and organiza-
tions (e.g. pure project and matrix structures) were created to combine functional and project
lines of authority, integrate specialized knowledge and deliver complex, novel projects on
time, to budget and according to specification (Sayles and Chandler, 1971; Johnson, 2002).
Indeed, project management is aptly described as a key innovation in how innovation can
be accomplished (Gemünden et al., 2013). Systems engineering techniques were developed
to coordinate the design, development and integration of complex technological systems
(Sapolsky, 1972). Operations research emerged as a discipline to analyse military operations
within which projects were conceived and executed. Articles on project management began
to appear in journals (Gaddis, 1959), the first textbooks on the subject were published (e.g.
Cleland and King, 1968) and professional project management associations were founded in
the United States and Europe – including the International Project Management Association
(IPMA) in 1967, the Project Management Institute (PMI) in 1969 and the Association for
Project Management (APM) in 1972.
 Introduction 7

From its foundation as a discipline in the 1960s until very recently, project management
research and practice have been dominated by the assumption that there is a standardized
“one-size-fits-all” model applicable to the management of all types of projects (e.g. Project
Management Body of Knowledge [PMBoK]). Advocates of project management emphasized
its practical importance and the need for people trained in highly standardized guidelines,
processes and bodies of knowledge, such as the PMI’s PMBoK (PMI, 2021). Although defi-
nitions vary, most project management textbooks and handbooks agree that projects can be
defined as unique, one-time endeavours undertaken to produce a novel, one-off product, event
or outcome (Cleland and King, 1968; Maylor, 2005; Pinto, 2010). Projects range in size from
large inter-organizational endeavours (such as the multinational project established in the
1990s to launch the International Space Station) to small projects undertaken by a department,
group or individuals in an organization. Success is traditionally measured in terms of whether
projects achieve a predefined goal within time, cost and quality – the so-called “iron triangle”
of project management. Projects are sometimes defined as complex because they incorporate
many interacting parts and functions, with inputs from members in various departments or
other organizations.
Projects are temporary because they have a start and end date and dissolve on comple-
tion of the task. According to the standardized model, projects should be planned, controlled
and managed in life cycle stages – the “stage-gate” approach originating in NASA’s Phased
Project Planning in the 1960s – from initiation through execution to commissioning and hand-
over, involving many tasks performed sequentially in distinct order, with some overlapping
or undertaken in parallel over time. Requirements and resources can be defined at the outset
(e.g. work packages, contingencies, cost and schedule estimates) and projects are executed as
planned. Various tools and techniques are employed to reduce risks and uncertainty and by
efforts to control and manage projects within time, cost and quality constraints.

Projects versus Operations

While project management is often treated as a management discipline in its own right (Morris,
1994; Morris et al., 2011), it is also part of the broader discipline of operations management,
where it applies to the unique, one-off production stage end of a spectrum from low to high-vol-
ume operations producing standardized products and services for mass markets (Wheelwright
and Clark, 1992; Browning, 2017). Project management textbooks, by contrast, often draw a
sharp distinction or dichotomy between unique, discrete and non-repetitive projects and stand-
ardized, ongoing and routine operations. Until recently, projects were often considered to be the
“antithesis of repetition” and ideally suited for achieving innovation and change (Pinto, 2010,
25–27). Despite recognizing that some projects contain “repetitive elements” (PMI, 2008, 5)
and that “the process by which it is delivered is often repeated over time” (Maylor, 2005, 5),
most scholars and professional bodies emphasized that this element of repetitiveness does not
undermine the “fundamental uniqueness of project work” (PMI, 2008, 5).
Perhaps because projects are defined in a singular way as entirely novel and unique, the lit-
erature rarely distinguishes between projects based on their degree of novelty (a core attribute
of innovation) and associated uncertainty. In practice, however, innovation undertaken by pro-
jects varies considerably from largely predictable and known incremental changes or adjust-
ments to products and services at one end of a spectrum to far-reaching radical changes and
breakthrough innovations that are new to the world at the other end. As the degree of novelty
8 Handbook on innovation and project management

increases, projects become increasingly uncertain, particularly but not only during the “front-
end” planning phase when they involve fuzzy, ill-defined customer requirements, unknown
technological possibilities and many other contingencies that cannot be foreseen at the outset
and may disrupt carefully prepared plans during execution. Different types of project organi-
zations and processes are, therefore, required to match varying degrees of innovation.
As we will see below, several scholars have suggested that traditional project management
structures, processes and techniques designed for stability and predictability are unable to
deal with increasingly novel, changing and unpredictable projects (Pich et al., 2002; Loch
et al., 2006; Shenhar and Dvir, 2007). Revisiting the historical origins of project management,
Lenfle and Loch (2010) challenge the underlying assumption of the discipline that the control,
phased-based standardized model was developed and widely used on the Manhattan, Atlas,
Apollo and other systems. They show that these projects had to be flexible and adaptive to
deal with unforeseeable uncertainties and developed many techniques (not considered in tra-
ditional project management) to experiment and test alternative solutions, such as the parallel
development of new technologies and experiential learning from the feedback gained during
project execution.

Project Management Embraces Theory

Over the past few decades, there have been several attempts to import theories from other dis-
ciplines to develop a more rigorous understanding of project management (Söderlund, 2011).
Although innovation may not always take centre stage, this work is important because it pro-
vides conceptual background for several chapters in this Handbook and research seeking to
build bridges between project management and innovation.
In the 1980s, some prominent scholars working inside the discipline began to criticize the
traditional model of project management for an almost obsessive focus on execution and failure
to consider the key strategic conditions – including technological and organizational innova-
tion – shaping how projects are successfully planned and delivered in different organizational
and institutional contexts (Morris and Hough, 1987). Morris (1994) advocated the need for a
new paradigm – the “management of projects” – to understand how projects are managed in
their entirety from front-end definition, through execution to commission, start-up and opera-
tions. Morris (1994 and 2013) suggested that innovation and organization theory (e.g. Burns
and Stalker, 1961) provide useful frameworks for identifying how project organizations are
configured in various ways to address different technological and market environments. Many
other leading scholars have since attempted to reinvigorate the field of project management
by developing a broader, more theoretically informed view of the subject (Morris et al., 2011),
striving for greater disciplinary recognition for scholarly research by improving the quality of
academic journals particularly the International Journal of Project Management and Project
Management Journal.
In the 1990s, a growing number of scholars working outside the discipline have become
increasingly interested in understanding how projects are organized, but widely dissatisfied
with how they are conceptualized in the traditional project management literature. In what is
now known as “project studies” (Geraldi and Söderlund, 2018), this research first emerged in
Scandinavia and France when scholars drew upon organization theory to provide new insights
and perspectives on how organizations work together in “temporary” projects and how pro-
jects are embedded in “permanent” organizations (Midler, 1993; Giard and Midler, 1993;
 Introduction 9

Lundin and Söderholm, 1995; Jolivet and Navarre, 1996). Concerned with understanding how
projects evolve in different contexts, project studies emphasize that projects both shape and
are shaped by the wider development of organizations, globalization, networks, fields, indus-
tries and societies. This work recognizes that “no project is an island” (Engwall, 2003): what
happens inside a project must be understood in its broader organizational context and in rela-
tion to past, current and future projects.
Project studies have grown and diversified since the late 1990s to encompass other disci-
plines such as economic geography (Grabher, 2001) and perspectives such as network theory
(Manning and Sydow, 2011; Manning, 2017) and institutional theory (Söderlund and Sydow ,
2019). This is particularly evident in research exploring the link between projects and innova-
tion (e.g. Midler, 1995; Lindkvist et al., 1998; Hobday, 2000; Gann and Salter, 2000; Lenfle,
2016), organizational learning (Lundin and Midler, 1998; Brady and Davies, 2004), experi-
mentation (Gillier and Lenfle, 2019; Ben Mahmoud-Jouini and Midler, 2020), design theory
(Lenfle, 2016), and digitally enabled project delivery models (Whyte, 2019). Several seminal
contributions on the dilemmas and challenges of temporary organizing can be found in two
special issues of Organization Studies (Sydow et al., 2004; Bakker et al., 2016).
Since the early 2000s, scholars applied various theoretical perspectives to understand the
novel governance, organizational and institutional arrangements for managing increasingly
large-scale, global megaprojects and their role as vehicles for transformational change. First,
a study of 60 complex and uncertain “large-engineering projects” (e.g. offshore oil platforms,
hydroelectric dams and subways) around the world found that front-end strategizing, new forms
of governance and careful risk management contributed more to successful outcomes than con-
ventional execution-oriented project management (Miller and Lessard, 2000). Second, a grow-
ing body of research on “megaprojects” that cost US$1 billion or more – including “Big Science”
R&D projects (e.g. the Large Hadron Collider) behind breakthroughs in science and radical tech-
nological innovation – has found that such projects are frequently late and over budget because
of inadequate front-end planning and behavioural bias, primarily due to unrealistic assumptions
and overly optimistic expectations about initial budgets and schedules (Flyvbjerg et al., 2003;
Flyvbjerg, 2014, 2017) but also political tensions about partial goals (Jimoh et al., 2022). Third,
another stream of research examines the range of traditional and new institutional arrange-
ments for “global projects” (e.g. energy and transportation infrastructure) and how stakeholder
alignment and political conflicts are addressed when various parties become involved in large,
temporary cross-national, public–private partnerships (Scott et al., 2011; Levitt et al., 2019).
Despite efforts to rethink the foundations of the discipline, the development and adoption of
new theories have been slow and erratic (Huff, 2016). Many project management professionals
and academics teaching the subject in business schools and engineering departments continue
to promote the standardized model and fail to distinguish between projects according to their
degree of innovation and uncertainty and ignore the context which shapes their development.
Project management associations, in particular, tend to adhere to the normative view of how a
project ought to be managed (as described in various bodies of knowledge), rather than the man-
ifold ways in which they actually occur and are managed in different contexts around the world.

Project Novelty, Complexity and Flexibility

The classic view of “how projects ought to be managed in general” was, however, flawed
almost from the outset. In the study that is often cited as coining the term “stage gate process”
10 Handbook on innovation and project management

(see next section), Cooper (1983, 5) conceded early on that “the new product manager is …
faced with the complex task of managing a highly uncertain endeavor where many things
must be done properly and a single miscue can spell disaster”. This statement is compatible
with the view that projects represent “bundles” of challenges that do not all pull in the same
direction. Despite recognizing that different challenge configurations must be treated differ-
ently, the stage-gate blueprint ended up being used as a single standard process for handling
projects. But work in the early 21st century clearly spread the realization (rediscovering what
the RAND analysts knew in the 1950s; see Lenfle and Loch, 2010) that different projects
require different processes (e.g., Shenhar and Dvir, 2007; Loch et al., 2006).
This is illustrated in Figure 1.2, which shows that the demands on project management
flexibility differ depending on the extent of the novelty of the territory that the project attends
to (lower horizontal axis) and on the extent of stakeholder demands and complexity (upper
horizontal axis). The increasing novelty of the terrain is associated with decreasing knowledge
and related to uncertainty and unpredictability, which range from risk, where only the mag-
nitudes of known variables “tremble”, to unforeseeable uncertainty where neither risk fac-
tors nor actions can be foreseen. Novelty may stem from customer novelty (including “users”
such as government agencies), technical novelty, regulatory novelty (including sustainability),
system novelty (including integrating existing components with new interdependencies) or
process novelty (including the supply chain).
Novelty implies a demand for flexibility, including the ability to deviate from a plan fixed
at the outset requiring iteration (or plan adjustments), parallel trials or redundancy (e.g. overd-
esign to enable more outcomes, so changes in the terrain can be accommodated). All three
are managerial choices that represent sources of flexibility. Flexibility is required to adjust
not only to unforeseen or unforeseeable events but also to sensitivities and changing desires.

Figure 1.2  Project management flexibility is demanded by novelty and complexity

(dotted line refers to stakeholder complexity and solid line refers to territory)
 Introduction 11

For example, we may know exactly what different configurations an innovative project aims
to produce, and yet still need to change the plan when stakeholders simply insist on it and
use their bargaining power to force through a change, even if that change results in poor
performance. Stakeholder change management requirements for flexibility in the project are,
therefore, quite different from the implications of uncertainty (the U-shaped dotted curve).
A single stakeholder or small coalition may have sufficient power to force through any sig-
nificant changes, whereas when there are several stakeholders, the priorities and interests of
each entity may play off against each other resulting in a so-called “average” outcome and
less need to change plans. When stakeholders become numerous and influence one another in
unpredictable ways, “taste swings” may occur requiring significant changes and considerable
flexibility for the project to proceed.
Complexity has a similar effect. Indeed, stakeholder involvement in a project may be con-
sidered a special instance of complexity. When complexity is low, participants are more likely
to agree to proposed changes that are easily implemented. As the system becomes complex,
stability is required to prevent the possible cascade of changes that might disrupt a project.
When complexity is very high (a “deeply complex system”), even small changes, wobbles or
overlooked interactions, especially over the long timeframes that highly complex projects
often take, can cause the whole system to shift. When such deep complexity causes uncer-
tainty, flexibility is increasingly necessary to absorb the inevitable, far-reaching changes. As
Figure 1.2 illustrates, when two projects are situated at different positions in this uncertainty-
complexity space, they require different levels of planning and execution flexibility and differ-
ent project processes to be able to respond to the demands of their environments.
Before looking at recent research that bridges the innovation and project management lit-
eratures, let us first consider the ways in which projects have been treated in some of the
classic and influential contributions to the innovation management literature. In describing
innovation research as providing an “outside view of project management”, let us remind
the reader that the separation between the two literatures has never been complete. Even the
earlier-mentioned article that coined the term “stage-gate process”, Cooper (1983) was a study
of product development (innovation), and the most popular product development textbook
(Ulrich and Eppinger, 2012) has a whole chapter on project management as the primary means
of getting product development done.

HOW “PROJECTS” ARE CONCEPTUALIZED IN INNOVATION

STUDIES

Unlike project management, scholars interested in innovation have not been constrained by
the need to create a standardized and universally applicable body of knowledge. Informed by
a variety of theoretical perspectives, the field of innovation studies is concerned with under-
standing the sources and dynamics of innovation (Abernathy and Utterback, 1978; Utterback,
1994) and how organizations implement new combinations of novel ideas, existing knowledge
and routines to achieve successful innovative outcomes (Nelson and Winter, 1982), such as
new products, services, processes, forms of organizing and business models. Firms require
dynamic capabilities to adapt, integrate and recombine internal and external resources, rou-
tines and competencies to manage innovation and keep pace with rapidly changing environ-
ments (Teece, 2009). As knowledge is imperfectly shared over time and geographies and
12 Handbook on innovation and project management

across people, organizations and societies, existing and well-established ideas from one firm
or industry often appear new and creative as they change form and combine with other ideas
to provide innovative solutions to problems found in another firm or industry (Hargadon and
Sutton, 1997).

Diverse Theoretical Foundations of Innovation Studies

The origins of innovation studies (like project management) can be traced back to the 1950s
and 1960s when government-sponsored large-scale projects were established in the United
States to create complex military weapons and defence systems. Economists and social scien-
tists at the RAND Corporation sought to understand how to improve innovation in complex
projects, such as intercontinental ballistic missiles and fighter jets, which were highly uncer-
tain in cost, time, quality and operational outcomes (Klein and Meckling, 1958). RAND stud-
ies identified the uncertainties associated with innovative projects and discrepancies between
estimated and actual costs and time spent on projects (Peck and Scherer, 1962).
The connection between innovation and project organizations became the focus of research
for scholars working in a variety of fields from the early 1960s, such as organizational
theory (Burns and Stalker, 1961), industrial economics (Freeman, 1974), product develop-
ment (Cooper, 1985), operations management (Wheelwright and Clark, 1992), entrepreneur-
ship (Kanter, 1990), strategy (Christensen, 1997) and organizational design (O’Reilly and
Tushman, 2004). Despite working in different disciplines and on different topics, all of these
contributions share the view that selecting, organizing and managing projects is the key to
successful innovation.
Scholars responsible for developing contingency theory in the 1960s challenged the pre-
vailing view that there is “one best way to organize” applicable to all industries (Woodward,
1965) and suggested that innovative project-based organizations require “organic” or “ad hoc”
structures to deal with novel, uncertain, complex and fast-changing environments (Burns and
Stalker, 1961; Lawrence and Lorsch, 1967). Innovation is a core task performed in projects by
producers of novel or highly customized products, services or events (e.g. aerospace, defence,
telecoms, construction, advertising, film-making, consulting and complex capital goods)
(Woodward, 1965; Hobday, 1998, 2000). Everything these project-based organizations do
either internally for themselves (e.g. NASA) or for external customers (e.g. IBM) is accom-
plished through projects (Mintzberg, 1979).

Project Uncertainty and the Innovation Process

In his work on industrial innovation, Freeman (1974) emphasized that one of the main dif-
ficulties facing firms is managing the risks and uncertainties associated with R&D and inno-
vation projects. Following Knight’s (1921) classic distinction, Freeman (1974) suggested that
innovation involves projects ranging from truly uncertain (unmeasurable uncertainty) to less
risky (or measurable uncertainty) and more predictable ones. Subsequent research has shown
that traditional risk management and contingency planning may work well for stable projects
facing foreseeable uncertainties, whereas prototype testing, pilot plant production, iterative
learning from experience and parallel trials with alternative technologies may be required for
highly innovative projects facing unforeseeable uncertainties (Abernathy and Rosenbloom,
1969; Pich et al., 2002; Loch et al., 2006).
 Introduction 13

A portfolio approach helps firms select projects by offsetting a few large, uncertain invest-
ments in radical innovation against a large number of less risky endeavours (Cooper et al.,
1997; Kock et al., 2015). Bottom-up, small-scale and unofficial innovation projects are some-
times undertaken by adventurous people and teams that deliberately circumvent strict port-
folio evaluation criteria. Firms often engage in “bootlegging” by tacitly accepting or even
encouraging under-the-table, covert innovative projects, which might not be undertaken
because they involve such a high degree of uncertainty (Schön, 1963; Freeman and Soete,
1997; Augsdörfer, 2005; Criscuolo et al., 2014).
Building on NASA’s approach to project planning in the 1960s, Cooper (1985) suggested
that the process of taking a new idea from concept to implementation resembles a funnel
with a series of stage gates in a project life cycle from the “fuzzy” conceptual, ideation phase
through product definition and development to testing, launch and production (Cooper, 1985;
Cooper and Kleinschmidt, 1987). In recent years, many large firms have shifted from a closed
model of innovation where the product development funnel is largely in-house to a more
open model formed with multiple parties in inter-organizational projects – such as Proctor &
Gamble, Intel, Google and Netflix – which leverage internal and external sources of ideas to
create innovative solutions to well-formulated problems (Chesbrough, 2003; Dahlander and
Gann, 2010; Chesbrough et al., 2014).
Innovative projects often fail to make it across “the valley of death” when they move from
the creative, uncertain front-end stage of R&D into what is often the more rigid, risk-averse
product development stage (Midler, 2019b). In the pharmaceutical industry, for example, drugs
that make a real impact on diseases, such as Alzheimer’s and other forms of dementia, depend
on nourishing exploratory, scientific research and development in laboratories and then help-
ing promising projects move across through a stringent regulatory process into clinical trials
and large-scale production.

Revolutionizing New Product Development

Pioneering research showed how product development was revolutionized by new lean devel-
opment approaches established by Japanese car manufacturers (e.g. Toyota and Honda) in
the 1970s and 1980s (Wheelwright and Clark, 1992; Clark and Fujimoto, 1991; Womack
et al., 1990). Japanese firms in electronic consumer goods industries (e.g. Fuji and Canon)
introduced the “overlay” approach for developing new products in overlapping or concurrent
phases (Takeuchi and Nonaka, 1986; Clark and Fujimoto, 1991; Eisenhardt and Tabrizi, 1995;
Terwiesch and Loch, 1999), combining flexibility in product design with the acceleration in
pace offered by lean development. Using the overlay approach, product development teams
absorb new information and engage in iterative, trial-and-error learning and adaptive pro-
cess to narrow down the number of design alternatives they have to consider. In more recent
research, Edmondson (1999, 2012) suggests flexible product development projects engage in a
process of “teaming” to deal with uncertainties facing innovative projects, with leaders who
build the “psychological safety” required to tolerate the failures that come with experimenta-
tion and embrace the conflict that often arises when diverse groups of people with different
priorities and values work together.
The typology of innovation projects developed by Wheelwright and Clark (1992) is still
influential and widely used to understand how innovation is managed in fast-paced, uncer-
tain and globally competitive markets (Shenhar and Dvir, 2007; Midler, 2019a). Derivative,
14 Handbook on innovation and project management

platform and breakthrough projects are distinguished according to the degree of novelty in
products and processes on a continuum from incremental to radical innovation. At the incre-
mental end of the spectrum, derivative projects undertake cost reductions or minor adjust-
ments to existing products or processes. On the other end, breakthrough projects are highly
uncertain because they create radically new processes or untried products, leading to revolu-
tionary improvements in productivity (e.g. Toyota’s just-in-time system of manufacturing) or
the creation of entirely new markets (e.g. the introduction of Apple’s iPhone in 2007). Situated
in the middle, platform projects create new processes or products for customers in existing
markets, such as each new generation of iPhone.
Wheelwright and Clark’s (1992) four-part classification of team structures – functional,
lightweight, heavyweight and autonomous – has also profoundly shaped how contemporary
scholars understand the types of organization required for innovative projects (e.g. Hobday,
2000; Shenhar and Dvir, 2007). An autonomous team structure, for example, is set up to deal
with unforeseeable uncertainties associated with breakthrough projects, such as integrating
new technologies and anticipating unknown user needs and future operational requirements.
Keeping the structure separate poses less of a threat to the mainstream business and pro-
vides the autonomy needed to develop the new technology without becoming overly con-
strained by established fiefdoms, formal plans, board approval or bureaucratic procedures that
might constrain efforts to change direction. A heavyweight project manager has full control
of resources and people from different functional groups working in permanently co-located
integrated teams for the duration of the project. For example, pioneered by Lockheed Martin,
the American aerospace and defence manufacturer, so-called “Skunkworks” project organ-
izations were established as autonomous structures to develop high-technology systems in
the utmost secrecy, such as the U-2 spy plane and F-117 Stealth Fighter, far removed from
the mainstream organization and the influence of established routines, rules and procedures
which might otherwise inhibit innovation (Rich and Janos, 1994).

Contrasting Types of Innovative Projects

Many well-known scholars have suggested that contrasting types of innovative projects are
required for existing or new markets. Kanter (1990) argued that “mainstream projects” make
enhancements (derivative) to existing products or create new ones (platform) for customers
with stable preferences and predictable requirements in established markets. Firms are suc-
cessful in mainstream projects because they depend on proven technologies and listen to
their customers before developing new and improved products or services. Projects can be
carefully planned and schedules developed before action is taken because firms have a his-
tory and experience base in the market, providing fairly accurate data for predictions about
future market requirements. However, ongoing investments and commitments designed to
keep mainstream projects flowing also make it difficult to change direction when products
become obsolete or markets stagnate and decline.
Firms launch “newstream projects” to imagine new possibilities and create the (break-
through) innovation needed to change direction and open up entirely new markets. Because
firms have little or no experience in the new offering and there are no existing customers
to listen to, forecasts about customer needs are impossible to produce, project schedules
are unrealistic and costs are likely to overrun. Action must be taken during the front end
before plans are developed to recognize dimly perceived opportunities and tasks adjusted
 Introduction 15

to address unforeseen circumstances while the project is underway. Existing knowledge is

applied where possible, but new ideas are often nurtured and developed through random and
intuitive insights. The purpose of the project is clarified through experimentation to discover
“what is possible and what might be possible” (Huff, 2016, 14). Flexibility, speed and multiple
approaches undertaken in parallel are required to make sense of evolving customer require-
ments and poorly understood technologies (Eisenhardt and Tabrizi, 1995; Loch et al., 2001).
For example, Apple was a successful computer and music software firm when it entered the
established mobile industry dominated by a few large, well-established manufacturers. To
mitigate the immense uncertainty associated with its breakthrough innovation, Apple secretly
developed two phones in parallel, one based on the iPod nano (code name P1) and the other
multi-touch phone based on a tablet (P2). After a few months of testing prototype phones, the
more uncertain but potentially promising multi-touch P2 was selected and introduced in 2007
(Kahney, 2014).
Christensen (1997) makes a similar distinction between types of technological projects.
Whereas “sustaining technologies” require projects to improve the performance of products
and services valued by existing customers, “disruptive technologies” ultimately promise to
open new and rapidly growing markets, although they may not be valued by customers in the
near term. Christensen (1997) identified the electric vehicle as the car industry’s disruptive
technology and recommended that General Motors establish a small, separate project-based
organization to nurture, develop and commercialize the new technology. However, the indus-
try was eventually disrupted when Tesla, a start-up from outside the industry, established a
small project team with its own office in Elon Musk’s SpaceX factory to develop and com-
mercialize the Model S electric car.
Building on March’s (1991) well-known distinction between exploration and exploitation,
O’Reilly and Tushman (2004) suggest that firms need ambidextrous organizational designs
(often based on effective portfolio management) to “exploit” current projects (e.g. deriva-
tive and platform) for existing customers markets while launching breakthrough projects
to “explore” new technologies and open up new market opportunities (Raisch et al., 2009;
Tushman et al., 2010). The most effective breakthrough projects share resources with the
mainstream organization and are tightly integrated with mainstream organization, but are
geographically and organizationally separate to ensure that the freedom required to develop
and implement new ideas is not constrained by established organizational priorities and pro-
cedures. For example, Apple’s product development remained inside the organization but was
established as a small team of talented designers with the autonomy of an outside consultancy
firm to select and work on multiple breakthrough projects.
Incorporating these contributions and more recent insights, innovation management
emerged as the distinct discipline and fairly coherent field of management research with a
growing number of textbooks offering theoretical insights and practical guidance on how
innovative projects can be more successfully managed (e.g. Tidd et al., 2001; Dodgson et al.,
2008; Schilling, 2020). Significant work on innovative projects has appeared in a range of
management journals such as California Management Review (e.g. Clark and Wheelwright,
1992), Organization Science (e.g. Hoegl and Gemünden, 2001), Research Policy (e.g. Hobday,
2000) and Journal of Product Innovation Management (e.g. Edmondson and Nembhard,
2009). In recent years, research has expanded beyond traditional classifications of innovative
projects based on product/process, incremental/radical, open/closed and sustaining/disruptive
dichotomies to include business model innovation, service innovation, platforms, ecosystems
16 Handbook on innovation and project management

and sharing economy platforms (e.g. crowdsourcing). We now consider efforts to explore the
synergies between the fields of innovation and project management.

RESEARCH BRIDGING INNOVATION AND PROJECT MANAGEMENT

As we have seen, project management and innovation studies have common roots in American
defence and aerospace projects of the 1950s and 1960s. At the time, both were perceived
to be strongly interrelated domains (Lenfle and Loch, 2010) and contemporaries may have
been surprised to discover many years later that project management and innovation studies
became increasingly specialized disciplines, following largely self-contained trajectories of
scholarly and practical development.

Joint Roots and Contrasting Trajectories

An important study of weapons systems projects in the early 1960s conducted by RAND
researchers identified two contrasting models for identifying and managing the uncertainties
surrounding highly innovative projects (Klein and Meckling, 1958), which would characterize
an ideological divide between project management and innovation studies lasting for dec-
ades (Brady and Hobday, 2011; Davies, 2014; Davies et al., 2018). Widely practised in project
management, the “optimizing model” assumes that rational planning, formal processes and
analytical techniques applied at the start of the project are able to predict future conditions
and reach a decision about the optimal end product from a range of alternatives. Influential in
innovation studies, the “adaptive model” recognizes that innovative projects are fundamen-
tally uncertain, because unexpected situations may arise that cannot be fully known at the
outset, such as new technologies, strategic factors and a changing operational environment.
The adaptive model emphasizes the importance of intuitive judgement, informal processes
and learning gained from trial-and-error experience and the need to experiment, test and
evaluate alternatives before selecting the preferred solution.
Despite sharing the same roots, over the subsequent years, the two disciplines failed to rec-
ognize each other’s contribution to a shared research agenda and there was little incentive to
overcome the fragmentation of research by learning from each other and integrating the differ-
ent bodies of knowledge (Davies et al., 2018). Researchers specializing in project management
were stimulated by the urgent need to provide firms in many industries with practical guid-
ance based on standardized bodies of knowledge. As we have seen, scholars working inside
and outside the discipline eventually became dissatisfied with project management’s focus on
execution-oriented practical knowledge and initiated new streams of theoretical research to
move beyond the optimizing model, such as the management of projects paradigm and project
studies. While innovation studies emerged from a variety of disciplines and theoretical per-
spectives, many researchers shared a common interest in understanding how different types of
innovative projects are organized to deal with varying degrees of uncertainty. By the 1990s,
innovation management had emerged as a specialized body of theoretical and practical knowl-
edge published in textbooks (e.g. Tidd et al., 2001) and handbooks (e.g. Dodgson et al., 2014).
Although the two disciplines became increasingly isolated from each other, project man-
agement and innovation studies are considered neighbouring disciplines because they often
refer to the same concepts (projects, innovation, novelty and uncertainty) and have overlapping
 Introduction 17

empirical domains (e.g. R&D and new product development) and topical interests (e.g. the
climate emergency grand challenge) (Davies et al., 2018). In recent years, scholars work-
ing in the two disciplines have slowly begun to acknowledge each other’s contributions and
recognize the benefits of importing, exporting and sharing theories and concepts to promote
the inter-disciplinary collaborative research needed to tackle changing empirical realities and
societal challenges (Davies et al., 2018). For example, a special issue in 2016 of the Project
Management Journal was produced to showcase research bridging the two domains and inte-
grating theory and practice (Midler et al., 2016). The Project Management Journal also pub-
lished a special issue on exploratory projects (Lenfle et al., 2019). The Journal of Operations
Management has published articles on innovation and project management since its founda-
tion in 1980 but created a new department for Innovation and Project Management in 2019 in
recognition of the growing importance of both domains and the connections between them
(Mishra and Browning, 2020).

Reconnecting and Developing Domains of Knowledge

In the early 2000s, two early and significant contributions attempted to create a new synthesis
and integrated framework for innovation and project management research.
An evolutionary approach for coping with the uncertainty surrounding innovative projects
is developed by Loch, DeMeyer and Pich in Managing the Unknown (2006) and other arti-
cles (e.g. Pich et al., 2002; Loch and Sommer, 2019). Following an “instructionist” approach,
traditional project management is sufficient as long as task scheduling, risk management
and contingency planning can trigger the actions needed to deal with foreseeable events and
predictable future conditions. Different strategies are required, however, when projects face
unforeseeable uncertainties including “learning” to conduct new planning and change direc-
tion when the project is underway and “selectionism” to identify the best candidate from
multiple solutions explored in parallel (e.g. Lenfle, 2011).
A contingency model grounded in innovation theory is developed by Shenhar and Divir in
their book Reinventing Project Management (2007) and various articles (e.g. Shenhar, 2001)
to move beyond the conventional one-size-fits approach. Projects vary depending on where
they are positioned in a diamond model comprising four different dimensions: system com-
plexity, technological uncertainty, market novelty and pace. The model identifies the right
approach required to manage the particular mix of variables facing each project.
As we will see in this Handbook, an increasing number of scholars are now conducting
research on these overlapping domains, revisiting existing concepts, introducing new the-
oretical perspectives and challenging our current understanding. In Figure 1.3, we include
an important third domain to capture how other disciplines (e.g. organization studies, insti-
tutional theory and strategy) and the field of project studies are increasingly connected to
research on innovation and project management. Here we highlight four streams of well-
established research crossing the domains.
First, research on R&D and new product development has evolved to deal with the more
dynamic and innovative projects of the 21st century, such as the new forms of concurrent
product development projects driven by deadlines (Lindkvist et al., 1998; Midler, 2019b), the
exploratory nature of research-intensive technology projects (Lenfle, 2008, 2016), the role of
dynamic capabilities in selecting and sharing innovative design features across multiple prod-
ucts (Maniak and Midler, 2014; Maniak et al., 2014), managing projects to achieve disruptive
18 Handbook on innovation and project management

Other disciplines
(e.g. strategy) &
fields (e.g.
project studies)

Project Innovation
Management Management

Figure 1.3  Overlapping domains of knowledge

innovation (von Pechmann et al., 2015) and the role of ambidexterity in project management
(Turner et al., 2014). Hatchuel and Weil’s (2009) research on design theory and creative collec-
tive action, emphasizing the dialectic between the exploration of breakthroughs concepts and
construction of new knowledge, provides a valuable conceptual framework for understanding
exploration projects (Lenfle, 2016) and cross-project learning (Maniak and Midler, 2014).
Second, research on organizational capabilities, routines and learning in projects has shown
that innovation requires project-based organizations or firms (Hobday, 2000; Gann and Salter,
2000; Whitley, 2006); how vanguard projects are launched to explore changing market condi-
tions and innovative opportunities (Brady and Davies, 2004; Lenfle, 2008); and how project
capabilities are honed, developed and exploited by transferring knowledge and learning from
one project to the next (Lundin and Midler, 1998; Lundin et al., 2015; Prencipe and Tell, 2001;
Söderlund, 2005; Davies and Brady, 2016) to obtain “economies of repetition” (Davies and
Brady, 2000). Organizations may follow two action trajectories (based on contrasting degrees
of repetitiveness) by performing routines to get repetitive things done or pursuing “creative
projects” to achieve new things through innovation (Obstfeld, 2012).
Third, research suggests that organizations responsible for complex projects build or acquire
capabilities in systems integration to coordinate the design, production and integration of com-
ponent parts of the product or system architecture (Hobday, 1998; Brusoni and Prencipe, 2001;
Prencipe et al., 2001; Davies et al., 2009; Tuertscher et al., 2014; Whyte and Davies, 2021).
Modular product platforms based on standardized design interfaces and interoperable “plug and
play” components may help to minimize the risks of integration (Sosa et al., 2004; Von Pechmann
et al., 2015) and facilitate the coordination of interdependent organizations (Jacobides et al.,
2018) involved in each project. Apple, Amazon and Google, for example, have developed digital
platforms of interchangeable modules that can be updated and transferred from one project to
the next. Platform strategies have recently migrated from digital to more traditional industries,
such as automotive, shipping, construction and space exploration. For example, whereas NASA
has traditionally treated each rocket launch as a one-off, bespoke project, SpaceX treats each
rocket as a platform of interoperable component technologies that can be reused and replicated
at lower cost across multiple projects (Ansar and Flyvbjerg, 2022).
 Introduction 19

Fourth, research has explored how innovation has been applied to plan, design and exe-
cute megaprojects. Flexible architectures, modular designs and integrated project teams
provide the adaptability required to accommodate evolving requirements (Gil and Tether,
2011) and unexpected interdependencies (Tee et al., 2018). The innovative potential of a
megaproject may be enhanced by developing the absorptive capacity to incorporate new
and evolving technologies (Gil et al., 2012) and dynamic capabilities required to balance the
need for stability and change in a large, complex megaproject (Davies et al., 2016; Davies
et al., 2017). In a collaboration between researchers and practitioners, an open innovation
strategy and digital platform were developed and applied to introduce new ideas, technolo-
gies, materials and practices while London’s Crossrail railway megaproject was underway
(Davies et al., 2014). Research also identifies some of the new delivery models (Davies
et al., 2019) and simple rules for innovation in megaprojects required to limit goal tensions
and politics (Jimoh et al., 2022) and to address unforeseeable uncertainties and opportuni-
ties to improve performance (Davies et al., 2017).

INNOVATION AND PROJECT MANAGEMENT: INTEGRATED

RESEARCH THEMES AND PERSPECTIVES

In developing the idea and our ambition for the Handbook, we were mindful of the need to
encourage the authors to develop and apply new theoretical perspectives to integrate research
on innovation and project management, cross-fertilize ideas between the two domains and
offer practical guidance on how to manage innovative projects in real-world settings. The
chapters were carefully selected because the authors have made significant scholarly contri-
butions that traverse the two domains and are highly committed to developing a new, more
integrated research agenda. The Handbook is divided into four parts to account for the variety
of perspectives, conceptual contributions and case studies with practical examples of how
innovative projects are organized and managed. Some chapters are relevant to all parts of the
Handbook and are allocated according to their primary contribution.

Part I: Converging and Integrating

The chapters in the first part, following this chapter, consider the convergence of innovation,
project management and closely related disciplines and discuss integrated perspectives, mod-
els and frameworks that straddle the different domains.

• The intersection between research on innovation studies and project studies has cross-
fertilized and generated many new theoretical ideas, concepts and frameworks. However,
important cross-disciplinary and inter-disciplinary research in these overlapping domains
can be extended further by a meta-theoretical framework and new research agenda pro-
posed by Geraldi and Söderlund (Chapter 2).
• Georget and Maniak (Chapter 3) examine the evolution of two distinct disciplines
– corporate entrepreneurship and project management – and consider how each con-
ceptualizes the role of innovation in the organization and strategy of the firm. Despite
some differences in approach, there are many similarities between the two disci-
plines and opportunities for cross-fertilization leading to a more integrated model of
innovation.
20 Handbook on innovation and project management

• While scholars in the separate research communities interested in projects and innova-
tion have not always engaged in a fruitful interaction, Holzmann and Shenhar (Chapter 4)
suggest that they are actually addressing two sides of the same process: developing and
implementing new ideas. They present an integrated theoretical and practical model
for examining the processes, contingencies and strategies of this combined innovation/
project effort.
• In a review of the literature, Lewis, Harrison and Roehrich (Chapter 5) focus on one key
concept – the fuzzy “front-end” of projects or the innovation process – which appears
extensively in research on innovation and project management. The chapter explores
opportunities for the two domains to share insights about how to conceptualize the front
end and identifies promising avenues for future research.
• Tillement, Garcias and Charue-Duboc (Chapter 6) explore how the concepts of explora-
tion and exploitation are used differently in the literatures on innovation management and
project management. A case study of the first French Generation IV nuclear reactor illus-
trates how the dynamics of “exploration and exploitation” are entangled in some large-
scale “hybrid projects”. The case identifies the tensions associated with this entanglement
and how the “identity” of the project was disputed by major stakeholders (managers and
government) leading to its eventual postponement.
• In their study of the internationalization of innovation projects in multinational corpora-
tions (MNCs), Midler and BenMahmoud-Jouini (Chapter 7) seek to bridge two streams
of distinct but complementary research on global innovation management (GIM) and
global innovative projects (GIP). Whereas GIM emphasizes the innovation strategy, capa-
bilities and organization of the MNC’s spatially dispersed local-global activities, GIP
addresses the management of innovative global projects. The two approaches are com-
plementary and mutually supportive because the global innovation strategy of the MNC
is implemented through projects and innovation projects play a reciprocal role in defining
the innovation strategy and the dynamics of an MNC’s organization.

Part II: Building and Extending

The second part of the Handbook includes chapters that build on and extend existing con-
cepts, frameworks and ideas that have already developed connections between innovation and
project management research.

• “Lineage management” and “ambidexterity” examined by Maniak and Midler (Chapter 8)

are two recent strategies to manage innovative projects and overcome the limitations of
multi-project management methodologies, project portfolio management and common
product platforms introduced in the 1990s. Lineage management involves creating dis-
ruptive offers by progressively capitalizing on a series of projects generated by a trajec-
tory of innovations and adapting to take advantage of learning accumulated along the
way. Ambidexterity strategies are used to manage innovative projects by “exploring”,
developing and accelerating breakthrough innovations, while “exploiting” committed
project resources.
• In a review of research on “exploratory projects”, Lenfle (Chapter 9) identifies how pro-
ject management has neglected to fully account for how projects are organized and man-
aged to tackle “unknown unknowns”. A future research agenda for exploratory projects is
 Introduction 21

proposed outlining the need for new case studies, management tools and methods design,
governance and portfolio management, and a theory of agency for projects facing unfore-
seeable uncertainties.
• Building on prior research on novel projects facing unforeseeable uncertainties, Loch,
Sommer and Jiang (Chapter 10) consider two automotive projects – rapid manufactur-
ing and flying vehicle projects – combining new and evolving technologies and applying
them to new uses and markets. The cases illustrate that a “Project Learning Process”
for novel projects must be identified at the outset as a valuable activity in its own right,
but that it will accomplish nothing unless accompanied by a long-term vision, which is
agreed upon and authorized by top management.
• In their study of “project portfolio management”, Kock and Gemünden (Chapter 11)
emphasize that portfolio management for innovation projects is challenging because
firms pursue several and often conflicting goals in uncertain markets. A decision-making
model is proposed to identify success factors for the different groups of stakeholders
involved in innovation projects with varying degrees of innovativeness (derivative, plat-
form and breakthrough) and contingent on various interdependencies between projects
and the environment.
• Van Den Ende and Blindenbach-Driessen (Chapter 12) show how “project-based organi-
zations” have advantages over mass production firms because they are less focused on
improving operational efficiency and more equipped to perform organization-driven pro-
active and client-driven responsive innovation. As an alternative to relying on an innovation
manager to develop, select and organize innovative projects, firms can achieve “ambidex-
terity” by establishing a separate unit in a project-based organization to undertake explora-
tory, proactive radical innovation, sheltered from the demands of operational units.

Part III: Importing and Cross-Fertilizing

The third part of the Handbook includes chapters that have imported theories, concepts and
frameworks from outside the domains of innovation and project management to cross-fertilize
ideas and stimulate new thinking.

• Building on the concepts of “collaboration” and “trust” developed by scholars working

outside the domains of innovation and project management, Noorderhaven (Chapter 13)
discusses how trust can stimulate positive outcomes by enabling collaboration between
participants in innovative projects. Because trust and collaboration are so closely con-
nected and it is difficult to ascertain which comes first, Noorderhaven suggests they are
best conceived as mutually reinforcing and together form a “positive spiralling effect” on
the performance of innovative projects.
• In an ambitious and creative effort to draw upon theories of culture found in anthro-
pology, organizational theory and evolutionary biology, Loch, Kavadias and Sommer
(Chapter 14) develop a “cultural evolution model”. While partially codified, project man-
agement practices are socially learned evolving bodies of knowledge or culture. The
model is used to show how the ambidexterity required to balance innovative and routine
projects is not simply determined by high-level managerial goals but may evolve cultur-
ally in a dynamic interactive process of top-down strategy and bottom-up project learning
and evolutionary pressures.
22 Handbook on innovation and project management

• Informed by case study examples of international development, film production and event
organizing, Manning and Vavilov (Chapter 15) identify how the challenges of “social
innovation” (ideas, methods and practices that address social problems and large-scale,
societal grand challenges) may be stimulated and mitigated by three dimensions of pro-
ject-based organizing: project entrepreneurship (individual), project capabilities (organi-
zational) and project networks (inter-organizational).
• Drawing upon recent literature on project ecologies and innovation ecosystems, MacAulay,
Davies and Dodgson (Chapter 16) introduce the concept of “project innovation ecosys-
tems” to explain a new approach to creating and capturing value through innovation in
large, complex projects. A case study of London’s Crossrail railway infrastructure pro-
ject identified how a “meta-organization” was established to orchestrate innovation and
reveals how research on project innovation ecosystems can inform the study of innovation
and project management.
• Hooge and Lenfle (Chapter 17) consider how the concept of “value management” has
been applied since the 1960s to model the benefits whilst minimizing the costs of innova-
tive projects for customers. The process of constructing value for new product develop-
ment has been enriched in recent years by a variety of new tools to help both project and
strategic managers evaluate the future benefits of not-yet-existing products and services.
As societies face climate change, biodiversity decline and other challenges, models of
value management going beyond conventional monetary measures of performance (profit
and technological abundance) are needed to address the generative, desirable and attrac-
tive value of the unknown.
• In a fascinating in-depth empirical study of Italian opera (an example of a creative
industry) where each show is a project, Cancellieri, Cattani and Ferriani (Chapter 18)
argue that opera houses face the challenge of demonstrating that each production must
be “familiar” (satisfying the expectation of audiences), whilst demonstrating “novelty”
(provoking surprises to entertain audiences). Pursuing a “robust design strategy” allows
the opera houses to reconcile novelty and familiarity, a tension which may apply to new
product development in many other industries where organizations have to both preserve
and deviate from a traditional product design, such as Volkswagen’s New Beetle.

Part IV: Cases and Contexts

The fourth part of the Handbook includes chapters that consider how our understanding of
innovation and project management can be developed further by investigating rich case stud-
ies and new contexts to illuminate novel processes and practices and provide many valuable
insights for new lines of theoretical and empirical inquiry.

• Johnson (Chapter 19) provides an in-depth historical analysis of how systems engineering
has been overlooked and often ignored, but has always been and remains one of the core
capabilities developing in tandem with project management to manage large, complex
technological projects. Since its origins in the weapons systems projects of the Second
World War and the Cold War, systems engineering has evolved to incorporate computer-
based modelling and simulation techniques now used to develop today’s complex tech-
nological innovations.
 Introduction 23

• Davis and Pinto (Chapter 20) consider how the agile methodology which originated in
the software industry around 20 years ago has become widely adopted by other project-
based organizations to drive innovation. In contrast to the traditional sequential waterfall
approach to project management, agile offers flexibility, mutual problem-solving and cus-
tomer-focused innovative solutions. Organizations must overcome significant challenges
when transitioning from waterfall to agile and recognize that while agile has worked well
in some industries with frequently changing requirements, it is no “silver bullet remedy”
for project failure.
• In an interesting case study of the Italian Civil Protection Department, Cacciatori and
Prencipe (Chapter 21) identify how “project capabilities” were developed to handle major
public events, focusing on the celebration in Rome of the Jubilee of the Catholic Church
in 2000. Social networks and artefacts formed in this vanguard project helped develop
project capabilities for future events. The authors identify a promising avenue for future
research exploring the micro-foundations of project capabilities.
• Illustrated by a programme of research on the UK construction industry, Whyte, Mosca
and Zhou (Chapter 22) examine how project-based firms deploy digital information, tech-
nologies and platforms to create new sources of innovation and competitive advantage.
They suggest that project capabilities are enhanced by the development of digitally ena-
bled product platforms used to manage a large portfolio of projects and extended supply
chains including manufacturers of modular components.
• Since the Second World War, “Big Science” projects have been major contributors to
industrial innovation and economic growth. In an in-depth case study of fusion power,
Dodgson and Gann (Chapter 23) show how highly ambitious large-scale science projects
stimulate far-reaching innovation upstream and downstream in industries, including the
development of new data and digital technologies, complex manufacturing and large-
scale construction capabilities.

NEW DIRECTIONS FOR RESEARCH

The chapters in this book provide an important benchmark for research on innovation
and project management and offer numerous ideas and suggestions about interesting
empirical contexts for further study, as well as importing new theories (e.g. practice, neo-
institutional and cultural theories) and developing novel conceptual insights and methodo-
logical approaches. Despite these and some important early contributions, we are aware that
research connecting and transcending the domains is still evolving so we now offer some
new, exciting directions for empirical and theoretical work that might serve as a guide for
future research.

Artificial Intelligence and Digital Platforms

The first direction research might consider is the impact of disruptive digital technological
innovation on the process of managing projects. Dramatic improvements in software and data
analytics afforded by artificial intelligence (AI) provide more accurate, complex and reliable
information and opportunities for machine learning. As studies of firms such as Amazon,
Airbnb, Uber and Netflix have shown, AI changes the way organizations gather and use data,
24 Handbook on innovation and project management

react to new information, make strategic decisions and execute interrelated operational tasks
(Iansiti and Lakhani, 2020). Amazon, for example, has redesigned its entire organization,
evolving from highly specialized functional units supported by disconnected IT systems, into
a modular, distributed structure integrated by a common AI platform. Organizations with
AI-enabled architectures deploy small, agile project teams with the data science, engineer-
ing and product development capabilities needed to integrate data across functional silos and
establish new digital connections between networks of organizations working in open, dis-
tributed innovation projects. It will be interesting to discover how AI capabilities are used to
design new flexible, project-based organizational architectures, integrate tasks across tem-
porary and permanent organizational boundaries, adapt and respond in real time to unfore-
seen events and provide more sophisticated predictions about opportunities, risks and future
conditions. Using AI and digital technologies to coordinate across boundaries in spatially
dispersed projects may be particularly challenging, however, because recent research suggests
that remote work during the COVID-19 pandemic has not produced the improvements in col-
laboration that many expected (Yang et al., 2021).

Complex Innovation Ecologies and Ecosystems

The second direction research might consider is how projects form part of an ecology of
knowledge, capabilities and resources dispersed across many entities (Grabher, 2001; von
Pechman et al., 2015) and ecosystems of distinct, but interrelated organizations (Adner
and Kapoor, 2010; Jacobides et al., 2018) involved in the coordination of complex techno-
logical systems (Tuertscher et al., 2014) and inter-organizational projects (Malherbe, 2022).
Dougherty (2011, 2016, 2017), for example, suggests that the ecology of a complex innovation
system encompasses the entire public and private organizations and agencies with the knowl-
edge capabilities to support multiple innovation projects (Dougherty, 2011). The ecology is
orchestrated to discover emerging innovations by generating new products and services, inte-
grating knowledge, strategically framing innovation for the long term and enabling appropri-
ate forms of governance. Projects play a central role in this ecology-wide innovation process.
Project innovators search, select and combine elements of emerging solutions, and project
work “is very hands-on, concrete, embodied, iterative, and multi-functional, but occurs in
large networks because emergent knowledge is noisy, fragmented and far flung” (Dougherty,
2016, 14). For example, the development of the Oxford AstraZeneca (Gilbert and Green, 2021)
and Pfizer BioNTech (Boural, 2021) vaccines for COVID-19 at an unprecedently rapid pace
demonstrated that multifaceted uncertainties can be overcome when project teams, connect-
ing people working in many different countries, organizations and agencies, persist with inno-
vation work as problems evolve.

Tackling Grand Challenges

The third broad direction for research is how innovative projects will be organized to tackle
the grand challenges facing societies in the 21st century, such as climate change, biodiver-
sity loss, future global pandemics and societal inequality. Complex, highly uncertain and
often global in scale, grand challenges are sometimes defined as “wicked problems” because
they are difficult to define and resistant to simple solutions (Rittel and Webber, 1973) and
“evaluative” because actors have different views about what the problem is and how it can
 Introduction 25

be solved, and new concerns arise as problems are being tackled (Ferraro et al., 2015). When
conditions are volatile and the future is so unpredictable, organizations are equipped to deal
with grand challenges when they develop a variety of innovative responses to multiple sce-
narios (Augustine et al., 2019). Private, public, not-for-profit and hybrid organizations, for
example, are developing solutions ranging from incremental (e.g. renewable energy) to radi-
cal innovations (e.g. small modular reactors) for climate change adaptation and mitigation
(Howard-Grenville et al., 2014). Developing multiple, radical technological solutions (e.g.
geoengineering) on a global scale may provide a more robust understanding of the distant
future, including opportunities to envision breakthrough innovations and imagine disruptive
alternatives to the status quo (Augustine et al., 2019), but delay immediate action and local-
ized near-term solutions using proven, well-established technologies (Wright et al., 2013).
Resistant to “easy fixes” provided by a single organization, grand challenges require a collec-
tive, multi-actor process of “distributed experimentation” (Ferraro et al., 2015) and ongoing
coordinated and collaborative efforts (Howard-Grenville et al., 2014).
Research is clearly needed to understand the extent to which grand challenges will pre-
cipitate novel forms of project organizing and new types of projects networks, including how
multiple organizations will work together in large, inter-organizational innovation projects
and engage in the participatory approaches needed to solve the urgent, intractable prob-
lems facing societies. In addition to research on innovation ecologies and ecosystems, we
think two promising theoretical frameworks – innovation mission policies and multi-level
transitions – may help scholars understand how innovative projects might be organized to
tackle grand challenges.

Missions and Moonshots

Research might consider the role played by large-scale projects in achieving mission-oriented
innovation policies, such as tackling climate change (Kattel and Mazzucato, 2018; Mazzucato,
2021). Inspired by NASA’s Apollo programme in the 1960s, a mission is a “moonshot” inno-
vation policy to imagine a desirable future, set an ambitious target and galvanize the inno-
vation across public and private sectors required to achieve it (Mazzucato, 2021), such as
the European Green Deal. Defined and led by government, a mission steers and coordinates
cross-sectoral private investment, experimentation and risk-taking innovation. Despite the
analogy with the Apollo programme, however, this policy research provides surprisingly lit-
tle guidance on how projects can be designed and coordinated to achieve a societal mission.
More recent research has attempted to readdress this gap by showing how megaprojects can
be an important policy instrument geared towards shaping the market for a green energy tran-
sition in South Africa (Andreoni et al., 2022).
Several leading scholars claim, however, that the Manhattan and Apollo projects offer inap-
propriate models for guiding innovation policy because the challenges of combating climate
change are quite different and even more daunting than the wartime development of the atomic
bomb or moon landing (Mowery et al., 2010) and because of a fundamental lack of agree-
ment on what should be done (and what sacrifices might be expected from whom). America’s
Manhattan and Apollo projects were funded and centrally managed by government to produce
“big-push” technological solutions for a sole, nationally based customer, in a “closed system”
with little or no interference from external stakeholders (Sayles and Chandler, 1971; Edwards,
1996). Developing climate-change solutions to tackle the open, emergent and pervasive extent
26 Handbook on innovation and project management

of global warming, by contrast, will require “multiple moonshots” that are decentralized and
systemic in nature to reflect the complexity of the challenge (Mowery et al., 2010). Whereas
the Manhattan and Apollo projects did not require broad market adoption, climate change
innovations will require extensive, often disruptive changes in consumer behaviour and incen-
tives to induce widespread adoption (Hargadon, 2010). Future research might consider how
large portfolios of projects are coordinated to achieve societal missions by generating and
implementing multiple solutions ranging from audacious supply-side breakthroughs to incre-
mental, locally adapted innovations that serve the needs of a great variety of users.

Transitioning to a Sustainable Future

Future research might also explore how innovative projects initiate, enable and implement
transitions to a sustainable future, such as shifting from a reliance on fossil fuels to renew-
able energy (Geels, 2010). Drawing inspiration from evolutionary theories of innovation (e.g.
Nelson and Winter, 1982; Utterback, 1994) and other perspectives, scholars have developed
a multi-level perspective (MLP) comprising niche, regime and landscape levels (Kemp et al.,
1998; Geels, 2004, 2010; Geels and Schot, 2007). At the micro level, technological “niches”
induce change from the bottom up by introducing radical but initially unstable and low-per-
forming innovations, often developed by outsiders or peripheral actors. At the meso level, the
socio-technical “regime” encompasses the actors, organizational networks and institutions
surrounding an established technology. Shared, stable and aligned sets of rules, routines and
regulations direct the behaviour of actors and innovative activities are locked in a trajectory
of incremental improvements (e.g. increasing the fuel efficiency of cars). Radical alternatives
to established regimes are nurtured and developed in protected niches that shield vulnerable,
emerging technologies from direct market pressures, such as sheltered autonomous teams,
skunk works and breakthrough projects within firms (Schot and Geels, 2008). At the macro
level, changes in the “landscape” (macro political economy and cultural patterns) often occur-
ring over decades, such as growing societal awareness and concerns about climate change,
can eventually exert a “top-down” exogenous pressure to change existing regimes or promote
neglected niche technologies (e.g. the world’s first offshore wind power farms introduced in
Denmark in the 1990s).
Transitions occur through interactions within and between levels but often commence when
radical innovations emerge from sheltered niches to challenge an existing dominant design
(e.g. the first electric vehicles) and lead to a far-reaching transformation of the prevailing
socio-technical regime. A transition is brought to a close when the regime stabilizes around
a new constellation of technologies, actors, rules, routines and institutions. Despite providing
helpful insights on sustainability transitions, early MLP research failed to fully grasp the role
of agency (i.e. what actors actually do in projects) in leading transitions (Smith et al., 2005;
Genus and Cole, 2008). Actors participating in niche projects are not necessarily “locked in”
by a selection environment or waiting for exogenous pressures to “unlock them”, but mind-
fully create and navigate pathways to an emergent future (Garud and Gehman, 2012). Future
research might, therefore, benefit from understanding how transitions are activated, enabled
and regenerated by “project-oriented agency” (Lenfle and Söderlund, 2022) and how projects
may encompass niche and regime change. Whereas prior MLP research emphasized how
sheltered niche projects incubate and initiate innovation leading to subsequent regime change,
research might explore how high-visible megaprojects are designed to drive sustainability
 Introduction 27

transitions by integrating novel technologies, overcoming organizational resistance and imple-

menting new innovation policies (or missions), such as the UK’s net-zero plans for megapro-
jects that will decarbonize the energy sector (Sovacool et al., 2022).

CONCLUSION

The Handbook provides new perspectives and insights on research on traversing innovation
and project management. With 23 chapters from leading scholars, the Handbook highlights
efforts to cross-fertilize ideas from the two domains, share and create new concepts, and bor-
row theories from other disciplines to assist empirical research and develop a more integrated
research agenda. We encourage scholars inspired by the Handbook to engage with practition-
ers and provide them with valuable ideas and the practical guidance needed to solve pressing
real-world problems and grand challenges facing organizations and societies in the coming
years, particularly in developing countries which are poorly addressed in prior literature. Our
ambition has been to produce a scholarly book with practical implications that is a must-read
for anyone embarking on research, practice or study of innovation and project management,
and wants to understand the two domains (as they once were many years ago) as integrated in
theory and practice and closely connected to other disciplines and fields.

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 PART I

CONVERGING AND
INTEGRATING
2. Bridging project studies and innovation
studies: a meta-theoretical approach and
research agenda
Joana Geraldi and Jonas Söderlund

INTRODUCTION

Innovation studies and project studies have much to share, and in the last few years, these
two disciplines have constructed fruitful cross-disciplinary bridges (Zahra and Newey, 2009)
that have become a domain of knowledge and research in itself. This is most evident in vari-
ous studies of so-called innovation projects (Davies et al., 2018), specifically those address-
ing the nature and process of projects that deliver new products and services (Shenhar and
Dvir, 2007).
This is no small feat, as cross-fertilization between domains is a well-known challenge
(Knudsen, 2003; Raasch et al., 2013). Indeed, the very assumptions supporting cross- and
interdisciplinary work have been severely questioned (Brewer, 1999; Jacobs and Frickel, 2009)
and voices have been raised that specialization might be favourable over attempts to cross
the fences. Yet, despite the identified challenges and critique, there is an overall agreement
that cross-fertilization is highly needed, especially as contemporary societal challenges, such
as climate change, peace and development, biodiversity and social inequality, are genuinely
multi-faceted and require collaboration among and across several specialized disciplines and
domains of knowledge (e.g. Garud and Gehman, 2012). Thus, considering these modern-day
and pressing challenges, the question becomes not of whether but of how to establish fruitful
bridges across specialized fields of knowledge.
Davies, Manning and Söderlund (2018) argue that meta-theories, such as learning and prac-
tice theories, represent noteworthy approaches to promote cross-fertilization across fields in
general and to develop the fields of innovation and project studies, in particular. Such meta-
theories, they argue, may foster providential cross-fertilizations because they offer a “generic
language that is applicable across empirical domains” (2018, 972) while also encouraging
“scholars to question established assumptions and adapt theorizing to changing empirical
realities, rather than adhere to narrow ideologies” (2018, 974). Meta-theories also avoid
incommensurability and may foster genuine dialogue between academic fields.
Accordingly, exploring common theoretical foundations could offer a more comprehensive
framework to facilitate the search for appropriate and fruitful meta-theories for cross-ferti-
lization. In Geraldi and Söderlund (2018), we suggested such a framework targeting project
studies. Our framework was aimed at generating novel research ideas and questions spanning
multiple levels of inquiry while capturing the value of different perspectives and theoreti-
cal foundations. The framework was based on the juxtaposition of Habermas’ (1972) three
knowledge-constitutive interests and three levels of analysis: micro (individual), meso (pro-
ject) and macro (organizations/firms and society). In this chapter, we build on this framework

36
 Bridging project studies and innovation studies 37

and integrate it with the work of Davies et al. (2018) to suggest a meta-theoretical framework
and research agenda extending the bridge between innovation studies and project studies.

OUR APPROACH

We explore the bridge between the fields of innovation studies and project studies through an
inclusive framework and research agenda. In the next paragraphs, we explore each aspect of
our approach.
The fields of project studies and innovation studies. Project studies is an academic field
interested in the management of projects, the nature of project-based organizing and project-
based work. It is a relatively clearly defined scholarly community of researchers and educators
with an interest in practical and theoretical issues in and around projects. Project studies is
concerned with projects as a different form of organizing that starts with an institutionalized
death sentence (Lundin and Söderholm, 1995). As such, research explores why projects exist,
how they behave and what impact they have on individuals, teams, organizations and society
(Söderlund, 2004). In the last decades, the field has moved from projects as the primary level
of analysis to a wider context, opening up alternative levels of analysis within and beyond
organizations. The field has also diversified from technocratic forms of knowledge often
hosted by engineering schools to more sociologically informed inquiries, embracing alterna-
tive ontologies and epistemologies. The field’s core journals – International Journal of Project
Management, Project Management Journal and International Journal of Managing Projects
in Business – focus predominantly on the micro and meso levels of projects, with most papers
addressing managerial, governance and organizational practices in and around projects.
Likewise, we refer to the academic community studying innovation in its broader sense as the
field of innovation studies (Dodgson et al., 2014). The field of innovation studies is concerned
with understanding the development and dissemination of newness and improvement. From the
Schumpeterian perspective, this may include the development of new products, new processes
and new organizational procedures (Fagerberg et al., 2005, 4). More recent accounts have
called for a stronger focus on the aspects, levels and types of management to increase our gen-
eral understanding of innovation as a process and outcome (Dodgson et al., 2014). Innovation
studies have underlined the importance of the management and organization of technology
and innovation as an important realm of its domain of knowledge. This has included studies
of capabilities, resources and systems for generating innovation (Dodgson et al., 2014). The
field’s core journals (with the highest AJG ranking) – Research Policy and Journal of Product
Innovation Management – explicitly focus on the macro and meso levels of innovation, with
most papers addressing policy, systems, transition and the diffusion of innovation.
Both project studies and innovation studies have experienced rapid growth in the number
of scholars and publications (Davies et al., 2018; Fagerberg and Verspagen, 2009). Several
research units (centres, institutes, departments, etc.) focusing on innovation have been estab-
lished over the past two decades. Similar developments are observed within project stud-
ies although perhaps not with the same magnitude. The development of project studies and
innovation studies as separate scientific fields is part of a broader trend towards phenomena-
focused research and an increasing specialization and diversification of knowledge, which
could potentially blur traditional knowledge boundaries and lead to new challenges (Fagerberg
and Verspagen, 2009).
38 Handbook on innovation and project management

The bridge. Innovation studies and project studies have much in common. Davies et al.
(2018) point out the fields’ common history within the management of novelty and uncer-
tainty and the study of large-scale defence projects in the 1940s and 1950s (Morris, 1994).
Both fields are still interested in the study of highly innovative projects (Davies et al., 2018,
966), but there are also several other connections when considering innovation in, around and
through projects, most notably:

• Innovation in the management of projects, such as the development of new project man-
agement approaches and technologies based on algorithms (Stingl and Geraldi, 2021).
• Innovation around projects, including project capabilities in project-based organizations,
project governance by project owners and the development of collaborative ecosystems
for projects (Davies and Brady, 2000; Grabher, 2004; Söderlund, 2005; Söderlund and
Tell, 2009).
• Innovation through projects, that is, the products and services generated by highly
innovative projects, often referred to as breakthrough projects (Wheelwright and
Clark, 1992), exploration projects (Lenfle, 2008) or vanguard projects (Frederiksen and
Davies, 2008).

The intersections proposed here are not meant to be restrictive. A bridge between knowledge
areas is alive and continuously under construction (Locatelli et al., 2023). It is not us but
scholars addressing innovative projects and innovation in projects who will construct and
reconstruct this bridge through their research.
Inclusive approach. To begin with and in the very pursuit of cross-fertilization, we pro-
mote an integrative understanding of both project studies and innovation studies. We con-
tend that current views of cross-fertilizations across these two fields have largely been
restricted to a few exceptions. However, such restricted views might overshadow other
opportunities for fruitful cross-fertilization. Therefore, we propose an inclusive and inte-
grative research agenda for the study of innovation in, on, around and through projects,
under the general heading of “innovation in projects and projects in innovation” (Brady
and Söderlund, 2008).
This inclusive approach may foster a productive dialogue between innovation studies and
project studies that extends the different theoretical foundations present in both domains.
However, such extensions should avoid the incommensurability and the challenges of “encap-
sulation” (Davies et al., 2018). Therefore, we build on Habermas’ theory of knowledge-con-
stitutive interests as a reflexive meta-theoretical lens to foster new bridges at the intersection
between innovation and project studies within each of the three ways of knowing as well as
an understanding of what is valued in research. According to Habermas, human interests
guide the structures of work and authority and influence how people think, enquire and create
knowledge of the world. In that respect, knowledge is never neutral but is rather a reflection
of interests. Habermas presents three knowledge-constitutive interests rooted in human exist-
ence as a social and biological species. In the following, we summarize these interests and
highlight how they are visible in research on innovation and projects.
Technical (type 1) refers to the desire to control one’s environment and the attempt to solve
problems. This interest refers to the anthropologically deep-seated interest to control and
predict the environment, which frequently motivates positivistic research and the study of
 Bridging project studies and innovation studies 39

law-like regularities to uncover the “truth” and verified facts. Accordantly, this knowledge-
constitutive interest tends to view science as predominantly instrumental and objective.
In project studies, empirical work is usually quantitative, based on surveys, controlled
observations and laboratory studies, some of them crossing industrial sectors and different
types of projects. The objective is to identify commonalities between projects that increase
project success (or other performance variables).
Understanding (type 2) attempts to interpret the world around us and understand oneself and
others. The interpretive or cultural-hermeneutic sciences are, to a great extent, driven by the
practical interest of maintaining or increasing oneself and achieving a mutual understanding in
life. It is frequently embedded in the pragmatic human need to communicate with others and
develop an intersubjective understanding of their contexts and relationships. “Truth” here is, to
a greater extent, conceptualized as consensus and is largely coherence-oriented: something is
considered true if multiple people consider it to be true. Empirical work tends to be qualitative,
for example, single or multiple case studies, ethnography and often building on grounded theory
or abductive approaches. Core objectives are to compare different contexts, practices or project
types and understand and explain the differences while also respecting them as different.
Emancipatory (type 3) intends to rectify that which is seen to be unjust and to challenge
and change the status quo. This interest is aimed at the realization of autonomy from defective
actions and utterances arising from social relations of power, domination and alienation, and
hence, with a core interest in the desire to overcome dogmatism, compulsion and domination.
Therefore, Habermas suggests a third human interest centring on self-reflection and reason-
ing. However, Habermas’ emancipation is not about critical reflection for its own sake. His
emphasis is on the potential for transformation through human reasoning rooted in language
and discourse analysis. The role of the researcher is markedly different. Here, the researcher
becomes more of a political actor, be it through the choice of research topics or his or her
direct intervention in the researched context. Empirical work is more diverse, with a bias
towards qualitative work. Engaged scholarship and action research are common among type
3 scholars, yet these methods are by no means only used in emancipatory research. Due to
their critical stance, publications within type 3 research are typically essay-like rather than
classic academic papers.
We explore these three knowledge-constitutive interests across three levels of analysis to
exemplify and concretize our arguments. At the micro level, research is concerned with indi-
viduals and teams working on projects. In this case, this relates to innovative behaviour in
projects and how individuals create innovative ideas. The meso level addresses challenges
related to the project, in particular, project management processes, practices and modes of
organizing. This also relates to various interpersonal dialogues and team-level issues that
drive innovation. Finally, the macro level addresses challenges at the societal and corporate
levels. This relates to research into technological transition and the nature of the diffusion of
innovation in project-based industries.
By juxtaposing the different levels of analysis with the three knowledge-constitutive inter-
ests, we identify a broad spectrum of research opportunities within the domain of innovation
and project studies. Table 2.1 gives a flavour of different potential research topics. While we
aim to be inclusive, we do not offer a complete research agenda. Instead, our emphasis is pri-
marily on the development of novel and interesting research ideas over a claim of systematic
coverage of past research or avenues for future research.
 Table 2.1  Overview of the three streams of work and potential avenues for future research

Knowledge-constitutive interests
Type 1: Predict and control – Type 2: Understand – Type 3: Critique and reconstruct –
searching for commonalities explaining the differences problematizing the commonalities
across individuals, projects between individuals, and differences within individuals,
and industries that increase projects and industries projects and industries
performance
Level of Macro level: Society/industry/(inter-)firm Research aimed at Research aimed at Research aimed at problematizing
analysis as the focal level of analysis identifying and predicting understanding the top management support and
what makes innovations interaction between top government involvement in
successful through projects management and project innovation projects.
in society and firms. management in innovation
projects.

40
Meso level: Projects as the focal level of Research aimed at Research aimed at Research aimed at problematizing
analysis identifying and predicting understanding the how collectives are developed to
successful projects, critical processes and challenges organize for innovation, how certain
success factors in innovation facing innovation projects, perspectives are blocked, how
projects and best practices addressing the evolution of certain values are marginalized
of successful innovation these projects. and how certain groups possess the
projects. power to influence, for instance,
gender studies and minority studies.
Micro level: Individuals as the focal level Research aimed at Research aimed at Research aimed at problematizing
of analysis identifying and predicting understanding the role and the role of the leader in innovation,
who would be successful work of champions, inner questioning the role of individual
in innovation and how motivation, experience and workers in innovation.
they would lead projects learning.
successfully.
 Bridging project studies and innovation studies 41

MICRO LEVEL

At the micro level, research takes the individual and the small group as the focal point of
analysis; that is, it explores individual- and team-level properties and the practices and doings
of the individuals engaged in innovation projects. Work on project teams is also clustered here
if they take the individual’s vantage point and investigate the actions and interactions among
individuals. Such research includes investigations into individual learning, competencies and
skills, agency, personality, engagement, motivation, individual emotions and decision-mak-
ing, career development within and across projects, organizational and national borders, as
well as team interaction and team cognition. It also encompasses studies of communication
patterns among participants in innovative projects (e.g. Katz and Allen, 1985).
Project studies offer a wealth of research at the micro level across knowledge-constitutive
interests, from quantitative studies exploring the skills and competencies of project manag-
ers (e.g. Crawford et al., 2006b; Müller et al., 2012; Pinto and Patanakul, 2015) and project
workers (Borg and Söderlund, 2015) to critical studies of the individual implications of the
projectified society (Jensen et al., 2016; Packendorff and Lindgren, 2014). This parallels the
developments of “the project manager” as a profession, from the early portrayal of its strug-
gles (Gaddis, 1959; Pinto and Kharbanda, 1995) to the increased professionalization and ever-
larger numbers of members of professional associations in project management (Crawford
et al., 2006a; Hodgson, 2004). Such a development called for a stronger focus on what makes
a “good project manager” and what the implications for choosing project management as
a career path are, both within (Bredin and Söderlund, 2013; Engwall and Jerbrant, 2003;
Konstantinou, 2015) and across organizations (Berglund et al., 2020; Manning and Sydow,
2011). More recently, researchers have turned their attention to the roles and characteristics of
the project manager to dynamic interactions within projects. This stream of research includes
balanced project leadership (Drouin et al., 2021; Lloyd-Walker and Walker, 2011; Sergeeva
and Kortantamer, 2021), boundary work (Stjerne and Svejenova, 2016), as well as studies
on individual emotions and sensemaking in project teamwork (Lindgren et al., 2014; Musca
et al., 2014).
While the micro level is perhaps not as central to the innovation studies community, it is
relevant and has received attention from some innovation scholars. Notably, Ralph Katz and
Thomas J. Allen played key roles in driving research on the individual in innovation, how
teams interact to identify and process relevant information, and how people communicate
to facilitate innovative behaviour and processes. One of the most important contributions
within this area is probably Katz’s collected readings on “The Human Side of Managing
Technological Innovation”, which features several seminal contributions on the micro-level
factors of innovation (Katz, 1997). Moreover, the variety of individual roles and personal
interactions is discussed, for example, when exploring the inventor/innovator (Dodgson, 2011;
Gorman and Carlson, 1990; Israel and Rosenberg, 1991). Other studies have moved beyond
the simple recognition that innovation is an act of brilliance by the lonely inventor or organi-
zation into how innovation happens in interactions, such as brokering (Hargadon, 2014), social
networks (Kastelle and Steen, 2014) or conflicts. For example, Tushman and Katz (1980)
opened a line of inquiry into the role of gatekeepers, who act as intermediaries of knowledge
and information sources. Along these lines, Hargadon (2003) demonstrated that innovation is
an act of recombination of ideas, people and technologies. He highlighted the importance of
“technology brokering” and the networked and social nature of innovation at the micro level.
42 Handbook on innovation and project management

Subsequent works have addressed how recombinations occur at multiple levels, underlining
the importance of a multilevel analysis of innovation, which embeds the role of the individual
into their contexts – in particular, organizational and institutional contexts. An example is the
work on dynamic capabilities, a core analytical lens in innovation studies, which also explores
the micro level indirectly as it studies “resources” and their capabilities (Dodgson et al., 2014).
The bridge between innovation studies and project studies at the micro level is perhaps
particularly relevant because it explores the role of the individual in the innovation project,
thereby making it possible to shed light on the micro level of innovation and the role of indi-
vidual agency in the innovation process. The focus on individuals in a project context would
thereby improve our understanding of not only agency in innovation but also how individuals
establish project-oriented agency and thus generate collective action in complex industries
where action is dependent on the contribution of many individuals and stakeholders (Lenfle
and Söderlund, 2022). The importance of agency in innovation has been addressed in sev-
eral recent studies of socio-technical transition (Geels, 2020, Geels et al., 2023), which has
become an influential stream of research within innovation studies.

Predicting and Designing Behaviours

With an interest in control and prediction, type 1 research strives to find commonalities at
the micro level and attempts to use the knowledge to create more predictable positive out-
comes. Typical type 1 research at the micro level explores the skills and competencies of suc-
cessful project managers for innovative projects. A fruitful source of inspiration for further
research in this area is organizational psychology and social psychology. This field of work
predominantly pursues technical knowledge-constitutive interests (Stingl and Geraldi, 2021)
and addresses a variety of questions and a solid theoretical foundation. We present two ideas
that seem particularly relevant to explore further.
Our first idea for research is the nature and promotion of agency. If innovation is about
implementing inventions in practice, it draws on action and an understanding of what triggers
action in certain situations. In many industries, projects are a vehicle through which such
action and interaction come to fruition, as innovation requires collaboration among people
with different expertise. Yet, as we bring this reflection to the micro level, agency becomes
the engine of innovative projects (Frederiksen and Davies, 2008). Therefore, future research
could explore how agency functions in innovative projects and the role that projects play
in generating agency among diverse players in complex industries. It also seems relevant to
compare how situations differ along these lines and how project-oriented agency varies across
contexts, for instance, if certain environments and conditions promote agency more than oth-
ers. Suitable meta-theories for such endeavours abound, agency theory being the most obvious
starting point (Emirbayer and Mische, 1998), yet other theories within motivational psychol-
ogy, commitment, involvement, and the like could also be sources of theoretical inspiration.
A second line of research could draw inspiration from laboratory studies and explore, for
instance, how individuals judge the time to let go of the project as opposed to fighting and
getting benefits “at the end”. This research would explore the cognitive abilities and traits
of individuals in identifying opportunities for innovation. Questions may include: How do
people differentiate the “sunk cost fallacy” from “optimistic hope”? Such judgement calls are
essential in innovation projects because, on the one hand, persistence often plays an impor-
tant role in innovation (Hirschman, 1967; Kreiner, 1995; Schilling, 2018a). Yet, on the other
 Bridging project studies and innovation studies 43

hand, decision makers sometimes wait too long to terminate a failing project (Ross and Staw,
1993; Winch, 2013). Inspiration for theoretical foundations for such research can be found
in, for example, cognitive psychology, such as theories related to heuristics (Gigerenzer and
Gaissmaier, 2011) or prospection (Baumeister et al., 2016).

Understanding Emotions and Relationships

Type 2 research at the micro level searches, considers and explains differences between indi-
viduals. Here, typical studies are the stories of accomplished innovators and their various
roles in shaping projects and society. For example, Schilling (2018b) analyses the story of
eight prominent breakthrough innovators, from Albert Einstein to Elon Musk, and explores
why these “outliers” were successful serial innovators. Some studies have followed a simi-
lar path by exploring in depth the lifework and achievements of famous innovators, such as
Thomas Edison (Israel and Rosenberg, 1991), Alexander Graham Bell (Gorman and Carlson,
1990) and Josiah Wedgwood (Dodgson, 2011). Such studies generally provide an interesting
and in-depth view of how these innovators work, how they work with ideation and how they
collaborate with other innovators and experts.
Further studies in this area could find inspiration from behavioural sciences, philosophy,
anthropology and sociology, particularly those drawing on ethnographic and other observa-
tional methods. Such fields are geared towards interpreting the world around us and under-
standing oneself and others, and they provide solid theoretical foundations for future research.
In the following paragraphs, we present two ideas for future research.
Our first idea centres on the role of emotions in innovative projects. Innovation processes
are oftentimes marked by relatively extreme “ups and downs” and a need for persistence
(Schilling, 2018b). How do project managers and other team members and decision-makers in
innovative projects cope with the emotional labour associated with such innovative processes?
How does this evolve over time and in different kinds of innovative projects? These research
questions open a variety of more specific research opportunities exploring, for example, how
individuals feel after the project has crashed and how they mobilize energy and strength to
move on to other projects, that is, to create a new passage into a new project. Why are some
individuals more resilient than others in coping with failed projects? What kinds of coping
mechanisms do they rely on to be able to embark on new innovative projects? This avenue of
research could explore innovators and project managers of innovative projects behind closed
doors and tell the intricate, detailed stories of their projects intertwined with their emotional
labour to better understand the inner life of innovative projects. In a way, such study would
bring academic rigour to Tracy Kidder’s brilliant novel – The Soul of a New Machine (Kidder,
1981) – and make us aware of the emotional and motivational turmoil of some radical innova-
tive projects that depart from conventional wisdom and practice.
Second, open innovation has become increasingly critical for innovative projects (Igartua
et al., 2010; Lopez-Vega et al., 2016). However, it puts individual members of the project,
including but not limited to the project manager, in complex ethical and potentially problem-
atic situations. Our second idea, therefore, centres on exploring decisions, decision rights,
loyalty and ethics in open innovation (Gambardella and Panico, 2014). Drawing on the work of
moral philosophy, researchers could explore how innovators and project managers define and
redefine fairness through acts of reciprocity or generosity. For example, Vedel and Geraldi
(2020) explored the role of the stranger, a university researcher, in drug development in a
44 Handbook on innovation and project management

large pharmaceutical firm. The case is interesting in this context, as the researcher was also an
inventor, pushing his discoveries into practice through collaboration with the pharmaceutical
company. However, while developing close relationships with senior managers of the pharma-
ceutical company, he also acted as a “stranger”, safeguarding his interests, and in particular,
the potential profit from the innovation. How did the stranger actually feel about the collabo-
ration and its many different faces? How can one define loyalty in such contexts? How does
one decide what to share in open innovation processes while maintaining close relationships
to facilitate productive collaborations?

Surfacing the Precarity of Project-Based Work

Type 3 research at the micro level espouses and criticizes the silently accepted assumptions
of our current ways of working on innovative projects. As Habermas argues, the point of
emancipatory research is not only to problematize and criticize but to help transform the status
quo – and to offer new alternatives for a more promising future. Typical type 3 studies explore
the precariat of project-based work and how innovators and project managers carry the risks
of innovation as individuals, not as a society or larger corporations. Research methods are
varied, yet with a bias towards qualitative studies, such as auto-ethnography, engaged scholar-
ship and action research. Within project studies, we can highlight the work of Lindgren and
Packendorff (see, for instance, Berglund et al., 2020), although their studies have addressed
contexts in which highly specialized individuals collaborate in processes requiring high levels
of creativity. In the following paragraphs, we propose two additional research ideas.
First, research could explore the so-called dark side of innovation (Locatelli et al., 2022) to
individuals. The research could go in several different directions. On the one hand, it could
explore actual unethical and even illegal practices surrounding innovation processes and how
individuals decide and act within those boundaries. For example, Bas van Abel launched
FairPhone to inform users of the dark practices behind the supply chain of our day-to-day
devices, including sourcing metals in war-ravaged regions, and provide fair alternatives. Yet,
in this programme of work, he and his team faced difficult trade-offs and had to make com-
promises in the actual fairness of their phones. Future research could expose such dark sides
of innovation projects and help individuals cope with their hard choices. Work on moral phi-
losophy can offer a solid theoretical foundation for such an endeavour.
Another suggestion could be to explore diversity in innovation projects. For example, as
we glorify certain types of innovators and project managers, who are excluded? Who has the
power to decide on new kinds of innovative projects and how do they use that power? What
are the gender characteristics and implications of such projects? Do more feminine traits, such
as collaboration, generosity and care, find space in fiercely competitive innovation projects?
What are the longer-term consequences of a male-dominant form of innovation? What are
the more general preconditions of diversity in such projects? How is diversity addressed, sup-
pressed and maybe surpassed – and how does it contribute to or hinder innovation? What kind
of innovation is particularly promoted and why?

MESO LEVEL

At the meso level, research has the project as the focal level of analysis; that is, it explores
work on projects and their management as well as how projects embed, facilitate and create
 Bridging project studies and innovation studies 45

innovation. Topics include but are not restricted to why projects exist, how they behave, are
organized and create value, and what is considered value and to whom (Söderlund, 2004).
In many ways, studies in this area are clearly at the core of project studies and are central to
innovation studies too. Accordantly, research at the meso level abounds both in innovation and
project studies as well as in the existing bridge between the two. The bodies of work are too
broad and diverse to provide a more nuanced picture. In project studies, research varies from
the use of tools, processes, practices and routines to the understanding of how projects unfold
over time from their inception to their ending.
In innovation studies, the meso level has been addressed primarily as a form of organizing
and as a context for innovation. This includes work on breakthrough projects, the challenges
that those projects face, learning processes in and across projects, combinations of technolo-
gies within projects and various management approaches to facilitate innovation work. In the
following sections, we will explore some of the current studies in each research type and pro-
pose ideas for future studies. Project studies and innovation studies deserve to be connected
at the meso level. This is the bulk of the study in both areas, and the research questions and
preoccupations are similar, making this connection probably easier to achieve. It is therefore
no surprise that most studies on the intersection between project and innovation studies are at
the meso level. However, there is room for further exploration, particularly as we delve into
different knowledge-constitutive interests.

Identifying Commonalities across Innovations in Projects

Type 1 research searches for what is common across innovative projects and innovations
in projects. It aims to identify particular effective teamwork characteristics (Hoegl and
Gemünden, 2001; Malach‐Pines et al., 2009), organizing practices (e.g. Kock et al., 2020; Raz
et al., 2002; Teller et al., 2012), strategies and capabilities at the team and project levels that
are more likely to lead to higher performance.
Despite the wealth of research in this area, we suggest two additional ideas for future stud-
ies. First, we would encourage more research on the role of innovation technology (Dodgson
and Gann, 2014) in general and visual practices in particular (Comi and Whyte, 2018) in
innovation projects. With a few exceptions (see e.g. Killen et al., 2020; Yakura, 2009), most
of the studies in this area have focused on the firm (Comi and Whyte, 2018; Whyte et al.,
2008) and portfolio levels (Geraldi and Arlt, 2015; Killen, 2013; Killen et al., 2020). However,
visualizations and other innovation technologies also abound at the project level and impact
projects’ innovation processes, as they enable new forms of collective and innovative work
across disciplines (Dodgson et al., 2005; Dodgson and Gann, 2014). Yet, not enough research
has addressed the role of these visualizations in social interactions, as well as their role in
helping to understand and manage the uncertainty and complexity embedded in projects.
This research seems particularly important now, in times of rapid technological development
and advancements in visualization technology. Indeed, the possibilities for visualizations and
other virtual innovation technologies have been developing for years (Dodgson et al., 2013),
but their development and deployment were accelerated, particularly after the COVID-19
pandemic. With the pandemic, there has been a rise in online work, which has altered the
nature of some visualizations. This is important as our main source of data remains discur-
sive despite a visual turn in our projects, organizations and society (Boxenbaum et al., 2018).
Materiality and multi-modality are examples of theoretical inspirations to ground such stud-
ies, which could add insights into how visualization techniques interact with physical objects
46 Handbook on innovation and project management

and how different types of visualization techniques might be needed to grasp a complex inno-
vation situation.
Our second idea for research is to explore the role of algorithms as an innovation in the
actual management of projects. To date, research on algorithms in a broad sense has been
confined to repetitive operations. Yet, projects could also benefit from algorithms, be it to
optimize their repetitive tasks (Brady and Davies, 2004) or to help in controlling project
progress and minding information from reporting (Stingl and Geraldi, 2021). A few projects
are starting to use algorithms and develop capabilities in this area (Whyte, 2019). More
research could explore how this innovates project management processes and with what
implications.

New Forms of Innovative Projects

Type 2 research looks for outlier projects – special cases that show possibilities rather than
probabilities for new forms of managing and organizing innovation in projects and inno-
vative projects. This research is at the core of what Davies et al. (2018) discussed as the
bridge between innovation and project studies. Examples abound in this very handbook. We
see opportunities by connecting the research with current societal trends and challenges. For
example, as discussed earlier, digitalization and the role of artificial intelligence are signif-
icantly changing the nature of work and innovation, such as digitalization and our grand
challenges – including ageing, climate change and diversity. The pharmaceutical industry
uses algorithms abundantly to create and test the resilience of new potential compounds.
Digitalization transformed the financial industry completely, as algorithms opened possibili-
ties for new investment strategies. Innovative IT projects became central to this financial
transformation. Such contexts are attractive for type 2 meso-level research due to their pecu-
liar interaction with technology and projects.
Along these same lines of digitalization and artificial intelligence, it seems important
to address new forms of organizing innovative projects. Agility has become a key term
in both innovation studies and project studies, and it continues to attract the interest of
both scholars and practitioners. However, agility changes shape and is implemented differ-
ently in different contexts. It would be interesting to further explain how these differences
emerge, what effects they have and how new forms of agility are developed in different
contexts.
These are two examples of innovation in (innovative) projects through new organiza-
tional approaches and novel technologies. In more general terms, it seems important to
address how innovative projects embrace new technology and create options to reap the
benefits of new technology. Further developments evoking the concept of dynamic capabili-
ties could be particularly relevant in this regard. By dynamic capabilities, we mean “the
strategic innovation processes used to adapt, integrate, and reconfigure a firm’s internal and
external competences, resources, and routines in response to rapidly changing and volatile
conditions” (Davies et al., 2016, 26). Despite existing work on dynamic capabilities within
(Davies et al., 2016) and across (e.g. Brady and Davies, 2004; Cattani et al., 2011; Söderlund
and Tell, 2009) projects, more can be done on exploring how dynamic capabilities evolve
and develop in the course of a project and in interaction with innovative technologies that
are changing working practices around the globe as economies reorganize in a post-pan-
demic context.
 Bridging project studies and innovation studies 47

Surfacing the Hidden Dimension of an Innovative Project

Type 3 research at the meso level espouses, criticizes and transforms the silently accepted
assumptions about how innovation and projects are organized. Methodologies vary with a
bias towards qualitative and engaged studies, such as engaged scholarship and action research.
Typical studies in this area examine the dark side of innovation projects and innovation in
projects. For example, van Marrewijk et al. (2016) examined how innovation in project roles
led to conflicts in the Panama Canal project (van Marrewijk et al., 2016). Although the authors
did not explicitly discuss innovation, it was the change in the roles between the United States
and its Panama partners that culminated in myriad conflicts in the inter-organizational rela-
tionship. The authors used the case study methodology but were also involved in the project,
consulting and observing the work for long periods. Such engagement provides a deep under-
standing of the context required for transformative research.
The so-called “Making Projects Critical” network, founded by Svetlana Cicmil and Damian
Hodgson, led the work on type 3 research in project studies. Much of this work and the first
range of papers and ideas were published in a much-cited book published in 2006, edited by
Cicmil and Hodgson (Hodgson and Cicmil, 2006). However, as with the micro level, the work
is not particularly focused on innovation contexts and reflects on the precarious situation of
this context and what it means for the individual. In the following paragraphs, we propose two
research ideas.
Both innovation studies and type 3 (emancipation) are grounded in an interest in chang-
ing the status quo. Future research can explore how type 3 research in projects is actually an
innovative process. This methodological line of inquiry could explore how methods within
innovation studies, such as co-creation, can be used as a methodology for emancipatory
research, where one first unveils silently accepted assumptions and then explores possibili-
ties for changes in, for example, utopian workshops. Emerging research on a distant future
grounded on temporality or imaginaries can offer theoretical inspiration to guide research
(Milner, 2019; Schultz and Hernes, 2020).
More generally, it seems important to continue along the lines of documenting projects as
political instruments. An example is exploring the processes through which they create pow-
erful positions and how they block certain interests or positions in favour of others. It would
then also be crucial to explore processes of inclusion and exclusion in innovation projects of
certain stakeholder groups, interests and employees – and how projects respond to such con-
cerns and evolve together with them.

MACRO LEVEL

At the macro level, research explores the relationship between projects and their wider
context – both in terms of the firms related to projects and more widely how projects interact
with society. This research could also look upon even broader issues involving the relation-
ship between some projects, project-intensive industries and the character of project society
(Lundin et al., 2015). In this regard, the macro level is dedicated to projects in and for society.
This line of research explores questions of strategy, governance and governmentality, project
portfolios and multi-project organizations, project networks and project ecologies, and many
other elements of an emerging project society (Boltanski and Chiapello, 2006).
48 Handbook on innovation and project management

A wealth of research in innovation studies is dedicated to this level of analysis, such as

work on innovation systems and innovative states (e.g. Edquist et al., 2000). Research Policy,
a core journal in the classic innovation field, is dedicated exactly to the interaction between
innovation and its societal context and explicitly asks for research policy implications. Later
work has taken a strong policy orientation with Freeman’s classic work on the economics of
industrial innovation that shaped the field during the 1970s (Freeman, 1974) as a prime source
of inspiration. Key works within innovation studies have addressed the factors influencing
investment in R&D and innovation, the sources of innovation, and the great differences across
industries and sectors concerning innovation (see, for instance, Pavitt, 1984). Some scholars
have addressed technological, institutional and economic change and suggested a system-
atic analysis of innovation across different contexts (Rosenberg and Frischtak, 1984). They
subsequently worked on the “national systems of innovation” (Lundvall, 2016) that favoured
a holistic approach to the study of innovation, emphasizing the role of interactions among
actors. More recent works within innovation studies have emphasized the centrality of socio-
technical transition (Geels, 2020). However, they have paid less attention to the micro-level of
innovation and the study of project-oriented agency (Lenfle and Söderlund, 2022).
Project studies also count, with a large body of work dedicated to the management of the
institutional context of projects (Morris and Geraldi, 2011), project society (Jensen, 2012;
Lundin et al., 2015), project ecologies (Grabher, 2002; Sydow and Staber, 2002), govern-
ance of projects (Ahola et al., 2014), multi-project management and portfolio management
(Hobday, 2000; Martinsuo, 2013; Midler, 1995; Teller et al., 2012) and project strategy (Artto
et al., 2008). Another line of research, mentioned earlier, focuses on the nature and capabili-
ties of the project-based firm, addressing such aspects as project capabilities, organizational
structures and learning mechanisms (Davies and Brady, 2000; Hobday, 2000; Söderlund and
Tell, 2009). The macro level has also been studied explicitly at the intersection between inno-
vation and project studies, but more work in this area is welcomed and required.

Identifying Contingencies and Designing Contexts for Innovation Projects

Type 1 research searches for commonalities in project and innovation contexts that are more
likely to lead to higher performance. Commonalities can be in a diversity of areas, for exam-
ple, governance mechanisms and organizational practices, such as forms of organizing port-
folios (inter-organizational) and contractual agreements. The research is mostly quantitative;
yet, it includes not only surveys but also archival data on, for instance, innovation records and
econometrics.
In project studies, the research is dedicated to multi-project firms and project portfolio
management. The study is mostly done within the firm, in such areas as R&D, new product
development and IT contexts (Brown and Eisenhardt, 1997; Martinsuo et al., 2014).
As with the work at the meso level, the body of work here is extensive and exhaustive;
therefore, developing new research ideas is challenging, particularly at the more generic level
targeted by this chapter. Having said that, we propose research ideas based on new develop-
ments within society that open space for new forms and new contexts for research.
We suggest studies based on archival data and social media data. The field of innovation has
a strong tradition of such methodologies, but this is not the case in project studies (with a few
exceptions, such as Lenfle and Loch, 2010). With the increasing use of platforms for innova-
tive endeavours, some innovative project practices moved online and were partly transformed
 Bridging project studies and innovation studies 49

by the myriad of other opportunities emerging from online formats. Researchers can make
use of the digital traces left from such an online format (opening difficult questions related to
GDPR – General Data Protection Regulation – and research ethics). The quantitative aspects
of archival data can be used to explore commonalities between different platforms or sectors.
Advanced data mining tools also open incredible opportunities for data analysis and research,
which, to our knowledge, are still to be explored at the intersection between projects and
innovation studies.

Understanding the Role of Societal Innovation in Projects

Type 2 research at the macro level pertains to and explains the differences between project
ecosystems and contexts. Examples of research in this area are the works of Sydow and Staber
(2002) and Grabher (2002), which draw on network theory and economic geography to exam-
ine the institutional embeddedness of projects. Others are those of Manning and Sydow (2011)
on project networks and how project networks create consistencies across projects or that of
Whyte (2019) exploring the digital revolution in megaproject ecosystems.
It is not difficult to find examples of outstanding work in this area; therefore, proposing new
research requires looking at new developments in our society and the emergence of interesting
new phenomena to address (von Krogh et al., 2012). One such development that is making us
curious is the rise of blockchain technology. It creates opportunities for new forms of organ-
izing – like autonomous organizations that facilitate contracting between people with very
limited constraints in terms of geographical location, size and even legal frameworks. This
form of organizing is still alien to most of us but presents an opportunity for future studies, as
it constitutes, in itself, an innovation in forms of (project) organizing.
Another feature would be to look at the evolution of projects spanning industries to drive
new kinds of innovation across established, mature industries. How are these actors interact-
ing to establish a platform for collaboration, what technologies are used and why? How are the
different players’ diverse institutional requirements influencing collaboration and demands on
project collaboration? A particularly promising line of work in this area is exploring the role
of projects in socio-technical transitions. In the innovation literature, the so-called multilevel
perspective (MLP) has marked the study of socio-technical transitions (Geels, 2002, 2011).
This perspective identifies various pathways in which socio-technical transitions take place,
where scaling niche innovation levels and landscape development pressures in current regimes
culminate in a transition into new socio-technical regimes. As mentioned earlier, projects and
project-oriented agency (Lenfle and Söderlund, 2022) are vehicles that enable such transi-
tions, both in terms of niche innovations and changes within the regime. Future research adds
to emerging contributions (e.g. Sovacool and Geels, 2021; Turnheim and Geels, 2019) and
explores the role of megaprojects in socio-technical transformations and the forms of integrat-
ing projects in niche developments, among several other topics.

Surfacing the Political Dimension in and around Innovation Projects

To espouse, critique and transform the status quo, type 3 research at the macro level draws
on engaged research methodologies. In some regards, a notable example of research in this
quadrant is the Brighton Group and their work on complex products and systems (see, for
instance, Hobday, 2000). Their work started focusing on the firm, particularly multi-project
50 Handbook on innovation and project management

organizations, and what they require to support the development of complex and innova-
tive systems, such as factories and infrastructure. The work then moved on to explore the
megaproject ecosystems they had observed to be developing over the last decades in the
United Kingdom. The group of researchers and their ramifications across the UK have been
leading the research in the area while also maintaining strong connections with practice and
advising the government and firms. Therefore, they offer a good example of engaged scholar-
ship. Having said that, there is not as much research building on critical studies more firmly
and developing work that is not only engaged but also more critical towards current forms of
organizing (Courpasson, 2013; Van de Ven, 2007).
In the following paragraphs, we propose two research ideas. First, the politics of innovative
projects could be further explored. In line with the work of Clegg and colleagues (2002) on
project governmentality in the construction industry, future studies could delve into the politi-
cal arenas involved in the development of a context for innovative projects. They could do this
by, for instance, exploring the work of UN officials building (or failing to build) conditions for
democratic governments in countries struggling with autocratic regimes.
Second, we encourage more work that takes alternative perspectives on project ecosys-
tems to the firm and its intrinsic interest in making profits. As we turn our attention to (inno-
vative) projects for society, we encourage a Hirschman’s glance into projects as something
that helps a country develop beyond its current situation not because of its circumstances
but because of “what a country does and of what it becomes as a result of what it does”
(Hirschman, 1967, 4). In this way, “it affords hope to a country with the ‘wrong’ endowment
provided only it finds the ‘right’ projects” (Hirschman, 1967, 5). Future research with this
perspective and in developing countries would be refreshing and valuable, both theoretically
and societally.

DISCUSSION

The fields of project studies and innovation studies have been separated for many years but are
now becoming increasingly intertwined (Davies et al., 2018). The bridge between these two
disciplines is an important source of theorizing, with potential implications to practice on top-
ics relating to, for example, disciplined flexibility (Sapolsky, 1972) and ambidextrous leader-
ship (O’Reilly and Tushman, 2004). While the bridge has already led to fruitful research and
collaborations, there is still much to do. In this chapter, we have identified opportunities for
further research by reflecting on how three knowledge-constitutive interests play out at three
key levels of analysis in and across the two fields. This exercise has three main implications
for future research.
First, when comparing and contrasting the fields, we noted promising opportunities for
extending each field – project studies and innovation studies. One of the most promising
opportunities for cross-fertilization is to make the field of project studies more concerned with
the macro level. Research at the macro level has played a key role in innovation studies since
the days of Joseph Schumpeter, and the work by the pioneers in innovation studies together
with OECD and national governments. An example is Christopher Freeman, one of the most
influential scholars in innovation studies, whose research was instrumental in governments’
collection of statistics on investments in research and development. In that regard, innova-
tion studies were early on influenced by research within economics and political science to a
 Bridging project studies and innovation studies 51

much greater extent than project studies and have continued to address macro-level concerns
through research on technological transition, technological regimes and national systems of
innovation. This is an area where project studies have, so far, only been marginally addressed,
although several scholars have called for more studies of the project society (Jensen et al.,
2016; Lundin et al., 2015) and the nature of the project economy (Flyvbjerg, 2014; Styhre,
2020). Moreover, studies at the project level, for instance, on megaprojects, have called for
greater awareness of urban planning, the effects of megaprojects and their influence on eco-
nomic growth (Flyvbjerg, 2014), and the creation of viable and innovative project ecologies
(Grabher, 2004).
That said, if innovation studies have historically been more aware of issues related to
the macro and meso levels, project studies have in the past had a much stronger orienta-
tion towards the micro level. Several larger research programmes in projects have addressed
issues associated with project leadership, shared and balanced leadership in projects, the role
of the project leader and the life and learning of project workers– all examples of greater
care and interest for the individual worker engaged in projects. That same interest could
strengthen existing research in innovation studies to better understand the people in innova-
tion, their emotions, skills, intuition, socio-material practices and interrelationships. Such
work would complete studies of innovation practices (Dodgson, 2017). Moreover, innovation
scholars could build on and continue to address issues such as work conditions that foster
innovation, how innovation projects are developed to create new interlanguages (Lenfle and
Söderlund, 2019) and how projects evolve to ensure a project-oriented agency that seems
critical for innovation. How opportunities for innovation or landscape pressure are material-
ized and constructed at the individual and team levels would offer a better understanding of
how macro factors of innovation play out at the micro level. Innovation and project studies
can build on this awareness and potential extension of under-explored levels of analysis to
explore the interplay between micro, meso and macro levels. In that respect, our chapter
highlights the fact that different disciplines can have strengths concerning their primary level
of analysis, and an awareness of the levels of analysis might spur improved cross-fertilization
and mutual learning.
Second, it also seems important to reflect more on which theories would better equip us
to bridge these disciplines. Our chapter focused on knowledge-constitutive interests, each
of which offers a variety of meta-theories. We briefly mentioned some enlightening theo-
ries throughout the chapter. We now return to some of them. Institutional theory has already
played an important role in advancing both innovation studies and project studies (Granqvist
and Gustafsson, 2016; Hargadon, 2014; Söderlund and Sydow, 2019). This has spurred much
interest from both innovation and project scholars to, for instance, better understand how
innovative projects handle institutional exceptions (Scott et al., 2011), how they cope with
institutional complexity (Pemsel and Söderlund, 2020) and how they might operate as insti-
tutional entrepreneurs (Sydow and Söderlund, 2023). Learning/knowledge theories have
also had a huge impact in creating a better understanding of essential learning mechanisms
and capability-building processes (Sydow et al., 2004), what problems are involved in learn-
ing across projects and why projects seem to repeat the same mistakes over and over again
(Flyvbjerg et al., 2009). More recently, scholars from the two fields have called for further
research in the area of imperfect projects and how they may spur breakthroughs (Rehn and
Lindahl, 2012). Practice theories have also played a much more important role in inform-
ing our understanding of the dialectic between structure and agency (Bourdieu, 1990). An
52 Handbook on innovation and project management

important point with practice theories has been to link practical understanding and the explicit
formulations and principles that enjoin people to perform specific actions (Schatzki, 2006).
Similar ideas could be applied to our understanding of what shapes innovation and creativity
in innovative projects and what problems are associated with the emergence of innovation in
innovative projects. Moving on, we should continue reflecting on emerging theories that could
play a significant role in bridging these two disciplines.
Finally, besides the inspiration of meta-theories, there is also an opportunity for more
theorizing and a long-term commitment to the development of new theories on the bridge
between innovation studies and project studies. Innovation and projects are intertwined in
myriad ways, and in each lies the seeds for new theorizing. Innovation in projects is theoreti-
cally challenging as innovation takes place in a transitory type of organization. How and why
does innovation happen in projects? What kinds of opportunities and challenges emerge in
innovation in projects? How do they differ from other kinds of learning processes? Research
on innovation around projects has been the focus of some of the core academics leading this
intersection, including project capabilities in project-based organizations, the study of owners
and the development of a fruitful ecosystem for projects (Davies and Brady, 2000; Grabher,
2004; Söderlund, 2005; Söderlund and Tell, 2009). There are opportunities for further theo-
rizing, particularly when exploring the financial and economic perspectives of innovation
projects (Styhre, 2020). Finally, innovation through projects will have increasing relevance
for society. They are needed to address grand challenges, such as climate change, an age-
ing population and inequality. In this regard, a problem-centric research agenda is useful to
build on the strengths of cross-fertilization of knowledge to act on our contemporary wicked
problems (e.g. Garud and Gehman, 2012). In this regard, we hope for passionate scholar-
ship (Courpasson, 2013) and responsible management research (Bamberger, 2020) that more
directly address issues that people care about and that influence their lives, not necessarily
those that address practitioners’ concerns.

CONCLUSION

This chapter has suggested an inclusive research agenda and a meta-theoretical framework
for cross-fertilization across innovation studies and project studies. In particular, the chapter
offers an agenda for systematic research into the nature and process of innovative projects in
which both researchers from innovation studies and project studies could participate. We iden-
tified nine areas of research and suggested several openings for future research. If successful,
this would make innovation scholars more aware of the agency and individual dimensions and
better understand the significance and various roles of innovative projects. Concomitantly, the
suggested research agenda encourages project scholars to be more aware of the macro-level
concerns of projects, their impact and institutional connections. Ultimately, we hope that this
framework will lead the way for both better developments of innovation studies and project
studies and their mutual progress and cross-fertilization over time. More generally, this chap-
ter advocates inter- and cross-disciplinary research. Our suggested bridge between innova-
tion studies and project studies indicates that management and organization studies would
benefit from more integration across our sub-field silos. Such integration not only encourages
scholars to explore phenomena from alternative angles but also, hopefully, to ask more daring
questions.
 Bridging project studies and innovation studies 53

ACKNOWLEDGEMENTS

This chapter is based on the authors’ prior work that draws on Habermas’ writing and devel-
ops the notion of project studies as an umbrella concept to encompass studies of project-based
organizations, projects and project-based work. This work has been published in Geraldi
and Söderlund (2016, 2018). The authors are grateful for comments from the editors and the
reviewers.

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3. Corporate entrepreneurship and project
management
Valentine Georget and Rémi Maniak

INTRODUCTION

Corporate entrepreneurship (CE) is not a new concept; it has been around since the 1960s.
Though it has been abandoned since the 1980s because of the lack of professionalism in corpo-
rate venturing management, the uncertain environment in which organizations are immersed
today implies the re-appearance of this concept and its institutionalization within the companies.
The concept of corporate entrepreneurship seems to hold great promise. At first glance,
it seems to reconcile the advantages of a large company – with its effects of scale, its R&D
power, its international presence, etc. – and of entrepreneurship – with its possibilities of crea-
tivity, agility, reactivity, etc.
However, one could also see it as “an old wine in a new bottle” because in many ways the
process of corporate entrepreneurship is similar to that of project management (PM). In both
cases, processes start from a concept or an idea and build a temporary organization capable of
transforming this initial idea into a new product or a new service, potentially having an impact
on the company’s strategy and organization.
This apparent similarity requires a more in-depth analysis of the differences and similari-
ties between these two schools of thought. This is what this chapter proposes to do.
In the first section, we will give a brief overview of these two disciplines and the evolution
of their questioning. Especially, we show that contrary to what one might think, most of the
work in these two fields does not focus on the tools and processes for optimizing innovation
processes, but rather on the articulation of innovation processes with the organization and
structure of the firm, and with its strategy.
In a second step, we study in a symmetrical and systematic way the similarities and dif-
ferences between the two schools of thought, focusing on these two variables – organization
and strategy. What can we learn from a reconciliation between these two fields? We will show
both a strong proximity and elements of differentiation, suggesting avenues for further models
of innovation management integrating these two approaches.
This chapter is based on our own experience in accompanying several dozen projects over
the past 20 years, and on studies and articles published on this subject, both concerning tradi-
tional projects and emerging corporate entrepreneurship projects.

TWO CONCEPTS TO MANAGE THE INNOVATION PROCESS

Project Management (PM): From Dinosaur to Innovative Companies
A dinosaur mythology not agile enough
The collective unconscious has the idea that certain established companies may see their
dominant position decline or even disappear with the entry of new actors who are supposed
60
 Corporate entrepreneurship and project management 61

to be more agile and do not have to deal with bureaucratic red tape. The reality is often quite
different.
The most obvious case is that of Kodak, taught at universities around the world. This is a
blatant example of a large company unable to reinvent itself in the face of a brutal change in
the environment – the transition from film to digital photography – leaving room for new play-
ers in this market (Sony, HP, Canon, etc.), benefiting from solid assets that are key in this new
market (sensors, electronics). Another example often shown is Nokia, a long-dominant actor
in the cell phone market, notably following its victory over Motorola, but which had to bow to
Apple’s technologies and business model.
In both cases, the new entrants are not startups but established companies. If we look for
startups that have currently disrupted an established market and its dominant players, there
are far fewer examples. SAP, the market leader in business software, has indeed been chal-
lenged by solutions like SalesForce, but SAP is far from dead. Tesla has attacked a highly
capital-intensive market – the automotive industry – with extraordinary capitalization despite
rather chaotic financial results. It’s the same for aerospace, with SpaceX clearly outperforming
established companies in the launch vehicle market, and for Palantir in the artificial intelli-
gence market. Here again, these adventures are not startups; this would not have been possible
without state aid or the fortune of a few billionaires.
We can also note that the domination of digital monopolies such as the GAFAMs, presented
as successful startups, is finally today due less to the intrinsic quality of their offers and more
to their rents on markets with strong network externalities (Eisenmann et al., 2006). It should
also be noted that they have the capacity to absorb innovative initiatives that could harm them
(Bourreau and Perrot, 2020).
Even so, the old literature on innovation has given many arguments to show how quickly
dominant players can disappear to the benefit of new entrants.
However, core competencies can become core rigidities since the organization struc-
ture always implies developing the same kinds of products, regardless of the evolution of the
market or technological environment (Leonard-Barton, 1992). Literature focused on product
architectures confirm this inertia and the structural advantage of newcomers over incum-
bents (Henderson and Clark, 1990), and that the current digitalization of the economy and the
standardization of protocols and modules favour small actors against integrators (Fine, 1998;
Jacobides et al., 2007). The literature about the ecology of population invites us to consider large
firms in their dimension of inertia much more than in their agility. Relying on the dominating
school of thought of the resource-based view (Penrose, 1959; Wernerfelt, 1984), even if the con-
cept of dynamic capabilities (Eisenhardt and Martin, 2000; Teece, 2007; Teece et al., 1997) is
now more than established, i.e. the ability of a firm to modify its routines to adapt to the evolu-
tion of the environment, there is very little evidence about the ability of incumbents to achieve it.
In the end, it is difficult to explain the reality of the debate between startups and large estab-
lished organizations with the theoretical “glasses” constructed in the 1970s–1990s, which
is not surprising. It is indeed at this precise moment that the first studies on modern project
management were born. The aim was to find processes and organizations capable of renewing
themselves, whether in terms of products or internal routines.

Project management as a vector of innovation

Obviously, practices and theories have largely dealt with these weaknesses by identifying
management principles and theories that allow them to be overcome.
62 Handbook on innovation and project management

As far as project management is concerned, the discipline was born in the 1950s as a way of
controlling projects that came from top management or political decisions (missiles, Apollo,
etc.) that required the involvement of several thousand or tens of thousands of individuals.
These methods were perfected until the 1990s. At this time, in the OECD countries, medium
and large companies faced new international competition and market saturation and had to
switch from a demand-driven economy to a supply-driven economy.
From then on, projects were no longer simply a way of controlling the complexity of a
development process, but the framing of collective actions aimed at exploring new markets,
new technologies or new architectures. The discipline has therefore moved closer to the dis-
cipline of innovation to integrate components related to uncertainty and serendipity (Lenfle,
2008; Lenfle and Loch, 2010). Since then, the rapprochement with innovation management
has become more pronounced, incorporating more organizational and strategic variables
(Andriopoulos and Lewis, 2009; Benner and Tushman, 2003; Maniak et al., 2014; O’Reilly
and Tushman, 2004; Tushman and O’Reilly, 1996).
This field of innovation management was itself built with strong ties to project manage-
ment, without these disciplines assuming their commonalities (Davies et al., 2018). Thanks
to these first studies – dating from the 1950s to 1960s – often dealing with innovation in
projects (Klein and Meckling, 1958; Lawrence and Lorsch, 1967), the field has gradually
structured itself around organizational variables – the relationship between firm-level and
project-level (Clark and Wheelwright, 1992; Midler, 1995; Mintzberg and McHugh, 1985;
Wheelwright and Clark, 1992) – and the underlying product planning strategy, especially in
terms of learning dynamics (Maniak et al., 2014; Marsh and Stock, 2003, 2006; Nonaka, 1991,
1994; Nonaka et al., 1995).
Theories, vocabularies and recommendations of innovation and project schools of
thought are converging. This could be traced back to Klein and Meckling’s (1958) land-
mark paper contrasting “Mr Optimizing” (standard PM) and “Mr Sceptic” approaches to
project management. Whereas Shenhar and Dvir (2007) demonstrate the fallacy of the
“one size fits all” approach and Brady and Davies (2004) propose the notion of “vanguard
exploratory projects”, Sommer and Loch (2004) develop a theory of project management
under unforeseeable uncertainties (or unknown unknowns). Lenfle and Midler (2009)
introduced the concept of “exploratory projects”, which deal with exploration, creativity
and flexibility and also a strong discipline in the management of such projects (Lenfle and
Midler, 2009). Nowadays, it is common to read project management articles discussing
ambidexterity (Kock and Gemünden, 2019), effectuation or open-innovation (Huff, 2016)
concepts.
As can be seen from this summary, both disciplines have relatively converged towards the
integration of project logic, innovation logic and organizational logic. Entrepreneurship has
followed the same dynamic.

Corporate Entrepreneurship: Innovation as a Personified Emerging Disruption

Success stories that feed a mythology of superheroes

For several years, entrepreneurship has been a key area for action and reflection. This is par-
ticularly corroborated by innovation indicators. Historically, the measurement of innovation
was based on productivity gains, number of patents, then number of new offerings, and now
on number of new startups created by a specific company or in a specific region.
 Corporate entrepreneurship and project management 63

Silicon Valley has played a major role in this paradigm shift. GAFAM – to name a few –
have fueled a mythology of the hero who starts with a great idea and gradually develops a
“unicorn”. Jeff Bezos, Bill Gates, Mark Zuckerberg and Steve Jobs are obvious examples of
creating empires from individual initiatives and then remaining at the head of the company.
In the collective unconscious, this factor is decisive in the success of the company in the short
and long term.
To be convinced of this last point, just follow the saga between Apple and Steve Jobs. The
decline of the company in the early 1990s was largely associated with the dismissal of the
founder, the success at the end of the 1990s was largely associated with his return, and finally,
his death in 2011 raised many questions about the ability of the company to continue to offer
innovative and revolutionary products such as the iPhone or the iPad. This personification of
the innovation process does not stop in Silicon Valley.
For example, in China, Alibaba’s success is largely associated with its founder Jack Ma. He
is considered a visionary and a quasi-guru and has been at the head of the company for a long
time at each of its decisive stages.
These adventures point to an extreme situation, where the idea precedes the creation of a
company, where the founder is the initiator of the concept, and routines appear as the scale-
up proceeds. There are also examples of innovative initiatives carried out within an existing
company. These initiatives have been supported by top management in a variety of ways.
There are cases where the internal initiative is not supported by top management. The most
famous example is certainly that of Toshiba (Abetti, 1997). The laptop project was initiated
by an internal engineering team. This team presented the project twice to the top manage-
ment, with a refusal each time. The team continued to work on the project informally, with
the support of their direct managers. The company finally launched the product by creating
the market, in which it remained dominant for almost ten years. The example of the Twingo
project at Renault is also emblematic of this bottom-up rise in power, against part of the hier-
archy (Midler, 1995).
Even if several internal-entrepreneurial projects could be hidden by employees or top man-
agement for many reasons, organizations understand the importance of systematizing and
democratizing innovation processes. The systematization of corporate entrepreneurship has
followed three waves: a wild wave and two systematized waves. Before the 1980s, compa-
nies were looking to invest in ventures within the company, like venture capitalists, but this
concept was abandoned for the next 20 years because the companies simply could not muster
the hardnosed discipline that VCs apply, as they cold-bloodedly stop a venture even if the
entrepreneur has brilliant strategic arguments. Since the 2000s, companies have been tak-
ing a renewed interest in this concept, which allows them to innovate and renew their strat-
egy in an increasingly uncertain environment (Sharma and Chrisman, 2007). Indeed, to face
environmental changes and competitive markets, organizations need to innovate and propose
innovative concepts to their customers to stay in the race or to get “back in the race”. So, they
have been creating a favourable environment to innovate by internalizing the entrepreneurial
process. These processes allow every employee/every “human resource” (Høyrup, 2010, 2012;
Smith et al., 2012) to propose their own innovative concepts in order to bring them to the fore
and retain only the most promising.
After this first phase of ideation, firms need to organize and manage the project with dedi-
cated processes. Google is the best-known example and has set up a management system
where each employee can work one day a week on a personal or collective project, which he
64 Handbook on innovation and project management

or she can propose to the top management. This system has given birth to innovations such as
AdSense, Gmail and Google News. Corporate entrepreneurship allows organizations to rein-
vent themselves (Sharma and Chrisman, 1999; Stopford and Baden-Fuller, 1994), to innovate
– incrementally and disruptively (Sharma and Chrisman, 1999; Stopford and Baden-Fuller,
1994) – and to gain in productivity (Phan et al., 2009).
From a theoretical point of view, entrepreneurship has progressively asserted itself as a sci-
entific discipline with solid roots and real academic recognition. For example, if we take the
500 journals with the highest h-index scores, 22 contain the title “entrepreneurship” or “small
venture”, while “innovation” appears 18 times and “project” only eight times. “Strategic entre-
preneurship journal” has the same h-index as “project management journal”. If we use the SJR
indicator, which is certainly better adapted to “rising” themes, “strategic entrepreneurship
journal” is now ranked tenth worldwide.
Within this general shift of focus towards startups, we have seen a rise in the importance
of the corporate entrepreneurship (CE) theme. According to Scopus, the number of corpo-
rate entrepreneurship publications has sharply increased in recent years (273 documents were
listed on Scopus in 2020, while only 139 documents in 2015). At first glance, corporate entre-
preneurship is very similar to project management, in that it is an entrepreneurial-based pro-
cess involving one or more individuals, conducted within an existing organization in order to
“create a new organisation or instigate strategic renewal or innovation within that organiza-
tion” (Antoncic and Hisrich, 2001; Basso, 2006; Christensen and Maskell, 2003; Chua et al.,
1999: 18; Delić et al., 2016; Sharma and Chrisman, 2007; Zahra, 1991).
Through the description of this process, most studies have been focused on an individual-
centric approach (Antoncic and Hisrich, 2003; Hisrich, 1990; Martiarena, 2013; Pinchot III,
1985; Zenovia and Maier, 2011) by studying the main actor of CE process: the intrapreneur
(Mohedano-Suanes and Benítez, 2018), who is literally an internal entrepreneur (Bager et al.,
2010; Zenovia and Maier, 2011) and can form an entrepreneurial group within the organ-
ization capable of persuading others, altering their behaviour and influencing the creation
of a new corporate venture (Stopford and Baden-Fuller, 1994, 522). In recent years, CE has
become more professional and institutionalized within companies through the creation of
specialized entities, such as i-Lab (Air Liquide) and Intrapreneur Studio (Orange). Thus, the
purely individual conception of the works council is moving to a more collective perspective
(Bierwerth et al., 2015; Chang et al., 2019). So, this field evolved (1) from strictly marginal
business development to a more innovative and intrusive initiative on strategy and organiza-
tion (Bosma et al., 2010) and (2) from an individual-centric to a more collective perspective
(Bierwerth et al., 2015; Chang et al., 2019).
To encourage CE initiatives throughout the organization, companies need to manage it and
create conditions to allow it. For example, literature insists on the importance of the diffusion
of a corporate culture that allows failure (Alpkan et al., 2010; Euchner, 2016; Kuratko, 2005)
and of giving employees autonomy to propose their ideas (Hansen et al., 2017; Kuratko, 2005).
Furthermore, we assist the emergence of some entities inside the organizations. Generally,
these entities are composed of a dedicated managerial team and dedicated processes. Although
these processes are specific to organizations, the CE process is generally divided into three
main phases: the ideation phase, development phase and exit phase (Jung, 2018). Like entre-
preneurship with venture capitalists, the transition from one phase to another depends on the
company’s selection committee (Pandey and Tewary, 1979).
 Corporate entrepreneurship and project management 65

On strategy, the theme of effectuation (Midler and Silberzahn, 2008; Sarasvathy, 2001) has
progressively imposed itself. In this paradigm, and contrary to a fairly widespread idea, the
entrepreneur should not protect his idea and wait until he has enough money or networks to
launch, but rather disseminate his idea from the outset, in order to induce a social mechanism
allowing him to both strengthen his assets and redirect his initial idea towards more promising
avenues (Huff, 2016; Parker et al., 2021; Sarasvathy, 2001).
At the organizational level, the notion of entrepreneurial orientation has been studied in the
CE literature as the ability of an organization to generate innovative behaviours and as the
ability to take risks or be proactive (Covin and Lumpkin, 2011; Fayolle et al., 2010; Morris
et al., 2010; Slevin and Covin, 1990). CE can also act on the organization itself to enable it to
become more attentive and responsive to changes in the environment (Slevin and Covin, 1990;
Zahra, 1991).

What about Crossing the Two Approaches?

Several studies have attempted to explore the link between the disciplines and theoretical
fields of CE and PM (Huff, 2016; Nguyen et al., 2018).
Some works have pointed to some common genes, notably via cross-citation studies
(Fonrouge et al., 2018), or a theoretical and systematic analysis of the links between these
two schools of thought (Kuura et al., 2014). Also noteworthy is work on the use of effectua-
tion logic within projects (Huff, 2016; Nguyen et al., 2018). The study by Kuura et al. (2014)
provides a unique historical analysis of the emergence and then points of connection between
these two disciplines.
Several concepts have gone beyond the boundaries and crossed the two theoretical fields.
Strategically, some concepts have also linked streams of thought, for example, the notion
of the vanguard project, which describes a disruptive project that opens the way for other pro-
jects to follow the first breakthrough (Frederiksen and Davies, 2008). The current of thought
initiated by Slevin and Covin (1990) has often been at the intersection, notably via the concept
of “entrepreneurial orientation”, but also new product development. The point is also to give
entrepreneurs project management methods.
Ambidexterity can also play the role of an intermediate concept between these two cur-
rents of thought. Recent developments have integrated this concept with project management,
showing that exploration and exploitation activities can be carried out and coordinated as
a programme of a project portfolio with different maturity levels and perspectives (Midler
et al., 2019). The issue of CE is also largely correlated to the ambidexterity issue, insofar as
the spaces of freedom granted to employees by top management can vary widely, and the
“bottom-up” devices put in place can either be integrated into the permanent organization
(contextual ambidexterity) or sent to an ad hoc or integrating structure of other similar initia-
tives (structural ambidexterity).
On the organizational level, some studies have shown that in the face of a traditional project
management process – carried out internally, starting from a given objective – other forms of
more bottom-up innovation processes can appear, such as when the company keeps control
over the definition of the initial concept while leaving the constitution of a social network and
a learning dynamic around the project free and non-programmatic (Svejvig and Andersen,
2015). Either the questioning emerges from a problem or an opportunity experienced by the
66 Handbook on innovation and project management

organization, and the way in which this aim can be achieved can also find its own way within
the organization. This model is then defined as “subjective project management” (Huff, 2016).
As we have seen, there are many points of convergence between the two disciplines. These
similarities are not so much about the tools and processes used but about the issues related to
the articulation of the underlying innovation processes with the underlying organizational and
strategic dynamics.

PM and CE: Differences, Similarities and Complementarity

Reading the previous paragraphs, one might think that the similarities outweigh the differ-
ences and that these two disciplines are almost confused, each constituting “the old wine in
a new bottle” for the other. In this section, we will analyse the similarities and differences
between them and show their complementarity. The analysis will be systematic, successively
questioning the organizational and strategic aspects of both concepts, both statically – with
a focus on a single initiative, a project – and dynamically – notably via the articulation with
existing or following initiatives and projects.

What about Organizational Issues?

Wondering about organizational issues orients the analysis towards several questions.

• First, what about management? Is there a project manager? How is he empowered and on
which scope and time? How is the project team defined?
• Second, what about the design principles? Which activities must be carried out during the
project, and what’s next after the project?
• Third, what are the linkages between the project and the permanent organization and
structure, for example ranging from a contextual initiative with a barycentre within the
functional departments to a project-oriented process which involves a certain degree of
autonomy of the initiative regarding the traditional structure?

Management issues: is there a project manager/team onboard? Who is in charge?

Authors like Burns and Stalker (1963) were certainly the first to show that – in highly chang-
ing contexts such as the electronics industry – “mechanistic” companies (those that applied
the principles of bureaucracy to the letter) were outclassed by “organic” companies, which
privileged processes over procedures and had a fairly unstable product range and variable
team geometry. The principles of the “organic” company as described by the authors are (1) a
continual redefinition of individual tasks, (2) participation of each employee beyond the limits
of his or her responsibilities, (3) a complex network of control, authority and communica-
tion, (4) democratization of knowledge and (5) transversal and lateral communication modes
(Burns and Stalker, 1963). The two concepts – PM and CE – obey this injunction, with dif-
ferent answers.
Project management has developed a variety of models, particularly in relation to new prod-
uct development. The different models can be positioned on a continuum between situations
where the project activity takes over the activity of the business units and functional exper-
tise and situations where the opposite occurs (Allen, 2001). The model called “heavyweight
project management” corresponds more to the second situation (Clark and Fujimoto, 1991).
 Corporate entrepreneurship and project management 67

In this model, the project manager is the one in charge of the convergence of the project with
its initial objective. He/she is generally not the initiator of the initial concept or the functional
specifications. The initial concept, process and project team are allocated to him/her a priori.
Much of the work on PM has focused on ways of motivating and empowering these teams
within the convergence process and pacifying the relationships between the functional units
and the projects that draw resources from these units to feed them. The “heavyweight” or
“tiger team” model gives primacy to the project over the business units from the very begin-
ning when the project is being formalized.
The corporate entrepreneurship approach differs greatly from this dynamic. First, the pro-
ject manager – the intrapreneur (Antoncic and Hisrich, 2001; D’Amboise and Verna, 1993) – is
not named but is emergent. He/she is the one who comes up with the initial idea (ideation
phase), identifies with and invests personally in the project (Antoncic and Hisrich, 2001).
Finally, the intrapreneur becomes almost unintentionally the leader of the project that comes
from his/her inspiration (Bouchard and Fayolle, 2017). The team dynamics are also differ-
ent. As in the effectual approach to entrepreneurship, the challenge at the beginning of the
project is to progressively integrate relevant, competent people who are sufficiently interested
in the initiative to devote time to it and to negotiate with their hierarchy on the time that will
be devoted to the project and not to the functional activity (Bouchard and Fayolle, 2017). The
challenge of the intrapreneur is to find time resources and competencies through his/her own
network to pursue the project. In some cases, the intrapreneur can rely on a CE device, which
provides methodologies, a support frame and a pre-existing network on which he/she can rely.
To move from an ideation phase to a project development phase, the project must be selected
by a selection committee, generally composed of top managers.
From a sociological perspective, we can say that the two approaches are quite similar.
Innovation dynamics within firms involve being able to explain complex social issues, and so
require integrating several bodies of knowledge or disciplines (Antoncic and Hisrich, 2001;
Auer Antoncic and Antoncic, 2011; Berggren et al., 2011; Kuratko, 2005). Pollack (2007, 267)
points out that, in addition to the “hard paradigm” of project management based on positivist
and realist philosophies which emphasize control, there is growing acceptance of a “soft para-
digm” that attends to the social process, interpretivist philosophies and learning.
We find here the initial definitions of the project manager and the project team. The role
of the project manager is to embody the identity of the project and to have a strong influence
on the general management and on the participants and allies useful for project development.
In the context of PM, the project team is formed in an ex-ante and authoritarian way, whereas, in
the context of a CE project, the project team is created in an ex-post and democratized manner.
On a dynamic multi-project level, the two approaches seem quite similar, with a few
differences.
In the case of PM, the project manager and his/her team are generally not responsible for
parallel or subsequent projects. The notable exception is when, as in civil engineering, there
are career paths that focus on project management, where the project manager may be reap-
pointed. Another exception may be in platform management (Cusumano and Nobeoka, 1998)
or lineage management (Kock and Gemünden, 2019; Midler, 2013) where the team is respon-
sible for parallel projects to organize cross-project synergies and capitalization on a sequence
of similar projects.
In the case of CE, the project and its team are focused on the initial project, with lit-
tle responsibility for linking to other projects or aligning the project with parallel or future
68 Handbook on innovation and project management

projects. This is more the role of the CE device. It may seem rather illusory to apply a priori
control policies (platforms or project portfolios) to them because CE projects are not meant to
fit into boxes but to initiate or experiment with new markets, new routines, etc. On the other
hand, in dynamics, it is clear that the company will have to effectively apply or invent meth-
ods of controlling the actual profitability of the project and apply the theories and methods of
project line management so that the profitability of the project is not limited to the profitability
of the first exotic project, at the risk of seeing the CE devices disappear.

Design issues: how to frame the development of these initiatives?

The entrepreneurial logic of design management tends to be applied to CE logic. The stud-
ied systems favoured clearly tools and methodologies such as design thinking, lean startup,
coaching, mentoring, proof of concept (POC) or agility.
At first glance, these methods seem to be far removed from project management methodolo-
gies as described in the PMBOK (PMI, 2004) and its updates. The methodologies for control-
ling costs, deadlines and quality, structuring the project in work packages (WBS), GANTT or
PERT planning, concurrent engineering, etc. are not frequently used. All these methods are
not frequently used in CE projects, which are often managed in a more “agile” way. And even
better, these projects claim not to use these old methodologies to maintain a “startup spirit”.
However, on closer inspection, the PM and CE approaches are quite similar because they
are based on the same pillar: learning-based management.
Regarding PM, classical methodologies have progressively focused on control, to the det-
riment of innovation (Lenfle and Loch, 2010). But the roots of project management are not
focused on control but on innovation. Let’s take two examples.
Concurrent engineering was born in the 1990s with the objective of tracing upstream all the
information and potential problems that would have occurred sooner or later during develop-
ment (Carter and Baker, 1992; Clark and Fujimoto, 1991). For example, prototyping or using
numerical simulation tools can avoid quality problems at the end of development, thus saving
time and money (Thomke, 2001; Thomke and Fujimoto, 2000). Another example is the fact
of integrating users into the design loop, which allows rapid learning about usage and avoids
unpleasant surprises (Von Hippel, 1986).
Concurrent engineering is essentially about coordination under complexity. It was forbid-
den by the DoD in the 1960s because “if someone already runs ahead without knowing yet
what the input activity has come up with, it risks having to redo things and wasting resources”.
Concurrent engineering is about the choreography under the circumstances of which a down-
stream activity can start without upstream being finalized – do we need to know the end result
or an interim result, or can we try out under daily updates from upstream? There is a whole
literature in PM about complexity and coordination, mostly in engineering but also in organi-
zations (Eppinger, 1991; Terwiesch et al., 2002).
Indeed, methodologies used in entrepreneurship and CE follow these principles (Nowacka
et al., 2020). For example, concurrent engineering refers both to design thinking in the need to
involve the customer as early and as centrally as possible in the innovation process and to the
principles of agility and lean startup insofar as these methodologies are essentially oriented
towards rapid learning loops about client uses (Nowacka et al., 2020). Agility also refers to the
principles of organizing and reorganizing teams in a rapid manner, adapted to the specifici-
ties of the project. This is no different from the old principles laid down by Burns and Stalker
(1963), on which project management was based at the beginning (Burns and Stalker, 1963).
 Corporate entrepreneurship and project management 69

The organization of a project, whether emergent or induced by top management, must

therefore be driven not by tasks or schedule, but by the speed and depth of learning achieved
during the project (Midler et al., 2017).
If we switch the analysis to a dynamic level, the logic remains the same. The idea is once
again to use the initial strength of the vanguard project to decline new offers. From the point
of view of design principles, this refers to the need to make explicit the design “meta-rules”
that made the first project successful, i.e. the project mindset, the possible action variables,
which sometimes go totally against the design standards of the core company (Jolivet et al.,
2003; Midler, 2013).
This explicitness is particularly difficult, first because once the initial project is completed,
everyone wants to close the deal and embark on new challenges, not necessarily to extend the
pleasure to related products or services. Secondly, the identification of meta-rules is clearly
difficult, especially since most of them are tacit (Nonaka, 1991). It is also difficult to have the
structures and governance adapted to this type of multi-project policy.
Nevertheless, it can be emphasized that these lineage strategies are certainly difficult in
the context of project management but are even more so in the case of CE. Indeed, from the
moment when the orientation of projects isn’t defined by management (or marginally) but
by employees, it is more difficult to create a lineage that will continue to question the cur-
rent strategy and organization. Moreover, some companies have modified their CE process
by focusing the ideation phase on concrete problems encountered by the company and their
employees, questioning all their human resources to find solution(s).

Corporate issues: what are the links between projects and organization?
PM or CE initiatives must be articulated with the permanent organization (Loch and Sommer,
2019). To increase the legitimacy of a CE project, it needs to be supported by top management.
Obviously, budgets and decisions must be obtained; this necessarily requires a minimum of legiti-
macy and visibility within the organization. Furthermore, the project needs internal and external
resources (Basso et al., 2009; Bouchard and Fayolle, 2017; Huff, 2016) in order to exist and develop.
On this point, the work in project management has clearly defined the situation. Initially,
projects were troublemakers in a world dictated by business units or functions. The need
for renewal (Chua et al., 1999), which has increased considerably over the last 30 years, has
gradually shifted the barycentre to achieve a balance between functional activities and pro-
ject activities, which have been added to the functions. The diffusion of the concept of new
product development, defining a spectrum of organizational configurations with a balance of
power between functional expertise and project management logic, was clearly a decisive step
in this dynamic (Brown and Eisenhardt, 1995; Clark et al., 1987; Clark and Fujimoto, 1991;
Clark and Wheelwright, 1992).
In this spirit, it was necessary to assert the transversal role of the project manager, who
should have a hierarchical weight at least equivalent to that of the functional directors. It was
also a question of ensuring that the players in the functional departments were involved in the
projects and committed themselves beyond giving expert advice. The model that was built in
this way enabled organizations to transform themselves from production machines to develop-
ment machines. The function of the project manager has thus been defined and legitimized a
priori throughout the organization.
On this point, CE differs widely. At the beginning of a CE project, there is only one individ-
ual, or at best a small team, coming from an unknown employee, but who carries a promising
70 Handbook on innovation and project management

concept. At this stage, he has absolutely no legitimacy. Fortunately, there are more and more
initiatives coming from the top management, which aim at bringing out ideas from all or
part of the company, in order to improve the current processes or to create new offers. The
role of top management – generally represented by a team of management in charge of the CE
device – is then to select the ideas and give a small budget to the project to see if the project
can deliver on its promises. The role of top management is key in CE and PM. In the case of
PM, this support is defined a priori and continues to be built throughout the project develop-
ment. In the case of CE, the project starts before the support of top management and must
show its interest before obtaining the necessary support. This support is essential, especially
since the project will transform the established organization to different degrees, by calling
into question its functioning or its product lines and by generating “organizational antibodies”
that may call the project into question.
Beyond the strategic aspect, which will be studied later, and if we want to draw a parallel
with the principles of project management, the most important thing is to see to what extent
these individuals are really empowered. Being selected in a competition for the best ideas is
certainly not enough. Beyond what this new project leader can achieve, he/she must build
a network of allies (Stopford and Baden-Fuller, 1994) to enable his/her initiative to unfold
(Bouchard and Fayolle, 2017).
In this dynamic, two paths are open. Either the intrapreneur finds enough allies internally
to make the project succeed, or he/she must turn to the outside world to make it happen. Here
we find the dichotomy studied by Huff between projects that, even if specified internally, can
find internal or external support (Huff, 2016). It is clear that some intrapreneurs, faced with
the lack of hierarchical support or the inability to federate a sufficient number of allies, turn
to the external and go so far as to carry out an “inside-out” open innovation process to create
an external startup (Chesbrough and Brunswicker, 2013).
Concerning CE projects, the intrapreneur must build an “emergent team” around his/her
individual initiative (Bouchard and Fayolle, 2017; Mohedano-Suanes and Benítez, 2018;
Stopford and Baden-Fuller, 1994). These people will follow a much more difficult path than
the emerging project leader. Indeed, even if they are interested, they have no mandate to dedi-
cate time to the project (Bouchard and Fayolle, 2017); this process is based on “organizational
slack” (Herold et al., 2006). We find here the roots of the project manager, who even with-
out hierarchical authority, succeeds in having an influential role by allowing these emerging
teams to progressively affirm their attachment to the project and to negotiate with their hier-
archy to devote time and resources to it. This process of progressive interest is well known,
especially in the sociology of innovation (Akrich et al., 1988).
On the dynamic level, once projects are completed, the same question arises for CE and
PM: how to maintain the initial energy to decline the first success in other “cousin” initiatives?
In both cases, the continuity of this process could be embodied in the continuity of the teams
(Midler, 2013) or through a more diffuse process of remobilization and the reconstitution of a
new network of actors (Christiansen et al., 2010).
The question of ambidexterity also arises in both cases. Should CE or PM projects be devel-
oped and deployed in the permanent organization – contextual ambidexterity – or in an ad hoc
organization – structural ambidexterity? What are the routines to be invented and deployed?
How can we articulate these activities that we want to rationalize and put under a process
without losing the initial spirit of innovation? Even if it seems that building an innovation
structure specifically adapted to the DNA of the first launch from scratch is easier to achieve
 Corporate entrepreneurship and project management 71

than modifying the organizational routines of a large organization in place, this choice implies
many disadvantages: lack of legitimacy, lack of resources, lower impact capacity, etc.
This question of ambidexterity raises strategic issues, which we will now analyse.

What about Strategic Issues?

Linkage with corporate strategy

In the first approach, the relationship between project and strategy can be described as top-
down projects (PM) or bottom-up projects (CE).
In the first case (top-down), the project follows the deliberate strategy of the company. The
launch of the project is triggered by an analysis of existing opportunities. This analysis is
based on investigations conducted by specialists in business, marketing, foresight, design, etc.
Based on these elements, top management decides to launch this or that project and defines
its main lines. It is then up to the dedicated management structures to define the functional
specifications of this request. Based on these specifications, the development teams are mobi-
lized to produce specifications ranging from the most general (system) to the most detailed
(component, computer code). These teams, or others, are responsible for the actual integration
of these elements into a complete system, the coherence of which must be checked against
the initial request. We can therefore say that even if its role as a trigger is important, it is not
really top management that decides on the launch or the completion of the project, but several
dedicated departments that prescribe and carry out this work. The role of top management is
above all to check that the proposed opportunities are consistent with the company’s strategy.
However, the literature contains numerous articles that point out that the strategy is not a fixed
framework that must be adhered to, but can evolve according to the information that is fed
back to it, the failure or success of certain offers, or a diagnosis of the company’s resources
and skills (Burgelman, 1983, 1994; Dougherty and Hardy, 1996). The top-down approach is
therefore not so pronounced because the decision-making system passes through middle man-
agement and dedicated departments, and the strategy can evolve according to the inputs given.
In the case of bottom-up projects (CE), the situation is not so different. Ideas and motiva-
tions for the creation of a new project are also made upstream and then presented to top man-
agement in a more or less direct way – according to idea challenges directly ordered by top
management or through middle management – and it is up to him/her to decide to select and
allocate resources to certain projects (generally through the CE device). The only difference
is the services mobilized. Whereas in PM, the actors involved in the appraisal of the opportu-
nity are clearly identified and structured, in the case of CE, this appraisal can be carried out
by people or teams that do not belong to these structures. Indeed, this is generally the role of
specialized innovation entities. Moreover, even if some of the mechanisms allow a maximum
degree of freedom for the expression of needs for the launch of a CE project, there are also
calls for projects that are more closely defined by top management, which will, for example,
decide to define priority themes, markets or technologies, and in which the projects will have
to fit (Bager et al., 2010).
Now, consider this question from a dynamic perspective. Basically, beyond its initial coher-
ence with the explicit strategy of the company, the dynamics of the project can participate in
updating or even questioning the strategy of the company, understood as the definition of the
offers and markets targeted by the company. These projects – PM or CE – could be considered
vanguard projects, as vectors of diversification. “We argue that some vanguard projects serve
72 Handbook on innovation and project management

as an initial corporate entrepreneurial device for responding to and creating innovation in

technologies and markets” (Frederiksen and Davies, 2008, 487). In this context, a company
can press the gas pedal and deploy innovation beyond the initial ambition. The “scale up”
thus consists of moving from a relatively modest initiative, with a small team and in niche
and often local markets, to the deployment of the innovation on a broad geographical basis
or the expansion of niche markets to mass markets. For startups, it is a matter of organizing
themselves to set up new processes and routines, developing new resources, both human and
financial, a stabilized organization, etc. The challenge is major.
This is where the issue of ambidexterity reappears. The situation is quite similar if the
innovative projects (PM or CE) have been developed within the permanent organization (con-
textual ambidexterity) or in a structure dedicated to innovative projects (structural ambidex-
terity). In both cases, the challenge is either (1) to express the full potential of the project in a
dedicated structure or (2) to legitimize the project’s output to the business units involved and
to ensure that this output is integrated into internal routines as “the development of routines,
standard operating procedures and the establishment of an administrative framework for the
new venture” (Burgelman, 1983, 1363).
A priori, this choice may depend on the degree of radicalness of the innovative project.
Existing organizations are certainly better equipped to develop products that are not very
innovative. They have development routines that constitute dynamic capacities that allow
them to reproduce the act of innovation on a regular basis, with this aptitude constituting a
real dynamic capacity that allows them to survive in the medium and long term (Brown and
Eisenhardt, 1995, 1997; Eisenhardt and Martin, 2000). For more radical innovations, the per-
manent organization is ill-equipped to deploy the innovation because neither the routines nor
the resources or skills nor the organizational architecture is adapted to integrate the innova-
tion into the traditional regime. That’s why some projects could be “spin-offed” and continue
their development outside of the organization.
CE literature also tackled the relation between the emerging project and the company’s
assets. For example, Covin and Miles (1999) state that CE can stand as “corporate rejuve-
nation”, boosting or reorienting the assets of the company. One can also see the difference
between (1) “sustained regeneration”, involving the continuous introduction of new products
aimed at the same or similar markets and involving largely similar families of technologies to
achieve competitive differentiation or (2) more intrusive “strategic renewal’, such as “redefini-
tion of industry domain”, or looking at to what extent the CE project highlighted new business
areas where there is still no demand (Frederiksen and Davies, 2008).
At this stage, it is still up to top management to make these decisions, through regular com-
mittees. They also have the option of stopping the project or not pursuing it, or inserting this
initiative into the dynamics of the company’s other projects.

Linkage with other projects

The platform, programme and ambidextrous programme models organize a priori coordina-
tion between different projects. In the programme and platform models, the aim is to coordi-
nate different projects to achieve a more global objective. A relatively macro-goal is defined
(e.g. the organization of the Olympic Games) by a strategic entity, and programme and plat-
form management methods aim to orchestrate these different projects so that they complement
each other in order to achieve this overall objective. The PM model fits well with these models
because once this macro-plan and the sub-projects are defined, PM takes over and enters the
 Corporate entrepreneurship and project management 73

execution phase. Programmes articulate projects with the same level of radicality towards
an objective of low or medium radicality; ambidextrous programmes articulate projects with
different maturities and degrees of radicality with an objective of the global transformation of
the enterprise. It is therefore understandable that CE is hardly compatible with these models.
From the moment that ideas can come from all over the place and be articulated with other
projects in a null, random or accidental way, it is difficult to achieve a priori coordination.
The lineage model organizes a posteriori coordination between the different projects.
Based on a first vanguard project, the goal is to continue the effort by seizing the assets built
by this first project, by organizing a series of “cousin” projects that will have a variable impact
on the transformation of the organization and the product strategy. This model works for both
PM and CE. Whether ideas emerge from non-predetermined individuals or teams, or from
market analyses performed by specialized departments or top management, the project can
play a vanguard project role. Whether or not the company decides to pursue this first innova-
tive initiative does not depend on how the concept was determined in the first place.
On the other hand, the goal pursued also differs between the models. The platform policy
has a clear objective of cost reduction. For example, industrial product platforms such as the
automotive industry aim to minimize the diversity of components and systems within a prod-
uct family. The main objective of the lineage model is to create value by increasing the value
of each product over time while following a policy of cost minimization between projects.
The portfolio management model also tends to maximize the cost/value ratio in a logic of
demographic management and profitability optimization within a portfolio of projects that
is balanced in terms of profit expectancy. Programme models are primarily concerned with
the technical coordination of projects to ensure that, once assembled, the final objective is
achieved.
On this question of the objective pursued, the CE and PM models are relevant and similar.
Ideas, whether they come from the top or the bottom, can have objectives of cost reduction,
value creation or both.

CONCLUSION

In the end, one can say that it is a great pity that these two literatures discuss so little between
them. This theoretical distinction between the two schools of thought suggests that CE and
PM are more opposed than they are close. It is true that one might think that there is nothing
to compare between emergent projects led by internal entrepreneurs who rely on ad hoc pro-
cesses and top-down projects regulated by strategic and prospective studies, and which rely
on strict project management processes. This chapter was a an attempt to explain these dif-
ferences and to identify the similarities and complementarities between the two approaches,
summarized in Table 3.1.
The major difference is obviously the origin of the ideas that give rise to the projects. In
the case of CE, ideas can come randomly. Even though calls for ideas, which remain the main
mechanism for initiating intrapreneurial projects, may involve some framing, the people who
carry these ideas may belong to any organizational unit and the ideas may be radical or incre-
mental from a market or technology perspective.
Another difference relates to the organization of the project. The established project man-
agement processes organize a priori a pre-selection of project managers, who sometimes
74 Handbook on innovation and project management

Table 3.1  Table summary of results

Corporate entrepreneurship Project management

Goal Creating something new Creating something new
Type of company Large firms, SMEs Large firms, SMEs
Source of project From individual or self-appointed team People from strategy, product
ideation planning or R&D
Project selection Top management or business unit sponsor Top management or PMO
Project manager Ideator Professional project manager
Project team Ad hoc self-organizing and emerging team Ex-ante/formal predefined team
Project routines Ad hoc emerging routines at the beginning, Ex-ante predefined project
then execution through project development management routines
routines
Project methods Agility methods Control methods
Portfolio A posteriori coordination A priori coordination
management

belong to human resources departments dedicated to this function. They involve people with
functional expertise according to routines that make it possible to anticipate a priori the com-
position of the project team. In CE, the project manager is self-appointed by the idea he or she
is carrying, and the team is put together in a more ad hoc manner, according to the specificities
of the concept and the social network of the intrapreneur.
But there are many similarities.
Both currents of thought deal with the same question: how to deal with coordination and
complexity? In both cases, they are attempts to frame this problem within the framework of
innovative initiatives, starting each time with new ideas and concepts, and to organize collec-
tives to go from the idea to the execution and then to the market launch or scale-up. CE and
PM also rely on the same logic, which combines the creation of powerful learning mecha-
nisms with a milestone sequence that forces the decision to finalize the project.
Next, it would be wrong to think that CE projects are totally emergent and PM projects
totally top-down. It is only the prescribers that change. In the case of PM, the prescribers
belong to well-defined functions, such as expert functions in strategy, foresight, marketing or
R&D, who submit product strategies to the general management, which approves or redirects
them. In the case of CE, the prescribers are less well known and less instituted and may be
individuals, middle management or internal sponsors, who also suggest development projects
to top management, whose role is to validate or not their relevance.
At a multi-project level, we understand that intrapreneurial projects cannot be extracted
from any rationality at the project portfolio management level. The logic of portfolio manage-
ment requires that CE projects complement an existing portfolio and contribute to its overall
balance. So, we can say that those deliberate projects can be partially emergent, and emergent
projects can symmetrically be influenced by a deliberate strategy portfolio of projects.
The two approaches are also complementary. Once again, it would be wrong to believe that
CE processes are emergent and chaotic, whereas development processes are highly structured.
On the one hand, CE also needs processes to avoid constantly reinventing the wheel. For
 Corporate entrepreneurship and project management 75

this purpose, it can rely on the literature concerning the management of exploration projects,
which offers a framework allowing both control and flexibility. On the other hand, we can
consider that the two approaches can follow each other in time, CE can constitute an initial
phase of ideation and exploratory project management, but at a given moment in the process,
the company must seize the project and switch to PM mode, focused on execution.
It is precisely this last point that makes corporate entrepreneurship stronger than entrepre-
neurship because it relies on the power of the company, its assets, its expertise and its processes.

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4. The converging nature of innovation and
project management: process, contingency
and strategy
Vered Holzmann and Aaron Shenhar

INTRODUCTION

Society’s endless quest for humanity’s life improvement is manifested in at least two separate,
though related, concepts: innovation and projects. Innovation deals with the transformation
of new ideas into real valuable outcomes or outputs (Schumpeter, 2010), while projects rep-
resent the organized efforts that turn these ideas into successful creations (Kerzner, 2017).
Obviously, there is a strong link between the two. However, from a scholarly perspective, the
current knowledge, research and frameworks found in academic publications have been at
times disjointed. The two corresponding groups of scholars have often published their studies
in different journals, presented at different conferences, used two different knowledge bases
and, notably, failed to learn from each other (Davies et al., 2018). In reality, however, the two
concepts seem to represent two parts of the same process – the process of getting ideas to
markets and to the hands of customers and users. Furthermore, in most practising organiza-
tions, innovation and projects are strongly linked, often performed by the same people, who
are jointly attempting to achieve the same goals.
In this chapter, we address the link between innovation and projects and suggest looking
at them as two parts of the same consolidated process – the process by which society and its
organizations turn ideas into new realities. We believe it may be helpful to even coin a new
name for it; however, at this time, we will still call the combined effort the innovation/project
process. We argue that consolidating the two fields would greatly deepen our insights into
humanity’s creative forces, open up new research opportunities and speed up implementation
efforts in most companies.
We will discuss the separate interests of the two communities, before dealing in more detail
with the suggested combined process. Such a process begins always with an idea and ends
with the delivery of a product into the hands of customers and users. The main body of this
chapter is dedicated to four themes: first, we discuss the organizational process that is typi-
cally applied in furnishing a new creation. For each step in the process, we outline the kind
of work performed, who is involved, what expertise is needed, what we know about it and,
finally, what kind of future research is needed or expected. Second, since “one size does not
fit all”, we review the relevant theory of contingency, which would be useful for adapting
management to contexts, and suggest a unified contingency framework for future studies and
practices. Third, we address the business-related strategy issues relevant to innovations and
projects by using a recently developed framework for an innovation/project strategy. Finally,
we discuss the implementation aspects of a combined innovation/project process, as well as
potential areas for future research.

80
 The converging nature of innovation and project management 81

THE PARALLEL EVOLUTION OF PROJECT AND INNOVATION

MANAGEMENT RESEARCH

The concept of project management was first developed in the military and construction and
was a major objective of the engineering discipline. Famous projects became the subjects of
books and studies, which often described the lessons and difficulties involved in building and
operating them. Typical early stories involved railway or canal projects (Davies et al., 2014;
Koeppel, 2009), famous buildings such as the Empire State Building (Birch, 2006) or space
programmes such as the Apollo Moon Landing (Gisler and Sornette, 2009). However, projects
were often discussed as “one shot”, with limited interest in proximity fields or the permanent
organizations which undertook them. Evidently, the link between projects and the innovations
they represented as well as their competitiveness (e.g., Schumpeter, 2010) had little place.
The concepts of innovation as a disciplinary field and its association with competitiveness
were introduced in the 1980s and 1990s with famous studies on product development and
product differentiation (Clark and Wheelwright, 1992; Fujimoto, 1992), together with discus-
sions on the relationships between projects and their permanent organizations (Midler, 1995).
Although as mentioned, project management and innovation were often considered separate
fields, a few authors have nevertheless demonstrated the impacts of these fields on each other
or the relationship of a parent organization on its projects. For example, Davies et al. (2014)
have shown how a deliberate innovation process could improve the performance of mega
infrastructure projects. Using lessons from London’s Crossrail Railway system, they identified
four windows of opportunity where an appropriate innovation strategy can drive innovation
in a megaproject: fist, during the front end of the project, second, during the contract engage-
ment period, third, during the execution period, taking advantage of mutual engagements
among multiple parties and, finally, at the back end, where ideas can be combined with les-
sons from other projects to improve learning and performance. Another notable contribution
was Engwall’s (2003) “No Project Is an Island” study that used two major engineering efforts
– the hydropower and transmission projects – to address the importance of analysing the inte-
rior processes of a project in relation to its historical and environmental context. To do that,
Engwall analysed experiences from past projects, organizational politics during the pre-pro-
ject phases, parallel courses of events during the execution period, ideas about the post-project
future, and institutional norms, values and routines of the project’s organizational context.
Clearly, no discussion of the links between innovation and project management can be
completed without mentioning Robert Cooper’s work on project portfolio management or
his Stage-Gate process (Cooper, 2017; Cooper et al., 1997). Cooper asserted that portfolio
management has three major goals: maximizing the value of the portfolio, building a balance
in the portfolio and linking the project to the business strategy. He also advocated dividing a
project’s process into gate decisions, where at each gate a choice is made between “killing”
the project or moving it forward, based on the chances of its business success. Finally, as
Shenhar et al. (2020) have shown, any innovation success depends, primarily, on setting up
the right project for realizing it.
As these and several other studies demonstrate, the boundaries between projects and inno-
vation are gradually blurring, whereas the associated organizational efforts are often hard to
distinguish. Hence as we move forward, we advocate combining these disciplines into one
field, calling it together the innovation/project effort.
82 Handbook on innovation and project management

To support the merging of the two disciplines, we must establish a set of joint frameworks
that could be used by future researchers and managers. Yet, we must first revisit the com-
monly used definitions of innovation and projects and show why one combined definition is
appropriate.

REVISITING THE DEFINITIONS – THE COMBINED DEFINITION OF

INNOVATION/PROJECTS

Multiple definitions of innovation were offered in the past. For example, Crossan and Apaydin
(2010) defined innovation as

production or adoption, assimilation, and exploitation of a value-added novelty in economic and

social spheres; renewal and enlargement of products, services, and markets; development of new
methods of production; and establishment of new management systems. Innovation is both a process
and an outcome.

The UK Department of Trade and Industry defined innovation as “the successful exploi-
tation of new ideas” (DTI, 2003). However, for the purpose of this chapter, we adopt
Cropley’s (2006) simple definition: “Innovation is the process of commercializing the
novel product”.
Similarly, several definitions of a project have been offered: for example, the Project
Management Institute has defined a project as “a temporary endeavor undertaken to create
a unique product, service, or result” (2017). Other, more specific definitions have identified a
project as both a process and an organization, leading Shenhar et al. (2020) to adopt the fol-
lowing simple definition: “A project is a temporary organization and process set up to create
new value in the world”.
Notably, both kinds of definitions are highlighting the creation of valuable change in the
world, and as such, they are largely indistinguishable. On one hand, as mentioned, there
is no successful innovation without a project, and on the other hand, since every project is
based on an idea for building a new reality, each project can appropriately be considered
an innovation. Therefore, we suggest using the following combined and simple defini-
tion: “an innovation/project is the commercialization of an idea”, where commercializa-
tion is perceived in its broad sense, namely, an idea that has led to a successful and useful
outcome.
As mentioned, the following three sections are dedicated to the three proposed frameworks
and models for portraying the process, contingency and strategy of a combined innovation/
project effort.

THE INNOVATION/PROJECT PROCESS MODEL

Different models of the innovation process have been offered since the middle of the 20th cen-
tury (e.g., Myers and Marquis, 1969). Early on, a three-phase model was offered by Utterback
(1971): idea generation, problem solving and implementation. Later models have expanded into
specific steps such as proposal, selection, design, planning, building or testing (e.g., Cooper
 The converging nature of innovation and project management 83

and Kleinschmidt, 1986; Salerno et al., 2015). Our suggested combined generic process of
innovation/project is depicted in Figure 4.1. The different phases and the different steps in the
process are mostly distinguished by the type of work and expertise needed.
In a similar way to Utterback’s (1971) framework, this extended model can be divided into
three major phases:

1. The idea management phase – often called the “Fuzzy Front End of Innovation” (Edkins
et al., 2013; Koen et al., 2001; Verworn et al., 2001) or “the pre-project phase” (Gassmann
and von Zedtwitz, 2003; Verganti, 1997). This is the initiation stage of any innovation,
where opportunities are identified and concepts are developed prior to entering a formal
realization or development phase. At this stage, things are still quite informal and unde-
veloped; ideas are encouraged, collected and discussed, while many are tossed away, and
only a few are confirmed for moving on. It includes the initial idea generation, idea test-
ing, proposal and project selection.
2. The product realization phase – at this stage, a formal project is established, a project
manager and a team are selected, the project scope, budget and schedule are set, the prod-
uct is designed and developed and a formal process of review and control is established
for building, testing and approval of the final product.
3. The product commercialization phase – this is where the innovation product is getting
ready for implementation. The effort at this phase is focused on introducing the product
to the market and establishing support for its extended lifecycle. Improvements are made,
and next generations defined – including intermediate spinoffs, or derivatives, as well as
higher- and lower-end versions.

Table 4.1 summarizes the kind of activities in each step, who is involved, what is known and
what still needs further study.

Figure 4.1  The innovation/project process

 Table 4.1  The innovation/project steps along the process

Phase Activities Expertise What is known Future research and development

(kind of work) (who is involved) needed
Idea generation Ideas are collected based on Anyone – engineers, Ideas should be looked How to identify the most creative
needs, experience, availability customers, competitors, as for everywhere; open people? How to build better
of technology, market surveys, well as crowd responders innovation should be techniques to stimulate the
etc. Potential ideas are in open innovation market. encouraged. creation of more ideas?
collected and saved for review, Highly creative people
including reverse engineering often produce most ideas.
of competitors. Databases of Gatekeepers scan markets
ideas are created. and previous studies and
adopt ideas from outside
sources.
Idea testing and Ideas are discussed and Idea generators and Idea generators, More tools, techniques and
internal promotion of assessed based on specific professional testing idea champions and criteria for idea review are

84
ideas company criteria, such as value personnel. Idea champions gatekeepers are different needed. Strategic considerations
creation, chance of success, may be needed to sell the kinds of people. need to be added to assess
availability of resources, etc. idea inside, at a time when selection of specific ideas.
ideas are still vulnerable
and need support.
Proposal Detailed proposals are written, Initiators and champions Companies develop their More developed strategic review
with detailed assessment of are assisted by marketing own proposal formats. frameworks are needed. Such
expected benefits and value, and finance experts Most proposals present frameworks need to address
resources and expertise needed, to prepare appealing financial projections and the proposal’s competitiveness
as well as risks. Comparisons proposals. expected sales, compared beyond common financial
to competitors’ products and to expenses and budgets. estimations. Proposals also need
competing proposals are made. to be focused on specific project
types and their impact on project
management.
 Project selection Proposals are reviewed for Proposers, idea generators Selections are mostly Selection frameworks should be
acceptance, modification or and selection teams based on numbers and based on strategic considerations,
elimination. A final proposal is consisting of executive expected sales. Proposers competitive advantages and
approved for implementation. teams, including relevant are typically too business objectives, as well as
experts. optimistic while trying to specific project types and the
show the positive sides of impact of project implementation.
the project.
Requirements/specs Functional requirements Proposers, idea generators, There is still no Requirements and specifications
are prepared for product business experts standard format to write need to be considered in light
development. Technical and relevant experts requirements and specs. of strategy, in addition to the
specifications are determined. discussing and writing Formats are based on standard technical details.
final requirements and specific industries.
technical specifications.
Planning Project planning is conducted Project teams and Teams follow traditional Strategic planning frameworks
to determine scope, cost, planning experts from planning techniques, and tools are missing. Specific
schedule and method of work, planning and budgeting agile approaches or project types and contingency

85
as well as resources needed and groups. hybrid methodologies. considerations are needed in
risks involved. However, often teams do project planning processes.
not dedicate enough time
to planning.
Design Product design is conducted to Product designers with Design methods should Based on contingency and
determine building and testing the support of design tools include the impact of uncertainty of the project, design
instructions. and design experts. designed products on may need to be repeated and
competitiveness and often require redesigns and
company strategies. iterations.
(Continued)
 Table 4.1  
(Continued)

Phase Activities Expertise What is known Future research and development

(kind of work) (who is involved) needed
Build/test Product is built according to Design teams, developers The transition from Implementation may be impacted
design decisions and testing or technicians and design to build and test by contingency considerations
to determine if it meets QA personnel are often leads to an iterative with appropriate rebuilding
specifications and requirements collaborating in the process that requires efforts.
and is ready for production. If product building, effective internal and
deviation is found, a redesign assembly and testing external communication.
decision may be needed. process.
Production The product is built in its Production teams with DevOps models are Strategic tools for building a
newly established production inputs from designers. applied to create balance between introducing
line and is continuously Marketing and business an integrative and new products and maintaining
tested to keep manufacturing experts are involved in continuous process from production efficiency. Develop
within production tolerance. early activities. development to operation. industry-dependent production

86
Deviations are corrected practices.
if found. Early marketing
activities are initiated.
Commercialization Product launch, as well as Marketing and sales Marketing and More studies on industry-specific
marketing and advertising forces. distribution practices commercialization efforts and
campaigns, is initiated. are established based best practices.
on specific markets and
industry.
Support/improve The product is built with Ongoing maintenance by Ongoing maintenance Technological advancements and
continuous monitoring of product experts and sales and support teams market preferences are dynamic
customer feedback and support teams. learn from customers’ and lead to shorter product life
decisions about improvements experiences and respond cycles. More studies on industry-
or timing for a next generation. to competitors’ products specific support efforts to learn
with continuous from best-in-class leading
improvement and companies.
upgrades.
 The converging nature of innovation and project management 87

A CONTINGENCY MODEL FOR INNOVATION/PROJECTS

What Is Contingency Theory

There are different types of innovations and different types of projects, and obviously, “one
size does not fit all” (Shenhar, 2001). Specific types of innovations and projects have continu-
ously occupied the minds of researchers in the two areas, often utilizing separate frameworks.
However, for a joint process, it would be useful to create one model to distinguish between
different kinds of innovation/projects. The appropriate theory for that is called contingency
theory, and it was first introduced in the 1960s, primarily addressing organizations, rather
than projects or innovations.
Classical contingency theory asserts that different conditions might require different organ-
izational characteristics and that the effectiveness of the organization is contingent upon the
amount of congruence or goodness of fit between structural and environmental variables
(Drazin and Ven, 1985; Lawrence and Lorsch, 1967; Pennings, 1992). Burns and Stalker
(1961) were the first to suggest a distinction between incremental and radical innovation,
in the context of organizations, which were characterized as either organic or mechanistic.
A mechanistic organization was described as formal, centralized, specialized bureaucratic,
structured by many authority levels, and maintains only a minimal level of communication.
An organic organization, in contrast, was characterized as informal, decentralized, having
just a few authority levels, and typically using extensive levels of communication. According
to the early theorists, organic organizations would better cope with uncertain and complex
environments while mechanistic organizations predominate in simple, stable and more cer-
tain environments. It took, however, several decades until classical contingency theory was
extended to projects (Turner and Cochrane, 1993; Shenhar, 2001; Pich et al., 2002).
We begin with innovation frameworks, then address projects and, finally, discuss a com-
bined contingency theory for the innovation/project world.

Innovation Contingency

The most famous way to distinguish between innovation efforts was indeed the classical dis-
tinction between incremental and radical innovation, corresponding to the extent of change
introduced (Myers and Marquis, 1969). They have also added system innovation as a third
class. A similar distinction was offered later by March (1991), who distinguished between
exploitation and exploration learning for technological innovation. Henderson and Clark
(1990) extended the theory to four types of innovation: (1) radical innovation, which “estab-
lishes a new dominant design and, hence, a new set of core concepts in components that
are linked together in a new architecture”; (2) incremental innovation, which “refines and
extends an established design, where improvements occur in individual components, but the
underlying core design remains the same”; (3) architectural innovation, which is based on
“reconfiguration of an established system, linking existing components in a new way”; and (4)
modular innovation “that changes the core design concepts of a technology”.
Another dominant work is Christensen’s “Innovator’s Dilemma” (1997), which investi-
gated the concept of disruption. Christensen observed that successful companies often con-
tinue building on their past success with existing technology in their main businesses, while
88 Handbook on innovation and project management

ignoring the threats of disruptive new technologies, eventually, at times, driving past leaders
out of business.
An attempt to organize the various concepts of innovation in an orderly way was intro-
duced by Gatignon et al. (2002), who presented innovation in terms of its hierarchical position
(locus) within the product (core or peripheral), its type (architectural or generational) and its
characteristics (competence enhancing or destroying, and incremental or radical).

Project Contingency

The project management literature has been more practical in its search for classifying project
types and identifying ways to manage them. For example, Turner and Cochrane (1993) have
discussed the uncertainties in projects by indicating uncertainty in the market (or in the objec-
tives) and uncertainty in the solution (or in the technology). Similarly, Pich et al. (2002) have
distinguished between means uncertainty and solutions uncertainty and identified their most
appropriate management systems. The lowest levels of uncertainty should be addressed by
what they called planned projects, somewhat higher levels by learning projects, then parallel
and finally selectionist projects. For each level, they defined the optimal planning and moni-
toring systems, coordination and information systems, as well as incentives.
Shenhar (2001) and Shenhar and Dvir (2007) have offered a refinement to classical con-
tingency theory and introduced a four-dimensional framework – the “Project Diamond” – for
the classification of projects. The framework includes novelty, technology, complexity and
pace (titled NTCP) as its major dimensions. They suggested that the Diamond Model could
broaden existing frameworks by providing planning and execution guidelines to project man-
agers on how to optimally adapt a specific management style to each project effort. Each
dimension of the Diamond Model is refined into four different project types (Shenhar et al.,
2016) (Figure 4.2). We show later how this model could be used for linking the innovation and
project management disciplines.
The novelty dimension represents how familiar the market is with the new product and
its use, impacting the extent to which initial requirements can be defined. The technology
dimension is determined by the newness of the technology used for developing or producing
a product or, conversely, its maturity at a project’s onset. The complexity dimension reflects
the level of a product’s complexity, as well as the complexity of the organizational efforts
required to complete its design and production. Finally, the pace dimension indicates how
acute the project’s time constraint is. Pace represents the available time frame or, conversely,
the project’s urgency. Table 4.2 includes the specific project types on each of the diamond’s
four dimensions.
The Diamond Model instructs managers on how to adopt preferred managerial practices
for each type of project (Shenhar and Dvir, 2007). Figure 4.3 presents a summary of the main
implications for project management of each dimension.
The impact of novelty (or market uncertainty) on project management is the ability to deter-
mine the final product’s requirements. Notable, market research is only reliable for lower
levels of novelty with sufficient information on previous products. At the highest level, new-
to-the-world, there is less need for market research, since as experience proved: “markets that
do not exist cannot be analyzed” (Christensen, 1997).
The technology dimension impacts the amount of investment and time needed for develop-
ing the final product. Higher levels require more cycles of “design-build-test” and a later time
 The converging nature of innovation and project management 89

Figure 4.2  The Diamond Model – a unified framework

Table 4.2  The innovation/project diamond classifications

Dimension Project types (definitions)

Novelty 1 – Derivative (Improvement)
2 – Platform (A new generation in an existing product line – e.g., new car model)
3 – New-to-the-market (Adopting an existing product to a different market –
e.g., first PC)
4 – New-to-the-world (Product never existed before)
Technology 1 – A Type – low-tech (No new technology)
2 – B Type – medium-tech (Some new technology)
3 – C Type – high-tech (All or mostly new but existing technologies)
4 – D Type – super-high-tech (Project will use non-existing technologies at project
initiation)
Complexity 1 – Component/material (An element or material in a subsystem)
2 – Assembly (A subsystem – performing a single function)
3 – System (A collection of subsystems – performing multiple functions)
4 – Array (System of systems – a widely dispersed collection of systems serving a
common mission)
Pace 1 – Regular (Delays not critical)
2 – Fast/competitive (Time to market is a competitive advantage)
3 – Time-critical (Completion time is critical to success, window of opportunity)
4 – Blitz (Crisis project)
90 Handbook on innovation and project management

Figure 4.3  Managerial implications of the four dimensions of the diamond

of design freeze. At the highest level of super-high-tech where technology does not exist at the
project’s launch, a small-scale prototype must be built for testing the new technology (Shenhar
and Dvir, 2007).
The complexity dimension requires adopting the project’s organization, as higher levels
require larger organizations, more formality, coordination and documentation.
Finally, the pace dimension impacts the project’s time management. A higher pace requires
higher autonomy and less bureaucracy for project teams. The highest blitz projects are often
crisis projects where a pure project structure is the best and fastest solution.
In the next section, we show how these guidelines relate to different kinds of innovation and
how organizations could match a specific kind of innovation to the most appropriate project.

A Unified Project and Innovation Contingency Framework

The Diamond Model could be used early on during the front-end analysis of an innovation,
even before it is approved as a formal project. It may assist teams in crystallizing the unique-
ness of an innovation and selecting the optimal management approach. It could then be used
later, during the remaining steps of the project.
The different kinds of innovation mentioned earlier could be mapped onto the correspond-
ing dimensions of the Diamond Model (see Figure 4.4). For example, the classical distinc-
tion between incremental and radical innovation is represented twice in this model. They are
expressed by the levels of uncertainty (or newness) of the product in the market along the nov-
elty dimension (Pisano, 2015) and by the uncertainty of the technology along the technology
dimension (Rotolo et al., 2015). Derivatives and platforms on the novelty dimension stand for
low levels of market uncertainty when customer needs are well-known and market research
is highly useful. However, new-to-the-market and new-to-the-world represent radical market
innovations, in cases when markets are still unfamiliar with the product, requirements can
 The converging nature of innovation and project management 91

Technology

Radical Super-High-Tech
Technological
Innovation High-Tech
Incremental Radical
Market Market
Incremental Medium-Tech Innovation Innovation
Technological
Innovation Low-Tech
Array System Assembly Component

Complexity New to New to

Novelty
Derivative Platform
Market World

Regular

Architectural Modular
Fast/Competitive
System Innovation Time-paced
Innovation Innovation
Time-Critical

Blitz Crisis
Management

Pace

Figure 4.4  The joint framework of innovation and project management

still not be written and market research is essentially useless. Instead, market trials are neces-
sary before final requirements are determined.
On the technology dimension, the two lowest levels of low-tech and medium-tech corre-
spond to an incremental technological innovation, while the high- and super-high-tech lev-
els correspond to a radical one. Specifically, high- and super-high-tech require using new,
advanced technologies that are either new to the organization or, in extreme cases, still una-
vailable. With excessive uncertainty and risk, they require long development periods and test-
ing – and particularly, at the highest levels of super-high-tech, the development of non-existent
technologies as part of the project’s effort.
The disruption phenomenon can also be recognized twice in this model. First, there are two
types of market disruption: the lowest level is new-to-the-market, where a product has been
adopted from another market into a new one, and then new-to-the-world, where no one has
ever seen the product before. Also, there are two types of technology disruption: high-tech and
super-high-tech, which require increasing periods of development, many design cycles and
substantial market testing before a complete product is ready for delivery.
The innovation literature has also addressed complexity aspects. It was typically dealing
with structures and complexities of products and their components or modules, often called
modular innovation (Henderson and Clark, 1990; Oyama et al., 2015). In the project world,
these initiatives correspond to the component or assembly levels on the diamond’s complexity
axis. Larger initiatives, often called architectural system innovations, involve developing or
improving entire systems or collections of systems, and lead to higher degrees of complexity
as represented by the system and array levels (Shenhar and Holzmann, 2017).
92 Handbook on innovation and project management

Finally, the pace dimension represents the importance of the available time frame for com-
pleting a project. While regular-pace projects have no time constraints, the fast/competitive
level involves an extensive effort to complete a project ahead of competitors, called in innova-
tion terms a time-based strategy (Eisenhardt and Tabrizi, 1995). The two highest pace levels
are time-critical, where meeting the deadline is detrimental to success, and blitz (emergency)
projects where every moment counts for getting out of a crisis.

Managing Innovation/Projects in a VUCA World

Today’s turbulent and competitive environment is often characterized as the VUCA world,
standing for volatile, uncertain, complex and ambiguous (Barber, 1992). The VUCA world
is chaotic, fast-changing, unstable and often unpredictable (Millar et al., 2018). In this world,
things change fast and often, in an unpredictable way. Many things are still unknown, a large
number of unexpected factors play a role and many options are still possible.
The VUCA world requires future research for identifying responses to its four distinct
components. Specifically, high levels of volatility may require getting ready for immediate
response to change, high uncertainty may need the ability to tolerate long periods of unde-
cided actions and deal with delayed decisions, high complexity would require higher levels
of relationships for complex interdependencies and high levels of ambiguity would warrant
widely open responses to unclear situations.
In sum, the VUCA world requires extensive ongoing communication and collaboration,
high adaptability and agility and an open culture for tolerating constant change.

Additional Contingency Dimensions

Additional research may also be needed to define specific areas for adapting companies’
innovation/project activities. In addition to market and technological uncertainties, pos-
sible areas for contingency may include the environment, geography, politics, culture,
language or financial and economic uncertainties. Similarly, additional complexities may
be investigated by looking at global networks, communication issues, standardization or
local-base unique complexities. Obviously, more research would be needed to address these
challenges.

THE INNOVATION/PROJECT STRATEGY

What Exactly Is Strategy

The term strategy (from Greek strategia – “the art of the general”) is typically considered as
a specific plan to achieve long-term goals. In the traditional military context, strategy simply
means how we are planning to win the war or battle. However, apart from the military, strat-
egy is used today in many other environments, among them sports, game theory and, quite
often, business. In the business context, Porter (1985) defined strategy “as the formula for
how a business is going to compete”. And Mintzberg (1987) uses the five P words to describe
strategy: plan, pattern, position, ploy and perspective.
 The converging nature of innovation and project management 93

Most writings and studies about strategy deal with the strategy of an entire company or
business. It typically relates to the common idea about how a business is competing and how
it is achieving long-term competitive advantage. Over time, most companies are refining their
long-term strategy to strengthen their competitive pattern. They are not changing strategy
often and are recognized for their “way of competing”. For example, Apple’s strategy is high-
quality products, ease of use, attractive design and exceptional service, while Amazon’s strat-
egy is offering a wide range of choices, one-click convenient ordering and quick delivery
everywhere.

Macrostrategy versus Microstrategy

For the benefit of our discussion, we suggest making a distinction between two types of
strategy – macrostrategy and microstrategy. Macrostrategy means the at-large strategy of a
company or business. It is mostly stable and characteristic of the competitive pattern of a
business over time. Microstrategy, in contrast, is the specific strategy of a unique product
or a project that is creating this product. It is also flexible and could change more often. A
product’s microstrategy is defined as the specific way in which the product is built to achieve
competitive advantage over competing products (and normally designed to support the higher
macrostrategy of the business or company). Microstrategy is based on a collection of prop-
erties and activities that would support the product’s business success. Typical strategies of
products may exhibit a combination of advantages, such as low cost, better performance,
product advantage, product aesthetics and design, advanced features, high quality, ease of use,
low maintenance and compatibility with industry standards.
Earlier generations of scholars were often less concerned with the business aspects of
running a project and with moving from corporate strategy to project strategy (Morris and
Jamieson, 2005). However, it has often been claimed that the traditional emphasis on meet-
ing time, budget and project performance wasn’t sufficient to guarantee the organizational
business objectives (Davies and Hobday, 2005; Shenhar and Dvir, 2007; Williams, 2005).
Eventually, a new approach emerged, collectively called “strategic project management”
(Artto et al., 2008; Cleland, 1998; Jugdev, 2004; Miller and Lessard, 2001; Shenhar, 2004).
Strategic project management is based on the realization that projects are, most of the time,
initiated to achieve business results (Pennypacker and Dye, 2002) and that a project’s imple-
mentation process should be better aligned with the higher enterprise strategy. This claim
implies that organizations, project teams, project managers and executives must better learn
how to focus project execution on achieving better business results aligned with their mother
organization (Cleland, 1998; Shenhar, 2004). That realization highlighted the need to define
and use a new concept - project strategy, or as we defined it, microstrategy (Artto et al., 2008;
Patanakul and Shenhar, 2012).

What Is Project Strategy – the Microstrategy?

How to define the project’s strategy

A project’s outcome, its product, could only win if it would be attractive to customers and
buyers, in other words, having some competitive advantage, or sufficient value even in a non-
competitive environment.
94 Handbook on innovation and project management

Using three of the five “Ps” from Mintzberg’s model (1987), a project’s strategy will include
a “perspective” (the background, the reason and the general idea), a “position” (what we want
to achieve and how we will know that we have achieved it) and a “plan”, or guidelines (that
is, what we need to do in order to achieve what we hope to). In simple words, a project strat-
egy will include the following three parts: the “why”, the “what” and the “how” to create the
best competitive advantage and the highest value from the project. More formally, we define
a project strategy as “the project perspective, position, and the guidelines on what to do and
how to do it; to achieve the highest competitive advantage and the best value from the project”
(Patanakul and Shenhar, 2012).
These three parts are divided into eight implementable components: business background,
business objective, strategic concept, product definition, competitive advantage/value, success
and failure criteria, project definition and strategic focus (see Figure 4.5). The following dis-
cussion describes these elements in more detail.

The three parts of project strategy

The first “P” is the perspective part of project strategy. It presents the background, the envi-
ronment and the reason “why” we initiate the project, the overall objective and the concept
that will guide the project’s experience. It includes the business background, the business
objective and the strategic concept (what are we competing on?).
The second “P” is the position that will be obtained after the project has been completed.
The position part describes “what” we want to achieve once the project has been completed. It
is the new “state of the world” after the project ends. The position includes the product defini-
tion, the competitive advantage/value that is created by the project and the success and failure
criteria (how do we assess the project’s success?) (Shenhar et al., 2001).
The third “P” is the “how” – how we are going to make this happen, i.e., the “plan” of action
and the behaviour that is needed to get there. The guidelines include the project definition and

Project Strategy: the project perspective, position, and the guidelines on what
to do and how to do it; to achieve the highest competitive advantage and the
best value from the project

Perspective Position Guidelines

“Why” “What” “How”

Business Background Product definition Project Definition

Business Objective Competitive Strategic Focus

Advantage/Value

Strategic Concept
Success/Failure
Criteria

Figure 4.5  The Structure of a project’s strategy

 The converging nature of innovation and project management 95

the strategic focus (guidelines for behaviour and how to establish an environment of relentless
pursuit of competitive advantage) (Poli, 2006).

Summary – the strategy questions and answers

Table 4.3 provides a summary of the project strategy framework in terms of the questions that
each component is answering and the detailed answers.

SUMMARY
Lessons and Implementation Recommendations

From an implementation perspective, the combined frameworks presented in this article could
serve as a management tool for helping executives and their innovation and project teams
focus on the important critical aspects of an innovation effort during all phases of the effort.
Here are a few recommendations.
First, at the pre-approval stage, while an innovative idea is still being considered, project
experts should be involved as early as possible. Executives should not assume that once they
make a strategic decision, their project teams will figure it out. In addition to assessing busi-
ness opportunities and expected benefits, executives must ask questions about the level of
difficulty and challenge involved in the execution, as well as assess the expertise and critical
resources needed to bring the idea to market.
The best-fit management style should be selected, by determining levels of novelty, technol-
ogy, complexity and pace, as well as other characteristics of the innovation and its required
project. Combined teams should assess the implications of these characteristics on execution
time, resources, challenges and the critical skills needed. In some cases, initiatives would
ultimately not be approved due to higher-than-usual difficulties in their execution.
Second, during the formal approval stage of the effort, a project team must coordinate with
business and marketing executives to guarantee all critical aspects of the project are addressed
before it is launched. At least three major aspects must be addressed clearly: the project’s
strategic vision, a strong alignment and commitment between project participants and a clear
execution plan that is appropriately tailored to the project’s levels of uncertainty and complex-
ity, including resources, organization and process, as well as the right talents (Shenhar and
Holzmann, 2017).
The alignment should proceed through the execution phase. Innovation success depends
on the ongoing adaptation of business decisions, marketing activities and execution processes
and adjusting them to dynamic changes in the environment and technology. Changes may
include increased resources, allocating new people or adding unplanned activities.
Third, the appropriate project strategy should be selected and its components addressed
carefully. Teams must be certain they are able to create real value and implement a sense of
continuous pursuit of competitive advantage in their project.
Despite this chapter’s recommendation for a unified model of projects and innovation,
we should still recognize cases where unique models may be appropriate. Among them, we
should mention some unique initiatives of exploration projects, where neither technologies
nor customer requirements are known at the start of the project (e.g., Lenfle, 2008, 2012), or
96 Handbook on innovation and project management

Table 4.3  The elements of project strategy

Project strategy Questions Details

components
Perspective Business Why are we doing the Who is the customer/user?
– “why” background project? What is the need?
What is the business How do we address this need?
perspective and What is the business opportunity?
motivation?
Business objective What do we want to What is the ultimate goal to be
achieve? achieved after project completion?
Strategic concept Why will the project What is the guiding strategic
support the company’s principle that would dominate
business strategy? the project’s plan and execution
What is the general and will support the company’s
strategic competitive idea? strategy?
Position Product definition What is the product What are we producing?
– “what” that will be created or What kind of product is it?
produced by the project? What are the concept of
operation and its major product
characteristics?
Competitive How good is it? What is the advantage to customer/
advantage/value Why is it better? user over:
Why would the customer - Competitors?
buy? - Previous products?
What is the value for us? - Alternative solutions?
What is the product cost/
effectiveness?
How would we benefit?
Success and failure What are the expectations? What are the success dimensions
criteria How to assess success? and measures?
What can go wrong? What are the major risks and their
consequences?
Guidelines Project definition How do we do it? Project scope.
– “how” What is the project? Project deliverables.
Project type – classification.
Project leader, project team.
Resources.
Strategic focus How do we behave? Guidelines for behaviour.
What do we do to achieve Policy for managing and
CA/V? leveraging:
How do we create in this - Company competencies.
project the relentless - Professional expertise.
pursuit of competitive - Internal synergy.
advantage/value? - External alliances.
 The converging nature of innovation and project management 97

highly experimental medical research, where no real solutions have been offered and no clear
goals have been set (e.g., Varmus, 2006).
We realize that not all areas of research are yet ready to adopt the established frameworks
of either project management or innovation, and they will continue exploring issues in their
old-trusted ways.

CONCLUDING REMARKS AND FORTHCOMING STUDIES

In conclusion, we may be moving to an interdisciplinary world, where teams require the

involvement of different professions for joint solutions to modern life challenges. Future
research communities are required to follow this trend and be able to study multidiscipli-
nary and interdisciplinary problems. For this reason, our models, which tried to combine the
frameworks of innovation and project management, may be useful for improved practices and
future studies. This idea fits well with contemporary trends of cross-learning among fields
when a single discipline is often unable to find a solution on its own. The integration of innova-
tion and project management becomes essential for most companies.
This chapter offered several lessons for future researchers as well as practitioners: since no
innovation can succeed without a sound project, future studies should continue acknowledg-
ing this merge and keep studying the entire innovation and project cycles while coming up
with more insights to improve our understanding of the combined process. Similarly, industry
leaders should continue forming combined and multidisciplinary teams to deal with the entire
process. Switching gears to another team when an initiative is moving downstream is counter-
productive and inefficient. Project teams need to understand the extent of innovation that is
driving their project and accordingly adjust their execution plans. Specifically, since many
projects today involve new development, performed in short cycles, project managers need to
know the impact of uncertainty – in technology, markets or both – on their projects and learn
how to prepare and deal with it effectively.
The process, diamond and project strategy models of innovation/project presented here
may prove useful for future researchers as well as teams and organizations. Our models offer
new ways to deal with unanswered questions, such as how to reduce the uncertainty at the
onset of the process, how to organize the innovation project in the most appropriate way or
how to build the best winning product for the marketplace.
Modern innovations do not have to fail so often, and more value should be created from the
many good ideas that have failed in the past due to weak execution. Companies could expand and
invest more learning into the complex and integrative nature of their innovation/projects. They
could learn how to establish innovation and project management as one combined and effective
process, where joint teams are functioning together, contributing the best of their knowledge to
such a complex but highly promising process. The models presented in this chapter may serve
as useful management techniques for better integration and improved innovation successes.

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5. It’s all a bit fuzzy? The front-end in project and
innovation management
Michael A. Lewis, Joseph W. Harrison and Jens K. Roehrich

INTRODUCTION

It is almost axiomatic that project “front-end” (PFE) activities are critical to project perfor-
mance (Morris, 1987; Miller and Hobbs, 2005; Samset, 2010). A widely cited World Bank
study (1996) of 1,125 major projects suggested strong support for the value of a rigorous PFE
when it found that 80 per cent of projects with a satisfactory “quality at entry” were success-
ful. At the same time, the finding that only 35 per cent of those with an unsatisfactory qual-
ity at entry achieved success also confirmed that many projects proceed irrespective of PFE
evaluations – and that they are far from accurate. The general message, that “improved” front-
end management is likely to pay off in a wider life cycle perspective (Miller and Lessard,
2000), has meant that the PFE has been a sustained focus for project practice and scholarship
(Williams et al., 2020; Morris, 20161). In short, the PFE exists before project boundaries are
crafted at a time where there are “governing processes at play” but, typically, no “plans nor
formal contracts to govern the actions and relationships of the parties involved” (Hellström
et al., 2013, 712). Small wonder that such temporal and material ambiguity, paradox even
(Samset and Volden, 2016), has led to confusion and tautology. This has, in turn, created the
impression that it is under-researched (Samset and Volden, 2016) despite a recent PFE litera-
ture review (Williams et al., 2019) identifying 524 related papers. This level of interest shows
no sign of abating (e.g. Babaei et al., 2021).
So, what is the intent of this chapter? There is clearly scope for further PFE study but here,
rather than revisit the excellent review work already completed, we build on the project studies
tradition of knowledge creation at field boundaries by engaging with the adjacent innovation/
new product development (NPD) literature and, more specifically, the front-end of innovation
(FEI) literature as a comparative lens for (re-)considering the meaning and management of the
PFE. This is another opportunity to bridge the innovation and project management fields that,
as Davies et al. (2018) note, have long been (artificially?) separated, with complex, sometimes
conflicting relations. There are many similarities between the PFE and the FEI,

the very first phase of the NPD process that starts with the discovery of an opportunity or a raw idea
for product innovation (idea-generating: Van den Ende et al., 2014) and ends when the GO decision
is made to develop a new product.
(Eling and Herstatt, 2017, 864, emphasis added)

Early work suggested that the FEI was crucial for innovation success (Cooper and
Kleinschmidt, 1987; Cooper, 1988) with later studies confirming that FEI effectiveness can
significantly influence the likelihood of later success for innovation projects (Khurana and
Rosenthal, 1997; Backman et al., 2007). Given the subsequent projectification (Midler, 1995)

101
102 Handbook on innovation and project management

of NPD, frontloading – “a strategy … to improve development performance by shifting the

identification and solving of [design] problems to earlier phases of a product development”
(Thomke and Fujimoto, 2000, 132) – was widely perceived to be a best practice. Markham
(2013) observed that product performance – time to market, market penetration and financial
performance – was positively associated with FEI activities – including the use of a formal
front-end process, integrating marketing/R&D (cf. Moenaert et al., 1995), concept develop-
ment work and the presence of a champion. Jordan et al. (1988) argued that 15 per cent of
time and resources should be spent on front-end work, Miller and Lessard (2000) suggested
up to 35 per cent and more recent research suggests that as much as 50 per cent of total
innovation development time is attributable to FEI (Jensen, 2017). Although this categorical
distinction is made between FEI and standard NPD practices (i.e. the FEI is different and so
should be managed differently) it remains, like PFE, ambiguous in its details. To capture this,
Reinertsen and Smith (1991) applied the term fuzzy to this indistinct, informal, unstructured,
chaotic (O’Brien, 2020) phase “before a project enters formal development” (Frishammar
et al., 2016, 179).
The chapter is structured as follows. We begin by summarizing the core elements of extant
PFE and FEI studies. Then, we compare them to identify additive insights and unresolved
issues. The final section brings together our discussion by addressing limitations and reflects
on the challenge of “fuzziness” that prompts avenues for fruitful further investigations.

THE FRONT-END?

As a combination of nouns, front and end suggest ideas related to the forward-facing part of
anything, and the limit or last part of something, language that brings ideas of “boundaries”
strongly to mind (e.g. crossing into the “determinate” project phase [Winch, 2014]). Moreover,
the idea of the front is often used synonymously with a more temporal perspective – the early
or initial clock time of a project – the beginning (Lundin and Söderholm, 1995). This is not
a trivial conceptual challenge; the beginning of things has long been a source of scholarly
fascination. In his De primo et ultimo instant (1320?) for example, scholastic philosopher and
logician Walter Burley developed Aristotle’s work (in book VIII of The Physics, 4th century
BC) and proposed an elaborate classification of different kinds of beginning and ceasing.
Likewise, the notion of fuzziness is suggestive of what anthropologists call liminality (from
the Latin līmen, meaning “a threshold”) in descriptions of rites of passage. During liminal
periods of all kinds, social hierarchies may be reversed or temporarily dissolved, continuity
of tradition may become uncertain and future outcomes – once taken for granted – can be
thrown into doubt. In addition to (or absence of?) a more profound philosophical debate, there
is also basic confusion over terminology and reflections of different points of view (and units
of analysis).

The Project Front-End (PFE)

In their comprehensive review of the PFE literature, Edkins and Smith (2012) found no real
agreement on any specific definition but did note, intriguingly, that despite a lack of clarity
about the focal phenomenon, there is agreement (and evidence) that it was one of the primary
points where strategic success or failure for the project is set. As Williams et al. (2019) rightly
 The front-end in project and innovation management 103

stress in their own “what is the front-end” writing, the PFE’s definition is inextricably bound
up with the definition of what a “project” is.2 The PFE is identified as the greatest opportu-
nity for value creation (Artto et al., 2016) and by extension setting up value appropriation,
and frequently, axiomatically even, where the seeds of failure are sown (Morris, 2013). It
is where the “project will typically lock in many aspects of what will be the final project
configuration” (Scott and Levitt, 107). The PFE is “where” most aspects of the project will
be “frozen” (or at least strict areas of measurements/acceptance will be determined) as key
requirements and taken forward into execution. Arguing that the PFE is where complexity
and uncertainty are high(est) and information most limited, Williams et al. (2019) offer an
interesting figure (Figure 5.1) which presents the PFE in terms of the relationship between
the permanent and temporary organizations. Critically, it makes clear, at least by implication,
that the project “bookends”, whilst both critical to overall value creation, are very different in
character and composition. Remember the now classic project management case of Heathrow
Airport Terminal 5 moving from a very successful (in terms of time, cost, quality and wider
learnings) project into a “national disaster” at opening with “cancellation of numerous flights
and thousands of lost bags requiring manual sorting before being returned to their owners”
(Brady and Davies, 2010, 151).
Back to the project front-end, Williams et al. (2019) side-step the need for a specific defini-
tion by listing instead those “developments” that need to occur “before” a project starts and
that by inference must, in at least some fashion, constitute some aspects of the “front-end”.
Adapting their summary, the PFE is where:

1. Initial ideas emerge, raising issues such as where the idea comes from (e.g. a powerful
actor), what it is based on (e.g. standard solutions), whose interests it would serve, who
would pay for it, how it is situated within a wider strategy/project portfolio, etc.
2. Underlying problems and needs are analysed and contextualized and complexity becomes
clearer. A key part of this is revealing and clarifying stakeholder preferences and incen-
tives, either through deliberate or emergent processes.

Source:   from Williams et al., 2019.

Figure 5.1  PFE in relation to permanent and temporary organizations

104 Handbook on innovation and project management

3. Initial estimates of costs and benefits are made – although these will be revised as differ-
ent conceptual alternatives are considered. The focus is often on the final cost estimate
(the budget) and is a key arena for the manifestation of optimism bias and strategic mis-
representation. There is, by definition, limited essential information as the project is still
prospective, and to varying degrees (depending on project type) ill-defined. By corollary,
because uncertainty is at its highest, there will be an abundance of irrelevant (and uncer-
tain, judgmental, etc.) information – some of which may be more precise and detailed
than (subsequently) essential information.

There appear to be some distinct processual characteristics (from ideation, via clarification of
concepts, to greater formalization) where the project “foundation is laid” but they stress that
it is far from linear. In their influential discussion of the challenges facing public investment
projects, Samset and Volden (2016, 311), point out that recognizing the importance of the
front-end decision-making phase is a crucial part of strong project governance because “many
… problems can be interpreted in terms of deficiencies in the analytical or political processes
preceding the final decision to go ahead”. Detailing the Norwegian Ministry of Finance’s
mandatory quality-at-entry gates for large public investment projects, they offer a similar
model of the (major project) PFE, reviewing (a) the conceptual solution (“before” any politi-
cal executive decision to start the pre-project) and (b) the cost and steering frames (before the
project is submitted to Parliament for approval and funding).

The Fuzzy Front-End of Innovation

The growth of practical interest (“executive anxiety” [Harvey et al., 2015]) and scholarly
research into the FEI has been a consistent theme for more than 30 years (Evanschitzky et al.,
2012). Eling and Herstatt (2017) in their FEI Special Issue identified 85 studies published in
the Journal of Product Innovation Management3 (JPIM) since the first issue in 1984. The
FEI refers to the set of activities used to identify and screen viable candidates for new product
development (Koen et al., 2001). Various attempts have been made to define what Cooper
(1996) called the “up-front homework” of NPD and lots of different terminology has been
used, including “early”, “idea”, “discovery” or “pre-development” stage/tasks. More specifi-
cally, Koen et al. (2001), like many/most other authors,4 define the FEI in terms of its activi-
ties. They propose a model, built around the classic change management “engine” (2001, 49)
of senior and executive-level management support, that highlights five interacting elements:

1. Opportunity identification. Driven by the short- and/or long-term goals of the business,
this is a formally and informally creative process.
2. Opportunity analysis. The iterative process of assessing opportunities; to give a sense of
the specificity of this element, practices like competitive intelligence and trend analyses
are proposed.
3. Idea genesis. The process where ideas are “built upon, torn down, combined, reshaped,
modified and upgraded” (Koen et al., 2001, 50). This still essentially creative element
is where greater specificity is advocated, via direct customer/user contact and ties with
cross-functional teams, as well as collaboration with other companies and institutions.
The output is typically a more completely developed description of an idea or product/
service concept.
 The front-end in project and innovation management 105

4. Idea selection. Formalized project selection and resource allocation may be difficult due
to limited information and understanding at this point but selection (including via finan-
cial return) in the FEI can be considered analogous to an option portfolio or more simply,
a “betting process” (Reinertsen, 1999).
5. Concept (and technology) development. Koen et al. (2001) describe this as the most for-
mal stage but note that the formality of this business case activity will vary according to
the nature of the opportunity (e.g. new market, new technology and/or new platform).

Koen et al. (2001) stress that this is an iterative process, presenting a circular shape for the
front-end elements, later echoed in Cooper and Kleinschmidt (2007) who argued that keeping
a flexible and scalable set of possible options “open” was vital to innovation success.

CONNECTED THEMES

As well as related definitional challenges, and – despite any consequential ambiguity – the
shared (axiomatic?) assertion that the front-end “really matters” in terms of ultimate perfor-
mance, other connections are clear from reading the two literatures side by side. Both, for
example, are heavily influenced by normative questions of how to use different technologies
and methods to improve (e.g. to go faster [Saff and Ernst, 2003] or to better share knowledge
[Akbar and Tzokas, 2012]) in this critical phase. In this section, we explore three areas where
cross-reading adds insights for scholars and practitioners alike.

Process

The PFE and FEI both give a significant role to (stage) gates or reviews as critical elements of
the process (Ulrich and Eppinger, 2004). There have been many attempts, since the descrip-
tion of best practice methodology implemented at AlliedSignal and Alcor (Smith et al., 1999),
to define formal FEI processes. Stage Gate™ models, for example, have been expanded
(Cooper and Kleinschmidt, 1986; Cooper, 1990) to include consideration of the stages before
the stages (Gate 0, pre-Gate 05, etc.) and address more ambiguous issues such as ideation and
technological uncertainty (Cohen et al., 1998). We summarized one of the most sophisticated,
by Koen et al. (2001), in the second section. Gaubinger and Rabl (2014) critique Cooper’s
(1990) Stage-Gate Model and Khurana and Rosenthal’s (1997) three-phase front-end model
for lack of flexibility because of their linear approach and lack of feedback loops. Others
agree that FEI tasks are unlikely to occur in a sequential manner (Griffin et al., 2012) but have
suggested alternative formalizations. Eling et al. (2014), for example, note that FEI tasks are
like the steps of a general creativity process: (1) problem identification and preparation; (2)
problem-solving or idea generation (incubation and illumination); and (3) solution verification
and implementation (Wallas, 1926; Amabile, 1983; Lubart, 2001).
On the other hand, more iterative approaches such as the new concept development (NCD)
model we described in the second section now exist. Koen et al. (2001) recognize idea genera-
tion as iterative and unstructured (Pereira et al., 2017), often cutting across multiple phases.
Such models are not deterministic of course; Cooper’s later models are centred around what
he labels “fuzzy gates”, such that tasks associated with subsequent stages can be carried out
prior to a gate decision. Given the FEI setting, an associated portfolio decision includes the
106 Handbook on innovation and project management

allocation of resources and relative risks to different projects with implications for the range of
gates that only have to be passed at certain process stages. Koen et al. (2001) see refinement and
screening, forms of “information processing” (Reid and De Brentani, 2004) as key to the FEI
(Griffiths-Hemans and Grover, 2006). Martinsuo and Poskela (2011) and various authors have
generated large lists of quantitative/qualitative evaluation and selection methods found in prac-
tice and research, including question lists (Hall and Nauda, 1990; Cooper et al., 2002), scor-
ing models (Henriksen and Traynor, 1999) and analytic hierarchy processes (Calantone et al.,
1999; Englund and Graham, 1999) as well as various mathematical models (Loch et al., 2001).
Contrasting private and public PFEs, it is important to note that governments often embrace
the idea of public–private partnerships (PPPs) on the basis that the bundling effects of bring-
ing together the financing, designing, constructing and operating parts (Grimsey and Lewis,
2005; Barlow et al., 2013) will secure better value for money than traditional public procure-
ment options. Relatedly, there is some discussion of the benefits that accrue from the relatively
enhanced capabilities that many industrial firms have for ex-ante (forecasting) and ex-post
(sales, user satisfaction, etc.) information processing (evaluation). Ultimately, as Christiansen
and Varnes (2008) found, in practice managers are rather flexible in how they use methods and
interpret such evaluations (Loch, 2000). This is unsurprising given that the implementation
of useful and flexible process models – Cooper’s (1994) third-generation model offers a stage-
gate process with flexible gates and fluid stages – is likely to be more difficult than those with
simple flows and specific recommended actions for employees.
Interestingly, Reid and De Brentani (2004) differentiated between early-stage and late-
stage FEI processes and argued that the process differs for incremental and radical innova-
tion (cf. Koen et al., 2014a). They proposed a model of the fuzzy front-end for discontinuous
innovation in terms of boundaries to be crossed, the roles played at these “interfaces” by key
individuals and the general flow of information. Although this model predates much of the
subsequent open innovation (OI) literature (e.g. Dahlander and Gann, 2010), the movement
of unstructured information across the boundary between the environment and the organiza-
tion is clearly the “front of the front”. Figure 5.2 is an adaptation of this model that clearly

Source:   based on Reid and De Brentani, 2004, 178.

Figure 5.2  The fuzzy FEI for discontinuous innovation

 The front-end in project and innovation management 107

illustrates how the “interface between the organization and a commitment to a specific pro-
ject” (Reid and De Brentani, 2004, 181) is seen as the end point of the fuzzy phase.
Reflecting on processual (time and tempo) concerns raises an interesting point of distinc-
tion between FEI and PFE. Much of the PFE literature emphasizes spending more time (and
resources) – frontloading – on this phase, in part, reflecting the assumed temporary and one-
off nature of much project work (cf. Stjerne and Svejenova, 2016). In contrast, the perma-
nence/embeddedness and repetition (cumulative learning?) associated with organizational
innovation have led to discussions of either greater speed/less time at the FEI or even aban-
donment of this stage-based conceptualization. For example, developments such as platform
strategies (Beaume et al., 2009), have significantly changed the way firms think about the
innovation process and, correspondingly, the meaning and management of the FEI. Analysis
of the widespread industrial use of dedicated, semi-autonomous advanced engineering units,
for example, concludes that they are not necessarily working on exploration activity before
NPD (Maniak et al., 2013, 123), but rather supporting innovation/integration as a continuous
process, a tangible manifestation of what Marsh and Stock (2003) called an “intertemporal
integration” perspective.

People

Building on this discussion of boundary-spanning roles, there are many studies on the char-
acteristics and behaviours of individuals in the FEI (e.g. Reid and De Brentani, 2004; Salter
et al., 2015). If FEI work is (more) creative and nondeterministic than other NPD work then
the requisite skills, capabilities and personalities even are likely to be different. Reid and De
Brentani (2004), for example, highlighted three (indistinct?) roles critical in the front-end of
discontinuous innovations: “boundary spanners”, “gatekeepers” (cf. Macdonald and Williams,
1994) and “pattern recognisers” (cf. Song and Montoya-Weiss, 1998). There are also myriad
questions about team and group structure. For example, if an opportunity is worth exploring,
FEI models often argue small teams should be assigned to investigate (Kim and Wilemon,
2002), most effectively by combining skills in market (Montoya-Weiss and O’Driscoll, 2000),
competitive (Bacon et al., 1994) and technological (Verworn, 2006) analysis. In large organi-
zations with an innovation portfolio, the team should also include skills to determine fit with
existing business plans (Khurana and Rosenthal, 1998). Schmidt et al. (2009) in a survey of
middle managers involved in NPD found that review proficiency (i.e. proficiency in using
market, technical and financial criteria) at the idea screening gate was positively associated
with new product performance at the company level.
Similarly, Edkins et al. (2013, 79) found a wide range of individuals and team structures
involved in the PFE. They highlight how the need to deal with “diversity of input whilst man-
aging a fluid process and answering to the situational governance” likely requires a different
managerial approach from that of the prototypical execution-orientated PM and this should
lead to the appointment of managers who have a breadth of skills, including excellent inter-
personal skills, that span “not only project management, but also the sponsor’s business and
the key players and factors impacting from the external environment”. This normative recom-
mendation aside, they recognize that finding and placing such people in PFE roles is often
extremely difficult, given the uncertainties involved (including the probability of any individual
project not going ahead) and the corresponding psychological and social pressures (Williams
and Samset, 2010). There will be an elevated role for forming, shaping and giving voice to
108 Handbook on innovation and project management

goals – establishing and “selling” a vision – and motivating and influencing others to follow in
the realization of that vision – doing what needs to be done to fill out that vision and deliver.
There is also behavioural project research, stressing that projects are carried out by human
actors, with potentially conflicting interests and difficult personalities (Goldratt, 1997; Maylor,
2001; Clegg and Courpasson, 2004) and, as Stingl and Geraldi’s (2017) structured literature
review highlights, it addresses a wide range of PFE-associated issues, including “gold plat-
ing” or over-specification (Shmueli et al., 2015), escalation of commitment (Keil et al., 2000;
Du et al., 2006; Jani, 2008, 2011; Hällgren, 2010; Martinsuo et al., 2013; Meyer, 2014) and
over-optimistic6 planning and forecasting (Kutsch et al., 2011; Son and Rojas, 2011; Flyvbjerg,
2014). In one of the very few studies to consider the behavioural impact of this project phase,
Long et al. (2020) conclude (from experimental work) that sunk cost bias dominates later, with
status quo bias and gain-seeking preferences more important at the beginning of a project.

Networks

The role of suppliers in the front-end is another shared concern. Based on repeated observa-
tions in many industry sectors but particularly the automotive industry (Dyer, 1996a; Caputo
and Zirpoli, 2001), supplier involvement in the FEI is associated with reduced development
cost and lead time, improved product quality, easier and earlier access to innovative technolo-
gies and reduced opportunistic behaviour of suppliers (Primo and Amundson, 2002). Dyer
(1996b) labelled this “pre-sourcing”, choosing suppliers early in the (vehicle’s) concept‐devel-
opment stage and giving them significant, if not total, responsibility for designing a given
component or system. FEI research has noted the importance of supplier evaluation (technical
and financial) as a necessary precursor to successful early integration and collaboration (Chen
et al., 2006). There have been similar developments in the PFE, unsurprisingly, given the
aforementioned auto-centred discussions, often linked to ideas of lean project delivery7 (Mesa
et al., 2019) – for example, attempts in the construction industry to introduce a contractor’s
expertise and advice much earlier in the project lifecycle, so-called early contractor involve-
ment (ECI), than has traditionally been the case (Mosey, 2009). There have also been more
pessimistic reflections. Winch (2013) proposed a process model of strategic misrepresentation
in projects whereby a façade of performance optimism could be maintained by, for example,
scapegoating contractors.
The role of suppliers also raises interesting practical – e.g. which tools to support cross‐
company coordination (Cigolini et al., 2004) – and conceptual questions about the successful
transfer of novel knowledge across organizational boundaries. For example, numerous stud-
ies find that these knowledge collaborations are informal, even when crossing organizational
boundaries. This reinforces the significant role of (social) network characteristics and perfor-
mance (Phelps et al., 2012). Interestingly, both “weak” and “strong” social ties have been iden-
tified as important for idea generation (Van den Ende et al., 2014; Gupta and Maltz, 2015). For
example, in their analysis of six collaborative research projects (CRPs) with “suppliers” such
as universities working at the front-end of radical innovation, Takahashi et al. (2018) found
that relational (tie strength) and structural characteristics (network range) of the collaborative
network are important determinants of knowledge transfer. A surprising finding in their study
is that communities of practice (networks of knowledge experts who are not members of the
team) are as important as teams in FEI success, which “points to the importance of effective
collaboration outside the team” (Koen et al., 2014b, 27).
 The front-end in project and innovation management 109

IT’S ALL (STILL) A BIT FUZZY?

Having reviewed key defining characteristics of the front-end, in this section we turn to some
of the ongoing challenges, pragmatic and conceptual, in considering the front-end.

Formalization

The conflict between creativity and systematization (Verworn and Herstatt, 1999) is an endur-
ing one in both the project and innovation management worlds. Since Quinn (1985) talked
of “controlling the chaos” and Brown and Eisenhardt (1998) highlighted the need for a “dis-
sipative equilibrium” between chaos and bureaucracy, the innovation management world has
sought the ideal regime that balances formal and free exploration. The interest in FEI is partly
a consequence of the widespread adoption of formalized new product development (NPD) and
innovation processes. Koen et al. (2001) in their (definitive sounding) “Providing clarity and
a common language to the ‘fuzzy front-end’”, make this comparison explicit. What comes
before the “prescribed set of activities and questions to be answered” during NPD is, by com-
parison, “chaotic, unpredictable, and unstructured” (Table 5.1). In other words, FEI, like PFE,
is in large part defined by what it is not. Such an apophatic process may offer some insights,
but it leaves significant questions unresolved.
For example, what is the appropriate balance between flexibility and creativity (e.g. weakly
defined processes and targets) on the one hand and structure and bureaucracy (e.g. well-
defined processes and specific targets) on the other? Van der Duin et al. (2014) observed
formal FEI processes leading to both efficient (e.g. nudge to complete all relevant activities),
and inefficient (e.g. pressure towards unnecessary/overanalysed) outcomes. Too much struc-
ture kills creativity, while too little affects other performance attributes (Gassmann et al.,
2016). Kagan et al. (2017), for example, found that teams perform worse when they can decide
when to transition from ideation to execution in NPD projects. Herstatt and Verworn (2007)
stressed the importance of a situation-appropriate balance – incorporating wider project and

Table 5.1  Comparing FEI and “normal” NPD projects

Fuzzy FEI NPD project

Nature of work Experimental, often chaotic. Difficult Structured, disciplined and goal-
to plan eureka moments. oriented with a project plan.
Commercialization Date unpredictable. Definable.
Funding Variable. In the initial phases, many Budgeted.
projects may be “bootlegged”, while
others will need funding to proceed.
Revenue expectations Often uncertain. Sometimes done Believable and with increasing
with a great deal of speculation. certainty, analysis and
documentation as the product release
date gets closer.
Activity Both individual and team in areas to Multi-functional product and/or
minimize risk and optimize potential. process development team.
110 Handbook on innovation and project management

contextual factors – between structured processes and sufficient room for creativity. Similarly,
Kock et al. (2015) concluded that increased FEI performance is associated with a balance of
process formalization, ideation strategy and creative encouragement.
Eling and Herstatt’s (2017) review suggested some fascinating “open” questions regarding
the formalization of FEI. For example, the literature does not offer many insights on how to
formally organize and manage the FEI for systemic innovations (which only generate value
if accompanied by complementary innovations in the wider ecosystem and are thus highly
interdependent [Takey and Carvalho, 2016]). Indeed, even the definition of formalization
remains vague. For example, there is a limited distinction made between the formalization
of the whole FEI process (e.g. Kock et al., 2015), the formalization of distinct FEI activities
(e.g. Martinsuo and Poskela, 2011) and the application of specific formal methods or tools
(e.g. Seidel and Fixson, 2013). Boulding et al. (2017), for example, show that the framing of
review points (i.e. explicitly discussing the option of abandonment in a future review) can lead
to more frequent/appropriate project abandonment decisions, but the recent Long et al. (2020)
study suggests that the conventional advice that “a higher level of monitoring may curb escala-
tion” (Schmidt and Calantone, 2002, 114) could be wrong and that fewer reviews may lead to
better abandonment decisions.
Relating this to the PFE, it has been found that the logic that underpins stage gate evalua-
tions can lead to a kind of inflexibility that will have negative effects, especially on explora-
tory projects that have the function of preparing strategic disruptions (Christensen et al.,
2008). Some authors compare this front-end challenge to the so-called “valley of death”
(Markham et al., 2010) or chasm (Moore and McKenna, 1999), faced by innovations that
must navigate formal development gates to reach real customers/markets. The consequence
is not always that innovative ideas fall at overly harsh gates but that they are also distorted
or downgraded.
PFE concerns about strategic misrepresentation, the “deliberate use of misleading or false
information for political purposes or agency issues” (Pinto, 2014, 378), are clearly related,
but with different consequences. In part, this reflects a difference in classification, between
a permanent organization launching multiple innovation projects and the temporary organi-
zation delivering a “one-off” transformation. In this setting, once a project is “started” it is
more likely to continue receiving funds, and then the PFE becomes a critical juncture where
strategic misrepresentation can flourish, especially if normalized (i.e. not seen as unethical),
driven by a range of factors including self-interest (opportunism), asymmetrical information,
differences in risk preferences and time horizons and vague accountability (Flyvbjerg et al.,
2009). Wachs (1989) discussed how the most effective planner is sometimes the one who can
cloak advocacy in the guise of scientific or technical rationality. In contrast with the per-
fected process settings described in much FEI work, Pinto (2014) identified (commonplace)
dysfunctional project environments as encouraging strategic misrepresentation. In such envi-
ronments, “deviation” is “normalized” and dysfunctional behaviours like systematic over-
promising become the only “realistic” behaviours.

Uncertainty and Equivocality

Uncertainty reduction is explicit in nearly all front-end discussions; firms/projects/people react

to a perceived level of environmental change and uncertainty by gathering more information.
 The front-end in project and innovation management 111

Uncertainty is defined as an exogenous variable that describes the situation of missing infor-
mation at the front-end – an environmental circumstance that managers cannot control (Zhang
and Doll, 2001; Song et al., 2007). This definition is in line with that of Galbraith (1974)
and with information processing theory (IPT), the difference between required and available
information, and advocates for firms/projects/people to reduce information asymmetry. Thus,
the more “radical” a project is, the more uncertainty there is in the early stages (Verworn
et al., 2008). Geraldi and Adlbrecht (2007) termed this “complexity of faith”, requiring project
managers to act as “priests”, convincing the team and stakeholders to have faith in the pro-
ject (Waterman and Peters, 1982), but not necessarily be closed to criticism (March, 2006).
Examples from NPD include Tatikonda and Rosenthal’s (2000) article on task uncertainty and
Shenhar and Dvir’s (1996) typology of projects based on technological uncertainty and system
scope. Little (2005) applied this combination to IT projects, and Dietrich (2006) applied it to
organizational change. Much of this work has focused on undoubtedly “fuzzy” questions such
as product definition (a proxy for uncertainty reduction via processual work to better under-
stand technical properties), development time, costs, market, risk and organizational fit (Kim
and Wilemon, 2002).
Arguably less attention has been given to the equally important concept of equivocality
(another key concept of IPT), although it is a defining characteristic of many front-ends
(Burström and Wilson, 2018) and has different consequences for practice. Equivocality
means ambiguity, the existence of multiple and conflicting interpretations about a situa-
tion and/or information available to actors (Weick, 1979, Daft and Macintosh, 1981). High
equivocality, often the result of complicated settings, “presumes a messy, unclear field and
an information stimulus that may have several interpretations” (Daft and Lengel, 1986, 554).
There will be ambiguity in goals (Turner and Cochrane, 1993; Williams and Samset, 2010)
since “the idea of a single, clear goal is at odds with the reality” (Linehan and Kavanagh,
2006, 6) and there will be a lack of clarity on which issues are most relevant to the core
task(s). This will typically manifest itself in the different and potentially conflicting interpre-
tations of the same information among team members. A certain level of equivocality can
be beneficial for enhancing creativity and preventing early closure, but most argue that this
needs to be reduced if a viable (NPD) project is to proceed. For instance, building on IPT,
the study by Aben et al. (2021) investigated the use of contractual and relational governance
mechanisms to reduce information uncertainty and equivocality. However, both governance
mechanisms are often only present in later innovation or project phases and cannot be relied
on in the front-end.
Youker (1999) concluded that lack of agreement on project objectives was one of the big-
gest problems facing international development projects. The same analysis was repeated on a
sample of 17 large public investment projects in Norway (Andersen et al., 2014). Like Carlile’s
(2002) model of knowledge boundary spanning, approaches to reducing equivocality should
enable debate, clarification and enactment, rich communication for information processing
rather than “just” data provision (Daft and Lengel, 1986). Rizova et al. (2018) used social
network analysis to understand how technical advice and friendship ties affect equivocality in
project teams in the FEI. Their findings suggest that while high density in projects’ technical-
advice network is likely to reduce equivocality, high density in projects’ friendship network
is likely to increase it. In earlier work, Frishammar et al. (2010) suggested that a reduction
in effective uncertainty and equivocality was associated with successful PFE but that, more
112 Handbook on innovation and project management

interestingly, the negative consequences of equivocality may be more critical to PFE perfor-
mance than the consequences of uncertainty. They also conclude that sequential uncertainty
and equivocality reduction are more effective. In other words, if organizations can react to
equivocality with the wrong kind of formalization, equivocality will persist in any meaning-
fully complex project and, consequently, more improvised adaptive behaviours (functional
and dysfunctional) will co-exist.
Consider the case of large-scale projects, often termed megaprojects (Babaei et al., 2021),
with their messy combination of policy work and legislation, budgetary bargaining between
elected officials and departments, negotiations with local government, agencies, pressure
groups, etc., together with national and international firms looking for work (Flyvbjerg,
2014; Scott and Levitt, 2017). Interaction and interdependence among heterogenous actors
come with diverging commitments to “collective” goals (Doz, 1996; Gulati et al., 2012). One
obvious manifestation of this divergence can be found in the (sometimes) decades it takes
before the various actors are ready (often following judicial and quasi-judicial intervention) to
endorse a megaproject. It is well understood that divergent, self-interested (Gil and Baldwin,
2014) actors can hold up any project process (Morris, 1994; Miller and Lessard, 2000), mak-
ing their support conditional on, for example, additional investment but, more specifically,
this makes it very difficult to control initial project scope/budget. Moreover, the longevity
of megaprojects can further exacerbate this “paradox of perverse incentives” (Samset and
Volden, 2016; Welde and Odeck, 2017), ultimately creating the conditions for a version of the
so-called “tragedy of the commons”.

Contingency

Contingency plays a significant and under-discussed role in PFE and FEI. Classical theory
(Burns and Stalker, 19618) suggests different external conditions require different organi-
zational characteristics, and that effectiveness is therefore contingent upon the fit between
structural and environmental variables (Lawrence and Lorsch, 1967; Drazin and Van de Ven,
1985; Pennings, 1992). For example, Koen et al. (2014a, 2014b) surveyed 197 large, US-based
companies using their “new concept development” model and found organizational attributes
accounted for 53 per cent of front-end performance, and team-related attributes accounted
for 24 per cent. Evident from this is the need to differentiate between organization/project/
people-related archetypes (Lundin et al., 2015). In Table 5.2 we adapt Müller and Turner’s
(2007) list of project attributes and suggest some areas where they may act as key PFE
contingencies.
Now, think about PFE and project-based firms (PBF). Whitley (2006) offers a typology
around orthogonal dimensions: (i) the extent to which firms focus on singular outputs (i.e.
“unusual, sometimes one-off, products and services for varied, and often uncertain, mar-
kets”); and (ii) the extent to which the organization (“of expertise, tasks, and roles”) is predict-
able and stable over projects. Such distinctions have significant implications for the PFE given
that singular outputs mean organizations are less likely to draw on “economics of repetition”9
(Davies and Brady, 2000).
 The front-end in project and innovation management 113

Table 5.2  Project categorization implications for PFE

Attributes Examples Potential PFE implications

Application area Public/private, engineering, Range of stakeholders.
construction, ICT, culture Linking (in)tangibility of outcome and shared
change, training, etc. objectives
Regulatory (e.g. safety) compliance.
Complexity Dynamic/behavioural Defining agreed objectives, capabilities,
complexity typology: wicked stakeholders, etc.
problems, etc. Emergent behaviour/complexity of interactions.
Strategic Mandatory, repositioning, Urgency and resourcing.
importance renewal. Compliance versus creativity (objectives).
Contract type Fixed price, cost+, PPP, etc. Urgency and resourcing.
Range of stakeholders.
Life-cycle stage Feasibility, design, execution, Potentially reducing uncertainty over life-cycle.
close-out, commissioning. Risk of specification debt (cf. technical debt).
Culture Project manager in single Defining agreed objectives, capabilities,
culture, host culture or stakeholders, etc.
expatriate. Cultural attributes (power distance, etc.).

Source:   adapted from Müller and Turner, 2007.

CONCLUDING COMMENTS – ESTABLISHING FUTURE RESEARCH

AVENUES

In this chapter we explored two types of “front-end” research (and hence hopefully at least
observed practice) that address related concerns but, to date, have been largely distinct. Some
of the reasons for this isolation relate to structural contingency (see earlier section) and unit
of analysis, but the discussion shows there was significant value in such a “side-by-side” com-
parison. It was not intended to be a structured review of either field and there was no empirical
material to address specific research questions, but there is clearly scope for further research
in both spaces. For example, is PFE the same for organizations which deliver projects (or
indeed innovation) as their core business and organizations that use projects to structure their
in-house and collaborative activities (Hobday, 2000)? Equally, given the emergence of the
temporary organization literature (Lundin and Söderholm, 1995; Turner and Müller, 2003;
Sydow and Braun, 2018), it could be argued that the very nature of the organization or struc-
ture undertaking the project becomes a key PFE decision. There is also the “exploratory pro-
ject” literature. How different is the PFE of a project that is established to be a large PFE and
to explore strategic opportunities, new technologies, business models or use cases (Brady
and Davies, 2004) where neither the goal nor the means to achieve the goal can be clearly
defined at the outset (Lenfle, 2008, 2016)? Research on exploratory projects has shown that it
is difficult, if not impossible, to assume that standard project methodology can be efficiently
transferred to exploratory projects. More generally, three themes are worth highlighting as a
putative research “agenda”.
114 Handbook on innovation and project management

What Is the Front-End and Why Is It (Still) Fuzzy?

First, there is a conceptual challenge. It is clear from the review that many definitional issues
remain unresolved. The front-end of any process is clearly a multi-faceted notion. At one
level is it simply a useful metaphor? Treated phenomenologically, it makes many assump-
tions about temporality, sequence and change, all determined to a large extent by the level
of analysis and point of view and its manifold conceptual, experiential, psychological and
political components. Is it correct to treat projects – even mega projects – as “lonely islands”
(Engwall, 2003) divided from the rest of the world by (clock) time, task and people bounda-
ries (Lundin and Söderholm, 1995; Sahlin-Andersson and Engwall, 2002)? It is interesting to
reflect on Gersick’s (1989) pioneering time-pacing work (cf. Alioua and Simon, 2017) in this
light. She found that project team members did not adapt their activities in a sequential and
linear manner but rather went through phases of inertia and then more dramatic change – not
time but tempo – a kind of fartlek. Interestingly she also noted that environmental events
had consequences on how project members pace their activities with more beneficial conse-
quences at the beginning of a project. Given this breadth and dynamism, is it possible to avoid
being procrustean? Even if we are profoundly reductive, do we know much about the causality
of the front–back transition? Post hoc, ergo propter hoc (“After this, therefore because of it”)
can be true, but how often are we falling for a logical fallacy? There is abundant evidence that
relatively lower-performing projects had relatively lower quality at entry (by some measures)
than others, and not surprisingly plenty of research papers link the two. Samset and Volden’s
(2016) work using the Norwegian data set is arguably amongst the strongest because of its
longitudinal character. Yet most do so without really testing the causal link between quality
at entry and ultimate project performance (at what point, etc.). Randomized controlled trials
are missing – are they possible? – and many key questions of generalizability remain to be
tackled. For example, Sharp and Salter (1997) found that although agency theory10 had strong
explanatory power for project escalation behaviour in North America, it offered no explana-
tory power in their Asian sample. More recently, Driouchi et al. (2020) examined the role of
national culture and ambiguity in valuing real options, an interesting proxy for the PFE/FEI,
and found that cultural factors, along with age, gender and international life experience, influ-
ence subjective attitudes towards value and ambiguity. In sum, are we over- or under-sampled
in different types of projects, and, if we are, will this not impact our conclusions about the
character and consequences of the front-end?

How Do We Resolve Temporal Conflict?

Second, and most normatively, the PFE/FEI can be presented as a form of temporal conflict,
whereby actions taken ex-ante to address a contemporary set of circumstances inadvertently
harm another group ex-post. Resolving such a temporal conflict requires (especially when
framed in agency terms) us to address an information asymmetry problem: how much infor-
mation about a project (options, uncertainties, risks) should be disclosed (n.b., contingent on
legislation, regulation and other factors) in these earliest, options-rich, creative stages? In
a perfect world, there would be little difference between current and future stakeholders.
Unfortunately, disclosure of a profusion of details can obfuscate and confuse stakeholders,
and even the most sophisticated reviewers can suffer information overload, some may not
have the time to review much less evaluate (Dahlmann and Roehrich, 2019; Aben et al., 2021).
 The front-end in project and innovation management 115

Considering Bettis’ (2017) theory of “organizational intractability”, those circumstances

when rational decision-making would take longer than a given decision remains invariant in
its essentials seem very plausible in many PFE settings.11 Another reason takes us back to our
discussion of a behavioural perspective on the front-end. People are not rational assessors of
information (e.g. recency, optimism bounded rationality) and this can create another form of
information asymmetry. This echoes calls for a move towards strategic marketing in the PFE
(Cova et al., 1994) and the management of “sleeping relationships” (Hadjikhani, 1996). Earlier
we argued that the longevity of many projects can exacerbate this “paradox of perverse incen-
tives” (Samset and Volden, 2016; Welde and Odeck, 2017), ultimately creating the conditions
for a version of the so-called “tragedy of the commons”. Here we argue that valuable and
novel insights might be derived from considering aspects of initial (e.g. planning, budgeting)
processes as a form of shared resource or “commons”.

When Are We Really Looking At?

Finally, there is an empirical challenge. Are we engaged with the “real” front-end? Do schol-
ars need to venture even further off the PM/NPD map to a place where “here be dragons”12
(Elahi, 2011)? Andersen et al. (2014), in their study of 17 major public projects, found that
in 11 cases the choice of concept had already been made when the so-called front-end pro-
cess started, only in six cases, truly unique alternatives were identified. As Williams et al.
(2019) stressed, “ideation” is at the heart of the process of project “emergence” (Kwak et al.,
2014; Kock et al., 2015, 2016) and reaching a stable value proposition/business case can be
time-consuming, especially in large/mega projects involving higher degrees of newness. The
innovation literature offers some additive insights regarding how to work effectively with
“formative” definitions during the learning process (Verworn et al., 2008), and stopping such
activities from being crowded out by day-to-day project management (Kurkkio et al., 2011).
Björk and Magnusson (2009) noted that there is extensive literature related to idea generation
and identification, drawing on a broad range of disciplines and theories around creativity,
learning, psychology and social networks.

NOTES
1. Legendary project scholar Peter Morris (1994) strongly argued that an overly narrow life cycle
focus meant missing critical institutional elements – including the front-end – that more accurately
typify project work in practice.
2. Sitting on a panel at a major projects conference in 2018, the author was confronted with this dis-
tinction (Morris, 2016). As I began to describe how the front-end was integral to any project, even
if it is only a putative project at that point in time, a forceful comment came from the conference
floor: “in my view Professor, projects only exist once the ‘front-end’ is completed!”.
3. A more recent and broader-based review by Park et al. (2021) identified and analysed 266 fuzzy
FEI-linked studies.
4. Just as Cooper (1988) highlights idea generation, product definition and product evaluation, Smith
and Reinertsen (1992) talk about idea screening, business plans and project and product speci-
fication. Khurana and Rosenthal (1997) identify a “pre-phase” zero where there is preliminary
identification of opportunities and market and technological analysis, followed by phase zero
where product concepts are defined and phase one for more detailed product and project planning.
Similarly, Montoya-Weiss and O’Driscoll (2000) list idea qualification, concept development,
116 Handbook on innovation and project management

concept assignment and evaluation of concept. Langerak et al. (2004) identify four stages of pre-
development activity; Griffiths-Hemans and Grover (2006) offer three (idea creation, implementa-
tion and commitment).
5. Khurana and Rosenthal (1997, 1998) split their sequential FEI process model into the three sec-
tions: pre-phase zero, phase zero and phase one. They stress the need for parallel but project-
independent activities, so-called foundation elements, such as idea generation via market and
technology analysis, etc.
6. Optimism bias is the generic label used for overestimating positive and/or underestimating nega-
tive outcomes. Stingl and Geraldi (2017) argue it is an umbrella term for various PFE-related
cognitive biases like self-efficacy theory, illusion of control or outcome desirability. For example,
research has shown increased levels of perceived control in endogenous (versus exogenous) project
risks (Du et al., 2006; Jani, 2008, 2011).
7. A key part of lean project logic is that “downstream” stakeholders are involved in front-end plan-
ning and design through cross-functional teams.
8. Burns and Stalker (1961) also helped introduce the organic/mechanistic distinctions that feature
heavily in the wider organization literature and are evident in most of the discussions (e.g. mecha-
nistic = formal, centralized, etc.) in this chapter.
9. Maniak and Midler (2014) proposed “lineage management” as an approach that emphasizes suc-
cessive project learning and value creation processes from the initial breakthrough project.
10. Agency theory assumes goal divergence between manager (agent) and the firm’s owners (princi-
pal). The argument goes something like this. Managers escalate a “losing” project if (a) there is an
incentive for them to do so (personal gain, promotion, etc.), and (b) information asymmetry exists
(i.e. principal has less information than agent). Moreover, escalation might mean later recovery of
any “losses” already incurred, and if senior management has no awareness of the loss or the escala-
tion, then the manager will have a further strong rational incentive to escalate.
11. Interestingly, the broader psychological literature (e.g. Hammond, 2000; Ariely and Zakay, 2001)
has also explored the ways in which individuals cope with a classic project concern, the stress
of time pressure. Time pressure may lead to worse performance in learning tasks (DeDonno
and Demaree, 2008) but Payne et al. (1988) suggest a hierarchy of responses. First, people try to
respond by working faster but if the pressure is too high, they may begin to filter available informa-
tion. If this is still insufficient, they may opt for a simpler decision-making strategy. Again, linking
this concern to prospect theory, De Dreu (2003), for example, finds evidence that (perceived) time
pressure, by weakening people’s motivation to process information, reduces negotiation efficiency.
12. Since ancient times, the phrase “here be dragons” (HIC SVNT DRACONES) – engraved on the
Lenox Globe circa 1500 – has been used to signify unexplored (dangerous) territories.

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6. “A disputed project identity”: ambiguity and
hybridization of exploration and exploitation in
complex projects
Stéphanie Tillement, Frédéric Garcias and
Florence Charue-Duboc

INTRODUCTION

The literature on innovation management and project management makes extensive use of
the concepts of exploitation and exploration, notably to understand the learning processes at
play or the management of uncertainties. However, each literature makes a distinctive usage
of these categories. On the one hand, scholars in the field of innovation management increas-
ingly employ exploration and exploitation in a dynamic way. They insist on the coexistence
of exploitation and exploration dynamics and highlight the associated tensions at the intra- or
inter-firm levels. They are also increasingly interested in the way in which these tensions are
dealt with by actors and organizations and in the capabilities that are developed to do so.
In project management, on the other hand, the notions of exploitation and exploration are
still used in a rather static way, to qualify a project as a whole, at the macro level. A project
is therefore mostly described as either exploitative or exploratory. The way exploitation and
exploration may entangle within a single project is not fully addressed by these literatures.
In this chapter, we consider projects as essential instruments for innovation. Following this
idea, we propose to mobilize the exploitation/exploration framework in a dynamic way to ana-
lyse the trajectory of a complex project and its management. In doing so, we aim to show (1)
how exploration and exploitation dynamics may intertwine within a single large-scale project;
(2) the tensions associated with this intertwining; and (3) how the distribution between explo-
ration and exploitation can evolve in time throughout the course of the project, depending on
internal and external factors that embed technical and political dimensions.
To do so, we draw on a longitudinal and situated study of the ASTRID1 project, a large-
scale and complex project that was supposed to be the first French prototype of a “Generation
IV” nuclear reactor.
After outlining how literatures on innovation and project management address the question
of exploration and exploitation and detailing the research approach and setting, the chapter
analyses how and why exploitation and exploration dynamics get entangled within the project
and discusses the consequences in terms of temporal and organizational framing of the pro-
ject. To refer to the coexistence of exploitation and exploration dynamics within the project,
it introduces the category of a “hybrid project”. The chapter then details the trajectory of the
ASTRID project, between its launch and its interruption. It identifies important turning points
or turnarounds when the balance between exploration and exploitation domains evolves and
specifies the associated tensions. It highlights how it questions the very identity of the project,
i.e. its goals and mission, and how this disputed identity relates to project stakeholders’ agenda

125
126 Handbook on innovation and project management

and to power relationships. The chapter finally discusses the notion of “project identity” and
its interest in the field of project management and questions the exceptionalism or normality
of nuclear projects.

EXPLORATION AND EXPLOITATION IN INNOVATION AND

PROJECT MANAGEMENT LITERATURES

Exploration and Exploitation in Innovation Management Literature

The innovation management literature has introduced various kinds of innovation – incre-
mental, radical, architectural, discontinuous, disruptive, etc. – initially to explain why estab-
lished firms may be threatened by new entrants (Abernathy and Clark, 1985; Henderson and
Clark 1990; Christensen, 1997). The processes of knowledge development and accumulation
in companies and the path dependencies related to these processes appear central to explain-
ing this phenomenon. Hence, Leonard-Barton (1992) emphasizes that core competencies may
become core rigidities. Cohen and Levinthal (1990), with the notion of absorptive capac-
ity, highlight the need for internal competencies to enable firms to identify and profit from
external knowledge. Elaborating on the differentiation between exploitation and exploration
learning introduced by March (1991) in his seminal paper, scholars have related exploitation
processes to incremental innovation and considered that more discontinuous types of innova-
tion, such as breakthrough innovation (Ahuja and Lampert, 2001) require exploration learning
processes (Tushman and O’Reilly, 1997). Further, exploration learning is considered crucial
in the ability of the firm to adapt to an ever-changing environment (Kogut and Zander, 1992;
Stuart and Poldony, 1996).
The literature in innovation management has defined exploitation as activities that search for
familiar, mature, current or proximate knowledge and exploration as activities that search for
unfamiliar and remote knowledge (Ahuja and Lampert, 2001; Rosenkopf and Nerkar, 2001;
Katila and Ahuja, 2002; Nerkar, 2003). Particularly in technological innovation, exploitation
involves “local search” that builds on a firm’s existing technological capabilities, while explo-
ration entails a more “distant search” for new capabilities. This knowledge-based view of the
exploitation/exploration learning which underscores the refinement of existing knowledge ver-
sus the merits of new knowledge development is, however, a narrow understanding of this
framework (Lavie et al., 2010). More importantly, it reconciles the fact that differentiating
types of innovation refers to analyses undertaken once the innovation is introduced on the mar-
ket whereas learning processes are best understood along the innovation development process.
March (1991) acknowledged the fundamental distinction between two gestalts of organiza-
tional behaviour. Whereas exploration engages individuals and organizations in search, exper-
imentation and variation, exploitation enhances productivity and efficiency through choice,
execution and variance reduction. Both types of activities are essential for organizational
learning and firm survival but entail inherent contradictions that need to be managed. Recent
debates around the notions of exploration and exploitation have mainly focused on the way
in which firms seek to articulate these two (conflicting) logics, by showing in particular the
existence of several forms of “organizational ambidexterity” (O’Reilly and Tushman, 2013).
In particular, it distinguishes a structural ambidexterity, which allocates exploration and
exploitation activities to very distinct actors or entities, and a contextual ambidexterity, which
requires individuals to combine these two logics. A great deal of research has been devoted
 Exploration and exploitation in complex projects 127

to identifying the antecedents, or “micro-foundations” of organizational ambidexterity, which

was seen as a condition for the long-term success of organizations in overcoming both the
“productivity dilemma” (Abernathy, 1978) and the “innovator’s dilemma” (Christensen, 1997).
Research on organizational ambidexterity has thus largely insisted on the fact that explo-
ration and exploitation must not be opposed, but combined and articulated, by overcoming,
in the daily practices of organizations, the tensions inherent in their juxtaposition. This new
paradigm for innovation management is part of a renewed interest, within the management
literature, in the tensions or paradoxes that organizations and individuals face (Raisch and
Zimmermann, 2017).

Exploration and Exploitation in Project Management Literature: Contributions and

Limitations of a Contingent Approach

The project management literature has long imported the concepts of exploration and exploi-
tation from the innovation management literature (Brady and Davies, 2004; Lenfle, 2008).
But for the most part, these concepts have been used to construct a typology of projects, in
the wake of the revival of a contingent approach to projects since the 2000s. For a long time,
the challenge for project management researchers has been to distinguish projects from one
another, notably according to their level of uncertainty, in order to be able to manage them
adequately and avoid the pitfalls of the “one best way” approach (Shenhar and Dvir, 1996) and
to manage project portfolios. While this is a major advance, both theoretically and in practice,
this concern has tended to obscure the question of the coexistence of different types of learn-
ing within projects.
The need to build a contingent approach to projects resulted from a misunderstanding of
how the field of projects relates to the issue of innovation. Indeed, projects have been identified
for a long time in the innovation management literature as organizational structures that are
particularly well suited to hosting the most innovative activities of the firm. Innovation scholars
thus largely adopted a perspective inherited from the “contingency school” of organizational
theory (Burns and Stalker, 2011). Innovation activities, and in particular the most radical ones,
facing the “unknown” (Loch et al., 2011), require departing from the organizational “one best
way” and looking for specific management and organizational modes. From this perspective,
innovation management scholars have long considered projects as a suitable way to escape the
bureaucratic constraints of large organizations and to create the conditions for achieving high
levels of adaptability, flexibility and search. This postulate is at the heart of the highly influen-
tial work carried out by Clark, Fujimoto and Wheelwright at the turn of the 1980s and 1990s
(Clark and Fujimoto, 1989; Clark and Wheelwright, 1992). But, as Lenfle (2008) and Davies
et al. (2018) point out, this conflation of project and innovation overlooks that, simultaneously,
the “mainstream” of project management literature has developed an approach that largely
contradicts this association of ideas. In a way, this mainstream, which Söderlund (2011) calls
the “optimization school” in project management, embodies almost perfectly the rationalis-
tic, optimizing, instrumentalist and universalist “one best way” from which the contingency
school and then innovation scholars have sought to escape. It follows that

unlike innovation studies where projects were seen as a vehicle for change, projects in project man-
agement research were seen as complex, one-off endeavors that need to be managed with stand-
ardized tools, structures and techniques. Informed by a universal approach to management, every
project, no matter what context, faced the ‘triple constraint’ of time, cost and quality specifications.
(Davies et al., 2018, 970)
128 Handbook on innovation and project management

Faced with the risk of using management methods that would not fit the specificities of inno-
vation, and in particular its most radical forms, several studies have emphasized the need
to introduce distinctions between types of projects. For example, the distinction between
“mainstream” and “newstream” projects, suggested by Kanter (1990), or between the “com-
pression model” and the “experiential model” (Eisenhardt and Tabrizi, 1995), has enabled
us to take a step in this direction. During the following years, a real “contingency school”
emerged within project management studies, considered by Söderlund (2011) as one of the
seven main schools of thought in the field. This school was initially embodied in the pro-
posal of Shenhar and Dvir (1996) and Shenhar (2001) to make “technological uncertainty”
and “system scope” the main contingency factors. Later, Sommer and Loch (2004) and Pich
(2002) argued for a distinction between different types of uncertainty in order to establish a
relevant typology of projects.
In this wake, scholars have proposed to distinguish “routine projects” from “innovative pro-
jects” (Davies and Brady, 2016) or “creative projects” (Obstfeld, 2012). In a very similar way,
Lenfle (2008) suggested importing into the field of project management the notion of explora-
tion (as opposed to exploitation) borrowed from March (1991). He defined exploratory pro-
jects as “those in which neither the technology, nor the customer requirements are known at
the beginning of the process”, which differentiates them from “development” projects where
these parameters are known at the beginning. For such projects, models and tools from the
mainstream of the discipline are not only inoperative but also counterproductive: as Lenfle
indicates, the project management “body of knowledge is unsuitable for managing exploratory
projects” (Lenfle, 2014, 930).
While this clarification allows a significant advance, it seems difficult to fit the entire field
of projects into these new categories. Indeed, certain types of projects, such as “megaprojects”
(Flyvbjerg, 2014) or “complex projects” (Brady and Davies, 2014), resemble the so-called
“exploration projects” without, however, embracing all their specificities. According to Brady
and Davies (2014), “complex” projects entangle very “routine” and much more “innovative”
activities or sub-projects. Megaprojects, similarly, combine relatively clear objectives at the
outset with significant “pockets” of uncertainty and high levels of institutional complexity
that make them difficult to manage with standard tools. “First-of-their-kind” or “vanguard
projects” (Frederiksen and Davies, 2008; Brady and Davies, 2004; Laurila and Ahola, 2021),
such as EPR nuclear reactor projects currently under construction in France or Finland, can
easily be viewed as “megaprojects” (Lenfle and Loch, 2017), but also as “complex projects”
since they mix high uncertainties with well-known objectives and established core technolo-
gies. To label them “exploration projects” would however not make sense. Such projects, with
colossal stakes, resist fitting into the “ideal-types” forged by the contingent approach. Taking
them into account therefore calls for a better understanding of the way in which exploration
and exploitation are likely to entangle within the same project.
The co-existence of exploitation and exploration and the tensions that might result from
their juxtaposition meet the current interests of many researchers in the field of project stud-
ies (Geraldi and Söderlund, 2018). They call for a better understanding of the tensions and
paradoxes that characterize projects’ lives, be they organizational (e.g. between permanent or
enduring forms of organizing), temporal (e.g. between a short- or long-term temporal focus,
between different temporal norms or rhythms, etc.) or goal-related (e.g. between time econ-
omy and performance quality) (Raisch and Zimmermann, 2017; Slawinski and Bansal, 2017;
Braun and Lampel, 2020). These tensions are enacted by people’s actions (Geraldi et al., 2021)
as well as affecting them and thereafter the project’s trajectory and final success or failure.
 Exploration and exploitation in complex projects 129

Hence, gaining a deep understanding of how exploitation and exploration dynamics can entan-
gle within a project means adopting a situated approach to projects, attentive to practices and
their contexts (Geraldi and Söderlund, 2018). Such an approach, grounded in the tradition of
interactionist sociology and in recent developments in the field of process studies, uncovers
the tensions that fuel and arise from the simultaneous presence of exploitation and exploration
activities in the same project.

The Contribution of a Situated Approach of Projects to Analyse the Hybridization of

Exploration and Exploitation

This chapter is part of a renewal of the field of project studies (Geraldi and Söderlund, 2018).
More precisely, “project studies”, beyond the traditional field of project management, proceed
from a broadening of both the levels of analysis mobilized to study projects and the type of
research practised. This broadening is reflected in the evolution of a journal located at the heart
of the research field, IJPM: “Historically, the IJPM has had a firm grounding in engineering
management, construction management and project planning […]. Over the years, the journal
has become more rooted in social science and management/organization studies in a broader
sense” (Geraldi and Söderlund, 2018, 57). This is also evidenced by how “Cicmil et al. (2006)
plead for research on the ‘actuality’ of projects, arguing for a bottom-up, grounded approach
to PM theory building” (Lenfle, 2014, 921). This more grounded approach could give a better
account of the tensions or even paradoxes encountered in situ by the actors involved in the
projects’ life, which the engineering and rationalist tradition of project management has for a
long time kept out of its scope. Acknowledging and explaining these tensions would give more
substance to the call for a “move from deterministic to explanatory and non-deterministic
types of research” in project studies (Padalkar and Gopin’th’s, 2016, cited in Geraldi and
Söderlund, 2018). In particular, considering the exploitative or exploratory nature of projects
not as a fixed input that overdetermines the behaviour of actors, but as an emergent and nego-
tiated quality that can be subject to conflicting views and hybridization, would constitute a
further step towards non-deterministic research on projects. This would also be part of the
movement to bring the field of project management and general management theory research
closer together, as “project and general management research are increasingly being linked”
(Geraldi and Söderlund, 2018).
This convergence of research fields proceeds from the growing awareness that projects
cannot be studied without taking into account the organizational and institutional context in
which they are rooted. As put by Dille and Söderlund (2011, 481), “organizational processes
and structures are, to a large extent, affected by the organization’s institutional environments
and […] managerial actions are to a considerable extent directed towards the legitimization of
the organization’s purpose and actions by actors in its surroundings”.
The life of projects does not escape the injunctions of the environment, the power games
or the institutional logics that cross the organizations (Engwall, 2003) and generate tensions
and uncertainties for the individuals. There have been repeated calls within the field of project
management “for more fine-grained treatments of projects in their institutional context” in the
lineage of “earlier work by Engwall (2003), Kadefors (1995) and Grabher (2004)” (Dille and
Söderlund, 2011, 481).
These works converge towards a more nuanced vision of the projects, giving more room
to the plurality and indeterminacy of the finalities, to the logics of action and to the interests,
of which only a situated approach that would be attentive to multiplying the perspectives and
130 Handbook on innovation and project management

levels of analysis can give an accurate account. It also calls for a temporal lens, concerned
with understanding events and bifurcations in relation to long-term temporal dynamics (past
and future).
This attention is all the more critical in “megaprojects”, “complex” or “vanguard projects”,
which are often so-called inter-organizational or inter-institutional projects, defined as “a
particular kind of project that needs to respond multiple institutional affiliations” (Dille and
Söderlund, 2011). Nuclear projects are emblematic of the latter. To deepen our understanding
of such mega or complex projects and to show how they can be at the same time exploitative
and exploratory, we rely on an in-depth analysis of a flagship nuclear project of the last decade,
the so-called ASTRID project. Designed to be the first French “Generation IV” reactor, the
project has been halted in 2019 at the end of the basic design phase.2 The following section
describes the research setting and the methodology.

A QUALITATIVE STUDY OF THE ASTRID PROJECT

A Contextualized Approach to Projects

In line with the contextualized approach of projects, aimed at understanding the nature and
dynamics of “the social world of projects” (Geraldi and Söderlund, 2018, 60), we conducted a
longitudinal study of the ASTRID project from 2015 to 2021. Our methodology was qualita-
tive and interpretative (Gephart, 2004).
We collected evidence from different sources (individual and collective interviews and doc-
umentation). Data collection started in 2015 (three and a half years after ASTRID’s launch)
and continued through 2021 (about two years after ASTRID’s halt). We conducted 25 semi-
structured interviews, 23 of which took place during the course of the ASTRID’s project.
Thanks to our research programme,3 we had privileged access to key actors of the project
and were thus able – a rare thing for a nuclear reactor project – to follow the reactor’s design
process “in the making”. Our panel included mainly actors from the former Areva, but also
from EDF and IRSN (the French TSO). In 2021, we were also able to interview members of
the CEA.4 We thus gained a deep understanding of the project’s nature and dynamics and of
how it could differ depending on the role of the actors within the project or at its periphery.
Acknowledging the fact that “the focus on the project as the primary level of analysis is
relevant but no longer sufficient to understand the growing complexity of projects” (Geraldi
and Söderlund, 2018, 62), we articulated the micro, meso and macro levels of analysis. At
a micro level, we were attentive to the practices, assumptions, skills and careers of project
members and to the nature of relationships between project teams. At a meso level, we ques-
tioned inter-organizational relationships, notably the collaboration, coordination and govern-
ance mechanisms, in light of the conflicts and power relations. Finally, at the macro level, we
took into account the technopolitics (Hecht, 2014) in which ASTRID was embedded. This
meant analysing how technological solutions and political decisions have intertwined not only
at the time the project was taking place but also in a more distant past, in order to understand
how the ASTRID project (as a social organization and a technical infrastructure) has been
influenced by the long-term trajectory of nuclear infrastructures. From the outset, the issue of
how restarting a design activity after a long interruption affected knowledge and learning pro-
cesses was central to our study, hence our interest in the exploitation/exploration framework.
 Exploration and exploitation in complex projects 131

Replacing the ASTRID Project in Its Technopolitical Context

In many ways, France is an “extreme case” in the global energy landscape, since 69 per cent of
the electricity mix was nuclear in 2021. In 2022, France (via the semi-public company EDF)
operated 56 reactors, making it the most nuclearized country in the world in terms of electric-
ity production. The French civil nuclear sector is structured around a few major organizations:
EDF, Framatome/Orano (formerly Areva) and the CEA (the main R&D organization in the
French nuclear sector). To these industrial and research organizations were added in 2007 the
Nuclear Safety Authority (ASN), an independent authority that sets standards and monitors
the entire chain of activity to ensure the highest level of safety, and its Technical Support
Organisation (TSO) IRSN.
EDF is the leading electricity producer in Europe. For the most part, EDF’s reactors were
built in the 1970s, 1980s and early 1990s (Hecht, 2009). The replacement of this ageing
installed base has been the subject of much debate for several years, with the construction
of an EPR-type reactor in Flamanville (the first of its kind in France5) facing numerous set-
backs since 2007. Existing reactors as well as this expected new reactor are all based on the
same technology, originally developed by Westinghouse: pressurized water reactors (PWRs).
This technology represents about two-thirds of the world’s commercial reactors and 100 per
cent in France. However, France has long been a major player in the development of alterna-
tive technologies. In particular, it has been at the forefront of research and development in
sodium-cooled fast reactors (SFRs). For several decades, this technology has held out the hope
of drastically reducing uranium consumption and the production of nuclear waste (among
the main criticisms of mainstream established technologies). In parallel with the deployment
of PWRs by EDF, the CEA has actively engaged since the 1960s in research on a possible
symbiosis between PWRs and SFRs able to close the nuclear fuel cycle by partly reprocess-
ing spent fuel. Research and experimentation materialized in the development of Rapsodie
(40 MWth), Phénix (250 MWe) – co-operated from 1973 to 2010 by CEA and EDF – and
Superphénix (SPX, 1240 MWe). This quasi-industrial reactor built at Creys-Malville has had
a rocky history. Commissioned in 1984, it focused the attention of a then-burgeoning anti-
nuclear movement. Having encountered several highly publicized technical incidents, the
government decided to shut it down in 1998 (independently of any recommendation from the
safety authority). This decision put a brutal stop to the development of this technology.
In 2000, the SFR technology was revived by the GIF6 as one of the six technologies quali-
fied as Generation IV (the older PWRs being Generation II and the EPRs Generation III),
whose industrial deployment horizon was expected for the second half of the 21st century. In
2009, at a time when the industry was nurturing great hopes for a “nuclear renaissance” after
more than a decade of stagnation, the French government decided to revive sodium technol-
ogy by entrusting the CEA with the responsibility of a consortium whose aim was to build an
“industrial demonstrator” (Gauché, 2012) in 2020: ASTRID.

A Brief Description of the ASTRID Trajectory

The history of the ASTRID project is embedded in the French Act of 28 June 2006 on sustain-
able management of radioactive materials and wastes. The discourse of President Chirac who
announced the building of a French Generation IV prototype in 2020 is a major milestone
(Figure 6.1). The three key players of the French nuclear industry (CEA, EDF and Areva) then
132 Handbook on innovation and project management

Figure 6.1  Key dates and events of the ASTRID project

 Exploration and exploitation in complex projects 133

came together to jointly perform R&D studies to investigate innovative solutions for a future
SFR. In 2009, the ASTRID project was officially launched, with the French Government
entrusting CEA as the programme and project director with the design studies for the reac-
tor. In 2010, the project organization was set up. While CEA had a central position with the
“overall responsibility over the general architecture, the core and the fuel” (Gauché, 2012),
EDF and the former Areva were important partners from the beginning. EDF was in charge
of “specialized support to the owner and operability and safety studies” (Gauché, 2012) and
Areva was responsible for the design of the nuclear island. In 2011, 450 workers from five
industrial partners contributed to the project. Four years later, 650 people and 13 partners
were working on the project (Figure 6.2).
The conceptual design phase lasted from 2010 to 2015 and ended with the delivery of
a major report7 (CEA, 2015) to the public authorities. The Basic Design phase started in
January 2016 and was to continue until 2020. But by the end of 2017, the project underwent a
major turnaround after a project process review: the project objectives were revised to foster a
“design to cost” approach. This resulted in the abandonment of the initial 600 MWe prototype
in favour of a 150 MWe reactor project called NewASTRID. This downsizing aimed to strictly
reduce the estimated investment cost. For two years (2018–2019), the managers and engineers
worked hard to redesign this downscaled reactor. However, in August 2019, ten years after its
launch and after several changes of direction but also many R&D efforts undertaken by the
participants, the government finally decided to halt the project.

Source:   adapted from Varaine et al., 2017.

Figure 6.2  ASTRID industrial partners

134 Handbook on innovation and project management

With hindsight, the trajectory of the project is far from straightforward but eventful, marked
by dramatic turnarounds (Engwall and Westling, 2004) due as much to external crises as
to internal events. The next section describes the actors’ difficulties to define and share the
project’s raison d’être throughout its progress. It introduces the category of “hybrid project”
to capture this phenomenon and to label a project as being at the same time exploitative and
exploratory, with a distribution between exploitation and exploration domains likely to change
over time in unpredictable ways.

THE INTERTWINING OF EXPLOITATION AND EXPLORATION

WITHIN ONE PROJECT: LESSONS FROM THE ASTRID CASE STUDY

ASTRID as a Hybrid Project

In the nuclear industry, the exploration/exploitation dichotomy is not so clear-cut. Between

the low-power research reactor on the exploration side and the series of commercial/industrial
reactors on the exploitation side, there are many intermediaries such as “prototype reactors”
or “first-of-a-kind” (e.g. the French EPR).
In 2015, our interviews highlighted the difficulty for project participants to link clearly
the ASTRID project to an exploratory or an exploitative project and revealed its ambiguous
nature. ASTRID fitted into this “grey area” between experimental and mass-produced com-
mercial reactors. Those interviewed faced the same difficulty when it came to defining the
mission or the roles of ASTRID. Interestingly, managers from both Framatome and CEA used
the same expression (six years apart) to confirm our interpretation of ASTRID as being simul-
taneously an industrial prototype and an experimental reactor, saying that it was indeed trying
to “satisfy dad, mum, grandma, grandpa!” This expression highlighted the many (and often
conflicting) objectives of the ASTRID project. It also unveiled how much placing ASTRID in
a linear trajectory of technological progress was far from obvious to most of the interviewees.
From the very start, the actors were caught between two contradictory injunctions concern-
ing Astrid’s heritage and future. On one hand, the very short deadlines set to complete the
design (2020) and the initial vocation of the reactor as an “industrial demonstrator” argued
for reusing previous knowledge and technical solutions about SFR, thus for an “exploitative”
approach to the project. According to this approach, it made perfect sense to reuse previous
SFRs’ legacy (notably SPX) to rationalize the project. Conversely, it was not consistent with
the introduction of too many innovations and breakthrough solutions, which could jeopardize
the respect of costs and delays. On the other hand, ASTRID’s predecessors (SPX particularly)
were a cumbersome legacy, at the social and political levels. The shutdown of the reactor was
a trauma for the engineers and researchers who designed, built or operated sodium reactors. To
them, SPX was a “success” that was unjustly denied and a “treasure” (in terms of knowledge in
research and experimentation) they feared would be lost. Recovering this valuable knowledge
before it was lost forever was the tacit agenda of ASTRID’s promoters. At the same time, they
knew that no politician would support a reactor that looked like a new SPX. This was forcing
project designers to walk a tightrope from the beginning, as a CEA manager told us in 2021:

We [had] to disavow the founding father Superphénix … while recovering all the knowledge to be
able to do something new and with an industrial objective. So we can see to what extent the system
[was] constrained.
 Exploration and exploitation in complex projects 135

Its cumbersome and controversial technical heritage made the relationship between ASTRID
and previous French SFRs very complicated. Hence the need to introduce major innovations
very early on, which would clearly differentiate ASTRID from Superphénix in the eyes of
public investors and public opinion.

In this perspective, CEA’s rhetoric was very simple: “Why do we develop ASTRID? We do because
there are new facts that are worth reopening the case.” We have a new reactor core (it has not been
completely proven but it’s globally true). There is a technological breakthrough in terms of core
operation between ASTRID and Superphénix. This is fundamental! We even give hope that maybe
we won’t have any serious accidents.
(Framatome, 2016)

Before the official launch of the project, the three main players (under the leadership of the
CEA) agreed on the exploration of innovative solutions, notably the nuclear core. In doing so,
the project came close to an exploratory project. From the beginning thus, the project was torn
between exploitation and exploration and could not be labelled as either purely exploratory or
exploitative. Hence our labelling as “hybrid”.
This hybridity had very concrete consequences and was reflected in the very early organi-
zational and technical framing of the project, notably the consortium and the reactor size.
If the project organization involved the three main French nuclear institutions, CEA led the
project while Framatome and EDF performed support functions. At first glance, entrusting the
management of a large-scale “industrial” project to CEA rather than to Framatome or EDF
(which were more used to this function) could seem paradoxical. This choice, which gave
rise to internal controversies, could yet be explained by the emphasis on innovation, the CEA
being historically the organization in the sector most oriented towards experimentation and
research. The initial choice of reactor size (600 MWe) also sent a signal that could be inter-
preted in different ways. It was half the maximum power of Superphénix, which could rule out
the idea that ASTRID was the continuation of the “old” technology at a more industrial stage.
However, 600 MWe is already a large size in the nuclear industry landscape, which implies the
need to produce a lot of electricity in order to amortize the investment cost, and kept ASTRID
away from the category of “experimental” reactors. 600 MWe was, literally, a compromise
between opposing injunctions, placing ASTRID halfway between well-identified categories
of projects to which the actors could have referred. As the project members acknowledged,
the initial design choices for ASTRID were made in an attempt to reconcile contradictory
demands and expectations.
The hybrid nature of the ASTRID project, combining continuity and discontinuity, routine
and innovations, exploration and exploitation, is not really surprising for such a large pro-
ject. It comes close to “complex projects” (Brady and Davies, 2016) that combine “routine”
modules and exploratory subsets, calling for adapting management modes to the different
“sub-projects”. This complexity was recurring in the discourse of the project stakeholders,
including the managers. What is more surprising about the trajectory of ASTRID is that its
exploratory dimension tended to reinforce over time.

ASTRID’s Identity: A Permanent Construction?

The PM literature generally predicts that the degree of freedom of the project, whether
routine or exploratory, decreases over time as the actors have converged on options and
as the project gets closer to its final deadlines (Midler, 1995). ASTRID has followed a
136 Handbook on innovation and project management

reverse trajectory, with a tendency towards more exploration as the project was unfold-
ing, which reinforced the hybridity and blurred the ultimate purpose and mission of the
ASTRID project. Retrospectively, two main episodes have interfered with its trajectory:
(1) the decision of CEA to study a breakthrough system in parallel with the classical one in
2015; and (2) the move to a design-to-cost approach followed by the shift to NewASTRID
in 2017–2018.
Before the launch of the project, the actors agreed on specific project domains (notably the
nuclear core), which were worth exploring innovative solutions that we labelled as “deliberate
exploration” (Tillement et al., 2019). In spite of these exploratory knowledge domains within
the project, the project members considered it as rather exploitative at the macro level:

Let’s be clear, there are no breakthrough technological innovations, except perhaps the core […] or
the power conversion system (where we hesitate between steam and gas), that’s really innovative,
otherwise […] there are no breakthrough innovations […] in the sense that you create a complete new
product etc. This is not the case. […] What is the main argument [for focusing our studies on sodium
technology]? It’s to say: if we want to develop a new nuclear technology other than sodium, the costs
would be exorbitant … we’re not going to revolutionise the design, whereas the interest of sodium
technology is precisely that we benefit from experience and don’t have to reinvent everything. […]
So no, there are no breakthrough innovations.
(Framatome, 2015)

But as the project unfolded, project managers have pushed for breakthrough solutions to be
studied, adding “emerging exploration”, i.e. the emergence of “a novel technological solution
that was not envisioned at the beginning of the project and for which exploration learning
in a specific knowledge domain is required” (Tillement et al., 2019, 547). Mid-2016, things
seemed to be coming to a head. Tensions were emerging within the consortium around the
CEA’s stated intention to explore the possibility of a gas power conversion system (PCS)
instead of the classical steam PCS that had been used on previous SFRs and that had initially
been chosen. CEA thus proposed to its partners to take two years to explore this solution
and its consequences for the whole project, with a view to making a decision on whether or
not to integrate this technology into the detailed design of ASTRID that was to start at the
end of 2017. This idea was met with scepticism by the two main other nuclear actors (EDF
in particular) due to its radical novelty and the inevitable impact of such an innovation on
the budget:

EDF doesn’t believe in it! It’s a machine that’s going to be much more expensive, with a lower yield,
it’s not viable!
(Framatome, 2015)

This decision had a major impact on the organizational and temporal framing of the pro-
ject: important partners admitted that they were destabilized by this technical choice and the
requirement to switch to a typically exploratory mode of operation:

CEA […] asked to make a comparison at the end of 2017 between this gas version and the steam
one, without explaining how this technical and economic comparison should be made … there are
no criteria, no guideline defined today.
(Framatome, 2016)

As the project steering practices were very different depending on the exploitative or explora-
tory nature of the project, the switch of the project to the exploratory side made the usual
 Exploration and exploitation in complex projects 137

steering mechanisms suddenly superfluous. Actors thus faced the “floating” atmosphere and
the “strangeness” that characterizes most exploratory projects according to Lenfle (2016), a
strangeness even more accentuated since, officially, the project must follow its initial course.
An engineer from Framatome explained in 2016:

We have difficulty knowing how we should organize our studies in a very concrete way, what path
we should give them. […] We do many prospective studies, very high-flying studies and at the same
time we are still trapped in a work program that was initially called the “basic design” phase, 2016–
2019, it was anchored as a study phase where we start a detailed design in 2018–2019. Today, given
the state we are in, the questions we still have, we can clearly not make a detailed design at the begin-
ning of 2018 … in terms of technical maturity, especially on gas, but not only, we are still asking
ourselves real questions about the economic viability of the project.

In the last two years of the project, the exploratory dimension was finally more clearly assumed
by the programme management, with the passage to the so-called “NewASTRID” project,
corresponding to a reduction of the planned power of the reactor to 150 MW.

We were redoing a Safety Option File with a gas PCS! And then we finished the basic design, we
had to move on to Detailed Design. So we hold a big symposium between all the Astrid project
specialists over two days in 2016! And this is where we said: “we don’t fit into the costs that were
given to us as the maximum investment cost and we will have to review the total design of the reac-
tor with a ‘design to cost’ approach” … so we had a mix between … there was no discouragement,
we bounced back! It’s really bouncing back on a new concept and we completely changed the way
we worked when we have switched to “design to cost” … we started to put an Agile management in
the Astrid project team … with the Scrum method. We said to all the partners: “we no longer pilot
by the specifications as we do in a project, we only pilot by the cost and only the cost interests us”.
We no longer had any taboos or constraints (of power, of innovation), we had to get out in time (at
the end of 2018) a design to cost project that would allow us to show a reactor. And as this reactor
was reduced to 150 MWe, it was not semi-industrial as the 600 MWe, it was a small reactor like our
little Phenix, which we had lost.
(CEA, 2021)

Again, this turnaround had important effects on the project organization. In terms of schedule
first: the detailed design phase was abandoned, replaced by a new round of basic design, and
the construction was no longer considered a serious option. On a project management level,
this downsizing became a pretext for testing new methods and tools, such as Scrum. Finally,
it had effects on the consortium. EDF in particular officially left the project.
More importantly, in both cases, the turnarounds had major implications on the purpose,
mission and temporal framing of ASTRID. Figure 6.3 shows the evolution of how project
participants presented and conceptualized the ASTRID mission and how this coincides with
an increasingly distant horizon of industrialization.
Emerging exploration resulted in difficulty for most actors to understand the mission of the
project, i.e. what ASTRID was really for:

There is a question of substance, which is occasionally asked by people but remains unclear: what
exactly is ASTRID for? Between the experimental vision that some people of CEA clearly have (for
them, it would be a magnificent toy; it would be beautiful!) and the industrial demonstrator vision,
the path is narrow.
(Framatome, 2016)

The downsizing of ASTRID was an even sharper turnaround as it modified drastically the
project’s raison d’être. Its purpose was no longer to be an “industrial demonstrator”, but
 2009 (Rouault et al., FR09; Camarcat et al., FR09)

"prototype" 2012 (rapport CEA)

"precursor of a first of 2013 (Le Coz et al., FR13)
a kind of the "Industrial technology 2015 (CEA official report; Devictor, ESNII+)
commercial reactor" demonstrator" (2013) 2016 (Vasile, IAEA)
"industrial prototype« "technological integration prototype "Technological 2017, 2018 (Devictor, SFEN; Rodriguez, GIF)
enabling the demonstration of safety demonstration reactor (a
and operation on an industrial scale step before a First Of A
ASTRID "is a technological 2018, 2019
of 4th generation RNR-Na" (2012) Kind)" demonstrator and is not a
Construction and "Astrid must therefore demonstrate "technological First Of A Kind of a
industrial deployment on an industrial scale the validity, by demonstrator« New ASTRID
commercial reactor".

138
timeframe: 2020, 2040 qualifying them, of the innovative Tool for experimentation and
options in the areas of progress qualification
identified, particularly safety and "little Phénix«
operability." (2012) Construction and industrial
deployment timeframe:
2030, Mid-21st century

No construction or industrial
envisioned before the 2nd
half of the 21st century

Figure 6.3  Evolution of ASTRID’s goals and timeframes

 Exploration and exploitation in complex projects 139

rather to serve as a basis for the qualification of certain materials and for technological
experiments:

We kept a certain logic in our approach to move towards a power reactor while doing low power
because we changed the functions of the low power reactor. It was going to be much more of an
experimental reactor in support of the qualification of components.
(CEA, 2021)

ASTRID 150 […] was an experimental prototype. The aim […] was to validate the innovations for
the future. So we changed the role a little.
(CEA, 2021)

The “change of function” or “role” of the project itself was clearly assumed, confirming that
what ASTRID was made for had never been really decided, shared or stabilized. This leads
us to emphasize what we propose to call the “project identity”. Far from referring only to the
goals and objectives of the project as defined ex-ante at its outset and stable during its course,
this concept rather refers to the collective process of (re)defining the identity of the project as
a whole. The case of ASTRID shows that it is all the more important since the distribution
between exploration and exploitation activities evolved in time in an unpredictable way, as
evidenced by the project actors’ surprise in the face of the turnarounds. This confronted the
project participants with similar tensions to the ones that managers often experience at the
firm level in front of unforeseeable uncertainties.

Hybridization in the Face of Project Stakeholders’ Agenda and Power Relationships

These tensions throughout the project’s course were mirrored in the ambiguity around the
project identity at the stakeholders’ level. This is key to explaining ASTRID’s astonishing
trajectory. Initially (2009), ASTRID was the result of a three-way marriage between the major
players of the nuclear “French team” (Framatome). The engagement of these three actors was
important as a guarantee of the robustness of the project.
CEA was aware of the unusual character (in the eyes of the public and the other two “giants”)
of their position as project leader. They knew that they had to devote significant efforts to
build up their legitimacy in that function. This was reflected, in part, by the over-investment
of the project team (at least from 2016) in the tools and techniques of classical rationalized
project management (Reverdy, 2021) and the insistence of CEA managers on that point:

Technically it was very well organised! Extremely well organised! There was a very strong dynamic,
um … the project was rather … in good hands, it was progressing well, technically the people who
were steering it were really at the right level.
(CEA, 2021)

This contrasted with the statements of Areva’s engineers, who confessed to being puzzled by
the way the project was managed and governed. From the outset, the relationships were tense,
notably between EDF and CEA (a lot less with Areva).

The innovative proposal on the core was really backed by the project, so it became the Astrid’s
reference core very quickly. But still, we had to face enormous opposition; EDF was very opposed,
it fought a trench war for two years in terms of R&D because it did not want the CEA to lead this
innovation! For obscure reasons!
(CEA, 2021)
140 Handbook on innovation and project management

CEA was constantly navigating on a ridge, torn between its internal teams, who were push-
ing for innovation, and Framatome and EDF, who defended “classic”, well-known technical
solutions. From the start, the project’s trajectory was affected by the complexity of mak-
ing compromises between irreconcilable imperatives. Lacking a clear and shared backbone
allowing the actors to make sense of the whole project and coordinate their actions, the project
was exposed to becoming a playground for tactical behaviours and choices on the part of the
institutions involved.

We were always on a crest line! Do we really stick to Real Engineering and say: “OK, I have
Superphénix, so I’ll do the same thing again, that’s it” (which we could no longer do because safety
was evolving and things we did twenty years ago were no longer acceptable now), or do I switch to:
“look, we’re letting go of the bridles, we’re pushing innovations anyway, we’re going to explode the
cost, we’re going to reduce the TRL and we’re going to do something that will be unfeasible”! And
we were always on this ridge all the time, on the whole Astrid project, [oscillating between] “well,
we’re keen to carry on because it’s a major innovation, let’s see where it takes us”, and sticking to
something more … realistic. So we get yelled at from both sides! The CEA R&D people yelled
at us, saying “every time I propose something innovative, you don’t take it, you just have to do
Superphénix” and the engineering people said “stop dreaming with your stuff, we’ll never be able to
manage it or we’ll be two years behind in the studies!” So we were always torn between these two
poles, doing innovation or real engineering.
(CEA, 2021)

Framatome and EDF followed a mostly exploitative logic, thus pleading for many existing
solutions, which ASTRID would make it possible to qualify on an almost industrial scale. The
tensions between the exploitative and exploratory logics point to inter-temporal tensions, the
temporalities associated with ASTRID’s lifecycle being key in that story.

CEA proposed quite a few innovations [but] we found ourselves – this is a bit of a standard for the
ASTRID project – between a short-term vision and a more innovative vision! And if certain innova-
tive choices had been made perhaps earlier on, we would have had time to develop them.
(CEA, 2021)

ASTRID’s trajectory was punctuated by “self-legitimizing” decisions that were not dictated
by consideration of the objective interest of the project, but rather by an implicit agenda of
reinforcing the project participants’ position and legitimacy. The first decision was that of the
government to set a very short deadline (start construction in 2020). Consequently, the use of
sodium technology became almost compulsory.

Given the date, the technology was already chosen: a sodium reactor! Given the maturity of other
concepts, if something was to be done in 2020, it could only be a sodium reactor, nothing else!
(CEA, 2021)

This aligned with the tacit agenda of CEA to preserve the skills developed on SFR by launch-
ing a new project almost concomitantly with the closure of Phénix:

So it restarts all at once, trying to recover the definitive loss of competences that was going to happen
very quickly because the Phénix reactor was going to stop definitively in 2009! It was scheduled to
shut down! So […] we had to start again on something otherwise everything would collapse and we
would lose our skills!
(CEA, 2021)
 Exploration and exploitation in complex projects 141

Such advocacy-driven choices (in this case, reusing and preserving an already acquired
skill set) are reminiscent of the “garbage can” decision-making model (Cohen et al., 1972),
in which solutions generally pre-exist the questions posed and frame the process of problem
formulation. In some ways, the lack of a clear identity for ASTRID inevitably led to this
type of situation. We can interpret in a similar way the decision to impose the exploration
of the gas PCS. This choice, beyond its potential intrinsic interest in terms of R&D, can
be understood as allowing the CEA to push the ASTRID project towards a more explora-
tory identity, by introducing, on a major component, a solution with a very high degree of
unknown, which would definitively remove the “spectre” of Superphénix in the eyes of the
politicians:

CEA’s speech is very simple: “why do we make Astrid? Because this is definitely no more
Superphénix! It is not the same core […] and we have no more water.” So you say that to politicians.
(Framatome, 2015)

The very short deadlines, initially favourable to CEA’s choice of sodium, gave an obvious
argument to Framatome and EDF to push for a more rationalized approach to project manage-
ment. Then pushing the project towards more exploration was a way for the CEA to regain
legitimacy as a project leader and an industrial architect. This is how Framatome partly
explained the stance of the CEA, eager to bring the project back to familiar territory:

Basically, the architect designer was rather an organization specialized in R&D. So obviously the
technological object “gas cycle” is much more fun than the steam turbine that we buy at Alstom from
the catalogue!
(Framatome, 2016)

CEA’s partners perceived it as a research organization rather than an industrial actor. One
CEA interviewee lamented this persistent (and in his view largely unfair) image:

In the end, it’s always the same battle: Framatome always says: “CEA people are sweet dreamers;
they only do R&D and don’t know how to manage a project!”
(CEA, 2021)

The transition to NewASTRID, with a power of 150 MWe, confirmed the end of ASTRID as
an “industrial demonstrator”. Although brutal for most engineers, it had the merit of clarify-
ing the project’s identity by definitively siding with exploration. According to a member of the
CEA interviewed:

We were back in a comfort zone; […] we were back in a [normal] logic! We were no longer on the
crest path, this tool [NewASTRID] was entirely dedicated to validation, to qualification to help with
future power reactors, and it was much easier to work because we were no longer oscillating back
and forth between two options.
(CEA, 2021)

Even if it cannot alone explain the halt of ASTRID, this enduring ambiguity of the project’s
identity, and the tensions that resulted from it, made the project vulnerable to internal tensions
but also to external pressures. Officially, the halt of the ASTRID programme was justified by
the lower-than-expected tensions in the uranium market, making a less fuel-intensive technol-
ogy less needed. The lack of alignment of the project stakeholders around a common vision,
142 Handbook on innovation and project management

by never allowing a shared purpose and identity to emerge, deprived ASTRID of a capacity to
resist a reversal of the external situation. Nevertheless, it would be wrong to consider ASTRID
as a failure, insofar as the ten years of design work carried out have contributed to maintaining
and developing knowledge and innovative design tools and practices that could be reused for
future projects, whether in the field of sodium reactors or in another field.

DISCUSSION
The observed trajectory of the ASTRID project did not follow the classic sequential course
predicted in the traditional project management literature and prescribed by project managers
(where the detailed design follows the basic design which follows the preconceptual design),
nor did it evolve towards more exploitative objectives. Quite the opposite. It rather followed
a whirlwind trajectory (Akrich et al., 2002), which cannot be attributed to a major external
crisis (Fukushima does not solely explain ASTRID’s halt) nor to major conflicts between
project partners. The turnarounds rather resulted from a series of gradual and quiet decisions
at different levels (Engwall and Westling, 2004), from public authorities to programme and
project management, which made it more and more difficult for project members to align
on a shared interpretation of the ASTRID’s mission, and thus to agree on the best technical
options and project organization. Even if the ASTRID project can be seen as an extreme and
atypical case, hence the results as hardly generalizable, we believe it highlights factors that are
largely invisible in more ordinary projects or circumstances. This is especially true given our
situated and longitudinal research approach. The first important contribution is the notion of
“project identity” itself, which stems from our observations of the dynamic entanglement of
exploration and exploitation within a single project. The second contribution, both theoretical
and practical, focuses on the significance of “being nuclear” (Hecht, 2014) for a project and
questions how the “nuclearity” of a project may affect its trajectory and management.

The Concept of “Project Identity”

Over the years, the PM literature has proposed many projects’ typologies, such as “megapro-
jects” (Flyvbjerg, 2014), “routine” or “exploratory projects” (Lenfle, 2014) or more recently
“complex” (Brady and Davies, 2014) or “vanguard projects” (Laurila and Ahola, 2021).
Apart from identifying the main traits of such or such type of project, these categories help
to explain why certain types of project encounter systematically the same pitfalls, to better
define the relations between a given type of project and risks or uncertainties, or to pro-
pose adapted ways of managing and steering the project depending on its type. The study
of ASTRID led to the construction of a new category: “hybrid projects”. This category was
meant initially to capture how a single project could combine exploitation and exploration
goals, the distribution and balance of which were evolving over time in unforeseen and unpre-
dictable ways. But in the end, the main contribution of this case study is to draw our attention
to the notion of “project identity”, since hybridity ultimately reflects the absence of a stable
and shared identity. “Project identity” is a conceptual label, which is grounded in data reality
(Corbin and Strauss, 1990) and consistent with a processual view of organizational identity
(Schultz, 2016). When project management scholars take care to typify different categories of
projects, they are (indirectly) talking about the identity of a project. Often, however (though
 Exploration and exploitation in complex projects 143

this should be nuanced with the emergence of a more grounded and processual approach to
projects), they implicitly assume that this identity is well known, well understood and shared
among project managers and stakeholders, from the project launch to its completion. The
ASTRID case forcefully reveals the extent to which a project identity is permanently con-
structed and shaped, through negotiations and struggles between the members of the project
themselves but also external stakeholders (notably the political actors and the public authori-
ties). It highlights the potentially disputed nature of a project’s identity. The goals, status and
fundamental parameters of the project such as technical options, the project organization or
the project schedule can give rise to contradictory interpretations, well after its early framing
phase. Even more problematically, this can lead to attempts by some actors to redefine the
mission of the project as a whole. This echoes the work of Engwall and Westling (2004) who
underline and discuss the importance of enacting on a collective level “one conceptualisation
of the project”, i.e. a shared and legitimate definition of the mission and content of the project,
in order to be able to manage it. Adopting a methodology very close to ours (a longitudinal
and in-depth qualitative case study), they describe a project in which the actors succeed (after
a peripety) in agreeing on one conceptualization. It then became possible for project partici-
pants to devote their efforts to problem-solving (rather than problem-setting) and to change
“the project’s mode from one dominated by ambiguity to one dominated by uncertainty”
(Engwall and Westling, 2004, 1570). In our case, ambiguity was on the contrary reinforced
over time, which project participants expressed well when explaining that they were not really
able to understand the sense of some technical decisions and more globally what “ASTRID
was really for”.
Two important implications follow from this result. Firstly, this confirms the importance
for project management to put in place the organizational processes and governance mecha-
nisms that enable project stakeholders to collectively (re)enact a shared and legitimate pro-
ject identity, which aligns with its dominantly exploitative, exploratory or hybrid nature.
The identity of a project is the result of an alignment work, which is very complex since
it must be carried out simultaneously at several levels: between the main project partners,
between the different phases of the project and between the project and its environment
(Tillement and Garcias, 2021). To our knowledge, this alignment is little addressed in the
PM literature, as research on projects generally treats the identity of the project as an almost
invisible input.
Secondly, our research highlights the extent to which “project identity” is a temporal con-
cept. Obviously, the project identity (as the professional identity) is never fixed once and for
all. Following the famous words of Engwall (2003), “no project is an island”, no project is
“off-the-ground” either. “Project practices relate to long-term institutions” (Engwall, 2003)
and organizations, which embed histories and memories of humans and non-humans, of tech-
nical objects and social organizations. Our findings show well how much ASTRID’s distant
and near past and future have affected the choices, including the most technical ones, and
finally hindered the possibility of constructing a common narrative about the purpose of the
project, its usefulness and the place it was called upon to occupy in the long term of nuclear
history. In the absence of this shared narrative, the project could only whirl around, becoming
more and more chimeric. This confirms that “not only is the context created for and around
projects a key success factor, but it also largely determines how projects are done, and their
impact and legacy” (Geraldi and Söderlund, 2018, 62). We believe this is all the more true in
the case of nuclear projects.
144 Handbook on innovation and project management

What “Being Nuclear” Means for a Project

“Megaprojects” are widely documented in the literature since Flyvbjerg’s seminal work,
which constitutes a very popular framework to analyse the “pathologies” of large projects. In
many respects, ASTRID has characteristics that place it in the category of megaprojects: its
gigantic size, the multiplicity of stakeholders, its eminently political dimension, the impera-
tive need to convince public investors and the very ambitious nature of the initial plans in
terms of budget and schedule. By adopting this view, one could be led to conclude that the
explanation for ASTRID’s trajectory (and its final stop) lies in the “disaster gene” inherent to
most megaprojects according to Flyvbjerg (2014). However, recent research has pointed out
the limitations of this approach in the case of nuclear megaprojects, which require, more than
any other, “a vital contextualization” (Lehtonen, 2021). By this, Lehtonen refers to the neces-
sity for nuclear projects to align “the various interests of the involved key stakeholders and in
ensuring the compatibility of these projects with the material and institutional environment
that characterizes the modern Western society” (Lehtonen, 2021, 1348). Unlike emblematic
megaprojects such as the Sydney Opera House, or even the Channel Tunnel, nuclear megapro-
jects only makes sense if they are not isolated (or “one-shot”) projects. In order to be “success-
ful”, nuclear megaprojects must be part of a trajectory, where a new project is simultaneously
consistent with its technological heritage within a family of previous projects and the projec-
tion towards a desirable future. In this condition, it becomes possible to draw the lessons
from previous projects so as not to be in a perpetual “blank page” regime (which would be
economically unsustainable) while providing innovations compatible with the project’s mis-
sion and environment. In particular, any setbacks encountered (and classically so) on the first
of a series can benefit, in a logic of learning and continuous improvement, the “nth-of-a-kind”.
Their “success” thus depends on their ability to “amortize” the cost of the inevitable explora-
tions and errors of the first project, thanks to economies of scale, learning and repetition.
In addition (or in relation) to the difficulty in constructing a shared project identity, one of
the explanations for the halting of ASTRID probably lies in the impossibility for its promoters
and designers to align both these efforts of capitalization and projection. In spite of the many
“lessons learned”, they did not succeed in aligning the stakes and interests of ASTRID with
those of its broader environment (Geraldi and Söderlund, 2018).
We believe that this difficulty goes far beyond the framework of ASTRID and concerns the
majority of nuclear projects. The nuclear industry is full of hybrid projects, of the “first-of-
a-kind” type, that capitalize on existing knowledge while introducing exploratory ambitions.
These projects are particularly dependent (and this is probably not the case for all megapro-
jects) on the alignment of their own local infrastructure with the global nuclear infrastruc-
ture and on the associated technopolitical dynamics (Tillement and Garcias, 2021). They
require constant and dynamic alignment work in order to adapt in the face of the internal
and external contingencies that punctuate the projects’ life. This is all the more important
because of another characteristic of nuclear projects, their very long timeframes, of the order
of decades, which far exceed the time of political decisions. This long time span is combined
with the very strong internal inertia of these projects, whose initial choices prove to be very
structured, often irreversible or very difficult to reverse, of which the French EPR is a blatant
example.
Nuclear projects thus require being supported and positioned in a long-term vision and
strategy, both by their managers and the government. The absence (or the slightest presence)
 Exploration and exploitation in complex projects 145

of a state capable of playing the role of both arbitrator and strategy-maker (identified as one
of the reasons for the success of the Generation II nuclear programme) for more than two
decades has undoubtedly been detrimental to the French nuclear industry and its projects
(ASTRID but also the EPR). This contributed to the growing ambiguity faced by the project
participants and to the emergence of tensions between them, which, in the absence of a rec-
ognized and legitimate arbiter, persisted. Major issues regarding electricity production, fol-
lowing the Ukraine war, have marked 2022, forcing the French government to make decisions
and finally offer a long-term vision to the nuclear sector. ASTRID may have arrived too soon,
weakening or undermining the CEA’s great plan to safeguard, through practice, knowledge
that was considered valuable and built up in the long-term, as one project member (CEA)
sadly concluded:

Generation IV reactors … the 4th generation is postponed to the end of the century … ASTRID
arrived too soon! Like Concorde. That’s how it is with technical choices, it’s always complicated [to
know] when to go ahead or not […] there is no strategy on GenIV [now]. We’re sitting on our treas-
ure, waiting for it to be worthless, and then we’ll say [deep sigh].

In the coming years, it will be very interesting to observe if and how the nuclear industry can
once again become a major and legitimate actor in the face of the major challenges ahead.
Undoubtedly, its legitimacy and its future depend on its ability to carry out hybrid projects.

CONCLUSION

This chapter analysed the ASTRID project not as a static object but rather as embedded in a
temporal trajectory influenced both by internal processes and project members’ actions and
by external forces related to its environment. We showed that a project can combine both
exploratory and exploitative features and that the distribution and balance between explora-
tory and exploitative activities may change over time in an unpredictable way. As the project
unfolds, new radically innovative knowledge domains or activities emerge, making the project
increasingly exploratory. To make things even more complex, these emerging exploratory
activities do not necessarily come to replace previous ones (either exploitative or exploratory)
but can co-exist with them for some time. The resulting trajectory is far from linear but rather
a whirlwind (Akrich et al., 2002). This opens major challenges for managing such “hybrid
projects”. Among them is the possibility for these projects to face increased uncertainties and
ambiguities associated with complexity and hybridity: if not perceived and monitored, the risk
is blurring the goals, tasks and even the project’s raison d’être.

ACKNOWLEDGEMENTS

We would like to thank the ANR (French National Research Agency) and the Investissement
d’Avenir programme that funded the AGORAS research project in which this study has been
carried out (Grant ANR-11-RSNR-0001). For their helpful comments and advice, we want
to express our gratitude to the editors, and especially to our colleagues Sylvain Lenfle and
Andrew Davies. Finally, a special and huge thank you goes to our informants from Framatome
and CEA for their help, openness, reflexivity and patience.
146 Handbook on innovation and project management

NOTES
1. Advanced Sodium Technological Reactor for Industrial Demonstration.
2. This study has already resulted in two journal publications (Tillement et al., 2019; Tillement and
Garcias, 2021). Readers who wish to know more about the methodology used (including the data
collected) can refer to these papers. In addition, following these publications, three interviews
were conducted with two technical directors of the project from the CEA (in June/July 2021), who
wished to react to the previous articles. These interviews allowed us to obtain additional informa-
tion that was particularly useful for a more exhaustive vision of the project’s trajectory.
3. This work was supported by the ANR and Investissement d’Avenir programme through the
AGORAS project (Grant ANR-11-RSNR-0001). Ex-Areva and IRSN were partners in this
project.
4. Commission for Atomic Energy and Alternative Energy.
5. The Olkiluoto EPR in Finland has started in March 2022 and two are operated in China.
6. Generation IV International Forum: launched in 2000 by the American DOE, it gathered
12 countries (including France) to renew and stimulate research on future nuclear technologies
worldwide.
7. This dossier includes notably “the safety option report for the water / steam power conversion
cycle, the design choices justification, the first systems and components technical specifications,
ASTRID’s preliminary qualification plans for critical components, a preliminary ASTRID Cost
estimation, preliminary Planning for implementation” (Varaine et al., 2017).

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7. Innovation projects in a global world: bridging
global innovation management and project
management
Christophe Midler and Sihem BenMahmoud-Jouini

INTRODUCTION

The globalization of projects is not a new topic in project management literature. It has been
mainly addressed from the perspectives of resource diversity and geographical distribution.
Indeed, definitions of global projects emphasize team members working in many locations
across country borders dispersed geographically (Aaltonen et al., 2008), belonging to differ-
ent national systems separated by geographical and potentially significant cultural and insti-
tutional distances (Ainamo et al., 2010; Aarseth et al., 2014) associated with language as well
as time zone differences (Binder, 2007). Therefore, the research focus has been mainly on
managing the project itself, i.e. its complexity (Aarseth et al., 2013; Yang et al., 2015), mul-
ticultural teams (Bredillet et al., 2010; Henderson et al., 2018; Chevrier, 2013), geographic
distribution (Reed and Knight, 2010; Hosseini and Chileshe, 2013), procurement (Tracey
and Neuhaus, 2013; Kardes et al., 2013), stakeholders (Aaltonen et al., 2008; Aaltonen and
Sivonen, 2009), etc., rather than the relationships between the projects and the strategy or the
organization of the parent firms.
This chapter addresses these relationships and more specifically, according to the innova-
tion focus of the book, the relationships between global innovation projects (GIPs) and the
global innovation management (GIM) of multinational corporations (MNCs). We will focus
on global projects with significant innovation content and investigate how they fit and gener-
ate the global innovation strategies of the firms involved. Indeed, these relationships between
GIPs and GIM of MNCs deserve to be studied for theoretical as well as empirical motivations.
On one hand, the increasing trend of projectification of the firms (Midler, 1995; Schoper
et al., 2018) emphasizes the necessity to further study the link between temporary and per-
manent organizations (Bakker et al., 2016) which has been mainly studied through project
portfolios (Cleland and Gareis, 2006; Binder, 2016; Chiesa, 2000) or resources allocation
(Bredin and Söderlund, 2011).
On the other hand, the internationalization of companies has been growing continuously
through the expansion of markets as well as resources (globalization of R&D, etc.). However,
the execution of global innovation projects as well as the management of global value chains
by MNCs still raise critical issues.
Regarding resource allocation, project-based organizations (PBOs), project-supported
organizations (PSOs) or project-networked organizations (PNOs) (Lundin et al., 2015) share
a common characteristic or issue with MNCs, i.e. sharing tangible or intangible assets across
separate units. Indeed, an MNC is composed of a network of units or subsidiaries that gen-
erate new knowledge diffused through intra-firm cooperation and community-stimulating

149
150 Handbook on innovation and project management

innovation within the overall MNC (Birkinshaw and Lingblad, 2005, Kacpercyzk et al., 2015;
Hu et al., 2017). Knott and Turner (2019) argue that the headquarters of an MNC can create
value by favouring inter-subsidiaries dynamics as in the case of inter-project organizational
learning (Brady and Davis, 2004; Midler, 2013).
However, both streams of research, i.e. global innovation project management and global
innovation management, have developed independently. We argue that bridging GIM which
focuses on the company level (its strategy and organization) and GIPs which focus on the
project level is potentially fruitful. Indeed, the innovation strategy of a firm is mainly imple-
mented through projects (e.g. NPD projects, etc.) and reciprocally, innovation projects play an
important role in the definition of the firm’s innovation strategy.
In this chapter, we will start by highlighting the issues raised by the management of inno-
vation by MNCs and the impact on global innovation projects. Indeed, the globalization of
innovation management is a growing phenomenon (Ben Mahmoud-Jouini et al., 2015) that
impacts the innovation strategies of firms (Meyer et al., 2011) and their organizational dynam-
ics by inducing a more international R&D footprint (Von Zedwitch and Gassman, 2002) and
resulting in new roles assigned to subsidiaries, as well as to headquarters and corporate func-
tions. Literature has highlighted several models, i.e. transnational and meta-national models
(Bartlett and Ghoshal, 1989; Doz et al., 2001) corresponding to specific innovation processes.
One can assume that this phenomenon will have an important impact as well on global inno-
vation projects.
Then we will address global innovation projects, i.e. the empirical space in which MNCs’
global strategies and processes are executed. It is therefore through their analysis that one can
enlighten the scope and obstacles of innovation processes within MNCs and understand and
detail notions such as “reverse innovation”, for example. Furthermore, projects are a key com-
ponent of organizational learning in firms. It is therefore through their analysis that we can
understand the dynamics of knowledge within permanent organizations. Therefore, one can
assume that managing global innovation projects enables the execution of the global innova-
tion management of MNCs and its sustainability and evolution.

GLOBALIZATION OF INNOVATION MANAGEMENT

The field of international management has generated a large amount of research and has led
to several models of multinational companies (Vernon, 1966; Bartlett and Goshal, 1989; see
Forsgren, 2013 for a review). Some work has more specifically focused on the globalization of
innovation strategies and processes (Doz et al., 2001).

The Globalization of Innovation Strategies

In the past, innovation was primarily local happening in a specific place. The Philips brothers
developed their innovation in their town of Eindhoven, in the southeast of the Netherlands,
which was hardly predestined to become a hotbed of innovation. In most cases, the location
was motivated by favourable local or national circumstances (Porter, 2000). For example, the
textile industry in the Rhine Valley led to a need for dyes, which led to early innovations in
the German and Swiss chemical and pharmaceutical industries, which are still world leaders
today.
 Innovation projects in a global world 151

Then starting from this location, as new markets are developed, companies exported their
innovations internationally, a process conceptualized by Stephen Hymer (1960) and summa-
rized by Raymond Vernon (1966) as the international product lifecycle. In short, innovations
first developed for the domestic market would be “projected” internationally by firms wishing
to retain control (in terms of intellectual property and economic rent) of the fruits of their
innovations. This is a home-centric model of innovation.
This model corresponds to the development of projects targeting global innovation (Ben
Mahmoud-Jouini et al., 2020). Such projects are initiated at the corporate level and involve
mainly corporate resources (R&D, marketing, etc.) with minimal involvement of local teams
located within subsidiaries. They result in standardized offers generally commercialized in
the home market with very few local adaptations for local subsidiaries. The offer is based on
a set of specifications (technical and marketing) defined ex-ante by a corporate team. Global
suppliers are selected, and global infrastructure is established in order to reach economies of
scale. Local resources are marginally involved in the innovation project. Incentives are put in
place to ensure that the subsidiary adopts and commercializes the innovation.
Progressively, another model has developed. Rather than innovating in the home base
through the development and the combination of technological and market knowledge at
the corporate level, some multinational companies developed innovation in different loca-
tions where they are settled leading to a “multiple origin” model, i.e. the transnational model
of MNCs (Bartlett and Ghoshal, 1989). This multi-home-base model is an extension of the
home-centric model applied to several locations. Here as well, the origin may be incidental
or linked to a local competitive advantage. In this model, some subsidiaries receive “global
mandates” for specific products and activities. The principle is to leverage the competitive
advantage provided by some locations. It is designated as glocalization considering that the
processes of the MNC are designed to be global while leveraging local specificities of some
subsidiaries (think global and act local). Besides these ones, the others maintain the same
role as in the home-base model: commercializing the innovations with minimum adaptations.
The multi-home model corresponds to the development of projects targeting regional or
intermediate innovation (Ben Mahmoud-Jouini et al., 2020). These projects result from a
combination of corporate and local decisions. They share the same rationales of projects tar-
geting global innovations but on a smaller scope, i.e. a group of subsidiaries nested in differ-
ent countries but sharing the same needs and specificities such as customer behaviours, for
example. The innovation is conceived in order to address these needs and is developed by a
combination of corporate and local resources resulting in a core offer and specific modules.
Corporate resources are involved in the design of the core as well as in the diffusion of innova-
tions at the regional level. The complementary modules are developed by the subsidiary teams
that leverage their local ecosystem.
One specific case of the multi-home model is the case of subsidiaries of western MNCs
located in emerging markets that develop specific innovations addressing local needs. Indeed,
such growing markets represent growth opportunities for MNCs that face mature and stagnat-
ing markets in their traditional locations. Hence, they develop in and for emerging markets
specific innovations targeting specific characteristics (Govindarajan and Ramamurti, 2011)
and leading to “frugal” innovation strategy (Zeschky et al., 2011). Such a local innovation
strategy requires the understanding of the specific needs of local market segments such as the
bottom of the pyramid (Prahalad, 2005) or the middle of the pyramid and addressing these
needs in an innovative way. Beyond cost reduction and robustness, this type of innovation
152 Handbook on innovation and project management

leverages mainly local specificities, e.g. supplier networks, regulations, specific production
processes, etc. This strategy requires the acquisition of local knowledge (usage, market, tech-
nology, etc.) that can as well be combined with corporate knowledge from other locations of
the MNC such as R&D centres in the home market or other mature markets. For example,
General Electric’s (GE) famous cost-reduction breakthroughs in medical monitoring devices
in India drew on the knowledge of the specific needs of the local market and GE’s R&D efforts
in India combined with specific skills and technologies developed in Israel (Govindarajan and
Trimble, 2013).
It happened that after their launch in emerging markets, these specific innovations are
commercialized afterwards by the MNCs in their home market or in other subsidiaries (Von
Zedwitch et al., 2015) with potentially some adaptation of the offer or the business model
(Hadingue et al., 2019; Malodia et al., 2019). This phenomenon has been designated as a
“reverse innovation” strategy (Govindarajan and Trimble, 2012) because it reverses the tra-
ditional direction of diffusion of knowledge and innovation highlighted in the home-centric
model and that used to go from the home market to the periphery.
As a recap, the multi-home-base model combines corporate central needs with local needs,
it is host-centric drawing on and combining the assets of several locations around the world.
The process is inherently distributed and truly global.
In other cases, subsidiaries can develop local innovations (Ben Mahmoud-Jouini et al., 2020)
without the support of corporate resources based on a combination of their own resources with
those of their ecosystem and targeting specific needs for their local markets. Such innovations
may remain local or be diffused to other subsidiaries thanks to initiatives involving inter-
subsidiaries communities (Hu et al., 2017).
A mix of a multi-home model with a host-centric one leads to a model where innovation
(technological and market) can be generated anywhere in the MNC and diffused across the
different locations while knowledge flows inter-subsidiaries. It involves offers that are poten-
tially originated, developed and commercialized globally at any stage of the process. It is
the integrated polycentric network allowing the deployment of competencies and innovations
between the different poles. This model corresponds to the meta-national corporation model
(Doz et al., 2001) where the objective is to leverage local assets globally (think local and act
global).

Organizing for Global Innovation Strategies

Beyond the characterization of these global innovation strategies, literature on international

management and more specifically on global innovation management has highlighted four
organizational elements that play a crucial role to implement such strategies enabling spe-
cific innovation processes: the R&D footprint, the role of subsidiaries, the internal network
of knowledge and the organizational player which coordinates the implementation of such
strategy.

R&D footprint
The R&D footprint, i.e. where MNCs locate their innovation efforts, has evolved according
to the evolution of the innovation strategies highlighted above. Indeed, historically, it has
been centralized and generally located at the headquarter or the home market. The decrease
in communication costs and the improvement in the quality of information systems led to
 Innovation projects in a global world 153

the geographical distribution of innovation teams at the global level. This relocation of R&D
activities has several motivations: access to local knowledge and resources that represent a
critical asset and a competitive advantage, adaptation of the product or the operation process
to local specificities, diversification of resources, cost reduction, exploitation of imbalances in
resources supply and demand, etc.
As a mirror of the different models presented here, the R&D footprint or internationaliza-
tion of the R&D can adopt different forms. These forms differ as well according to the orienta-
tion of the innovation strategy, i.e., whether it is science and research-based or market-based.
Indeed, in each case, the knowledge acquired will be different. Therefore, the R&D footprint
can have different configurations: an ethnocentric centralized R&D, a polycentric decentral-
ized R&D or an integrated R&D network. Such configurations have different performances
in terms of absorption and efficient integration of local knowledge acquired and developed
(Zedtwitz and Gassmann, 2000).
This multi-localization leads innovation teams to collaborate but also to compete. More
importantly, it requires knowledge management and integration skills so that valuable
resources (market, technology, etc.) and corporate networks can be leveraged across structural
and cultural boundaries (Doz and Wilson, 2012). Laurens et al. (2015) show that the R&D
internationalization expansion reaches a plateau.

Roles of subsidiaries
The active role of subsidiaries in generating knowledge and stimulating innovation has been
acknowledged. They are not only commercialization channels but also sources of innovation
(Ferraris, 2014; Asakawa et al., 2018; Lee et al., 2020) involving knowledge creation and
sharing (Ryan et al., 2018). Partly due to the globalization of R&D, MNC subsidiaries were
increasingly involved in developing innovation (Ciabuschi et al., 2014; Asakawa et al., 2018).
They enable local adaptation of the MNC’s global products and services as well as the acquisi-
tion of global technology for the whole MNC.
Furthermore, considering that innovation does not involve only R&D, the global innovation
strategies relied as well on different configurations of relationships between the subsidiaries
and the headquarters and between the subsidiaries themselves. Indeed, innovation requires
the integration of knowledge (technology, market needs, etc.) from different types of sub-
sidiaries that can be sourced and developed in various locations. Bartlett and Ghoshal (1989)
identified four types of subsidiaries depending on the strength of the local innovation capacity
and the importance of the local market for the MNC: strategic leader, implementer (if both are
weak), contributor if the innovation capacity is strong but the market small and black hole if
the capacities are not strong enough to leverage the potential of the market.
Therefore, subsidiaries have dual embeddedness (Figueiredo, 2011; Ciabuschi et al., 2014),
internally within the global network of the MNC leveraging the assets and knowledge from
HQ and their sister subsidiaries globally and externally within their local environment lev-
eraging local assets. Tallman and Chacar (2011) have suggested that MNCs are networks of
units (i.e. subsidiaries, research centres, etc.) that are simultaneously embedded locally and
within the company as a whole. Therefore, each subsidiary will bring to the network spe-
cific resources and represent specific assets. They are boundary spanners (Monteiro et al.,
2008). Building on the differentiation of subsidiaries proposed by Bartlett and Goshal (1989),
Guerineau et al. (2015) have proposed to differentiate four types of subsidiaries that contrib-
ute differently to the innovation strategy of the MNC based on their own local innovation
154 Handbook on innovation and project management

capabilities and on their local innovation ecosystem and its specificities: (i) historically major
subsidiaries with innovation capabilities and significant market potential; (ii) implementation
subsidiaries, which deploy at scale innovation validated elsewhere in the MNC; (iii) accel-
erators that, thanks to their expertise in specific fields, their flexibility and reactivity gener-
ally due to their modest size and their exposure to demanding markets, develop following an
experimentation mode a specific innovation likely to be deployed elsewhere later on; and (iv)
high potential subsidiaries located in emerging growing markets with a strong demand for
innovation because of the necessity to explore new business models or distribution channels.
Therefore, the subsidiaries can have their own innovation strategy that is combined with
the global innovation strategy of the MNC as a whole. They play a crucial role in the global
innovation process of the MNC.

WHEN A REGION TAKES THE LEAD: THE CASE OF ORANGE MONEY

Orange, a telecommunications operator, is present in 27 countries including 19 in the
Africa and Middle East region (AME) where 11.6 per cent of its employees and 46 per
cent of its customers realize 12 per cent of a highly growing turnover thanks to mobile
services and data transmission. Therefore, Orange has adopted a growth strategy in that
region. Indeed, one African in ten is a customer of Orange. Even if there are disparities
in size, maturity and evolution of the various domestic markets in this region (mobile
penetration rates vary from 130 per cent for Botswana and Jordan, reflecting the multi-
device phenomenon, to less than 30 per cent for Niger), they present common char-
acteristics, including a low penetration rate of bank accounts (less than 10 per cent
in sub-Saharan Africa) compared to the penetration rate of mobile phones. Therefore,
Orange Money, a mobile payment service, can interest a wide regional market. It com-
prises four services: money transfers, cash withdrawals and deposits, bill payments and
refill of telephone call credit. The development and deployment of the offer required the
creation of an ecosystem with local financial and commercial partners willing to accept
this form of payment. It requires as well agreement with local bank authorities.
The project began in 2006 at the corporate level, when a marketing team was cre-
ated to discuss with subsidiaries in AME opportunities for a mobile payment service.
A few months later, in 2007, Safaricom (a Vodafone subsidiary in Kenya) launched a
mobile payment service (M-Pesa). It was a trigger to speed up the development. The
corporate team carried out initial investigations that revealed a need for a specific plat-
form, security controls in order to prevent fraud and money laundering and authoriza-
tions from the local financial regulator. Therefore, the team initiated a negotiation with
the Central Bank of the West African States. The development of a new infrastructure
required specification of the interface with existing information systems, both locally
and globally. Some subsidiaries participated by sending their requirements to the corpo-
rate team. During its development, the project benefited from the support of several cor-
porate sponsors that brought visibility and mobilized the resources necessary to make
progress during critical stages. The first launch was in Ivory Coast in December 2008,
then in Senegal in May 2010.
A process was established for the following launches: once the decision to launch
the service was made, a local project manager was appointed. He reported to the local
 Innovation projects in a global world 155

subsidiary’s CEO and worked with the corporate centralized team. He established a
local distribution network (bank partners, Orange retail stores, authorized Orange dis-
tributors, such as vendors and pharmacies, etc.) and executed the operational market-
ing campaign. A skill centre was created in Bamako to share and train local teams in
negotiating with local partners, as well as controls and reporting to banks. The platform
was installed by local teams with the support of the centralized team. In countries where
local resources were limited such as in Niger, a shared infrastructure was installed in
France where parameters and security tests were set up with little involvement of the
local team in the technical running.
After six launches, the project entered a second phase of improving the offer. The
subsidiaries were consulted to identify new services that could potentially be launched.
The final decisions were made at the corporate level favouring services that were likely
to interest the widest range of countries such as the delivery of microfinance financial
services (lending and saving) initiated in 2018 in Madagascar.
In 2018, ten years after the launch of the first service, Orange Money counts 39.2
million customers (15.1 million monthly users) in 15 countries on the global 276 million
customers of Orange. Two billion transactions with Orange Money have been registered.
The customer growth is about 35 per cent (2017–2018). In 2015, the service has been
launched in Poland and in 2018, Orange France launched an Orange Bank building on
the capacities and the knowledge acquired during the decade of financial services devel-
opment and operation in AME.
This type of innovation is neither global nor local because it requires a lot of effort
from the local team in the development phase (technical, marketing, ecosystem) beyond
marketing adaptation but also relies on centralized corporate resources and on regional
initiatives developed to mutualize the local efforts and share best practices.

Internal networks of knowledge

The globalization of R&D and the network model of MNCs involve a wide variety of knowl-
edge distributed within the MNC in different formats. In some cases, this knowledge is com-
plex and tacit (Doz and Wilson, 2012) and therefore its diffusion and sharing within the firm
becomes a big challenge. Literature on knowledge integration emphasizes the role of “com-
munities of practice” (Wenger, 1998) as a way to overcome such a challenge. Communities
of practice are organizational arrangements that foster formal and informal relationships
through regular face-to-face meetings, rotating assignments and expatriations and thus rep-
resent an effective “internal network of practice” that enables the circulation sharing and
integration of knowledge in geographically dispersed firms (Tallman and Chacar, 2011;
Guerineau et al., 2016). Doz and Wilson (2012) showed that the geographic dispersion of
innovation activities raises organizational integration challenges that limit the extent of
dispersion.
One specific case is when the knowledge sourced locally (either technology or market) is
tacit and “sticky” (Von Hippel, 1994). Research has highlighted the role of colocation and
embeddedness to capture such knowledge (Cantwell and Mudambi, 2005) such as in the case
of scouting units located in innovation hubs (Silicon Valley, for example) (Monteiro, 2015)
that will play a boundary-spanning role within the MNC. Globally distributed corporate
156 Handbook on innovation and project management

accelerators that host local startups also play such a role in acquiring knowledge and then
distributing it within the MNC network (Ben Mahmoud-Jouini et al., 2018).
Scholars (Ben Mahmoud-Jouini et al., 2015) interested in global innovation management
from a knowledge transfer perspective have highlighted that the challenge for an effective
GIM is to organize and exploit the knowledge distributed in order to leverage it in globalized
innovation processes. It is therefore necessary to adopt an analytical perspective that takes a
closer look at the processes at work. This is where the field of project management can make
a significant contribution.

A central coordination
We have highlighted three organizational levers (R&D footprint, subsidiaries and internal
knowledge networks) that would play an important role in GIM. However, without adopt-
ing a strict planning perspective, and while acknowledging the value of emergent strategies,
in order to lead to effective global innovation strategies and to develop and support global
innovation processes, these levers must be coordinated and managed. A central or corporate
position and perspective are required to benefit from such levers.
Researchers (Ben Mahmoud-Jouini et al., 2015) emphasized four central roles or functions
that should be provided. First, there must be an animation of these internal networks or a trigger
for the emergence of communities of practice to stimulate such initiatives and maintain the fluid-
ity of communications within the MNC (Guerineau et al., 2017). Second, the set-up of a relevant
incentive system for subsidiaries to innovate is needed in order to align their local innovation
efforts with the global innovation strategy. Third, central architecture decisions to mitigate the
tension between local adaptation and global deployment encountered during the deployment of
local innovation at a global level are needed, for example, to clearly differentiate the stable core
of the offering from its adaptable periphery (Ben Mahmoud-Jouini et al., 2020). Last, central
human resource management is an important way to enable knowledge sharing and the global
deployment of innovations thanks to innovation champions that would ensure or facilitate such
a role (Ben Mahmoud-Jouini and Charue-Duboc, 2014; Munoz and Zarate, 2002).

THE ROLE OF HQ IN THE EMERGENCE OF INNOVATIONS IN SUBSIDIARIES

AND THEIR DEPLOYMENT
IndusGaz is one of the world leaders in industrial gas with a vast network of subsidiaries
in more than 80 countries. The gas is used in the industrial processes of various industrial
customers leading to a matrix structure crossing major sectors served with geographical
markets. Innovation can originate in one of the six R&D centres leading to “corporate”
innovations and/or in the subsidiaries leading to local innovations. The company devel-
ops a wide diversity of innovations: specific gas, process and application, i.e. innovating
in the industrial process of the customer who uses the gas. The subsidiaries are particu-
larly involved in application innovations because of their proximity to customers.
In IndusGas, the HQ plays a dual role in the development of local innovation and its
deployment in the MNC across subsidiaries through two specific mechanisms: the Local
Innovation Fund (LIF) that provides subsidiaries with resources in funds and techno-
logical expertise and the Industrial Process Engineering Expertise Network (IPEN) that
supports the subsidiaries when developing application innovation with their industrial
customers.
 Innovation projects in a global world 157

The objectives of the LIF are twofold: to facilitate the emergence of local initiatives
likely to be adopted by other subsidiaries and, once the first success has been achieved,
to encourage their deployment throughout the MNC. It has its own team of two full-
time employees located at the corporate R&D department and ambassadors in four geo-
graphical areas and its own budget and process for selecting and allocating resources.
Subsidiaries submit a funding request based on initial technical and commercial ele-
ments. A jury (the team, the R&D department, corporate marketing and internal experts
chosen according to the subject) decides whether or not to allocate resources. The small
team, together with the local ambassadors, then accelerate the development process by
providing the resources and the expertise. They also ensure internal communication on
the innovation in order to favour future deployment. Furthermore, the team and the
ambassadors favour exchanges between subsidiaries (a request for expertise can some-
times be resolved through the help of a colleague from another subsidiary) and between
subsidiaries and corporate managers.
IPEN is a worldwide network of 130 full-time dedicated technical experts structured
in seven areas of expertise corresponding to the types of industrial applications that
use gas, such as combustion, atmospheric control or food cryogenics. The experts are
distributed in 11 centres ensuring wide global coverage. IPEN involves two types of
experts: locals who are based in the subsidiaries and interact very regularly with custom-
ers and vendors, and corporates located at the management level. Indeed, in addition to
the seven global referents, IPEN is managed by eight members at the HQ. They ensure
that the geographical experts’ resources are in line with the needs and expectations of
the subsidiaries, provide them with technical support and visibility and animate the net-
work through annual meetings and informal exchanges. They ensure the connection of
the network with the rest of the organization. The knowledge developed by the experts
is embedded in specific industrial processes difficult to model. It is developed through
practice and interactions with customers close to the subsidiary. In the meantime, thanks
to the relationships maintained between peers present throughout the world, the experts
enrich their local tacit knowledge with a global vision. This configuration favours a
certain level of standardization of innovations developed locally, which facilitates their
subsequent deployment phase. Indeed, these experts are aware of the challenges of
deployment in other contexts and therefore integrate them very early on.
Therefore, the operating mode and the geographical distribution of the members
enable the emergence of application innovation at the subsidiary level and their global
deployment.

GLOBAL INNOVATION PROJECT MANAGEMENT, A KEY

CAPABILITY OF THE INNOVATIVE MULTINATIONAL COMPANY

Projects as Learning Opportunities in Globalized Innovation Processes

One of the important issues in project management is the organizational learning and diffu-
sion of the knowledge created within projects to other projects or more generally to the parent
organization as a whole (Ben Mahmoud-Jouini, 1999). Lundin and Midler (1998) outlined
158 Handbook on innovation and project management

the transfer of knowledge from temporary to permanent organizations. In their articles of

2000 and 2004, Brady and Davis suggested a specific organizational learning mode that com-
bines the project learning process with that of the permanent organization. This scheme is
present as well in the specific case of vanguard projects (Frederiksen and Davies, 2008). Even
though these articles have not explicitly referred to innovation in multinationals, we argue that
the learning and innovation processes studied are relevant for understanding global innova-
tion processes where knowledge produced within global projects flows across projects and
within the permanent company.
Indeed, as shown by Söderlund and Tell (2011), in project-based organizations (the P-form
according to Lundin et al.’s 2017 classification), knowledge (technical, market, etc.) is created
and integrated within innovation thanks to the projects. As such they represent opportunities
to develop new knowledge. However, many studies, particularly in the field of construction,
have shown that the P-form prevents this knowledge from flowing across projects unless the
project’s members transfer their experiences from one project to another.
In project-supported organizations (PSOs), Midler has shown how the knowledge produced
in specific innovation projects supporting the firm’s growth strategy in Eastern European
countries at the end of the 1990s (Jullien et al., 2013) and in India in the middle of 2010 (Midler
et al., 2017, Midler et al. 2023) has diffused. Indeed, they outlined that a programme-based
organization (Pellegrinelli, 2002) enables the diffusion of knowledge across projects (Artto
Dietrich, 2007). Such a programme can be a group of projects developing a range of diversified
products that share the same DNA of the initial innovation targeting markets geographically
distributed. Midler (2013) suggested the concept of lineage to capture such a phenomenon
where knowledge is shared across succeeding projects. On top of the concept of lineage
(Maniak and Midler, 2014), managing the human resources across the projects and between
projects and functions constitutes a vector of transfer from projects to the parent organization.
It appears that the effectiveness of international projection strategies is closely dependent
on the firm’s specific project organization.

Globalized Innovation Processes: An Interplay between Projects, Subsidiaries and

Corporate Functions

If we consider innovation projects as a way to implement the innovation strategy of the

firm as claimed earlier, the global innovation strategy of MNCs should introduce global
innovation projects as an important player on top of the duo formed by headquarter and
subsidiaries, i.e. centre and periphery. Indeed, the evolution of MNCs as presented in the
previous section emphasizes the roles of subsidiaries in the development of innovation with-
out specifying where and how the knowledge is produced. Indeed, wherever the sources
of the innovation lie (from a subsidiary in order to address specific needs or to leverage
specific assets or from a corporate service targeting the development of global innovation
for standard needs or the exploitation of a promising technological innovation), it is gener-
ally developed through a global innovation project either supported by a subsidiary or by a
corporate department.
The current trend in project management triggers the integration of global projects in the
interplay between headquarters and subsidiaries that is required to manage innovation in
 Innovation projects in a global world 159

MNCs. Indeed, the competitive advantage of MNCs in terms of innovation lies in their ability
to launch innovation projects quickly and efficiently on a global scale. Ben Mahmoud-Jouini
and Charue-Duboc (2014) proposed the concept of innovation deployment, defined as the pro-
cess leading to the successive commercialization of innovation in different subsidiaries and
its adaptation to the corresponding markets once it has been developed and commercialized
in the first targeted one. They insist on the necessary adaptation or even redesign of an inno-
vative product to the local context in which it is marketed and on the conditions allowing the
subsidiary that deploys the innovation to access the necessary knowledge, most often located
in the subsidiary that originated the innovation (Ben Mahmoud-Jouini et al., 2020). Guerineau
et al. (2015) differentiate between the types of innovation and the types of subsidiaries that
are more likely to develop them, and they specify the role that each type of subsidiary can
play in the deployment processes. Effectiveness in this area depends on the ability to mobilize
the different components of the “three-player game” of project-subsidiary-hub according to
the capacities they can bring for the rapid deployment of innovation on a global scale. The
orchestration of these trajectories across subsidiaries is highly dependent on central decisions
concerning technological choices, which will allow (or not) to adapt the innovation when it
is diffused from one country to another, as well as on career management decisions, which
will allow (or not) champions to ensure the mobilization of the actors involved in the different
stages of the deployment trajectory.

Is the Global Innovation Management of MNCs Shaped by Global Innovation

Projects?

In this “three-player game”, we see how projects are combined with the permanent compo-
nents of the MNC in order to produce effective global development trajectories of innova-
tions. However, projects are temporary. Therefore, to what extent can they influence the firm’s
strategy?
In the case of PBOs, it has been emphasized that learning takes place essentially from pro-
ject to project, through the personal experience of professionals. In this context, the pole of
stability remains the dual relationship between the centre and the country subsidiaries.
This is not the case in the context of PSOs, such as the automotive or telecommunications
firms studied, where permanent resources were dedicated to stringing together projects con-
sistent with the DNA of the initial project. In this context, a trajectory of projects or a lineage
played a huge role in the strategy beyond the centre versus periphery perspective. Indeed, the
projects involve resources transversally to the centre and/or the subsidiaries. The examples
of the global innovation strategy of Renault, studied by Jullien et al. (2013), and those of the
Logan project in Romania, the Kwid project in India and the KZE project in China, studied
by Midler et al. (2017, 2023), show that, beyond the launching projects, the MNCs developed
three global platforms (or programmes) that combine global resources. This transformation
of the MNC from a traditional “home-centric” model to a multi-polar model (see Figure 7.3)
was enabled by the structuration of strong project management through heavyweight project
managers responsible for vanguard projects and programmes combining different projects
sharing common knowledge and components.
160 Handbook on innovation and project management

INTERNATIONALIZATION THROUGH PROJECT LINEAGE: THE RENAULT

LOGAN CASE
In 1999, when Renault started the Logan project, the €5,000 car, the Renault group
was essentially a European company with a market share outside Europe of 11 per
cent. Twenty years later, in 2019, more than 50 per cent of its sales are carried out
outside Europe, mainly through the contribution of vehicles of the lineage resulting
from Logan initially and then of Kwid. Between these two dates, a series of pro-
jects expanded and diversified the initial pilot project (the Logan, initially launched in
2004 in Romania) and then the Kwid (launched in 2015 at €3,500 in India) to attack
new customer niches and adapt them to the specificities of various markets (see the
following figures).​​​
This internationalization of the company is clearly the result of a multi-project learn-
ing process, beginning with the first breakthrough project of the frugal Logan, then
developing successive projects to explore new product and market concepts while capi-
talizing on, sharing and adapting what had been learned from previous projects to fit the
specificities of the intended customer targets.
In such lineage management, which will be analysed in Chapter 8, programme
management is at the heart of the design organization. The development of the Logan
and Kwid lineages thus led to the evolution of a home-centric structure of inno-
vation management centred on Renault’s central French engineering department to
a tri-centric structure of the engineering departments that took charge of the pilot
projects of the two lineages in Romania and India and then piloted the subsequent
deployments.​

Source:   Midler et al., 2023.

Figure 7.1  Deployment of the product line from the Logan project

161
Source:   Midler et al., 2023.

Figure 7.2  Geographic deployment of the Logan project line

 1,600,000 1,600,000

1,400,000 1,400,000

1,200,000 1,200,000

1,000,000 1,000,000

800,000 800,000

600,000 600,000

162
400,000 400,000

200,000 200,000

0 0

2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

Europe Afrique Moyen-Orient Inde LOGAN SANDERO DUSTER / OROCH

Eurasie Asie Pacifique Ameriques LODGY / DOKKER KAPTUR / CAPTUR GA KWID

Source:   Midler et al., 2017.

Figure 7.3  Logan lineage sales by market and vehicle type

 TC Central
TC Central French
Roumania TC
French TC Technocenter
Korea Roumania
Technocenter Korea TC India TC
TC Korea
TC
Roumania
Korea
TC Central French TC
Spain Brazil TC TC TC
Spain Central French Brazil TC China TC
Roumania
Technocenter TC China TC India TC Technocenter Brazil
Brazil

TC TC
TC India TC TC
Russia Russia TC India
TC TC Spain
Russia

163
Spain
Russia
TC China TC China

Kwid platform scope European platforms scope Logan platform scope

Source:   Midler, 2019.

Figure 7.4  From the home-centric model in 2000 to the tri-centric global innovation process in 2018
164 Handbook on innovation and project management

CONCLUSIONS AND PERSPECTIVES

Corporate globalization is a trend that is both old and has been developing rapidly for several
decades, based on structural data such as differences in the pace of market growth or the
asymmetry of resources and technological and financial capacities. The COVID crisis and
the war in Ukraine have put the importance of the sovereignty of national identities back on
the political and economic agenda, and have challenged the image of a “flat” world where
the activities of large multinational groups could be deployed without constraints. In fact,
this image of a “seamless” business world was largely idealized. For a long time, one of the
key issues for MNCs has been to reconcile the local specificities of countries and regions
with their global deployment strategies. This is particularly true for the internationalization
of innovation management. The contemporary context makes the processes and organizations
through which they attempt to achieve this more essential.
International management and project management currents approach the problem of the
internationalization of innovation management in a complementary way. On the one hand, the
former focuses on the strategic and structural level of the firm, emphasizing the role of central
governance and the role and capabilities of local units. It proposes typical models that respond
to the imperative of local-global articulation, as well as trajectories of evolution from firms
centred in their country of origin to polycentric networked organizational models, knowing
how to take advantage of local resources and business opportunities and how to effectively
circulate and combine knowledge useful for adapted agile innovation management. On the
other hand, project management studies in a more precise way the processes by which these
innovations are born and deployed (or not) within these structures and territories. It character-
izes the difficulties associated with innovation projects in an international context. It analy-
ses how the concepts developed by the discipline, in terms of organization and management
style of projects, allow us to deal with these difficulties. It shows how these project identities
are articulated with the classic variables of multinational firms, namely country and regional
subsidiaries and the strategic centre. Finally, it analyses how multi-project approaches such as
lineage management can constitute the vector of inter-project learning within the global firm
that stimulates original and perennial innovation trajectories, preserving the DNA of disrup-
tive innovations of the initial pilot project, while allowing us to capitalize and adapt it order
to deploy it in different contexts.
Returning to the current context, such lessons are important to deepen and deploy, both
because of the tightening of specific political and regulatory constraints associated with the
increasing power of public authorities in the business domain and also because of the huge
expansion of innovation areas associated with the climate and environmental crisis, which are
inherently global. Far from marking the end of research on the internationalization of innova-
tion projects, these crises should, on the contrary, stimulate a strong development and renewal
of the field in the future.

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 PART II

BUILDING AND EXTENDING

8. Corporate innovation strategies and
multi-project management on lineages and
ambidextrous programmes
Rémi Maniak and Christophe Midler

INTRODUCTION

Over the last few decades, innovation has become a survival imperative for companies.
The history and characteristics of the different multi-project management methodologies
can be seen as a mirror of the challenges companies are facing. After problems centred
on the management of a specific project, the issue of multi-project management devel-
oped in the 1990s to cope with an increasing number of projects in companies, according
to an imperative to rationalize resource allocation. Project portfolio management was
formalized at this time. At the same time, innovation strategies aiming to deploy more
diversified offers while keeping common elements and thus reducing overall costs led to
the grouping of projects according to programme and platform issues. The discipline then
had to invent other models as corporate strategies evolved. The most recently formalized
forms, project lineage management and ambidextrous programme management, are wit-
ness to the increasing intrusion of more radical and uncertain innovations in corporate
strategies.
The objective of this chapter is to characterize these last two models:

• Lineage management is based on the strategic management of a series of innovation

projects over time. It aims to generate and deploy a range of disruptive offers for the
company by progressively capitalizing on the assets generated by the trajectory of suc-
cessive innovations (“reuse” and learning about the technology, the product, the services,
the customer learning, etc.). It offers a flexibility of adaptation that pragmatically takes
advantage of the learning accumulated along the way, as well as the specificities of the
different contexts encountered in this trajectory.
• Ambidextrous programme management, for its part, is adapted to piloting sets of projects
carried out in the context of ambidextrous strategies, i.e. strategies that seek the simulta-
neous performance of exploration and exploitation logics within large companies. These
strategies have become widespread over the past decade with the development of com-
petition through intensive innovation. The issue is to manage heterogeneous projects in
terms of their content, level of maturity and time horizon, in order to accelerate the devel-
opment of breakthrough innovations while preserving the capacity to valorize short-term
developments and save committed resources. Consequently, the traditional framework of
project portfolio management has reached its limits in terms of its ability to quickly bring
to market the required breakthrough innovations. Ambidextrous programme manage-
ment aims to overcome these limits.

168
 Corporate innovation strategies and multi-project management 169

INNOVATION PROJECT MANAGEMENT IN THE AMBIDEXTROUS

STRATEGY CONTEXT

The Ambidextrous Strategy Context

The empirical relevance of new concepts in the project management academic field lies in the
dynamics of innovation strategies and the resulting transition in the management of innova-
tion projects. The 1990s and 2000s saw an increase in competition through intensive inno-
vation (Benghozi et al., 2000; Le Masson et al., 2010), with an increase in the variety and
customization of products, the shortening of development cycles and the gradual increase in
the radicalness of the innovations needed to create differentiation in the markets.
This situation of tension between short-term operating performance and the relevance of
long-term explorations in large companies is at the heart of the theoretical field of ambi-
dexterity strategies (Duncan 1976; March, 1991). Raich et al. (2009) identify three different
strategic models for resolving this tension. Temporal ambidexterity configures exploration and
exploitation approaches in a sequential manner, alternating between exploitation and explora-
tion when environmental disruptions require a renewal of the usual way of doing business.
Structural ambidexterity (O’Reilly and Tushman, 2004) isolates exploration units from busi-
ness units mobilized on exploitation activities. These units have limited resources, but have
more freedom to explore products and services different from the company’s usual activity.
Finally, contextual ambidexterity, where exploration efforts are driven by employees within
the operating structures themselves, in the form of freed up work time to participate in the
exploration of creative ideas (Gibson and Birkinshaw, 2004). Lavie and Rosenkopf (2006)
have added a fourth form of ambidextrous strategy, “network ambidexterity”, where the firm
mobilizes a network of outside firms to develop its disruptive innovation capabilities through
open innovation (Chesbrough et al., 2006).
The ambidexterity literature generally conducts high-level strategic and organizational
analyses that focus on overall structural models and the importance of top management gov-
ernance to integrate the two opposing approaches within these structures. From this perspec-
tive, Rosing et al. (2011) characterize different ambidextrous leadership styles. Turner et al.
(2013), Junni et al. (2013) and O’Reilly and Tushman (2013) all call for research to understand
the organizational mechanisms and processes within such organizational patterns. From this
perspective, Ben Mahmoud-Jouini et al. (2007) identify, under the terminology of “multiplex
ambidexterity”, the importance of the role of innovation units (or labs) and specific managers
in combining different forms of ambidexterity.

Projects, Programmes and Ambidexterity

The organization of projects does not figure explicitly in the aforementioned studies. However,
it is clear that the field of project management has interesting contributions to make, as pro-
jects are the primary organizational framework for orchestrating the sequence of activities
from exploration to exploitation.
Research in the early 1990s demonstrated how the introduction of new practices of project
management into product development engineering improved the ability to develop innovative
offerings within incumbent firms (Clark and Fujimoto, 1991; Midler, 1993, 1995; Wheelwright
and Clark, 1992b).
170 Handbook on innovation and project management

Over the next decade, the scope of project management expanded from implementation pro-
jects to more exploratory situations (Gastaldi and Midler 2005; Lenfle, 2008). Lenfle (2008,
473–474) characterized five specific features that differentiate exploratory projects from
implementation projects: They are strategically ambiguous (as opposed to an implementa-
tion project following a clear strategic formulation); they take a proactive approach (rather
than a demand-pulling process); they are not driven by a clearly specified outcome or goal (as
opposed to a target-driven project); they explore new knowledge (as opposed to integrating
and leveraging existing knowledge); and their temporality is characterized by hidden urgency
and multiple horizons (as opposed to the explicit deadlines and clear timelines of implementa-
tion projects). Such specificities call for management principles that differ from usual good
project management practices. In a recent article, Lenfle (2016) showed how the institutional
context could impose irrelevant project management models on such pathfinder projects,
making them seem “strange” because their specificity was not explicitly recognized. Such
exploration project management corresponds perfectly to the mission of exploration units as
defined in the structural ambidexterity. Several studies also show that the boundary between
exploratory projects and more traditional development projects is not clear-cut as soon as the
complexity and the innovative dimension of the projects are high. This is the case for certain
mega infrastructure projects with innovative components (Davies et al., 2014) or complex
technological projects, described as “hybrid” projects (Tillement et al., 2019).
Moving from single-project management to multi-project management literature, project
portfolio management can be seen as a way to implement sequential ambidexterity within
organizations. The project management literature analyses two key issues in such a process:
resources and learning. The issue of resource allocation is addressed by the step process
stream (Cooper et al., 1998; Teller et al., 2012). Here, the goal is to organize competition
between projects for scarce resources by prioritizing them along a sequence of phases from
research to development to market launch. An important advantage of this sequential coordi-
nation is to conserve resources for risky, long-term projects that would inevitably lose out in
a harsh financial comparison with short-term projects (Christensen and Raynor, 2013). Petro
et al. 2020 confirm the positive aspect of projectportfolio management as an ambidexterity
orchestration too. But their quantitative approach adopts a broad definition of portfolio man-
agement, whereas, in this chapter, we differentiate different types, from resource allocation
optimization oriented to learning capability oriented. Yet, from this second perspective, an
important limitation of the traditional stage-gate approach is that it introduces discontinuities
in the innovation process that (i) make longitudinal transfer and knowledge sharing more dif-
ficult and (ii) increase the time to market for disruptive innovations (Sethi and Iqbal, 2008).
Pellegrini et al. (2015) mobilize the concept of programme management (Artto et al. 2009)
to analyse how a multi-project approach can contribute “as the framework or organizational
structure for shaping and governing strategy implementation, simultaneously managing and
synchronizing concurrent flows of change carried out by projects”. Citing the case of a large
bank’s deep transformation strategy, they show how programme management appears to
require a key level of coordination to bridge the long-term radical transition track with shorter-
term operational change projects within the company. Such programme management is rather
consistent with contextual and network ambidexterity, where local incremental projects (inter-
nal or external) will be coordinated to contribute to a more radical transition.
Other project theories focus on the learning processes that take place within projects,
between successive projects and between projects and permanent organizational structures.
 Corporate innovation strategies and multi-project management 171

Brady and Davies (2004) envision a model of global learning, moving from existing knowl-
edge to pioneering projects, then from project to project, and finally from project to permanent
organization. Loch et al. (2006) propose a typology to characterize four different types of
multi-project processes that can be mobilized in exploring an uncertain and complex domain.
Trial-and-error learning is the typical mode of exploration in start-ups, whereas a large
pharmaceutical company relies on selectionism (i.e. exploring different solutions in paral-
lel). Planning and risk management are appropriate for complex but less uncertain situations,
while a combination of learning and selectionism is required when complexity is associated
with high uncertainty (the type of uncertainty that Loch et al. call “unknown unknowns”).
This chapter will focus on two different approaches that contribute to this stream of multi-
project management where cross-project learning effectiveness is a key competency issue, due
to the uncertainty of the innovation context explored. They both try to overcome the limita-
tions of more traditional portfolio management systems when faced with a context of radical
innovation.
In the following section, we will focus on the lineage management approach, which fits well
into the strategy of temporal ambidexterity, sequentially organizing the work of exploration
and exploitation. Project lineage management proposes an approach focused on rationalizing
learning between successive projects. In the third section, we will develop the ambidextrous
programme concept, which addresses the challenge of coordinating (i) breakthrough, (ii) mas-
sive and (iii) urgent transitions, leading to managing simultaneously heterogeneous projects,
in terms of horizon and content.

PROJECT LINEAGE MANAGEMENT

Project Lineage: A Sequence of Projects with Increasing Value

The success or performance of a project is traditionally seen as the achievement of objectives

in terms of quality, costs, time and profits generated. The multi-project approach (portfolio,
platform, programme) has made it possible to optimize these variables over a population of
projects. However, even if the importance of learning mechanisms within a firm and within
a population of projects has been widely discussed, very few works have explicitly focused
on the dynamics integrating the progressive construction of assets and project management.
This is what the concept of project lineage management attempts to explain.
Indeed, many cases show that the success of a project is not only based on the performance
of the management of a single project but on the management of a sequence of projects which,
over time, will progressively build a path of profitability around a given concept.
For instance, Nespresso was not an immediate success. On the contrary, after patents for
capsule machines were filed in 1970, the project totally failed to deploy these capsule sys-
tems on machines intended for professionals (hotels, restaurants, etc.), but the development
of an automated capsule insertion and ejection system in 2000 rebounded in 2004 with a first
machine for individuals which sold more than a million units, opening the way to the devel-
opment of a new market for espresso pods which was to experience tremendous growth. In
2015 the subsidiary’s turnover was estimated at €5 billion (Cimon and Poulin, 2017).
Another well-known example is the Toyota Hybrid Prius case. The project can be consid-
ered a stroke of genius by Toyota. But it is precisely not a coup. According to our estimates,
172 Handbook on innovation and project management

the Prius 1 project cost the firm around €1 billion. But the firm used the assets built up from
this “failure” to deploy its technologies in the hybrid market, which it had in fact created, with
the success that we know today (Itazaki, 1999).
The same story could be told of the iPod, whose first launch was an abject failure, but which
opened the way to a connected music market and led to the success of multiple “cousin” prod-
ucts, or Renault’s Logan, an initiative that started successful but small, and which has evolved
into a succession of successful major projects, each time developing the assets built by the
previous projects, with this “Global Entry” programme accounting for nearly 20 per cent of
Renault’s revenues in 2019 (Maniak et al., 2014b; Midler, 2013a; Midler et al., 2022).
All these cases show that project profitability is not built solely on a single project but on a
succession of cousin projects that build on each other.

At the Crossroads of Different Theoretical Fields

The difficulty in capturing this phenomenon theoretically stems largely from the fact that it is
based on mechanisms that cross different fields of literature.
In particular, this implies characterizing the links between strategy and project manage-
ment. Historically, projects were first seen as a consequence of strategy. Projects were then
defined as the application of existing strategy, knowledge and methods to achieve an objective
defined by one or more stakeholders (Wheelwright and Clark, 1992; PMI, 2004). The fact that
a key project portfolio notion to evaluate and control project progression is the project “align-
ment” (Cooper et al., 1998) to strategy mirrors this perspective of a clear ex-ante definition of
strategy to project management. Since the 1990s, a new school of thought has been develop-
ing, affirming the link between strategy and project management, with projects being defined
as a powerful lever for implementing strategy, whether at the level of a project (Morris and
Jameson, 2005, 2013) or a portfolio of projects (Artto and Dietrich, 2007; Kaplan and Norton,
1996; Markides, 1999). At the same time, several studies have shown that projects can have
behaviours and even outputs that were not foreseen at the time of their initial definition (Loch
et al., 2011; Wideman, 1992). Such an evolution to the project strategizing perspective in the
field of project management mirrors the growth of the emerging strategy concept in the field
of corporate strategy (Mintzberg and Waters, 1985).
This implies piloting projects with specific methods such as trial-and-error processes (Pich
et al., 2002), milestones that are not oriented towards the detection of deviations from the fore-
cast but towards the learning generated at each stage (Lenfle, 2008; McGrath and MacMillan,
1995; Iansiti and Clark, 1994) or a selection strategy between several parallel alternatives
(Sommer and Loch, 2004). In the end, these works have shown that projects are not only
execution processes but also processes that integrate a dose of uncertainty that will lead them
to modify the initial specifications or even the purpose set by the strategic plans.
From a strategic point of view, these considerations also refer to the notion of real options
(Copeland and Antikarov, 2001; Kock and Gemünden, 2019a). Traditional investment
approaches are based on forecasting scenarios with highly uncertain horizons, and there-
fore force initial choices that are risky between the credibility of such scenarios. The lineage
approach commits the investment process to a first project of limited ambition and risk, and
postpones the decision on subsequent investment development choices, when the returns on
the first project will be able to shed light on the opportunity and direction of the development
trajectory to be chosen, according to a non-risky opportunistic gain approach. We see here
that the relevance of this strategic reasoning depends on the company’s ability to operate
 Corporate innovation strategies and multi-project management 173

these successive developments in an agile and economical way. Kock and Gemünden (2021)
demonstrate the performance of the “Triple A portfolio management” that defines portfolio
practices that combine ambidextrous, adaptative and agile capabilities. As always in the field
of innovation, the relevance of a strategy depends on the conditions of its implementation, in
terms of process and organization.
Secondly, it implies admitting that projects will not only obey a top-down orientation based
on pre-existing knowledge but will also act in a more bottom-up way and feed the company’s
assets (Burgelman and Sayles, 1988). The articles by Brady and Davies (2004) and Iansity
and Clark (1994) are useful on the subject. They explain a sequence of interaction between
projects and the firm’s assets, with a first project (vanguard) generating new capabilities for
the firm, a phase of transferring this knowledge and these capabilities to other projects, and
finally a phase of integrating these new capabilities into the host organization, particularly its
routines. The notion of a skunkwork project is similar, focusing on how a project can disre-
gard and rebuild new competencies and design routines (Bommer et al., 2002). This approach
has been widely declined in many studies (Brady and Davies, 2004; Eriksson, 2013; Marsh
and Stock, 2006). On this point, we must therefore consider that the project not only builds on
pre-existing assets but also generates new ones, and that parallel or subsequent projects will
be able to exploit these new assets.
If these inter-project learning mechanisms are well known today, they remain relatively
abstract, insofar as we do not really know what objects are the focus of this inter-project capi-
talization, and even less what the organizational forms or processes are that could allow such
trajectories. Fewer studies analyse how projects build on each other, although the problem of
transferring knowledge from one project to the follow-up project has been known for a long
time (Clark and Wheelwright, 1992; Prencipe and Tell, 2001).
On the first point, the theories developed by Hatchuel and his colleagues are instructive
(Hatchuel et al., 2006; Le Masson et al., 2010). Based on concepts of design reasoning the
authors explain the concept of “lineage”. A lineage can be defined as a sequence of “cousin”
products, which are based on the same knowledge domain and the same product concept,
and where each new product development generates learning that can be used on future
“cousin” products. This approach makes it possible to specify and embody multi-project
learning in “cousin” objects, and to move from the abstraction of capitalization to the con-
crete. However, these theories do not talk about the processes (project) or the underlying
organizations.
On the second point – the organizational forms favourable to inter-project capitalization –
the literature remains strangely silent. We find several works on the first innovative project,
i.e. how to introduce knowledge developed ex-ante into development projects, which point
out in particular the importance of having a team responsible for making the transition from
research to development (Iansiti and Clark, 1994). Regarding capitalization from one project
to the next along a sequence of projects, there are several works indicating the importance of
maintaining the same team along this trajectory (Bartsch et al., 2013; Midler, 2013b). But this
vein of research needs further development.

Project Lineage Management as a New Strategic Management Perspective

These considerations invite to define the concept of “project lineage management” (Jullien
et al., 2013; Maniak and Midler, 2014; Maniak et al., 2014b; Midler, 2013b) as a multi-project
management perspective which encompasses the following aspects:
174 Handbook on innovation and project management

• The importance of considering the dynamics of a sequence of projects with the dynamic
of assets empowering these projects.
• The importance of serendipity and reactivity to make a product’s conceptual identity
expand along a sequence of coherent projects.
• The possibility that the flow of projects belonging to this sequence can influence and
redefine the corporate strategy along the way.
• The organizational side of such sequences, especially the composition of the project
teams which is involved in the lineage of projects.

Most of the multi-project management theories aim to reduce risks and costs. The portfo-
lio approach optimizes the allocation of the company’s scarce resources between competing
projects. The programme and platform approaches organize the coordination between com-
plementary contemporary projects. But all typically neglect longitudinal interdependencies.
Multi-project lineage management introduced a new unit of analysis and a new way to con-
sider value creation along the path of several projects, encompassing the strategic, managerial
and organizational aspects.
The initial empirical basis that gave rise to this concept was the automotive industry. As
mentioned earlier, Renault’s Entry line and Toyota’s Hybrid line showed that it could be rational
to invest in a “vanguard project” (the Logan for the Entry line, the Prius for the Hybrid line)
even if these projects were totally loss-making (Maniak and Midler, 2014; Maniak et al., 2014b;
Midler, 2013b). The genius was to consider the value of these initial projects as an investment in
assets, rather than as a “one-off” that had to reach a maximum level of profitability. From then
on, and from one step to the next, this initial project was followed by related ones (Sandero,
Duster and Kwid for the Entry line; Prius 2 and 3 and the entire Toyota and Lexus range). Those
projects relied on the assets built by the previous ones to build up a formidable profitability
which could not have been achieved and even considered if the first project had not existed.

Project Lineage Management

As mentioned, the concept is consistent with the notion of emergent strategy (Mintzberg,
1978; Mintzberg and Waters, 1985; Burgelman, 1983). The concrete implementation of these
serendipity mechanisms in decision-making systems thus requires the implementation of a
“planned emergence” regime (Grant, 2003). This requires companies to set up short-loop
decision systems, a good dose of flexibility in the decision systems and a focus on achieving
macro objectives rather than on monitoring the completion of a list of tasks.
The muti-project level of analysis is particularly relevant for characterizing these deliberate
and emergent steering modes (Burgelman and Sayles, 1988; Noda and Bower, 1996; Shenhar
et al., 2001; Meskendahl, 2010). The concept of lineage addresses all phases of multi-project
management.
It involves allocating resources at the outset to projects that are clearly outside the tradi-
tional scope of the firm in terms of technology or market,1 but that point to future strategic
trajectories. For example, if the company’s strategy is to expand internationally, a project
targeting international markets will be prioritized even if it does not have a very attractive
immediate payoff. The project can be formulated in a simple way as a breakthrough concept
or a metaphor (Hatchuel et al., 2006), which in itself constitutes a call for emerging strategies
insofar as management does not know a priori where the exploration of this concept will lead.
 Corporate innovation strategies and multi-project management 175

The formation of the team is also a key point because it is a question of finding members of the
project team who are not too procedural and who are open to both exploration and exploitation
(in this case development).
Project tracking within the portfolio is also specific. It is not simply a matter of mak-
ing a resource allocation or a stage-gate sequence with go/no-go decisions, but to have, as
mentioned earlier, richer and more flexible decisions than a compliance check. For example,
this may involve a geographical reorientation of the target offer, a revision of the functional
specifications, etc. In addition, and this is certainly one of the greatest specificities of the
approach, it is also a question of identifying the assets that this project will potentially cre-
ate, assets on which the company can build future projects. Thus knowledge management
becomes central to this process. Of course, at an early stage, it is very difficult to identify
these assets, but as the project progresses they can gradually be made explicit. Budget allo-
cation decisions are therefore based on both the expectation of direct gain and the potential
for the creation of strategic assets. We could compare this trade-off by saying that project
portfolio control focuses on the cash result, whereas lineage control also integrates the result
on the company’s assets.
Once the first project has been completed and the first offers have been put on the market, it
is important to pay attention to the first customer feedback and to the reality of the actual crea-
tion of assets associated with the project. Has the sales network really been modernized? What
new technological knowledge has been acquired? Has the concept of the offer been understood
by the customers? On the basis of this evaluation, the next phase can be initiated.
This is followed by a deployment phase that will combine, to varying degrees, re-exploi-
tation and re-exploration. The company can choose to base its next projects on these newly

Figure 8.1   The project lineage: a vehicle to project capitalization process

176 Handbook on innovation and project management

created assets without taking into account the recreation of new assets, or it can replay a
new “lineage head” project (Chapel, 1997; Le Masson, 2001) that will focus on both the
P&L and the contribution to the company’s balance sheet. The top management must also
take advantage of the results of this vanguard project to modify, if necessary, the pro-
claimed strategy.​
Such a project-to-project capitalization needs specific project organization and resource
management. The existence of a leadership capable of maintaining the “DNA” of the lineage
through the successive metamorphoses of the projects is a necessary condition. This leader-
ship can be embodied in the notion of a programme or platform director, which is understood
as the coordination of the projects of the lineage over time, whereas this notion is generally
considered as the responsibility of coordinating a group of projects simultaneously working
towards a common objective. Beyond the leadership of the lineage director, the ability to
deploy the lineage strategy is also highly dependent on the career management of the mem-
bers of the successive project teams, which ensures the transmission of skills and management
methods, even when the projects are carried out in different geographical areas (Midler, 2019;
Midler et al. 2023).
Ongoing research on this concept concerns four aspects.

• The relationship between this dynamic project portfolio management and platform man-
agement, i.e. component commonality (Laine et al., 2016), and how this approach changes
the way of approaching “new product development” (Laine et al., 2016).
• The performance of a project portfolio management balancing a portion of pro-
jects following a deliberate strategy and others an emergent strategy (Kock and
Gemünden, 2019b).
• The relationship between lineage project portfolio management and the issue of organi-
zational ambidexterity (Berggren, 2019).
• The relationship between lineage management and agile project management capabil-
ity. As already mentioned, the efficiency of lineage learning relies on the capability to
quickly derivate and adapt solutions to new business opportunities (Kock Gemünden,
2021; Rémondeau et al., 2021).

It is precisely on the basis of the latter questioning that the second concept explained in this
chapter, namely ambidextrous programme management, is concerned.

AMBIDEXTROUS PROGRAMME MANAGEMENT

Research on ambidexterity has shown the limitations of these different approaches, which are
in line with the limitations of the associated multi-project management models.

• As has been pointed out (Midler et al., 2019), sequential ambidexterity and portfolio
management do not encourage learning between projects and increase the time to market
for disruptive innovations. Lineage management, on the other hand, is focused on inter-
project capitalization but takes a long time to scale up the pilot concept.
 Corporate innovation strategies and multi-project management 177

• Structural ambidexterity based on the management of exploration projects often comes

up against the obstacle of the recovery of explored concepts by the operating business
units, which alone can ensure their effective deployment.
• Finally, the decomposition of breakthrough innovation management into a programme of
coordinated incremental projects is not always possible when the breakthrough in ques-
tion involves major uncertainties.

These different limitations do not allow us to effectively deal with the context of disruptive
innovations that are both radical and urgent, such as those encountered in the current chal-
lenge of responding to climate transition: decarbonization of automobile mobility involving the
replacement of the dominant thermal engine design by electrification; or decarbonization of air
transport, for example. These contexts combine the need for major technological breakthroughs
with significant areas of uncertainty, and this is on a particularly short time constraint.
In this section, we characterize a form of multi-project management that encompasses both
exploratory projects and shorter-term development projects under the name of “ambidextrous
programme management”. We will first characterize the strategic context in which these pro-
jects have emerged, that of the ambidextrous enterprise. We will then characterize, on the basis
of an emblematic example, the specificity of this model and its differences from other forms
of multi-project management such as portfolio management and programme management.
We then study the rationality that it pursues and conclude with its advantages and limitations.
This context is at the origin of the experimentation of new forms of multi-project manage-
ment, formalized by Midler et al. (2019) in the literature on the concept of “ambidextrous
programmes”.

Ambidextrous Programme Management: A Characterization

Based on the analysis of an emblematic case of this type of context, that of an autonomous
vehicle programme at a global car manufacturer, Midler and Maniak (2019) defined ambidex-
trous programme management by the following four characteristics:

(1) It involves multiple projects.

(2) The projects involved are complex.
(3) The projects have strong interdependencies that require a specific coordination effort
(which explains the name “programme”).
(4) The projects have heterogeneous objectives, some of which are oriented towards imple-
mentation (or operation), and others towards exploration (this duality explains the quali-
fication “ambidextrous”).

Here we present the results of our case study, which illustrate how these principles are embod-
ied in the organization and the R&D projects concerned by the autonomous mobility initiative
within the car manufacturer studied. The following figure shows how the car manufacturer’s
autonomous vehicle programme (i) brings together projects of different natures (exploratory
projects, vehicle development, technological development, development of on-board equip-
ment), (ii) is deployed within the different divisions of the company and (iii) associates com-
panies or organizations outside the firm (Figure 8.1).
178 Handbook on innovation and project management

MAPPING THE VARIOUS PROJECTS INVOLVED IN THE AUTONOMOUS

MOBILITY AMBIDEXTROUS PROGRAMME

Source:   Midler et al., 2019.

Figure 8.2  The various projects involved in the autonomous mobility initiative

The arrows r​ epresent the projects and the rectangles represent the company divisions in
the large rectangle, with the external units and partners involved outside. The projects
mobilize internal or external resources within internal functional divisions and external
units. The projects at the top of the figure are exploratory while those at the bottom are
development projects leading to the market in the short term.
Projects A and B are typical research projects on technological breakthroughs. Projects
C, D, E, F, G and H prepared and matured technological solutions and components using
an “on the shelf” featuring logic (Maniak et al., 2014a) to be included in AM vehicles.
Project I is an autonomous driving equipment development programme. Projects J and
K are vehicle development projects that had already been programmed in the group’s
product planning. Projects L and O are complex integrated prototype projects. Projects
M and N are technological development projects needed for AM deployment. Projects
P, Q and R were field operational tests in different environments in various countries.

This mapping allows us to characterize the specificity of the scope of the ambidextrous pro-
gramme, compared to the classic structures of multi-project management.
On the one hand, it associates projects of different categories (exploration, complete vehicle
development, equipment development, technologies and field experimentation). It combines
 Corporate innovation strategies and multi-project management 179

different horizons (long-term exploration, shorter-term development). It involves internal bod-

ies from different divisions. It brings together internal projects and cooperation with external
partners.
On the other hand, it allows for communication and learning between these different com-
ponents, which would not be possible with traditional processes that are “siloed” by project
category or by the scope of the bodies involved. Coordination between these multiple bodies
takes place at two levels. At the level of project managers, in addition to the established pro-
cesses mentioned earlier, a communication body for the extended perimeter makes it possible
to put the managers of the various projects in contact, regardless of the unit to which they
belong. At the strategic level, a senior vice-president’s committee ensures the overall govern-
ance of the AM domain.

Ambidextrous Programme as an Orchestration Process of Ambidexterity

The research cited concerns a transition in progress. It is therefore not possible to verify
whether this original mode of multi-project organization will deliver the promises that are
associated with ambidextrous programme management: shortening the time to market and
scaling of disruptive innovations; reconciling the valorization of short-term learnings by
development projects by coordinating them with longer-term trajectories; and articulating
different but highly interdependent levels of projects (from technology to platforms and to
complete products and equipment). Several examples (Midler et al., 2019) show, however, that
these arrangements have already enabled learning, coordination and experience transfer that
would not have been possible with other project coordination processes. It allows us to put for-
ward the following three hypotheses on the development of these multi-project management
models in the context of the response of companies to the “Great Challenges” that industries
are currently facing, in order to respond to societal challenges concerning the preservation of
the environment and global warming.

H1: An extension of the concurrent engineering approach to learning about innovative

breakthroughs.

Exploration and implementation projects are traditionally coordinated by sequential stage-

gate processes. Ambidextrous programme management, as it is manifested in our case, sets up
a different coordination process aimed at accelerating longitudinal knowledge transfers and
mutualizations and shortening the time to market for breakthrough innovations as well as for
the intermediate achievements of learning trajectories.
This approach extends to disruptive innovation the transformation of concurrent engineer-
ing processes deployed in the 1990s in the area of product development.

H2: A closer and more continuous articulation between the formalization of strategic choices
and learning how to implement them.

Ambidextrous programme management re-internalizes within multi-project management

the tension between strategic choice in uncertainty and operational implementation of these
choices, a tension that had been dissociated in traditional portfolio management. This has
several important consequences both in the field of strategy and in that of project management
and organization.
180 Handbook on innovation and project management

Ambidextrous programmes must support strategic ambiguity. Traditional phased portfolio

management emphasizes the importance of strategic alignment as a key criterion for evalu-
ating and selecting projects, with the strategy assumed to be clear ex-ante. Ambidextrous
programmes, by making the variety of explorations visible, show the real dialectic between
strategy formulation and exploration of possibilities, and thus force the actors of the organiza-
tion to bear the uncertainty and the real strategic instability of the company. From this point of
view, the concept of an ambidextrous programme seems relevant to the formulation of emer-
gent strategies (Mintzberg and Waters, 1985; Burgelman, 1983). This characteristic has two
consequences. First, it indicates the need to position the ambidextrous programme function at
the strategic level of the firm. Second, it implies that the tension resulting from this strategic
ambiguity is deliberately maintained within the programme, and thus understood and sup-
ported by actors accustomed to more structured and stable organizational contexts.
In particular, ambidextrous programmes combine both competition and cooperation
between projects, in accordance with a learning logic. In the selectionist approach (Loch
et al., 2011), multi-project management usually integrates competition between projects. Such
a competition context does not favour cooperation through cross-learning. Interaction between
projects is more complex here.

H3: What coordination is necessary for ambidextrous programmes?

The literature on programme management emphasizes the importance of a programme man-

ager who is empowered to coordinate the overall portfolio of projects. Such a proposal mirrors
the emphasis on high-level sponsorship in the ambidextrous literature and clearly resembles
the multiplex structure defined by Ben Mahmoud-Jouini et al. (2007). The leadership litera-
ture (Rosing et al., 2011) proposes that ambidextrous leadership emphasizes three elements:
“(1) opening leader behaviors to foster exploration, (2) closing leader behaviors to foster
exploitation, (3) and temporal flexibility to switch between them as the situation requires”
(Rosing et al., 2011, 966). Clearly, this leadership style addresses the dilemma of competition/
cooperation between projects within the ambidextrous programme.
In addition to this decision-oriented perspective on the role of the programme man-
ager, research on lineage management (Midler, 2013; Maniak and Midler, 2014; Kock and
Gemünden, 2023) has emphasized the role of managing multi-project sequences and longi-
tudinal interdependencies of projects in order to implement cross-project learning. It empha-
sizes the importance of human resource management within the programme to leverage and
transfer knowledge between sequential as well as parallel projects. The literature on knowl-
edge integration and transfer within and between projects (Sydow et al., 2004; Enberg et al.,
2006) emphasizes the multi-level dimension of inter-project learning processes. It is clear that
the scope and dispersion characteristics of ambidextrous programmes are not compatible with
the collocation approach that is often suggested as an effective way to transfer tacit knowl-
edge. Ambidextrous programme coordination thus appears to be a loosely coupled system
(Orton and Weick, 1990) that could enhance shared values and strategic decision-making
among projects that differ in nature, horizons and goals.
In addition to the specific leadership style of the programme manager, a hypothetical way
to implement this loosely coupled system could be the design of an “ambidextrous programme
hub” that could develop regular face-to-face communication among members of heterogene-
ous programme projects. Such a hub could not be equated with a programme team under the
 Corporate innovation strategies and multi-project management 181

authority of the supervisor but rather would be an organizational process to stimulate regular
and systematic learning between projects. A classic term to define such a knowledge-sharing
process is the community of practice – a concept that has been widely developed in academic
learning and knowledge management communities (Wenger, 1998). We prefer the hub meta-
phor because it emphasizes the importance of coordinating the connection points between
different learning tracks, even if these tracks have different orientations and time perspec-
tives (just as an airport hub connects different destinations and flights, from long distance to
medium and short distance, bringing continuity to the customer experience). In our case study,
we saw the beginnings of such a platform, but it could clearly be scaled up and streamlined.
There is an opportunity here for the field of project organization to explore and define new
organizational and methodological artefacts to better coordinate ambidextrous programmes.

Managing Ambidextrous Programmes: Towards an Orchestration of Ambidexterity

Our case shows how projects within ambidextrous programmes orchestrate different types of
ambidexterity patterns, from contextual to structural, network and multiplex configurations.
Not surprisingly, projects are the natural vehicle for developing “skunk” (Jenkins, 2001),
“vanguard” (Brady and Davies, 2004) or exploration (Lenfle, 2008) projects in an organiza-
tional pattern of structural ambidexterity. But ambidextrous programmes are also the means to
involve, stimulate and coordinate the actions of professionals in situations of contextual ambi-
dexterity. Network ambidexterity is driven by a dual pattern: some partnerships are managed
in a project orchestration, while others are more function- or knowledge-based cooperations.
While the discussion of this case can help characterize ambidextrous programme situations
and their challenges, it still does not allow us to derive robust principles for managing them.
First, we still lack data on programme outcomes, as we adopted a real-time methodology to
study the AM initiative at Global Car. Second, such a management situation is, as far as we
know, emerging in the industry, and will be subject to a learning trajectory – our research
being part of that collective effort. What we can do, however, is propose hypotheses from the
existing literature on programmes and ambidexterity and evaluate them against the ongoing
situation we observed at Global Car.

CONCLUDING REMARKS AND FURTHER RESEARCH

The study of the management of innovation projects implies crossing the fields of corporate
strategy, firm organization and project management. Indeed, innovation projects cannot be
considered simple implementations of innovation strategies that have been clearly formulated
beforehand. On the contrary, they are often the basis for the constitution of the ingredients that
allow the formulation of these strategies. Innovation strategies and management of innovation
projects are therefore two processes that need to be articulated in the time and space of the
organization.
Lineage management and management of ambidextrous programmes are two organiza-
tional forms for achieving this articulation. The first organizes in a longitudinal way the joint
construction of the emerging strategy and the lineage of successive projects that constitute it.
The second organizes, in the face of an imperative need for a major transition, the coordina-
tion of heterogeneous projects aimed at preparing for the future break while preserving the
182 Handbook on innovation and project management

profitability of short-term projects. Each in its own way, these two forms of multi-project
management contrast with the approaches developed in the 1990s and 2000s: portfolio man-
agement and programme management, both of which organized the steering of projects by
assuming the clear and stable ex-ante formulation of an overarching innovation strategy.
The current period, which sees, with the imperatives of the ecological transition, the emer-
gence of new innovation strategies based on renewed value criteria, seems to be a particularly
favourable context for the deployment in various sectors of these forms of management of
multiple innovation projects. This opens the way to rich perspectives for research in this field.

NOTE
1. The strategy of deriving from existing products to differentiate and renew ranges is obviously not
new. But this is done ex-post to enhance and extend already established rents. Here, the strategic
aim is to explore ex-ante the possibility of creating new areas of value.

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9. Exploratory projects: the state of the art and a
research agenda
Sylvain Lenfle

INTRODUCTION

Today project management (PM) is a mature research field. As demonstrated by Soderlund

(2004, 2011), project management research has grown and diversified in different research
streams (see the seven schools identified in Söderlund, 2011). In this chapter, we will focus on
the research on exploratory projects, which roughly emerged 15 years ago. In our view, this
research results from two significant and interrelated changes in PM research.
First is the move away from the universal approach behind the standard model of PM1 that
did not distinguish between different types of projects. Indeed, as demonstrated by Shenhar
and Dvir (2007), “one size does not fit all” and one has to adapt management models to the
inner nature of the project. Their NTCP model exemplifies this contingency theory of project
management.
Second is the coming together of innovation and project management research. Until
the early 2000s these two research fields had separate trajectories (Davies et al., 2018).
However, things began to change with the growing role of innovation in the strategy
of firms (e.g. Le Masson et al., 2010). This leads a new generation of academics, most
of them coming from production and/or innovation management, to study projects. The
performance of new product development was the major topic of the 1990s (Clark and
Fujimoto, 1991; Wheelwright and Clark, 1992; Midler, 1996). Then, with the strategic
question of the firm’s ability to develop radically new products, processes and competen-
cies, the management of projects confronted with unforeseeable uncertainties (which is
not the case of NPD projects) emerged at the beginning of the 2000s (Pich et al., 2002;
De Meyer et al., 2002)
Research on exploratory projects emerges at this crossroads (Brady and Davies, 2004) and
has become, during the last 15 years, an important research area (Lenfle et al., 2019). The goal
of this chapter is to take a retrospective look at this research stream and to identify avenues
for future research on exploratory projects. To do so we will first look at the emergence of the
question of exploratory project management by adopting a historical perspective. The second
section will focus on the synthesis of the main results of this research stream. Last, in the final
part we will try to identify avenues for future research in this field.

THE EMERGENCE OF RESEARCH ON EXPLORATORY PROJECTS

If the concept of exploratory projects first appears in the PM literature in Brady and Davis’
2004 paper, the question of the management of “innovative” projects has an older history. As
demonstrated by Davies et al. (2018), the fields of innovation and project management have a

186
 Exploratory projects 187

complex relationship with first a convergence and, quickly, separate trajectories. In this his-
tory, it is useful to distinguish four epochs.

First epoch. The Second World War brought to the fore the question of the management of
“radical innovation” projects. Endeavours such as the Manhattan Project (Rhodes, 1986) or
the radar project (Buderi, 1996) raised new technical and managerial challenges for industry,
science and the army. As summarized by L. Groves, Manhattan Project director, in his mem-
oirs (1962), the many unknowns of the project forced them to “abandon all normal orderly
procedures” almost at the beginning. What we see then is the deployment of very innovative
managerial strategies (see Lenfle and Loch, 2010, 2017 for a summary):

a. Creation of dedicated organizations mixing, in co-localized spaces like the MIT RadLab
or Manhattan Los Alamos, science and engineering in order to foster innovation and
speed (Lenfle and Söderlund, 2019).
b. Parallel exploration of different technological solutions.
c. Rapid experimentation at all levels of the projects.
d. Constant reformulation of goals and means during the projects according to what has
been learned.

Second epoch. Lessons from the Second World War were learned, and these managerial strate-
gies directly transferred to large Cold War projects such as inter-continental ballistic missiles
(or ICBM) and nuclear submarines (Hewlett and Duncan, 1974; Hughes, 1998; Johnson, 2002).
What is more interesting for us is the theorization of these practices in the 1950s. Indeed,
researchers at the RAND Corporation like A. Alchian and R. Kessel (1954), K. Arrow (1955),
R.R. Nelson (1959, 1961) or C. Hitch and R. McKean (1960) wrote vanguard papers on the man-
agement of highly innovative projects (called “exploratory development” by K. Arrow). The
insights from these works are probably best summarized in Klein and Meckling’s 1958 landmark
paper contrasting “Mr Optimizing” (standard PM) and “Mr Sceptic” approaches to project
management. This paper demonstrated the superiority (in situations of radical innovation) of an
approach by the project manager to try different solutions and to make a

deliberate effort to keep his program flexible in the early stages of development so that he can take
advantage of what he has learned. […] In order to maintain flexibility he commits resources to
development only by stages, reviewing the state of his knowledge at each stage prior to commitments.
(Klein & Meckling, 1958, 35; see also Brady et al., 2012)

Unfortunately this line of inquiry was not to have a rich posterity in the academic litera-
ture (Nelson, 1961). To the best of our knowledge, the last article dealing with this question
(before the new millennium) was Abernathy and Rosenbloom’s Management Science paper of
1969 on “Parallel strategies in development projects”.

Third epoch. The date of 1969 is emblematic since it corresponds both to the creation of the
Project Management Institute and Armstrong’s landing on the Sea of Tranquility on 20 July.2
And, actually, the standardization of PM practices from the “optimizing” perspective was
well in progress. It started in the early 1960s when the US Department of Defense and NASA
published a PERT/Cost Guide that became a de facto standard in the PM community. This
story has been told elsewhere (Johnson, 2000; Lenfle and Loch, 2010, 2017; Davies et al.,
2018) and is now well known, including the original misunderstanding on the supposed
188 Handbook on innovation and project management

efficiency of programme evaluation review technique (PERT) in the Polaris case (Sapolsky,
1972; Engwall, 2012). What is important for us is that the practices of the Second World War
and the 1950s completely disappeared in the process. Project management became dominated
by a rational and instrumental view of a project as the convergence towards a clearly defined
goal. Mr Sceptic faded away and with him the notions of parallel strategy, rapid experimenta-
tion and emerging goals through learning.3

Fourth epoch. Then came the early 2000s and the rediscovery of the question of the manage-
ment of very innovative projects. Whereas Shenhar and Dvir demonstrated the fallacy of the
“one size fits all” approach, and Brady and Davies (2004) proposed the notion of “vanguard
exploratory projects”, C. Loch and his colleagues developed a theory of project management
under unforeseeable uncertainties (or unknown unknowns). What is interesting here is that
they demonstrated the relevance of parallel (selectionist) or trial and error (iterate and learn)
strategies to deal with unknown unknowns without any references to Cold War practices and
theories4 (Pich et al., 2002; Loch et al., 2006; Sommer et al, 2009; Loch and Sommer, 2019).
Following this line of inquiry, Lenfle (in particular 2008, 2014, 2016) examined explora-
tory projects5 in depth by characterizing their nature and proposing management principles
(see the next section). He also built a bridge between the contemporary work of C. Loch and
the work and cases of the Second World War and the Cold War (see Lenfle and Loch, 2010,
2017). Finally, these contributions led to the development of research on the management of
exploratory projects with different lenses (see Lenfle et al., 2019, introduction to the Project
Management Journal special issue on exploratory projects).

The management of exploratory projects now constitutes a significant research stream at the
crossroad of project and innovation management. As we’ve seen, its emergence follows, in a
way, the process described in Davies et al. (2018): first a close connection, then complete sepa-
ration and, finally, rediscovery and strengthening of the management of these exploratory pro-
jects (EPs). In the next section, we will summarize the main contributions of the field before
turning to a research agenda in the final section. Since we have been part of this research
stream, this chapter constitutes an opportunity to reflect upon this research trajectory.

THE MANAGEMENT OF EXPLORATORY PROJECTS: WHAT DO WE

KNOW?

Current research on exploratory projects has yielded several important results on their defin-
ing features and their management. Indeed in 15 years, the field has moved “from strangeness
to theory” (Lenfle et al., 2019). We summarize the results in the following.

Definition

Several complementary definitions exist of exploratory projects (EPs). In fact, two definitions
emerged independently at the beginning of the 2000s. C. Loch and colleagues (Pich et al.,
2002; Sommer and Loch, 2004; Loch et al., 2006) explore the limitations of risk management
methods for projects confronted with complexity and unforeseeable uncertainties, demon-
strating the need for new management techniques. Quite at the same time, Brady and Davies
(2004) define vanguard exploratory projects as first-of-a-kind projects that “explore strategic
 Exploratory projects 189

Table 9.1  Exploratory and exploitative projects

Exploratory projects Exploitative projects

Emerging and strategically ambiguous projects Result of a clearly defined strategic decision process
Proactive process The “client” is identified, needs are known
Difficulties defining the results ex-ante Requirements are available
Exploration of new knowledge Knowledge exists (mostly incremental innovation)
Hidden urgency and multiple timescales Deadline is defined at the beginning

opportunities to move into new technology or market bases or to adapt to a changing mar-
ket environment”, paving the way for future “exploitation” projects. Building on these first
contributions, Lenfle (2008) proposed a definition of an EP as a “project for which neither
the goals nor the means to reach them can be clearly defined at the outset”. More precisely
he proposed five criteria to distinguish exploratory projects from exploitative projects, which
were the main focus of the literature since Clark and Fujimoto’s landmark contributions on
new product development projects6 (see Table 9.1).
They underline the fundamental uncertainty of projects which, fundamentally, are “experi-
mental learning processes” (Loch et al., 2006). Therefore the founding principles of the
rational approach (clear specifications and deadlines in particular) vanish and one needs to
invent an alternative model of project management since the rational approach is insufficient
(or even makes no sense) here. Instead, as formulated by Dugan and Gabriel (2013) based
on their experience at DARPA, project managers here “are focused on managing constant
flux—building, replanning, changing track, and moving talent in and out as needs shift”.7 The
question then becomes how to manage these fluxes.

EXPLORATORY, BREAKTHROUGH, DISRUPTIVE, CREATIVE PROJECTS …

WHAT ARE WE TALKING ABOUT?
One important question is the positioning of exploratory projects compared to existing
typologies of innovation and/or projects (e.g. Abernathy and Clark, 1985; Wheelwright
and Clark, 1992; Christensen, 1997; Danneels, 2002; Obstfeld, 2012). Whereas these
former typologies focus on the origins of innovation (e.g. technology/market com-
petencies in Abernathy and Clark and Danneels; level of product/process change in
Wheelwright and Clark; disruptive/sustaining innovation in Christensen; elements of
recognizability/action repetitiveness in Obstfeld), our definition of exploratory projects
emphasizes the impact of unknown unknowns, whatever they come from, on project
management. Therefore the exploratory projects (1) exclude regular/incremental inno-
vations (what Danneels refers to as pure exploitation) and (2) are compatible with dif-
ferent sources of uncertainties. For example, breakthrough projects in Wheelwright
and Clark or Christensen’s disruptive innovation are exploratory in nature. We thank
Andrew Davies for pushing us to clarify this point.
190 Handbook on innovation and project management

Managerial Principles

The described work demonstrates that firms are confronted with a new type of project that
requires a new kind of project management. The new model was summarized by Lenfle
(2008) around five overarching (or meta-) principles that synthesize research on the question.
These principles have evolved with research on the question. Since they have been presented
elsewhere (in particular Lenfle 2008 and 2016), we summarize and reflect upon them next.
P1: Differentiated managerial processes. Exploratory projects are confronted with the clas-
sic difficulties of innovation in large organizations. If they are evaluated through standard
financial criteria, they will probably be killed before they start (e.g. Christensen et al., 2008).
Furthermore if, once approved, they are managed with the standard stage-gate approach,
there is a high probability that they will fail due to “project inflexibility”8 (Sehti and Iqbal,
2008). Thus the need arises to set up specific managerial processes for exploratory projects to
evaluate and oversee them. Here the literature on exploratory projects joins research on ambi-
dexterity in organizations, for example through skunkworks (Tushman and O’Reilly, 1996;
Raisch et al., 2009; Zimerman et al., 2018)
P2: The central role of experimentation. One of the central questions concerns the funda-
mental mechanisms of agency in exploratory projects. Indeed, given their distinctive features,
in particular, the unknown unknowns, the fundamentals of standard project management van-
ish; goals are unclear, tasks largely unknown, knowledge is lacking, deadlines shift, etc. The
cases and the literature on innovation show that EPs are probe-and-learn processes (Lynn
et al., 1996). Therefore they progress through experimentation (Thomke, 2003) even if this
can become quite complex when confronted with unknown unknowns (Gillier and Lenfle,
2019). The question is thus to manage this experimentation process. Here the contributions of
C. Loch and colleagues are fundamental. They provide a framework to choose between dif-
ferent approaches, namely “iterate and learn” and “selectionism”9 (or a combination of both).
Since this work is well known we will not present it here (see Loch and Sommer, 2019, for a
recent overview and Chapter 10 in this volume).
P3: Concurrent exploration of technology and “market”. One important point is that
exploratory projects are projects; they have goals and deadlines (even fuzzy ones at the outset).
As one of our interviewees explains, “we are not exploring for the sake of exploring. We try to
do something that works” (in Lenfle, 2016). So exploratory projects are not research projects;
they do the groundwork for other, more “development-oriented” follow-up projects. Therefore
they have to explore simultaneously the technical and market dimensions of the innovation,
what Gastaldi and Midler (2005) called concurrent exploration and Dugan and Gabriel (2013,
following Stokes, 1997) called “use-inspired basic research”. The goal is to avoid the sym-
metrical traps of useless technology or inaccessible needs.
P4: A project that leads to products, concepts and knowledge. The fourth principle tackles
one of the difficulties raised by exploratory projects: the lack of clearly defined deliverables
that constitute one of the fundamentals of standard project management. What happens when
this premise disappears, when there is no obvious “result”, such as a product? Our argument
here is that an EP does not necessarily lead to physical objects. Its goal is to map an “unfa-
miliar landscape” (McGrath, 2001) to build new competencies and explore original concepts
through prototyping and experimentation. It is, as said before, doing the groundwork for future
projects. Therefore reflecting on the innovation journey during its unfolding is fundamental,
and projects should be evaluated from the “products” they deliver, which could be prototypes
 Exploratory projects 191

(see Jouini and Midler, 2020), as well as the knowledge, concepts, patents, competencies, etc.,
that they create (Iansiti and Clark, 1994; Elmquist and Le Masson, 2009; Keil et al., 2009;
Lenfle, 2016).
P5: Constant reformulation of goals. The last challenge identified in the literature follows
from the previous point. The fifth principle tackles one of the major managerial challenges
raised by EPs: the lack of “clear goals”.10 Indeed the existence of a contract book specifying
the requirements to be fulfilled constitutes the foundation of standard PM processes. Because
exploratory projects are “experimental learning processes”, it is important to develop manage-
rial methods that will help the team to manage this learning process and assess the “progress”
of the project. Reflection in action (Schön, 1983) is fundamental because the goals, and the
means to reach them, will be defined (and probably modified) during the project. In particu-
lar, the challenge is to manage the expansive nature of these kinds of projects (Hatchuel,
2002; Lenfle, 2012; Gillier et al., 2014). No doubt this constitutes a major question for future
research.
These principles should be understood as overarching principles. They help to clarify
the foundations of a management system for exploratory projects. But they do not settle the
debate. They provide a framework to assess the relevance of different types of organization or
management tools, proposed to manage exploratory projects.

Recent Advances

Indeed, research on exploratory projects is evolving. A recent special issue of the Project
Management Journal that we coordinated with Christophe Midler and Markus Hällgren
emphasizes several points that will be developed further in the next section.

A. The distinction between exploration and exploitation is probably a bit too simple. This
idea is already present in Loch et al. (2006). Indeed their framework suggests that some
parts of the project can follow, for example, selectionism, while others are managed
according to standard practices. Tillement et al. (2019 and Chapter 6 in this volume) go
one step further by demonstrating that a single project can have elements of exploration
and exploitation and that this may evolve during the project. They thus propose to distin-
guish between deliberate and emergent exploration.
B. The analysis of uncertainty constitutes another interesting avenue. In their 2008 paper,
Loch et al. propose a framework to diagnose unforeseeable uncertainty within a project.
More recently, Gomes et al. (2019) developed a multilevel approach that distinguishes
four sources (ecosystem/network, organization, portfolio and project) and three levels
(primitive, structural and elementary) of uncertainty. This, they argue, can help managers
to avoid the trap of uncertainty blindness, a very promising concept, which occurs “when
managers are not able to either define which uncertainties were mitigated (and the contri-
butions to the firm) or why they should invest in reducing the additional ones” (2019, 566)
and surely leads to project failure (see also Ramasesh and Browning, 2014).
C. The governance of EPs emerges as a central question. Indeed, the fourth and fifth prin-
ciples question the very foundation of project supervision. As we will develop in the next
section, the entire project supervision toolbox (be it portfolio or stage-gate processes)
is based on the premise that projects have clear goals and deliverables. What happens
when projects are hard to understand because goals are complex and fuzzy, deliverables
192 Handbook on innovation and project management

are hard to define and deadlines are floating (Lenfle, 2016; Loch et al., 2017; Loch and
Sommer, Chapter 10 in this volume)? Furthermore, how can we identify exploration and
exploitation projects within portfolio management processes? How do we manage the
transition from exploration to exploration? We know that there is frequently a valley of
death (Midler, 2019) between exploration and development. How can we overcome it?
From this perspective, the work of Kock and Gemünden (2019 and Chapter 11 in this
volume) demonstrates the need to take into account intertemporal linkages in portfo-
lio management. Indeed, as they argue, EPs create options that have to be developed
through lineages of projects. In the same vein, Midler et al. (2019) propose the concept of
ambidextrous programme management, i.e. a programme that combines exploration and
exploitation projects to explore a new innovation field (autonomous mobility in their case).
D. Finally, until now, exploratory projects have mainly been studied in isolation. Yet, as
pointed out by Engwall (2003), projects are not islands. They unfold within a context.
This is all the more true for EPs that have to manage their relations not only with their
parent company (Burgelman, 1983) but also with their frequently as-yet-undefined eco-
system. Here, research on exploratory projects meets the expanding research on the role
of ecosystems (Adner, 2012; Jacobides et al., 2018). Indeed one of the challenges of EPs
is that they are confronted with emerging ecosystems. How they can manage (or at least
influence) ecosystem creation and/or evolution thus constitutes an important question
(Ben Mahmoud-Jouini and Duboc, 2017; Koch-Ørvad et al., 2019).

THE ROAD AHEAD: DEEPENING THE CASES, BROADENING THE

SCOPE, STRENGTHENING THE THEORY

This brief overview of the state of the art of management of exploratory projects helps to iden-
tify the questions/problems that lie before us and the promising research avenues. From our
previous analysis, we can identify four areas for future work on exploratory projects.
First, we need more cases. The empirical base of the research on exploratory projects is
still limited and more cases are needed to understand their inner functioning, how coordi-
nation occurs when actors are confronted with unforeseeable uncertainties and novel prob-
lems (Lenfle and Soderlund, 2019), the problems they meet, the strategies they use during
the experimentation process, the role of project leaders, etc. Research strategies here can be
diverse:

• Collaborative research with firms can allow researchers to dig deep into the processes
of EPs through single or multiple case studies (Lenfle, 2016; Tillement et al., 2019;
Vasconcelos Gomes et al., 2019).
• The difficulty of accessing the field, due to the frequent secrecy of EPs, can also lead
researchers to explore history. As we have seen, looking back at history leads to the exca-
vation of the lost roots of project management (Lenfle and Loch, 2010, 2017).
• We can also hope that, with time, more quantitative approaches will develop (Koch et al.,
2019) to complement case studies and provide comparisons between different projects,
firms or sectors.
• Finally, there might be additional opportunities to create mathematical models of key
decisions in exploratory projects, which include unforeseeable uncertainties as well as
 Exploratory projects 193

interest misalignments across multiple stakeholders. For example, Sommer and Loch
(2009) showed that bonuses are not effective motivation mechanisms in exploratory pro-
jects (because bonuses assume that management knows what “success” looks like), as
opposed to process rewards or upward rewards.11

An additional opportunity lies in the fact that some literature exists that deals with or can be
useful to exploratory projects without using this concept, preferring more classical terms such
as “radical innovation projects”. This work is of course relevant to our research and should
be integrated into the corpus (e.g. Laamez and van Knippenberg, 2014 on the functioning of
teams in pursuit of radical innovation; or Kelley et al., 2011 on the direct manager’s role). The
richness of qualitative research is already visible in a recent paper by Wied et al. (2020) who,
by relying on interviews of managers of EPs, identify a repertoire of 11 approaches12 used to
increase the resilience of projects confronted with uncertainties. There is no doubt that this
line of investigation should be continued.
The second area of research concerns the management tools and methods adapted to these
projects. This is an already fruitful area, particularly with the work of C. Loch and colleagues.
We know that experimentation is the engine of exploratory projects and how to choose
between “iterate and learn” and “selectionism” according to the project’s level of complexity
and unknown unknowns. However, a lot remains to be done on the management tools that will
help to make sense of this experimentation at the team level. Research is promising but quite
fragmented in this dimension. Real option thinking (Kester, 1984; Schwartz and Trigeorgis,
2004) and its application through discovery-driven planning (McGrath and McMillan, 2009)
is a dominant approach, but its application to exploratory projects remains to be studied.
Moreover, we still miss real examples of its functioning in situations of radical innovations.13
In a stimulating paper, Gillier et al. (2014) demonstrate the limitations of value analysis for
innovative projects given their “expansive nature”, i.e. when more goals, problems and solu-
tions are discovered during the project (Lenfle, 2016). They thus propose new tools, based
on advances in concept-knowledge design theory, to design new tools to manage innovative
projects (Midler et al., 2012; Lenfle, 2012; Hooge and Stasia, 2016; Hooge, 2020; Hooge and
Lenfle, Chapter 17 in this volume). Here again, research in collaboration with organizations
is needed.
The third research area relates to the governance of these projects. As pointed out by Loch
and Sommer (2019), the lack of clearly defined goals in EPs runs counter to the logic of most
control processes in organizations. Indeed, as they explain:

It is at the very heart of management principles of accountability and control to have defined deliv-
erables. Once you give up on an activity’s defined deliverables, you give up on this activity being
manageable. […] [Therefore] allowing for not having clearly specified goals creates deep tension
with the very definition of a project, and its associated accountability for, and (even imperfect) con-
trol of, a deliverable. This tension engenders significant resistance from practicing managers, who
are assigned to provide project supervision – they simply cannot live with a complete (or so felt)
abdication of control. This is important because it represents a barrier to the success of exploratory
projects not from management methods, but from organizational oversight.
(Loch & Sommer, 2019, 524)

The problem is all the more complex in that exploratory projects are often difficult to
understand in their (novel or complex) details because of their very nature, thus rendering
194 Handbook on innovation and project management

supervision excessively difficult (Loch et al., 2017). The governance of exploratory projects
should constitute a central research area. Here two different but complementary questions
should be distinguished.
The first relates to the definition of adequate management processes for exploratory pro-
jects. Indeed, it is clear that EPs face the challenge of uncertain content (be it technical,
market, legal, etc., possibly also raising complexity challenges) that raises the question of
managing their legitimacy in the organization, thus the importance of political processes.14
In this perspective, as discussed in Lenfle (2016) and Loch and Sommer (2019), the bootleg-
ging strategy (Schön, 1963; Westrum, 1999) based on “organizational ingenuity” (Kannan-
Narasimhan, 2014) is risky because it is fragile. There is a high risk that someone discovers
the true nature of the project and kills it. However, it is clear, at least since Burgelman’s ICV
work (Burgelman, 1983, 2003), that such projects have to be protected. They “have to be
fought for by their originators. [And] hiding their effort until they could show positive results
clearly had survival value for product champions” (Burgelman, 1983, 233). Indeed, they need
time to build their legitimacy in the organization (Dougherty, 1994). How to build such shel-
tered places remains an important question, and the link with the literature on ambidexterity
is obvious here. Should the organization design a separate process, such as IBM Emerging
Business Opportunities (Tushman et al., 2009), set up skunkworks (Rich and Janos, 1994) or
favour contextual ambidexterity (Gibson and Birkinshaw, 2004)? The question needs further
research but it is now clear that the management of exploratory projects, as is common in
innovation (Van de Ven, 1986), combines a double process of project content exploration and
political legitimacy building.
The second question relates to the management of the portfolio of projects. This classical
dimension of project management has been, until now, insufficiently studied (for example,
Lenfle and Loch remain mainly at the project level). However, Koch and Gemunden (2019)
and Midler et al. (2019) demonstrate the fundamental role of portfolio management to articu-
late the firm’s exploration strategy through projects, manage their temporal linkages through
lineages of projects and orchestrate the transition from exploration to exploitation. In this line
of research the concept of ambidextrous programme management, proposed by Midler et al.
(2019), i.e. a programme “that simultaneously coordinates both exploratory and implementa-
tion projects” in order to explore a new field (in their case autonomous mobility at Renault)
seems very promising. Here again, it would be interesting to study the criteria used to manage
a portfolio or programme of exploratory projects, the unfolding of the decision process and,
of course, its impact on project “success” or “failure”.15
Last, but not least, we believe that the emergence of exploratory projects raises fundamental
theoretical questions on the very nature of projects. Indeed, EPs are questioning the funda-
mental hypothesis of the standard model, namely that a project has a clearly defined goal.
The problem is that the standard model is entirely structured around this hypothesis. Once
you have a clearly defined goal, it is possible to define a deadline, break down the project into
tasks, evaluate the costs, identify the risks, etc. So giving up on the idea that projects have
defined goals leads to the collapse of the standard model and its instrumentation. What are
the theoretical consequences of this situation? Indeed, removing the prerequisite that projects
have “clear goals” leads to the questioning of the theoretical background of project manage-
ment. Here again, the dialogue between project and innovation management could be fruitful
since innovation is frequently described as a chaotic process (Van de Ven et al., 1999). For
example, Dunne and Dougherty (2016) and Dougherty (2016) describe innovators’ reasoning
 Exploratory projects 195

as an abductive process that consists of gradually building/testing/refining hypotheses through

and during projects. This pragmatic perspective16 may help us to theoretically strengthen our
approach to a project as a probe and learn process (Lynn et al., 1996; Loch et al., 2006). No
doubt more work is needed to build these new theoretical foundations of exploratory project
management. In particular, we think that this could also lead us to intensify the connection
with two other fields:

• Research on sensemaking (Weick, 2001; Weick and Suttcliff, 2007) that, in our view,
has an obvious link with the management of complex and uncertain projects (Loch et al.,
2006; Ivory et al., 2006).
• Design theory, in particular the concept-knowledge design theory (Hatchuel and Weil,
2009), which could provide a theoretical framework precisely to make sense of the pro-
ject’s trajectory during its unfolding (see earlier).

CONCLUSION

As we have seen, exploratory projects offer a fruitful research field that, over the last 15 years,
has yielded important results. EPs are now well identified, the need to develop specific pro-
cesses is clear since the standard ones have been demonstrated to kill them, meta-principles
exist for this research and avenues for future research have been identified. However, we
are still only at the beginning of the process. One of the main challenges lies, in our view,
in the possibility for researchers to access the field and collect relevant data. Indeed, if our
experience demonstrates that organizations are eager to adapt their processes, working with
researchers is unfortunately not always possible given the secrecy of these questions.

NOTES
1. When we refer to the standard model we have in mind the “rational school” exemplified by the
Project Management Institute.
2. An analysis of the Apollo case would be very interesting since, as in Polaris, this is the manage-
ment system implemented in 1964 by Sam Phillips, quite late in the project, that has been retained
(Johnson, 2001; Seamans, 2005). Here again the goal was to regain control of the project in order
to bring it back on track in terms of delay. Innovation was not the question. Innovation takes places
before this, during the early stage of the project (see for example Hansen, 1995).
3. One important question that we decided to leave aside in this chapter is the discussion of the
so-called agile methods and their relevance for exploration (a question frequently raised by prac-
titioners at our conferences). Let’s just say that (1) agile approaches have their roots in software
engineering at the end of the 1980s (see Boehm, 1988). Therefore their transferability of the realm
of products remains questionable (Remondeau & Lenfle, 2022). (2) Agile methods do not neces-
sarily lead to innovation. One can easily conceive designing a me-too product through agile. They
generally suppose the existence of a customer and a product vision. This does not correspond to a
situation of exploration. For a discussion see Remondeau et al. (2021).
4. Their oldest reference is Abernathy and Rosenbloom (1968) (a previous version of the
1969 Management Science paper).
5. Or exploration project; the two terms are interchangeable.
6. Clark and Fujimoto focus on the performance of NPD in terms of cost, quality, delay and product
integrity. They are not studying innovative projects and uncertainty is very limited in this context.
196 Handbook on innovation and project management

7. Note that this idea of managing flux is also present in the description of the Manhattan Project’s
Los Alamos laboratory during the war by Thorpe and Shapin (2000). They describe a lab being
“in a continual state of flux and turbulence” due to the unknown unknowns confronting the project
(see also Lenfle, 2011). It’s interesting to note that Dungan and Gabriel forcefully explain that in
EPs “insisting that a team steadily hit milestones established in initial plans can cause it to adhere
to a path that – based on something the team has learned – no longer makes sense”.
8. I.e. the inability to learn and adapt the project goals during its unfolding.
9. Try different solutions one after the other, or in parallel.
10. It could be useful here to distinguish between goal and requirements. We think that there is always
some kind of goal to start something. But it can be very broad, fuzzy, questionable, controversial,
etc. (“go to Mars”, “build an electric mobility solution”). This leaves quite open how the goal evolves
during the project and potentially leads to somewhere different than expected. At the opposite end,
complete requirements written in a project’s contract book are the basis of the standard model.
11. This approach is related to work in Economics and Entrepreneurial Finance (e.g. Maskin and
Tirole, 1999; Levin, 2003). We are grateful to C. Loch for this suggestion.
12. Modifiability, redundancy, sequentialism, reversibility, etc.
13. The most complete example, the BioBarrier project in McGrath and McMillan (2009), really
deals with incremental innovation and limited uncertainty. It is almost suitable for traditional risk
management.
14. The fact that exploratory projects raise technical and organizational problems is a recurring prob-
lem. It was already present in historical projects like Manhattan, Sage, Atlas/Titan and Polaris.
For example, as explained by Sapolsky (2003), “as a new technology, ballistic missiles did not fit
easily into the existing weapons acquisition structures”. Thus the need to create new organizations
(the Special Projects Office for Polaris, the Western Development Division of the USAF for Atlas/
Titan, MITRE for SAGE, etc.). See Hughes (1998).
15. We use quotation marks to underline the complex nature of the notion of success and failure in the
case of exploratory projects.
16. They rely on American pragmatism, in particular the work of C.S. Peirce.

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10. Managing unforeseeable uncertainty through
learning
Christoph H. Loch, Svenja C. Sommer and Mengtong Jiang

INTRODUCTION

It has long been known that novel projects pose the challenge of unknown unknowns or events
and influences that cannot be anticipated. In “projects” drawn up around major technological
innovations, unknown unknowns are rampant, stemming from the combination of develop-
ing a set of new and evolving technologies and applying them to new uses and markets (Pich
et al., 2002; Loch et al., 2008). For such projects, firms (should) have a long-term vision, but
it is impossible to define clear operational goals or even to determine the best action plan
that could move the company forward towards the vision. As an example, consider the rapid
manufacturing project initiated by a European car manufacturer at the turn of the millennium.
In the summer of 2001, the car company European Motors initiated the “rapid manufactur-
ing project”, an analysis of the emerging topic of rapid prototyping and rapid tooling. At that
time, rapid manufacturing technologies generated a lot of enthusiasm in the industry, as they
promised a solution to the long-time dream of offering customers competitively priced prod-
ucts in small series or even customized cars.
The new technologies promised attractive speed and cost advantages both for tooling in
small-volume production and for the production of unique parts, but they still had severe limi-
tations in quality, cost and speed for larger volumes. In 2001, none of the existing technologies
was even remotely close to meeting the automotive industry’s requirements. Nevertheless, a
number of grassroots-driven small initiatives had emerged across the company to evaluate
these technologies (Figure 10.1) and some of them had nothing to do with car manufacturing;
the most exotic of them (not included in Figure 10.1) was a project to produce models of skulls
from MRI data to help surgeons carry out brain operations.
The Manufacturing Planning Department decided to start a more structured initiative to
evaluate whether a unified “rapid manufacturing project” would have significant value for the
company. However, it quickly found that planning and evaluating this project was very dif-
ficult, if not impossible. At this stage, the medium- to long-term performance of the various
available technologies remained highly uncertain, and at the same time, new technologies and
materials were under development. Even if performance measures were available for some of
the technologies, the performance of these technologies was still rapidly evolving. Therefore,
it was not clear which technologies would be relevant for which applications, or even which
applications would be the most promising or the most exciting ones to pursue. It became
quickly clear that the “rapid manufacturing project” could not be managed like prior product
innovation projects. It was a “large vision”, which was only vaguely defined and for which no
one knew how to get there. These are conditions that should (and do) frighten project manag-
ers because they are tied in with the extreme risk of failure, both for the project and for the
careers of the people involved.

201
202 Handbook on innovation and project management

Vintage
cars
Technology
Set 1

Spare parts

Process- Vision:

Mass manufacturing
centered Apply rapid
approach tooling to
Individualized mainstream
accessories manufacturing

Technology
Set 2

Niche cars

Concept
car

Figure 10.1  Possible range of applications of “rapid manufacturing” technologies envi-

sioned in 2001

This chapter will link the management of uncertainty to learning in projects and showcase
how European Motors managed the unforeseeable uncertainty using a learning perspective.
It will then argue for using a project learning process for novel projects, similar to the exist-
ing risk management process for risky projects. We will conclude with a second example of
another highly uncertain project that was a technological success but can be considered an
overall failure because (among other things) it did not follow some of these critical steps.

LEARNING IN PROJECTS

Learning is key in any project. In fact, the project itself can be seen as a learning process using
knowledge-based and intangible resources (Whitehill, 1997; Nonaka et al., 2000; Jugdev and
Mathur, 2012). Learning in projects is a process of repeatedly building knowledge sets, such as
“what do we already know”, “what might we know that we do not know right now” and “what
do we need to know in the future” (Loch et al., 2006, 120). However, learning in projects is not
easy: projects are by definition unique undertakings and constitute a non-permanent organi-
zation, with most teams being dissolved at the end of a project. Most often, learning will
not happen naturally. “Learning schemes” should be “instituted over the long term and their
continuity and development ensured” (Boudès et al., 1998, 65). The question is how to do so.
Clearly, the type of learning is not the same across all projects. Ahern et al. (2014) distin-
guish the “emergent learning” about unforeseeable uncertainty, or ill-understood problems,
 Managing unforeseeable uncertainty through learning 203

from the “planned” learning that is “programmed” up front in the stage-gate process (PMI,
2017), suggesting a similar contingency perspective for learning in projects as for project
management overall.

Routine Projects

For routine projects, Nevison (1994) differentiates “learning from the past” (project planning),
“learning from actions” taken in the project (project monitoring and progress measurement)
and “learning in action” (corrective actions), and argues that “successful project managers
have been, and remain, strongly committed to the idea of continuous learning” (Nevison,
1994, 6). The work breakdown structure and activity planning both build on knowledge from
previous projects. But this knowledge must be explicitly adjusted for the unique aspects of the
project at hand (for example, a different location of execution, a new feature or a new design).
The adjustments introduce risks into the project because they may not go as planned; this
requires risk management and learning (at least in the sense of continuous improvement).
Existing organizational routines and solidified knowledge enable learning in such projects
but also hinder project learning. Zollo and Winter (2002) considered that the dynamic capa-
bilities of the organization arise to some extent from the accumulation of routines but also
from knowledge articulation and codification. This happens in knowledge evolution through
testing cycles (Zollo and Winter, 2002). Such well-codified testing cycles support continuous
learning and are similar to continuous improvement initiatives in processes. These testing
cycles can take place within projects, but the parallel can also be drawn at the level of the
overall project. Kotnour (1999) shows the equivalence between the PDCA cycle of continu-
ous improvement in processes and traditional steps of project management and hence routine
projects overall: planning, doing = executing, checking = project control and finally acting =
“the use of the lessons learned on the next project during the planning phases” (Kotnour, 1999,
33). Like in the PDCA cycle, detailed planning and clear hypothesis (outcome expectations)
are seen as necessary for this continuous learning to take place, while the lessons learned
ensure the learning is made explicit and subsequently disseminated across the organization
(Kotnour, 1999). Similar to learning within existing processes, the testing and the associated
learning in routine projects must overcome the resistance of the prevailing knowledge, such
as pre-determined working procedures or experiential rules, and individual biased selection –
“We already know how to do it, why are you rocking the boat?” (Ordanini et al., 2010; Ivory
and Vaughan, 2008).

Risky/Uncertain Projects

As a project becomes less routine and more novel, the deviations from solutions used in the
past grow, that is, the changes become less “obvious” (e.g. a new feature is no longer a straight-
forward change in the graphical user interface) and require additional substantial problem
solving and creativity. In this case, testing cycles become more involved and turn into experi-
mentation. A testing cycle consists of generative variation (diverse idea creation), internal
selection of insights (choosing the most promising of hopefully many ideas for trials), replica-
tion (knowledge transfer) and retention (enactment and routinization) (Thomke, 2003).
The shift from routine projects is gradual and may be subtle and hard to see at first glance.
But it is embodied by a shift in managerial emphasis from a faithful replication of the past to
204 Handbook on innovation and project management

something new, from efficiency to effectiveness (and creativity) of a novel solution and from
delivery of a planned solution to the possibly modified solution that requires changes in the
plan (Thomke, 2020). Similarly, risk management shifts from the spirit of avoiding problems
to spotting opportunities (Chapman and Ward, 2003). Learning becomes less continuous and
less programmed and instead more emergent, still guided by an overall goal, but driven by the
(possibly unexpected) experimentation cycles (Lindkvist and Söderlund, 2002).

Novel and Exploratory Projects

While traditional risk management is the “art and science” of wrestling with “known
unknowns” (Wideman, 1992), it has long been known that novel projects pose the challenge
of unknown unknowns or events and influences that cannot be anticipated. Unlike risk, which
can be predicted, measured and tested for, unforeseeable uncertainty without a known “state
space” or probabilities requires “the creation of novelty and (radically) new knowledge”
(Peschl and Fundneider, 2017, 86; Gillier and Lenfle, 2019). Something hidden beyond the
existing horizon leads to “the inability to recognize and articulate variables and their func-
tional relationships” (Schrader et al., 1993, 73). Especially in the initial stage of such a pro-
ject, multiple factors cannot be fully anticipated (in spite of the “homework” that one has,
of course, to perform to become prepared; see Ramasesh and Browning, 2014), including
unanticipated stakeholders, unexpected customer reactions (or even unexpected customers)
and unforeseen technological problems or side effects. This creates major hurdles for testing,
since “the problems to solve, the alternatives to test, and the evaluation criteria are unknown
at the outset” and no prior theories exist to formulate clear hypotheses (Gillier and Lenfle,
2019, 450).
Many have argued that learning is in fact more important in novel projects. The core inten-
tion of such a project should not only be the traditional efficiency-oriented achievement of a
predetermined goal but also the innovation-oriented learning and exploration in its own right
(Frederiksen and Davies, 2008). Thus, intermediate outcomes should include both the deliv-
ery of pivot products and the creation of intangible knowledge (Maniak and Midler, 2014).
Iterations to pivot outcomes and iterations to learn are supportive of and complementary to
each other, the former offering a basis for value creation and the latter providing the dynamic
ability to respond quickly to urgent problems. In some cases, a project may not achieve its
original goals, but it may still create important concepts, knowledge or capabilities for future
projects (Loch et al., 2006; Keil et al., 2009; Maniak and Midler, 2014).
Therefore, for novel projects, facing high unforeseeable uncertainty (Feduzi and Runde,
2014; Dattée et al., 2018; Loch et al., 2006), neither objectives and goals nor actions and
means can be clearly defined at the outset. If the project lacks a clear goal for work structure
decomposition, then the implementation method cannot be fixed either. Therefore, knowledge
accumulation, a shifting vision and more flexible execution methods are essential to success-
fully deal with unforeseeable uncertainty (Lenfle, 2014, 2016; Loch and Sommer, 2019).
Many scholars have proposed that the dual flexibility of goals and means can be achieved
through two management approaches and their combination (Leonard-Barton, 1995; Pich
et al., 2002), both of which represent forms of learning. The first approach is an iterative
learning and adjusting process that focuses on repeated problem-solving cycles throughout
the project, also referred to as trial-and-error learning or “probe and learn”. This approach has
been applied in technology transfer, discontinuous innovation and new ventures (Van de Ven
 Managing unforeseeable uncertainty through learning 205

et al., 1999; Lynn, et al., 1996), which are environments that “push the envelope” rather than
implementing known techniques, and where the path to success and even the final outcome
could not have been foreseen at the outset.
It is important to emphasize that problem-solving cycles are not the same as experimenta-
tion cycles in risky projects. The latter test known hypotheses, resolving known risks and nar-
rowing down the choice among known alternatives. In contrast, consecutive problem-solving
cycles of exploratory projects cannot be defined at the outset, do not have plannable hypoth-
eses and not all possible outcomes are known upfront. In extreme cases, even the evaluation
tools and criteria might not be known (Gillier and Lenfle, 2019) and may have to be discov-
ered over time. Thus, in novel projects, experimentation and testing are at least initially more
of an exploratory nature; rather than running experiments to test hypotheses, the focus in
novel projects might first need to develop the hypotheses themselves and to expand the search
space rather than on narrowing it down and quickly converging on the best solution approach
available.
As new information becomes available, learning requires the flexibility of adjusting the
project’s course and possibly even its goals (Loch and Sommer, 2019). Thus the goals cannot
be narrow and specific at the outset. However, even emergent learning is not totally blind.
When solutions finally do emerge through trial and error, firms need a vision specific enough
to rule out directions that are not compatible with it (Loch et al., 2006, 103). Thus, the dis-
covery process is not completely random; it is not like biological evolution, where changes
are random and direction arises from selection only, but more like cultural evolution, in the
sense that it is at least partially directed, here by the overarching vision (see Richerson et al.,
2006). Consistent with this view, Lindkvist (2008) observed that project-based adaptation in
organizations is based on goal-oriented but open-ended processes.
The second approach is parallel trials (also referred to as “selectionism”, as the best of
the trials is at some point selected, like in evolution). The approach is suitable if multiple
alternatives exist and can be pursued simultaneously as part of the project (Abernathy and
Rosenbloom, 1969; Lenfle, 2011). The premise of this approach is that no one can predict the
best technology or the best application at the outset, and hence this choice is postponed until
enough information is available (Pich et al., 2002; Lenfle, 2011). The parallel approach not
only broadens the possibilities for learning, but also avoids the possibility of outright failure,
reduces the need for pre-guessing and saves time. In the development of the atomic bomb,
Los Alamos scientists pursued two solutions in parallel, and what they initially considered the
backup solution led to success (Gillier and Lenfle, 2019). However, pursuing multiple solu-
tions is very expensive, especially if the unforeseen uncertainty resolves only slowly, which
deters many managers from making this choice (Wheelwright and Clark, 1992; Loch and
Sommer, 2019).1
We summarize the differences between learning in novel projects and more traditional
projects in Table 10.1.

THE “RAPID MANUFACTURING PROJECT” AT EUROPEAN MOTORS

Our introductory example clearly falls into the category of an exploratory project. European
Motors had a vision: a factory using rapid manufacturing technologies to build cars. But it
had neither a concrete goal nor an idea of how to progress towards this vision. In fact, it faced
206 Handbook on innovation and project management

Table 10.1  Focus of learning across types of activity in projects

Activity type Focus of learning Example

Routine project Both outcomes and activities are known Continuous improvement by changing
and planned upfront and fairly repetitive activities for better speed or quality
from one project to another. Learning or lower cost. E.g. use of technologies
focuses on learning from the past and on to automate or otherwise improve
continuous improvements via systematic activities.
experiments.
Risky/uncertain Outcomes and activities are known Post-mortems develop lessons of what
project and planned but might need substantial went wrong, so the next time, the
changes. Learning focuses on project team has a “better contingency
contingencies of the one-time execution, list” and a more accurate contingency
i.e. on possibly needed modifications to size.
achieve the outcome.
Experimentation cycles are an important
institutional element of project activities
to test hypotheses, with systematic idea
generation, selection, replication and
retention.
Novel and Outcomes and activities are only A new technology is developed or
exploratory partially known, i.e. it is not known implemented, and it is learned what it
projects precisely what goal is achievable and can achieve and whether, and in which
what needs to be done to achieve it. form, it can be incorporated into the
Learning focuses on (a) what precisely project.
can be achieved (within a broad vision) It is learned what stakeholder
and (b) what needs to be done and how. requirements really are only when
Iteration and learning need to not only they are confronted with the real (new)
test hypotheses but establish targets outcome for the first time, something
and fundamental approaches in the first that no one (including the stakeholders
place. themselves) could foresee.

unforeseen uncertainty both on the market and on the technology side. Multiple technologies
were still under development, and could, in principle, be applied to a number of different
markets or user applications. Figure 10.1 (in the introduction) shows a simple overview cre-
ated at the outset of the project. It shows possible applications in a qualitative way, not forcing
“business case numbers”, because those were simply not available. The key realization of the
preliminary discussions represented in Figure 10.1 was that an overarching vision was needed
to guide decision-making and to integrate a stream of new information that would become
available in a piecemeal fashion over the next years.
The preliminary analysis also attempted to determine the market potential and the require-
ments of different user applications identified in Figure 10.1 (see Table 10.2). Comparing the
requirements to the performance of the rapid prototyping technologies, it became quickly
clear that a “business case” might be possible only for some niche applications, but not for the
many technologies that were too early stage to do any reliable testing, and certainly not at all
for the large opportunity on the horizon of “rapid manufacturing in batches of one”.
 Table 10.2  Potential market opportunities as perceived in 2001

Business Prototyping Concept car Accessories Vintage cars Spare Niche Mfg. Ramp-up Mass
parts cars production
Potential
Requirements Speed Same as Speed
Quality level High surface Full quality Full quality vintage Full Full quality; lifetime ?
dependent on finishing; and same cars quality of tool can be
application; lower product material as possibly lower
than series lifetime can in series
be lower

207
Low cost Market test: Low cost: < Low cost: Low cost; saving in
compared to 50 pieces for < 2× series < 2× tooling changes
today’s $10K series (?)
If success: cost
like series
Low volumes Low volumes Market test: ~150 pieces x0 to Volume
50 pieces; x000 per year x000 influences level of
if successful pieces (?) postponement
Business case Possible to consider in vision, detailed planning not possible No planning
possible possible
208 Handbook on innovation and project management

In spite of this uncertainty, a project was put in place in order to drive this opportunity for-
ward. A project manager was appointed with a small team. The team started to execute smaller
intermediate projects with clearly defined, interim outcomes. Rapid prototyping had already
been used in car development projects for ten years and soon became a standard part of testing
in engineering. Next, parts were produced for concept cars at exhibitions – these parts had to
look right but did not have to have the full functionality, durability or load-carrying capacity.
In 2014, some worker-individualized ergonomic manufacturing tools were produced to reduce
fatigue and injuries for manufacturing workers. The same year, water pump wheels were
produced via additive manufacturing for “small series”, in particular for racing cars. Also,
some parts were produced for the new all-electric models. In 2018, a service was offered to
end customers of one model line to “print” parts that individualized elements of the passenger
compartment. Finally, the company decided to take a large step forward, announcing a €15m
investment in a dedicated Additive Manufacturing Centre with 80 employees. The Additive
Manufacturing Centre opened in 2020, and the services of this centre are commercially used
in multiple departments throughout the company.
In summary, over 19 years, the company continually invested and “inched forward” toward
a “large vision”, which was only vaguely defined at the outset and which no one knew how to
attain. Looking at the “large vision”, the risk of failure was extreme, but failure did not hap-
pen here, at least not on a large scale. (Some of the intermediate projects did not work out, but
they were not seen as failures but as sources of learning.) By structuring the overall project as
a series of intermediate projects, progress happened in smaller steps, most of them producing
some visible outcome and value. All the steps in the end complemented one another to enable
the company to adopt a bundled approach to additive manufacturing in the new centre.
The “dangerous sting” was taken out of this unforeseen project (along with the risk to the
careers of employees involved in the project) by breaking the long journey into pieces and
using the pieces to learn. The unforeseeable project was turned into a learning process, where
learning about an unknown new strategic technology and its applications occurred. In the pro-
cess of learning from the projects, the overall vision evolved and was modified and sharpened.
It is important to note that this progress was not linear, not a simple narrowing down of risky
technology choices to the one that best fits a set of pre-defined requirements. In fact, at the
outset, the firm could neither specify the requirements for the long-term vision nor determine
the complete choice set in terms of the finally available technologies or in terms of the possible
applications. Therefore, these small projects did not always result in the narrowing down of
choices; rather, some of them triggered the exploration of new opportunities (like the worker-
individualized ergonomic manufacturing tools). This was possible because the company was
willing to not set a tight schedule for achieving the vision – schedules were set for some of the
intermediate projects, but reaching the vision emerged “when it did”; even the investment in
the new facility had not been planned beforehand, but was undertaken when the technologies
were ready and profitable applications could be envisioned.
The uncertainty was overcome by articulating intermediate steps that were (a) reachable
and achievable without excessive unknowns and (b) opportunity-driven, providing some value
to the company in the form of some new application or service. At the same time, some of
these services (such as the worker-individualized ergonomic manufacturing tools) had been
completely unforeseen at the outset and emerged as the growing project team explored new
opportunities. The third characteristic was that these projects (c) were not viewed or managed
in isolation; rather, they were treated as a sequence of steps towards the (however vague) vision
 Managing unforeseeable uncertainty through learning 209

of “large-scale rapid manufacturing”. The third characteristic is key because these intermedi-
ate projects were not only chosen to deliver a direct value – in fact, in many cases, the business
case (ROI) would not even have resulted in the selection of these projects. Instead, they were
chosen because they delivered progress (if they worked) and at least insights (even when they
failed) that allowed the firm to learn and refine the vision.
It was essential that the overall project did not have a fixed schedule or budget, but was
open-ended. In fact, only the immediate next set of projects was to some extent planned,
leaving the decision about any follow-up projects open and allowing for the discovery of new
opportunities in the learning process. At the same time, the projects “accumulated” a suf-
ficient stock of knowledge that finally allowed the company to announce the decision in 2018
(after 17 years) to invest in the “additive manufacturing” factory. Note that observing such
long-time horizons in the development of radically new technologies is not new – it has been
long known that such technologies can take more than a decade to reach commercial success
(see, for example, Lynn et al., 1996). Thus, the two critical features are the pursuit of lower-
uncertainty intermediate projects to accumulate knowledge and explore opportunities at a
lower risk for the firm and the flexibility to allow the “vision achievement” to be open-ended.
We can summarize our observations from this example in Figure 10.2: firms can tackle a
vague initial vision, which is itself unplannable, by using a staged series of learning projects.
The use of such iterative cycles is a natural element of the management of unforeseeable
uncertainty – a well-managed novel project that poses unforeseeable uncertainty offers an
opportunity to accumulate emergent knowledge.
Each learning project should, therefore, have two results: (a) a defined intermediate out-
come that ideally creates an economic benefit in its own right (albeit possibly at a level below
those required for stand-alone projects), and (b) an explicit learning goal that enables the

Choose small set of – Stop/go decision

learning projects – Redefinition of vision

and general approach

Learning
Identify Major Project
Hurdles and
areas of Intermediate Flexible
Initial Learning
knowledge Project Vision
Vision Project
gaps on the Outcomes
– Opportunity
path towards
– Collective driven
Vision Learning evaluation ITERATION: – Qualitative
Project – Track exogenous start a new set
– Robust
technological of learning
evolution projects – Large
– Each project has – Evolving
-- a defined (intermediate) outcome
-- ideally an economic value in itself
-- contributes a defined competence to
learning toward the vision
-- is evaluated collectively vs the
vision (rather than based solely on
its own expected ROI)

Figure 10.2  A staged sequence of “learning projects”

210 Handbook on innovation and project management

firm to accumulate knowledge and dynamic capabilities in order to progress toward the (pos-
sibly modified) vision. Note that the intermediate outcomes in (novel) learning projects do
not necessarily represent “progress” towards the overall vision (which may change anyway
as new knowledge emerges), but include explicit learning objectives that allow the firm to
explore what is now known that was not known before. Based on this learning, the vision will
and is even expected to change and evolve. Each learning project has thus the explicit goal to
produce two types of learning: learning towards the nature of the vision and learning towards
how the vision can be attained.
For this learning to be effective, it has to be carefully managed. After each wave of sub-
projects, the intermediate project outcomes have to be evaluated and the vision needs to be
adapted to incorporate the learning. Since the learning is (at least in the initial rounds) of
exploratory nature, this learning potentially includes learning about new opportunities and
new alternatives. It is, therefore, only at this evaluation stage that the next wave of subprojects
should be chosen, and the intermediate outcome and learning goals for the next wave of sub-
projects should be defined.
The idea of managing a sequence (or overlapping portfolio) of projects and learning across
them is not new. Midler (2013) coined the term “project lineage management” for a sequence
of projects that build on each other. Such sequencing of projects allows for the development
of several product generations that exploit options created via a first exploratory project (see
also Maniak and Midler, 2014). Kock and Gemünden (2019) provide empirical evidence that
managing the learning across lineage projects both in a forward-looking way in the sense of
project roadmaps and in a backward-looking way by learning from past projects improves the
overall success of a firm’s project portfolio.
While the concepts and lessons in project lineage management are closely related to the
learning projects described in our case example, there is a fundamental difference: the learn-
ing projects we describe are all part of the original exploratory project; they are all mere
stepping stones to define (and then move towards) an emergent and changing overall project
vision. These learning projects typically cannot be exploited directly in subsequent product
generation but rather provide lessons that help clarify the project goal and how to progress
towards it. Thus, what we describe is not a sequence of projects itself but a way to move a
specific exploratory project forward, by cutting it down into smaller, lower-risk steps, which
are more acceptable in an organization with budgetary and career concerns.

THE NEED FOR KNOWLEDGE GOVERNANCE IN NOVEL PROJECTS

Let us summarize two important elements from the European Motors example that enable
accumulated learning in exploratory projects:

• An “ambidextrous” approach to budget and schedules: the intermediate learning projects

can be approached with some budget and schedule discipline (with flexibility and buffers
due to the uncertainty that these projects also contain). However, the final vision is an
unplanned “outcome” rather than a planned event at a planned point in time. The initial
vision may be judged to be achieved at an emergent point in time, but it may also have an
emergent form, with features that were not anticipated at the outset at all. For example,
no one would have been able to describe at European Motors in 2001 what an additive
manufacturing facility might look like.
 Managing unforeseeable uncertainty through learning 211

• The intermediate projects are managed as a mutually complementary group rather than
as standalone projects. This will allow both for the investment into less profitable learn-
ing projects and for efficient learning to take place across projects. Indeed, even the fail-
ure of one project may create useful learning that makes several of the other projects
more effective. Therefore, an important aspect of knowledge creation is the transfer of
knowledge across the projects (see also Sydow et al., 2004; Söderlund, 2008), so that
some projects may be changed, constrained or boosted by what happened in other pro-
jects. For intermediate projects to be managed as a mutually complementary group, it is
necessary to put in place a shared overarching responsibility and accountability. In the
European Motors example, this was embodied by a business manager responsible for the
overall vision to whom the project managers of the individual projects reported.

In order for the staged sequence of learning projects to lead (or meander) to a successful final
vision, it is essential that learning does not happen only at the level of the projects, but that this
learning happens across the different learning projects at the organizational level. Prencipe and
Tell (2001) acknowledge the importance of cross-project learning to develop new organizational
capabilities and observe that firms emphasize different cross-project learning processes (peo-
ple-embedded experience accumulation, knowledge articulation and knowledge codification) to
varying degrees. Cross-project learning, however, requires the synchronization of many separate
project activities in order to enable knowledge exchange. For learning to result in the transfer of
insights across projects, the “clock speed” of learning insights must be coordinated across vari-
ous parts of projects because otherwise insights cannot be absorbed (Söderlund, 2008, 2010 calls
this “knowledge entrainment”). However, the learning process at multiple levels of projects
increases the complexity of requirements for project management, especially the need to closely
link knowledge activities at different levels (Grant, 1996; Hedlund, 1994). At the individual level,
it requires knowledge transfer and integration across multiple fields, and at the project level, it
poses a dilemma between control and autonomy in the learning process (Lindkvist et al., 1998).
Additionally, there are inherent contradictions between cross-project learning (which consumes
resources in the short run while offering the unpredictable possibility of future benefits) and
overall efficiency at the organizational level (Sydow et al., 2004; Whitley, 2006).
Since cross-project learning and learning at an organizational level is essential for novel
projects to succeed, it is necessary to invest in proactive activities and a governance structure
that allows for knowledge accumulation and knowledge integration to take place – not only at
a project but at an overall organizational level (Pemsel et al., 2016). Söderlund (2008) recog-
nizes the important role of top management in creating structures that allow for knowledge
transfer and learning across projects and for knowledge integration at the firm level to build
new capabilities. Similarly, Maniak and Midler (2014) acknowledge the need for top manage-
ment to create linkages between the project and the overall organization and for it to decide
which capabilities or new routines should be integrated into the overall organization.
Pemsel et al. (2016) explicitly call for a knowledge governance strategy to shape organiza-
tional knowledge processes. They identify different knowledge governance strategies that dif-
fer among other things in the attitude of top and middle management towards (1) knowledge
(considered a valuable resource or not), (2) knowledge control (via performance control, i.e.
degree of knowledge codification, or socialization control, i.e. mentoring, training, etc.) and
(3) humans (resilience and faith in others’ ability to learn). They recognize that these attitudes
affect whether firms are able to engage in novel and exploratory projects and whether they are
willing to allow for unstructured learning, which is essential for such projects.
212 Handbook on innovation and project management

A SKETCH OF A PROJECT LEARNING PROCESS

Open-ended but vision-oriented problem-solving and learning across (parts of) projects is
not an established project management method in most firms. In fact, anecdotal observations
suggest that learning across projects is in most organizations not well managed. We, therefore,
suggest that a project learning process should be established as an explicit set of activities in
novel, exploratory projects, just like the risk management process was established explicitly
for risky projects in the 1980s and 1990s (Wideman, 1992). Wideman (1992, II-3) defined
project risk management as “the art and science of identifying and responding to project risk
throughout the life of a project and in the best interests of its objectives”. This inspired us to
propose the following definition for a project learning process:

Proposition for a definition: a project learning process comprises institutionalized systematic steps
of identifying, targeting and, if possible, codifying knowledge outcomes of project activities, which
serve the evolution and development of a project vision and its pursuit as it evolves.

A project learning process should have institutionalized steps that can be incorporated into the
management of novel projects. In other words, once learning from projects is institutionalized
in such a process, it can contribute to the wider “dynamic capabilities of the organization”
(Davies and Brady, 2016; Brady and Davies, 2004).
In analogy, risk management has four steps: risk identification, risk prioritization, risk
management (response) and documentation and learning (Wideman, 1992). More recently,
a wider view of risk management has tried to also embrace elements of the management of
uncertainty, including the management of unknown unknowns (Chapman and Ward, 2003).
Chapman and Ward (2003) stress the importance of seeing risk management not only as the
management of downside risks but also as the creation of opportunities, and they point out the
value of integrating such uncertainty management into project management at an earlier stage,
thereby possibly influencing even the objectives of a project.
However, this still reflects risky (versus novel) projects, where outcomes are identifiable and
plannable at an early stage (albeit with contingencies). The project learning process should
therefore go one step further. It is not only about creating opportunities for the current project;
rather, it is about the creation of novel knowledge that will allow the morphing and evolution
of an overall project vision that is implemented via a portfolio of intermediate learning pro-
jects or activities.
Analogous to the steps in a project risk management process, we suggest the steps shown in
Figure 10.3 as a first sketch of a project learning process.
The first step in this high-level process is the identification of learning domains. In which
domains do you lack fundamental knowledge? What knowledge is missing or questionable to
be able to define concrete goals and plan activities linked to the overall vision? What makes
the project “novel”? Learning can occur in the domain of new technologies that the company
needs to master, about the emerging needs of customer groups who cannot yet articulate their
needs for new-to-the-world products or services, or with respect to regulatory regimes that
evolve and are being put into place at the same time as the innovation project takes shape. In
our example, the firm faced major gaps in knowledge about the performance potential of the
different technology choices, of which many were still under development at research institu-
tions at the outset, and about the market potential and even possible domains of application
within the overall long-term vision of rapid manufacturing.
 Managing unforeseeable uncertainty through learning 213

• Establish an overarching responsibility for the novel project overall to allow for knowledge integration
at an organizational level
• Establish responsibilities and decision right for managing each learning cycle, for documentation and
sharing the results, for adjusting activities to emerging results
• Recognize knowledge as the most valuable outcome and be willing to trust in the team’s learning
abilities to allow for less structured and codified knowledge to be created.

Knowledge Governance System and Strategy

Supportive of Novel Projects

Identify Prioritize Establish Evaluation and

Learning Learning Learning Sharing of
Domains Domains Activities Learning
• In which domain do you • Which knowledge gaps • Identify intermediate • Evaluate outcomes of
lack fundamental are the most critical to learning projects that learning activities and
knowledge ? be able to move will create knowledge document / share
towards the vision? within the chosen knowledge obtained
• For example: market
• In which domains is it learning domain, but if • Integrate knowledge /
knowledge (customers,
currently possible to possible creates capabilities at
regulations), knowledge
learn / create economic value by itself organizational level.
about the technology, or
about design types knowledge? • Only one wave of • Re-evaluate and adjust
learning activities overall project vision
• This identification helps
should be planned; later based on knowledge
to focus the learning
waves will be planned acquired
activities
when results of the
previous wave are
available

Figure 10.3  A first sketch of a project learning process for novel projects

Identifying learning domains assumes that the domains of “knowledge gaps” can be identi-
fied beforehand, as opposed to the unknown unknowns themselves (which have by their nature
to remain unspecified until they emerge). Note that learning management thus means that
learning is not generic; an organization cannot learn “any” unstructured knowledge explicitly.
While individuals may learn things tacitly, this is not open to formal management and control.
Specifying the important learning domains focuses the learning efforts, preventing them from
becoming too diffuse and therefore unproductive.
Similar to risk management, the second step in this process is the prioritization of the learn-
ing domains. It enables an effective design of the next learning cycle in step 3. The prioritization
should take into account two factors: (1) what the most critical knowledge gap is that prevents
the firm from moving towards the vision; and (2) which domain it is currently possible to learn/
create knowledge about. In our example, learning about the technologies was clearly more
critical than identifying the most promising applications – also because identifying promising
applications is intricately linked to the achievable performance of the chosen technology, and
hence promising applications cannot be identified in isolation of technological learning.
The decision about the learning domain allows a third step for the design of the next learn-
ing cycle or set of learning activities. This set of intermediate learning projects should produce
214 Handbook on innovation and project management

outcomes that enable the evolution of the vision – either progressing towards it (if it turns out to
conform to assumptions) or adapting it (if it turns out that assumptions are not fulfilled or can be
surpassed). Note that the actual knowledge acquired might not be anticipated. Especially in the
first waves of learning projects, you might not be able to predict what you will learn. This still
does not mean that learning is generic; it is still within a specific learning domain. However,
what you learn might be only discovered in the learning project, including possibly the identi-
fication of previously unanticipated knowledge gaps (see Gillier and Lenfle, 2019 for such an
example). Given the uncertainty about the knowledge acquisition itself, these learning activities
might be asked to also create (if possible) an economic value in the traditional sense of a project
outcome, thereby limiting financial risks and risks for the careers of the people involved.
The fourth step is the evaluation and sharing of knowledge acquired across the set of learn-
ing projects in step 3. This relates to Söderlund’s (2010) knowledge entrainment (clock speed
coordination). It is at this point that the knowledge needs to be integrated at the organizational
level. The overall project vision should then be re-evaluated and possibly adjusted or morphed
into a new project vision, which then serves as input into the next cycle through those four
steps. Some of the knowledge gaps might have been closed by the previous set of learning
activities, others might have just been narrowed down (but not fully removed), or the evalua-
tion of the learning outcomes might even show that new, previously unanticipated knowledge
gaps emerged in the last wave of learning projects. Therefore, the firm should re-evaluate the
learning domains before choosing which knowledge domain(s) to prioritize for the next wave
of learning projects.
Last but not least, the intermediate projects and learning cycles have to be chosen and
managed as a group rather than as individual projects, in order to enable effective knowledge
transfer across the different learning projects and different learning cycles. This requires the
establishment of a knowledge governance structure supportive of organizational knowledge
creation and integration processes (Pemsel et al., 2016). These learning cycles need man-
agers who (a) recognize that knowledge is a valuable outcome in its own right in explora-
tory projects and who are hence willing to launch learning projects that might not meet the
cut-off criteria as standalone projects, and who (b) are willing to replace outcome-oriented
performance measures by qualitative demonstrations of learning taking place. This requires
a larger amount of delegation and trust in a team’s ability to learn in order to enable crea-
tivity and flexibility toward unanticipated outcomes (Sting et al., 2021). Equally important,
it requires that clear decision rights and responsibilities are formally assigned, not only at
the level of the intermediary learning projects but more importantly as a shared overarching
responsibility for the novel project overall. This responsibility needs to include that the cre-
ated knowledge is shared in a timely manner with the right parties, and hence it requires top
management involvement (Maniak and Midler, 2014). In the European Motors example, this
was the responsibility of the business manager, but it could be the role of a separate project
coordinator, analogous to a risk manager.

CONCLUSION

As we have started with an example, we will conclude also with an example. The opening
example of European Motors consists of a long-term vision with multiple intermediate pro-
jects. The closing example is a novel project of a “flying car” (Loch and Sommer, 2005).
 Managing unforeseeable uncertainty through learning 215

An external inventor brought the idea and drawings of a flying car to the technology
scouting manager of the automotive company Lemond Automobiles. The idea of the fly-
ing car has fascinated car users for a century, so the manager explored the idea with the
help of enthusiastic colleagues and suppliers who saw an opportunity in collaborating with
Lemond Automobiles. The decision was taken to develop a proof of concept of a flying
vehicle (with wider lessons). But since this idea was so far outside any beaten track, it was
unpredictable which technological approach might be suitable, or which concept might
have any chance of getting market traction. Therefore, three concepts were developed in
parallel (Figure 10.4, from left to right): a “flying scooter” based on a scooter with a wing
assembly that would fly at slow speeds; a “flybike” based on a heavy motorcycle that would
keep its propeller and wing assembly at the nearest airport and fly like a small propeller
plane; and the three-wheel “Duosport” that would be a sports vehicle on the road and also
fly like a small plane.
The flying scooter and flybike were built as mock-ups but were abandoned when it became
clear that the Duosport was the most appealing concept. The Duosport was developed into a
functional prototype that won flight approval from the air traffic authority and successfully
flew with a pilot. Technically, the project was a success, producing a functional concept in
less than three years for a total budget (for all three mock-ups and the flying prototype) of €2
million. The Duosport was admired by the people who were allowed to see it. It also offered
learning benefits with respect to its new steering interface (which worked for driving on the
road and in the air), the testing of new lightweight materials, as well as testing market reac-
tions to an alternative concept.
However, no overarching project learning architecture was in place. The project was run as
an informal “submarine” (indeed, some of the budget was bootlegged from leftovers in other
projects), the company did not buy into the experiment and the learnings were rejected. The
project was cancelled, and the prototype was not even used as an attractive PR story to show-
case the innovativeness of the company.
This example demonstrates that technical learning within one project alone accomplishes
nothing if the overarching vision (of alternative uses) is not identified, agreed to and author-
ized to be explored by top management. This project fulfilled the requirements of a learning
project: clear learning goals were identified at the outset (learn about new steering interface,
new light-weight materials, etc.), and the project had an identified economic value of the con-
cept development itself (PR value). But neither the learnings nor the economic value was real-
ized, since it was not embedded in a larger vision and no knowledge governance structure was

Figure 10.4  Three parallel mock-ups/ prototypes for a flying car

216 Handbook on innovation and project management

in place. The Duosport example shows that if an overarching learning process is not in place,
learning simply will not be disseminated and get accepted.
Novel project learning rarely happens if it has not been identified at the outset as an impor-
tant activity with valuable results in its own right. Only when activities are defined can organi-
zations reliably execute them (Nelson and Winter, 1982), and the same holds true for learning
activities. With a project learning process, learning management can be integrated into project
activities in a similar way as how risk management was integrated into project management
30 years ago. While the project example in this section shows the importance of a project
learning process at the firm level, we did not demonstrate how to implement such a learning
process. The process proposed here is merely a conjecture based on our observations of two
case studies (the rapid manufacturing project and the flying vehicle project), which needs to
be further tested, modified and developed in empirical work.

NOTE
1. The two approaches of iteration and parallel trials often occur together and can often not be neatly
separated in projects. Few projects have the resources to apply both approaches throughout the
entire project, therefore iteration and parallelism should be tightly focused on the project elements
where knowledge has the largest gaps and uncertainty is highest. The choice of the best combina-
tion of the two approaches is influenced by the complexity and the extent of unforeseeable uncer-
tainty (knowledge gaps) of the project (Sommer et al., 2009).

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11. Success factors of project portfolio
management and their influence on
innovation success
Alexander Kock and Hans Georg Gemünden

INTRODUCTION

Any company that wants to be enduringly successful needs innovation capabilities to continu-
ously renew itself by creating new products or services or reinventing how it creates value.
The task of an innovating organization is to attract, create and select innovative ideas and
concepts for new products, processes, services, systems and business models that are then
developed, produced and used (Gemünden et al., 2018). Companies use projects as tempo-
rary organizations to manage such tasks. Therefore, companies typically run many innovative
projects concurrently, and the share of project work generally increases (Nieto-Rodriguez,
2021; Schoper et al., 2018). Project portfolio management (PPM) helps exploit the potential of
a portfolio of projects and mitigate risk accumulation. The task of PPM is to lead the organi-
zation properly so that it carries out the right projects, staffs these projects with competent
project managers and teams, uses the project results sustainably and achieves all stakeholders’
value-creating objectives.

PROJECT PORTFOLIO MANAGEMENT

Objectives of PPM

Typically, portfolio management for innovation projects pursues several goals (Cooper et al.,
2001; Kester et al., 2014): First, firms do not necessarily need to make every innovation project
successful but should strive to maximize the overall value of the portfolio: one big break-
through can make up for many failures, which are bound to happen due to innovation projects’
high uncertainty and complexity (Kock et al., 2011). Managers should strive to maximize the
overall value across the portfolio’s projects by ensuring that projects achieve their objectives
and deliver benefits for the organization (Cooper et al., 2001).
Second, like in a financial portfolio, firms do not want to put all eggs in one basket but
instead aim for a balanced portfolio. Portfolio balance refers to a harmonious portfolio com-
position concerning, for example, project innovativeness, time horizon or risk level (Cooper
et al., 2001; Kester et al., 2014). Balance is supposed to assure organizational ambidexter-
ity (O’Reilly and Tushman, 2004). Ambidexterity means simultaneously performing projects
that improve innovations and hone existing competencies (i.e. exploitation) and projects that
develop new competencies and create new options (i.e. exploration). Without exploitation,

219
220 Handbook on innovation and project management

companies may not survive today; without exploration, they may not survive tomorrow.
Therefore, ambidexterity is crucial for long-term survival (O’Reilly and Tushman, 2004).
Third, an organization must ensure that all innovation activities support the overall strategy
and bring it closer to where it wants to be. Strategic implementation success describes the
extent to which a portfolio’s projects align with the overall business strategy (Cooper et al.,
2001; Kester et al., 2014; Kock et al., 2015; Kopmann et al., 2017).
Fourth, a project portfolio high in future preparedness is one that, in the present, builds new
skills, competencies, products and technologies that open up long-term future opportunities
towards shaping the organization’s market and gaining a competitive edge (Kaufmann et al.,
2020, 2021; Kock et al., 2015).
Since there may be some trade-offs between these objectives, we need to assess the success
of innovation portfolios multi-dimensionally. Firms achieving success in these dimensions
have higher customer satisfaction, market effectiveness and profit (Kester et al., 2014).

Challenges of Project Portfolio Management

Portfolio management faces several challenges that are well-documented in the literature.
A significant challenge lies in the elements of the portfolio, innovation projects, which are
uncertain, difficult to predict and complex because they apply new and uncertain technolo-
gies and address uncertain markets (Kock et al., 2011; Schultz et al., 2013b). Managing the
overall collection of portfolio elements that are individually difficult to predict makes portfo-
lio decisions highly difficult. The innovation literature intensively debates balancing projects
with different degrees of innovativeness or innovation horizons. Already Wheelwright and
Clark (1992) emphasized the right mix of derivative, platform and breakthrough development
projects. Christensen stressed that disruptive empowering innovations creating new markets
and jobs should receive more investments and management attention, contrary to the current
practice favouring investments in sustaining and efficiency innovations (Christensen and van
Bever, 2014; Mezue et al., 2015).
Kim and Mauborgne (2004) made an appealing plea for highly innovative strategic moves
in product offerings that help firms avoid competitive battles in “red oceans” and exploit yet
uncontested highly profitable “blue oceans”. However, this does not mean that every radical
innovation is successful. On the contrary: the more innovative a project becomes (i.e. the
more it addresses previously unaddressed needs and uses new technologies), the higher the
likelihood of failure (Kock et al., 2011). In addition, the more successful innovations are, the
higher the likelihood they get imitated and contested so that the initially blue ocean can also
become red.
Similarly, Nagji and Tuff (2012) argue that radical innovations are rare but contribute so
much to growth and profitability that firms should strive for higher innovativeness in their
portfolios. However, the authors acknowledge that the right balance varies between industries
and firms and that no objective ratios can be derived. This proposal is in line with the findings
from Schultz et al. (2013b) that the relationship between a portfolio’s innovativeness and suc-
cess is inverted u-shaped. Finally, the frameworks by Kim and Mauborgne (2004) and Nagji
and Tuff (2012) ignore that many innovations require new technologies using new knowledge
bases, new technological principles, new materials or components or new systems designs. It
usually takes a lot of time and effort until this pays back – and it is not one simple strategic
move but consecutive projects building on each other.
 Success factors of project portfolio management 221

Nevertheless, firms must make decisions about the degree of innovativeness of their project
portfolios. The balance between projects from different innovation horizons is challenging
because with increasing proficiency in one type of project, the ability in the other type wanes.
Decision-makers are often unaware of this path dependence and may slip away from the
right balance. A permanent challenge portfolio decision-makers must monitor is establish-
ing the right balance and sticking to the ambidexterity rule to perform sufficient explorative
and exploitive projects simultaneously. In portfolio decisions, exploitation projects often look
more favourable (Christensen and van Bever, 2014). They need resources more “urgently”,
promise quicker gains, face lower uncertainties and are backed by influential stakeholders
who depend on their funding.
A further challenge is that projects are highly interdependent. Portfolio complexity increases
with the number of projects, the degree of interdependency and the magnitude of changes in
projects and interdependencies (Teller et al., 2012). Projects are interdependent when the suc-
cess of one project depends upon other projects (Killen and Kjaer, 2012). Interdependencies can
relate to benefits, resources, risks or knowledge. For example, the benefits of one project might
increase when other projects are also done, or projects may need to share the same specialized
human resources. Making holistic portfolio decisions – instead of isolated project decisions – is
therefore essential. However, decision-makers struggle with understanding interdependencies
(Killen and Kjaer, 2012), which can overload their mental capacity to analyse the high number of
combinations and the variety of information (Killen et al., 2020). Sommer and Loch (2004) show
that for unforeseeable uncertainties (“unknown unknowns”), a trial-and-error approach is supe-
rior to selectionism (i.e. parallel testing of alternatives and retaining the best option) if the costs
for both strategies are high and in a comparable range. Parallel testing is only superior if the tests
are precise and reliable and the complexity caused by the interaction of variables is very high.
Finally, portfolio decision processes can be very political and biased. The stakes are high
when deciding on the initiation and termination of innovation projects because they involve
the company’s future and viability. In addition, many different and influential stakeholders
must participate in the decision process. This constellation invariably leads to negotiation and
bargaining (Martinsuo, 2013). For example, Kester et al. (2011) show how political behaviour
in the form of influence, persuasion and negotiation leads to power-based decision-making
so that an unequal distribution of power allows more powerful groups or individuals to make
decisions that reflect their personal interests. Furthermore, portfolio decisions about project
initiation, continuation or termination are often subject to cognitive biases (Killen et al., 2020;
Kruft et al., 2019). For example, portfolio decision-makers tend to prefer less novel project
proposals, especially when they have a high workload (Criscuolo et al., 2017), and even the
order of proposals in portfolio meetings affects their decisions (Criscuolo et al., 2021).

PORTFOLIO MANAGEMENT SUCCESS FACTORS

Empirical research has identified several success factors to overcome these challenges and
successfully innovate through project portfolio management. We categorize these success fac-
tors in a framework of five groups that follows a decision-making perspective. The framework
starts with one stakeholder group and a few decision-making parameters and then integrates
more stakeholders and malleable parameters that influence project portfolio success (see
Figure 11.1).
222 Handbook on innovation and project management

Figure 11.1  The five groups of success factors in portfolio management

The first group contains the traditional success factors, which were investigated early on
by Cooper et al. (2001). This research focuses on the stakeholder group senior management,
and the decision situation assumes the resources, projects and strategic goals as given and
fully controlled by the focal organization. The decision situation becomes more complex in
the second group, which integrates upstream and downstream factors and external stake-
holders who co-create or co-exploit innovations or act as their buyers. The project proposals
are no more considered as given. Instead, searching and creating project candidates – often
with external partners – becomes an integral part of project portfolio management. Similarly,
using and commercializing the project results becomes an essential part of PPM. In the third
group, the human resource factors, the people who work in projects and PPM environments
are integrated as a major stakeholder group that needs to be attracted, selected, developed and
motivated. These three types of success factors are driven and leveraged by the fourth group
of success factors that we call strategic frame factors. We emphasize strategic orientations
that indirectly affect portfolio success and moderate other factors’ success influence. The last
group, long-term factors, are those factors that help overcome the somewhat static perspec-
tive of PPM. The previous groups did not yet include how a system of success factors evolves,
which path dependencies may explain why some factors have developed well and others have
not, and what kind of decision-making behaviour may help find the best development paths
to create enduring success. In the following, we will discuss the five groups in more detail.

Traditional Success Factors

The first group concerns traditional success factors that assume a project portfolio’s resources,
projects, strategies and stakeholders as given. Although the corresponding practices are not
sufficient for innovation success, they pose necessary conditions. First, strategic clarity
means that the organization should clearly formulate and communicate its innovation strategy
and closely link corporate and portfolio strategic planning to operationalize the strategy to
the single project level (Kopmann et al., 2017; Meskendahl, 2010; Salomo et al., 2008). For
example, deliberately specifying innovation focus areas and providing organizational framing
 Success factors of project portfolio management 223

for related innovation projects increases the overall innovativeness and the success of new
product development portfolios (Salomo et al., 2008).
Second, portfolio stakeholders, such as senior managers, line managers and portfolio and
project managers, need to communicate openly, share common goals and support and trust
each other (Jonas et al., 2013). Particularly, senior manager involvement is beneficial, but only
if they follow their own rules and do not regulate every detail (Unger et al., 2012b).
Third, a mature PPM organization is a necessary condition for success. This means portfo-
lio decision processes are clearly defined with accepted and transparent criteria (Teller et al.,
2012). Furthermore, single project management needs a certain degree of maturity and for-
malization to enable effective portfolio processes (Schultz et al., 2013a; Teller et al., 2012).
Project portfolio management offices also support success through their coordinating, con-
trolling and caretaking roles (Unger et al., 2012a).
Fourth, informed planning and controlling are essential. Top-performing companies
review their project portfolios more often, adjust faster, communicate decisions well and pur-
sue actions more intensively (Kock and Gemünden, 2016). Formal risk management also posi-
tively influences portfolio success (Teller and Kock, 2013), but risk management is more than
managing the sum of individual project risks (Teller et al., 2014).
Finally, project portfolio management information systems improve transparency, collabo-
ration quality, resource allocation and decision-making, but only if the portfolio, project and
risk management processes have sufficient maturity (Kock et al., 2020).

Enlarging the Scope: Up- and Downstream Factors

The traditional factors concentrate on internal stakeholders and project execution. The second
group abandons this limited view and also considers the ideation and exploitation stage and
external stakeholders’ inclusion and co-creation processes.
First, top-performing companies actively manage the idea pipeline of their portfolio.
Good front-end management is a critical success factor not only in single projects (Eling
and Herstatt, 2017; Park et al., 2021; Williams et al., 2019) but also in project portfolios. For
example, Kock et al. (2015) showed that ideation management positively influences portfolios’
front end by simultaneously supporting the variety and selection of ideas, thus improving
the project candidates’ value and feasibility. Ideation management supports variety, creativity
and openness through creative encouragement to give employees autonomy, resources and
support for ideas’ further development. For example, ideators can increase their ideas’ qual-
ity by receiving constructive feedback from a heterogeneous group of commentators (Zhu
et al., 2019). Furthermore, the novelty of selected ideas is higher if the portfolio board is more
diverse in expertise (Criscuolo et al., 2017). But ideation management should also provide
alignment and integration, which can be achieved by a supportive ideation strategy – provid-
ing a vision and guarding rails aligned with corporate goals – and a formalized ideation pro-
cess to improve idea selection (Kock et al., 2015). The front end’s positive effect on portfolio
success is significantly stronger when companies are willing to take risks and their innovation
portfolios are larger and more complex (Kock et al., 2016). Thus, ideation pays back for large
and complex innovation portfolios if the will to take risks is reasonably high.
Second, top performers consider benefit exploitation over and above the immediate project
results. For example, Kopmann et al. (2015) define the term business case control as a portfolio
control activity that includes (1) the use and analysis of business cases for evaluating project
224 Handbook on innovation and project management

proposals, (2) the continuous monitoring of the business case validity of ongoing projects and
(3) the tracking of the business case in terms of benefits realized after project completion.
While most companies apply the first element, only a few use the second and third elements.
But companies that monitor and question business case validity during project execution and
track business case realization long after a project’s completion have, on average, more suc-
cessful portfolios. Business case control has an even more substantial positive effect in more
complex portfolios, under higher environmental turbulence, and when business case owners
are incentivized for overall portfolio goals and made accountable.
Third, integrating external stakeholders becomes critical because the external context is
highly relevant for project portfolios (Martinsuo and Geraldi, 2020). For example, Vedel and
Geraldi (2020) show how external partners can profoundly shape a portfolio’s strategic direc-
tion over time. Voss and Kock (2013) analysed customers’ influence in portfolio boards on
portfolio success and found that “value for the customer” and “value from the customer”
increased portfolio success. And Biedenbach and Müller (2012) find a strong correlation
between an organization’s ability to integrate external knowledge (i.e. absorptive capability)
and project portfolio performance.

Human Resource Factors

The third group addresses people-related capability factors. Project portfolio management
usually considers the assigned human resources as given. Developing and motivating employ-
ees to do a good job and collaborate well with others is typically outside the scope of project
portfolio management, but it is an important part of multi-project management. In addition
to developing individual competencies, a learning project-oriented organization must institu-
tionalize knowledge management practices for systematic collective learning. We, therefore,
mainly address how companies recognize and support project managers and experts working
on innovation projects and portfolios.
The first issue is knowledge management: lessons-learned practices for capturing and
disseminating the knowledge gained during projects effectively retain project management
competence and eventually increase business success (Ekrot et al., 2016a). For example, com-
munities of practice help to share and co-create knowledge.
Second, project manager career systems should fit the needs of project managers the com-
pany wants to develop and retain. Firms should communicate and manage such systems well
so that their offers are credible and reliable. Offers include remuneration and career advance-
ment comparable to line managers, training and coaching matched to their career stage, and
participation in assignments that match their development (Gemünden et al., 2018). Ekrot
et al. (2016a) show that combining career systems and lessons-learned practices improves pro-
ject management competence, fostering the success of project portfolios. But since this sup-
port is often unavailable, project professionals initiate informal practices, including mentoring
or buddy systems (Huemann et al., 2019).
Third, project managers’ voice behaviour, the discretionary communication of ideas,
suggestions or concerns with the intent to improve organizational functioning (Ekrot et al.,
2016b), increases portfolio success (Kaufmann et al., 2020). Senior managers should listen to
their project managers’ suggestions, which can also trigger new emerging strategies. Ekrot
et al. (2016b) found that career systems, qualification opportunities, idea encouragement and
peer collaboration improve voice behaviour. Investing in people-related capability factors pos-
itively influences not only project portfolio success but also project managers’ development
 Success factors of project portfolio management 225

and work satisfaction. Work satisfaction and perceived organizational support are higher, and
turnover intention is lower when career systems and qualification opportunities offer devel-
opmental perspectives (Ekrot et al., 2018). Combined with better knowledge management
activities, this leads to higher competence retention because more successful project managers
remain, and their knowledge is improved and better exploited (Ekrot et al., 2016a). So far, the
studies seem to indicate a positive relationship between fulfilling the goals of project manag-
ers and project portfolio success, particularly if the investments in project management career
systems and upward communication are enduring and create an excellent vertical collabora-
tion culture.

Strategic Frame Factors

The fourth group includes decision-makers’ fundamental strategic orientations that guide
their attitude and behaviour and are essential antecedents for managerial practice. These ori-
entations have also been called core values (Gemünden et al., 2018), and they affect innovation
success directly and indirectly because they can leverage the effect of other success factors.
Stakeholder orientation: a central idea of project management is that problem-oriented
cross-functional, inter-disciplinary and inter-organizational collaboration in teams may help
find better solutions in a shorter time and save money by avoiding mistakes. This idea does
not only apply to single projects but also to the management of project portfolios that con-
tain interdependent projects. The more the notion of mutual understanding, respect, trust and
support becomes a central value for joint problem-solving, the higher the performance will
be. This kind of stakeholder orientation applies to internal and external stakeholders who co-
create or co-commercialize projects and their results. Stakeholder orientation refers not only
to partners who exchange essential inputs and outputs but also to people negatively affected
by projects that have a risk at stake. It is essential to understand their concerns, often legally
protected, and act accordingly. Stakeholder orientation is particularly supportive of sustain-
able and social innovations.
Future orientation means that decision-makers prioritize future success above current
success, meaning they aim at long-term, sustainable development at the expense of short-
term gains and profits. This orientation implies a company’s willingness to invest in projects
that make existing products, investments and capabilities obsolete, favouring investment in
empowering innovation projects (Christensen Bever, 2014; Christensen, 2015). For example,
Rank et al. (2015) showed that this willingness to cannibalize is significantly related to a
company’s future preparedness.
Entrepreneurial orientation describes the characteristics of firms and their decision-makers
who actively pursue innovation, accept risks and deliberately enter new markets. Covin and
Slevin (1991) suggested that entrepreneurial orientation comprises innovativeness (constantly
striving for novelty through experimentation), proactiveness (actively pursuing opportunities)
and risk-taking (accepting high-risk ventures). Firms with high entrepreneurial orientation
have more innovative portfolios (Kaufmann et al., 2021), are more successful (Kaufmann et al.,
2020) and further increase the positive effects of PPM practices (Kock and Gemünden, 2021).

Long-Term Factors

The last group of factors complement the previously introduced elements in various ways.
First, we consider path dependence to emphasize that both the PPM success factors and the
226 Handbook on innovation and project management

innovative results they create develop over time: the current and future states depend on previ-
ous states. By introducing the path development perspective, we want to overcome the static
view of PPM and integrate the intertemporal dependencies. Second, so far, we have assumed
the organizational strategy as given and that portfolio management does the strategy’s bidding
by aligning the projects with it. However, this is an unrealistic assumption. Strategies need to
adapt in the face of new threats or opportunities and proactively create new fields of action.
Therefore, we look at the role of emerging strategies, how they come into being and how they
drive changes in the success factors or moderate their impact. Third, we are interested in what
kind of decision-making principles are supportive in a dynamic world. Real options reasoning
is a principle that can serve as a good heuristic.
Path dependence: “Rome was not built in a day”. This proverb also applies to innovations.
Successful new products often build on previous successful products and improve their func-
tionality, usability, reliability or safety. Therefore, firms develop products like the iPhone or
the Star Wars movies in project sequences that describe successful innovation paths. In con-
trast to single projects, which are temporary organizations with a predetermined time hori-
zon, a project sequence building a long-term innovation path is not a temporary organization
because it is uncertain how many elements the sequence will have. Wheelwright and Clark
(1992) already acknowledged the importance of project sequencing for building development
capabilities. Midler (2013) studied Renault’s successful Logan, designed as a low-cost car.
Accompanied by aggressive marketing in price-sensitive markets, it established a new brand
and product family. Davies and Brady (2000) proposed an organizational learning cycle for
innovation of complex product systems, modelling capability building via lessons learned
from initial projects and leading to improved project management procedures and higher
performance of follow-up projects. Successful firms consciously manage project sequences
rather than isolated projects and use established planning and knowledge management prac-
tices for their sequence management. The contribution from Midler and Maniak in this book
deals with the challenge of managing such project sequences and proposes a model of project
lineage management. Portfolio managers should know that their choices affect a portfolio of
innovation paths and that business success depends strongly on developing innovation paths. It
is essential to recognize when an innovation path ends and should not be supported anymore.
And it is also vital to build and seize options for new paths that extend the existing portfolio
and lay the ground for future success.
Emerging strategies: while the influence of clearly defined and well-communicated delib-
erate strategies is well documented (Meskendahl, 2010), the performance effect of deliberate
strategies might vanish in turbulent environments and emergent strategic initiatives (i.e. ini-
tiatives that arise unintentionally, usually bottom-up) increase in importance. Such emerg-
ing strategies may react more quickly to opportunities and risks observed by mid-level line
managers and project managers. For example, Kopmann et al. (2017) show that PPM not only
fosters the implementation of intended strategies but can also disclose strategic opportunities
by unveiling emerging patterns. Deliberate strategy implementation and emerging strategy
recognition even show complementary effects on success (i.e. one increases the benefits of the
other). However, the deliberate strategy’s impact becomes weaker with increasing environ-
mental turbulence. Both strategy implementation processes are supported by strategic control,
which comprises premise control (continuous verification of strategic planning assumptions
also during implementation), implementation control (scrutinizing the currently pursued stra-
tegic direction) and strategic surveillance (scanning the environment to identify unforeseeable
 Success factors of project portfolio management 227

or previously undetected critical events) (Kopmann et al., 2017). Another study shows that
also agile capabilities (i.e. the competence in and the application of agile practices) drive
strategy emergence in multi-project environments (Kaufmann et al., 2020). Agile projects
have a higher autonomy, and team members interact more frequently with project users and
consistently exchange information with the portfolio’s other projects (Sweetman and Conboy,
2018). Such a portfolio resembles a complex adaptive system that can adapt to a challeng-
ing environment (Sweetman and Conboy, 2018). Through the dynamic relationships between
individuals and projects, valuable strategic initiatives can arise that benefit portfolio success.
Real options reasoning: the core principles of longitudinal intertemporal interdependen-
cies can also be investigated from a real options perspective. According to Klingebiel and
Adner (2015), real options reasoning means that (1) instead of deciding whether or not to
fully finance an option at a certain point in time, the decision-makers distribute the invest-
ment sequentially over a period of time; (2) only low initial investments are made in selected
options, increasing the autonomy of future decisions; and (3) all available options compete
against each other for further investment, allowing shifts from low-potential options to bet-
ter ones. The empirical results from Kaufmann et al. (2021) confirm a positive relationship
between real options reasoning and portfolio innovativeness, and between portfolio innova-
tiveness and portfolio success. This finding is in line with the argument that ROR encourages
project portfolio decision-makers to venture into more innovative and, therefore, uncertain
options. The influence also depends on the strategic and cultural context because a sufficiently
high level of entrepreneurial orientation is required for ROR to affect portfolio success. A
strong entrepreneurial orientation seems conducive for managers to rely more on high-option
values and be willing to take considerable risks to use these options if there is sufficient evi-
dence of eventual success. We encourage managers to apply ROR to cope with innovative
projects’ higher uncertainty. However, we also recommend managers assess a firm’s strategic
and cultural contexts before introducing ROR.

DISCUSSION

Our framework offers a grouping of project portfolio management success factors that posi-
tively influence innovation success. There is positive evidence for all reported success factors,
but we are not yet aware of a meta-analysis of these factors. Kock et al. (2021) also showed
that six selected success factors covering several of our success factor groups influence project
portfolio success when controlling for each other’s influence. The explained variance amounts
to 50 per cent, suggesting that the simultaneous use of several success factors can make a big
difference. It might be helpful to extend such tests using the proposed new model.
We emphasize that external and internal contingency factors moderate the influence of
the success factors because project portfolios are highly context-dependent (Martinsuo, 2013;
Martinsuo and Geraldi, 2020). Context dependence means, for example, that in more static
environments, the influence weights of the success factors may have other values than in more
dynamic environments, or the effects may even change direction (i.e. we see a disordinal
interaction effect). Internal contingency factors may also play a role, for example, a project
portfolio’s innovativeness, its composition concerning the projects’ content, or the degree of
interdependencies between projects. Thus, simple linear models may be helpful for orientation
but misleading if strong contingencies exist.
228 Handbook on innovation and project management

One specific contingency deserves more profound attention. We hypothesized and found
positive evidence that the entrepreneurial orientation positively moderated several other suc-
cess factors but did not directly influence portfolio success when controlling for the other
success factors. There is no free lunch. Establishing and maintaining a success factor comes
at a cost. If the success factor’s dose is too small, it will not show the desired effect; if the
dose is too high, adverse side effects may occur. Success factors may also deliver diminish-
ing returns. Therefore, the dose of a success factor might be within a limited range, and the
success factor may also have a limited effect. If a leveraging factor such as entrepreneurial
orientation moderates this success factor positively, its impact can further increase (Kock and
Gemünden, 2021). Future research should develop theories and tests for such leveraging suc-
cess factors.
We want to stress another issue. The success of innovative project portfolios is usually
measured from the perspective of the firm that is this portfolio’s business owner. The success
measures thus reflect the perspective of upper managers who make decisions about project
portfolios and investors who own a firm’s equity. However, project portfolio management
only indirectly influences the success of the projects in a portfolio. A more direct and strong
influence comes from the project managers and the experts working on the projects. What are
these stakeholders’ success criteria and expectations regarding good project portfolio man-
agement? Surprisingly, we found that project managers who had a more successful previous
project were more motivated to leave the project manager position, favouring a line manager
position (Ekrot et al., 2018). In addition, successful project managers are more likely to get
promotional offers. Therefore, firms need to be concerned about retaining good project man-
agers in project management positions. What do project managers want, and how can firms
manage their project portfolio to fulfil these wishes?
Firms that prefer more innovative and challenging projects need to attract, select, develop
and retain good project managers; firms also need to give them more power and a higher sta-
tus. Project selection and staffing choices influence not only customer and supplier benefits
and growth and profitability goals but also project team members’ competence development
and motivation. Thus, portfolio decisions should also consider the benefits and risks of these
decisions for the project managers and team members.
The previously referenced studies show that people-related success factors increase per-
ceived organizational support, work satisfaction and the willingness to stay in a project
management role. However, does this also mean that career success measures like salary,
promotion quality and speed, social status, disposable power and perceived achievement are
sufficiently fulfilled? We know that there are deeply rooted conflicts between project and line
managers, and if more empowered project managers want a higher share of the created value,
this may cause conflicts with those that get a lower share. Therefore, we suggest extending the
performance measurement of project portfolio management.
The success factors are not given; they must be developed and maintained over time.
Like innovations, innovation systems also show a path dependence. Applying the promo-
tor theory from Witte and Hauschildt, Lehner et al. (2020) found positive evidence that key
innovators – expert, power and process promotors – cooperatively established the success fac-
tors of a project-oriented organization. However, it took about ten years to develop the success
factors of such an organization, and they came mainly from the first and third groups of our
framework. We should learn more about how innovation systems develop over time, which
success factors are easy and more quickly to create, which need more time and effort, which
barriers hinder their development and how we can overcome these barriers.
 Success factors of project portfolio management 229

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12. Innovation in project-based organizations1
Jan van den Ende and Floor Blindenbach-Driessen

INTRODUCTION: WHAT IS A PROJECT-BASED ORGANIZATION?

In this chapter, we address innovation and new business development in project-based organiza-
tions. Project-based organizations perform their activities in the form of projects for customers
(Davies et al., 2011; Hobday, 2000). Examples are construction companies, consultancy firms,
IT solution providers and law firms. Project-based organizations are distributed organizations,
in the sense that knowledge and innovation-related activities are more spread across the organi-
zation compared with most product or mass-service firms (Moore, 2005). In addition, project-
based organizations have a different organizational structure than product or mass-service firms.
Even if such organizations operate in a single country, their sales and operations are spread over
different units and projects that often each have their own profit and loss responsibilities.
Because of their characteristics, project-based organizations have certain advantages over
mass-product or -service firms when it comes to innovating. Most of the innovation literature
addresses the friction between operations and innovation activities in mass-product and -service
firms (Raisch and Birkinshaw, 2008). In those firms, operations usually focus on short-term
efficiencies and on preserving the status quo. In such an operational environment it is difficult to
make innovation thrive (Tushman and O’Reilly, 1996). In project-based organizations these ten-
sions are not the same, because operations in these organizations are less focused on efficiency,
are more customer-oriented and are much more adaptable (Blindenbach-Driessen and Van den
Ende, 2010). That means that ambidexterity – the ability of an organization to simultaneously
exploit today’s capabilities and explore those needed in the future – has a different polarity.
In project-based organizations, all infrastructure and decision-making processes, including
quality control, are client-centric. When the client asks, the organization is quick to deliver
(Gann and Salter, 2000; Hobday, 2000). As a result, the ambidextrous polarity is not so much
between operations and innovation activities, but instead, the tension arises from the conflicts
between the demands of the short-term customer-focused innovation and more future-ori-
ented, firm-initiated innovation. We label this latter type of innovation as proactive innova-
tion. The proactive innovation projects lack the same urgency, funding source and immediate
application as the operational projects that are executed on behalf of clients. That is the chal-
lenge that project-based firms must overcome if they want to become ambidextrous.
We discuss the solutions to these tensions in this chapter and illustrate the challenges and
solutions with practical examples from the legal and healthcare sectors.

HOW DO PROJECT-BASED ORGANIZATIONS INNOVATE?

Innovation plays a paradoxical role in project-based organizations. On the one hand, inno-
vation is their core competence, but on the other, they really struggle to renew their own

232
 Innovation in project-based organizations 233

offerings, business models and processes. For example, a typical product of an IT solutions
provider is building a new IT system for a bank. Such projects result in an innovative solution
for the client. As such, project-based organizations have the development of innovative solu-
tions for clients as a core competence. But as the saying goes, “The shoemaker’s children go
barefoot”; project-based organizations are usually not good at innovating for themselves. As
we will explain, this has much to do with the distributed character of the knowledge base in
project-based organizations and with how they operate (Van den Ende, 2021).
There are in general two ways of innovating for project-based organizations. The first is
reactive innovation, which involves innovating on a customer’s project. In this case, the pro-
ject-based organization performs a project for a customer in which it includes some kind
of innovative part, which it can apply in the future for other customers. Gann and Salter
label this activity as “practitioner-research” (2000, 965) and Brady and Davies (2004, 1607)
speak of project-based learning, which occurs in a bottom-up process through the activities of
customer-facing units. So, for instance, a contractor builds an office block with an innovative
air-conditioning installation which is new to the contractor and the customer. The customer is
of course aware of the innovation, and if it is more expensive, they will pay an extra price. The
customer may (also) pay for the cost of the provider learning about the innovation, or these
costs may be shared between the project-based organization and the customer. This way of
innovating is an attractive option for the project-based organization because it is nearly risk-
free since the customer is paying for the development and implementation. Another advantage
is that the decisions regarding these types of reactive customer-oriented innovations are con-
veniently aligned with these organizations’ core operations and decision-making processes.
Because the client is paying, reactive innovation projects typically don’t require approval from
anyone else in the organization, except the business unit that is signing off on the job.
However, this approach also has two disadvantages. The most important one is that the
project-based organization is required to adapt the innovation to the specific needs of the first
customer – since they are paying. These requirements do not necessarily coincide with the
needs of the larger market. In many cases, the first customer will be an innovative company,
which is not necessarily representative of the average customer. The project-based organiza-
tion may therefore have to adapt the innovation again for other customers, or a permanent mis-
fit may remain between the innovation and other customers’ needs. Second, this innovation
approach is suitable for more incremental innovations that are aligned with the organization’s
core competencies (Moore, 2007). Clients won’t be asking an organization to do something
new in an area they do not yet have a reputation for and are unlikely willing to foot the bill and
take all the risk to help the organization build completely new competencies. Therefore, the
scope of innovations that can be developed through the reactive innovation process is limited.
The second way of innovating for project-based organizations – proactive innovation – is by
initiating innovation or new business development projects themselves. In such a project, the
project-based organization describes, invests, develops and tests the innovation before selling
it. Brady and Davies (2004, 1607) speak of business-led learning that emphasizes top-down
strategic changes. In fact, this is the way in which most other companies innovate. In such an
innovation project, the project-based organization develops a new product or service that it
can sell to existing or new customers or apply internally if it concerns a process innovation.
The main advantage of this approach is that it is a more proactive way of innovating because
the project-based organization can take the initiative itself independently of its current client
base and reputation. The solution can be aimed at the best target market and is not limited to
234 Handbook on innovation and project management

the needs of a single customer as in the reactive approach. Since the project-based organiza-
tion has total control over these projects, it can give direction to the outcomes. As such, a
proactive innovation project allows a project-based organization to address completely new
customer groups and yet unmet needs of existing customers. It is the means to address disrup-
tive innovations.
The main disadvantages for the project-based organization are that proactive innovation
activities are much riskier. What does not help, either, is that most project-based organizations
lack the capabilities and infrastructure to make organization-wide investments. Such invest-
ments are never needed for the core business, in which no activities take place unless a client
has agreed to pay for them. And while the project can target all clients in a particular market,
the scale and scope will often still be relatively limited by the nature of the work involved.
Even when services get automated, nearly always a human service component remains, as
their human capital in the end is a core capability of these organizations.
For these reasons, many project-based organizations stick with having a reactive innovation
process only. In times of overcapacity, they tend to spend time and effort on more future-
oriented, proactive innovation. In other cases, digital transformation and the need to have
an innovative image to attract clients and talent have forced project-based organizations to
venture into proactive innovation activities. But even then, many project-based organizations
invest little in proactive innovation, and they don’t do it consistently.
To optimize the outcomes of their innovation activities, project-based organizations need
to operate a reactive process in response to explicit customer demands and foster a proactive
process of defining and creating innovations. It is a challenge to bring these two processes
in line with each other. The business units will often perform reactive innovation activities,
whereas proactive innovation activities require a more centralized approach. Because of the
strong decentralized nature of these organizations, conflicts can easily occur when it comes
to priorities, budgets, allocation of resources and decision-making power, with inefficiencies
and duplications in the innovation activities as a result.
Coordinating the processes is even more challenging if the organization operates in differ-
ent countries, which many project organizations do, since the innovation activities can take
place in different countries too. As we will argue in the following, a central innovation man-
ager can be a solution to these problems.

HOW TO MANAGE PROACTIVE INNOVATION PROJECTS

How should project-based organizations manage and execute proactive innovation projects?
How do they develop the new capabilities needed for proactive innovation (Brady and Davies,
2004)? Project-based organizations are usually organized around certain competencies, for
instance, “tunnelling” and “road construction” in a project-based construction firm, and at
the same time they are organized around certain customer segments, such as “government”,
“offshore”, etc. Matrix structures are quite common in these kinds of organizations. In addi-
tion, these organizations may have supporting departments for marketing, purchasing, etc.
This means that the traditional functional structure does not exist. In addition, employees in
project-based organizations often work more autonomously than in other types of firms. Many
employees have direct customer contacts, and they are used to organize projects, including
collecting resources, themselves. All in all, activities are more distributed in project-based
 Innovation in project-based organizations 235

organizations than in more functional or divisional companies. This distributed way of deci-
sion-making works because on all the operational projects, the client has the role of the budget
owner, key decision-maker, quality controller and arbiter. It is worth noting here that the
absence of the role of the client on proactive innovation projects creates numerous challenges
for the management and execution of innovation projects.
Blindenbach-Driessen and Van den Ende (2010) studied the success factors for innovation
projects in project-based organizations. The question was whether the normal success factors,
such as having cross-functional teams or a structured process, would also apply to proac-
tive innovation projects in project-based organizations. We had to adapt our vocabulary; for
instance, in the absence of functional departments we had to replace “cross-functional team”
with “multidisciplinary team”. We compared functional firms (product and mass-service
firms) with project-based organizations in the same industries and found that:

1. While cross-functional teams contribute to the performance of innovation projects in

functional firms, multidisciplinary teams do not contribute to the success of proactive
innovation projects in project-based organizations. Our explanation was that cross-func-
tional teams serve to integrate knowledge from different functions, but that project-based
organizations have little need for dedicated mechanisms to integrate knowledge because
they are already used to doing so in their customer projects. So, it’s relatively easy to
integrate knowledge in innovation projects, even if there is no multidisciplinary team.
2. A structured innovation process didn’t increase success in project-based organizations.
Our explanation was that project-based organizations are used to a fairly strict way of
organizing customer projects, and innovation projects need more flexible processes. So,
the innovation processes they apply are too rigid, which does not contribute to success.
For innovation, a structured innovation process is needed, but with some degree of flex-
ibility (Lenfle, 2016; Markham and Lee, 2013, 419).
3. A heavyweight project manager, on the other hand, did have a positive influence on inno-
vation projects in project-based organizations, and much more than in functional firms.
This is because the project manager must bridge the default decision-making structures,
cross organizational silos and have enough cloud to keep their project on the forefront
against all the other pressing demands of external clients. In addition, the diffusion of
innovation is a particularly difficult process in project-based organizations. You can’t
just send the product to the factory, as in a product firm, or start the operations, such as
in mass-service firms. In a project-based company, you always need other people to sell
your innovation concept to the customer, or to apply the innovation to the processes. And
a heavyweight project manager is better able to get other people committed.

With respect to the second point, the innovation process, we can note that project-based
organizations that today use agile, lean-start-up, and design thinking methodologies while
serving their clients are at a distinct advantage when it comes to managing and executing
innovation projects, as these are processes, tools and capabilities that they can also use for the
execution of their proactive innovation projects. However, project-based organizations – like
most construction firms – that use traditional project-management methodologies are at a
clear disadvantage because the capabilities needed and used for operational projects that are
characterized by relatively low levels of uncertainty are very different from those needed for
often less complex but far more uncertain innovation projects. Using the traditional project
236 Handbook on innovation and project management

management process will lead to a lot of unnecessary planning and creates a false sense of
certainty when used for highly uncertain innovation projects.
The general lesson is that the application of management practices in innovation projects,
such as cross-functional teams or heavyweight project managers, depends on the organi-
zational context. As mentioned earlier, a project-based organization is a highly distributed
organization, where people work autonomously in a matrix organization. In such a context,
innovation projects must be managed differently than in a functional context. For instance, a
highly mono-disciplinary project team may work fine in a project-based organization, since
it is easy to acquire knowledge from other disciplines in the project context. The bottleneck
comes later when the result of the project has to be commercialized.

CASE: COORDINATION OF INNOVATION IN AN ENGINEERING COMPANY

Engineering company WaterCo develops and manages hydraulic projects, infrastruc-
ture projects, chemical installation projects, etc., and operates in several countries, with
different disciplinary units in each country. The company performs future-oriented
research projects for customers, often government agencies, financed by those custom-
ers. Although the company develops new technologies in those projects, implementation
on markets is often not guaranteed. To improve this process and facilitate implementa-
tion, a central new business development unit defines proactive innovation projects. As a
result of those projects, the firm can make offerings to customers. However, employees
have to perform these projects on top of their customer-oriented projects and with lim-
ited budgets. That means that these proactive innovation projects often get delayed. To
improve these projects, the new business development unit appoints experienced project
managers for each innovation project.

THE ROLE OF THE INNOVATION MANAGER

Most product and mass-service firms have dedicated research, innovation and development
teams. We single out the role of the innovation manager here because they can have an impor-
tant role in project-based organizations. The innovation manager in a project-based organiza-
tion has a challenging role when it comes to orchestrating the innovation activities that happen
throughout the organization because of the distributed and knowledge-intensive nature of
these organizations (Van den Ende, 2021, Chapter 7).
An innovation manager does not operate on his or her own (Figure 12.1). An innovation
manager coordinates the innovation and new business development activities in the organi-
zation, while business units perform the activities themselves. Depending on the size of the
organization, the business units may have a department or team within the business unit
for this purpose, or employees dispersed in the business unit may perform the innovation
activities.
The innovation manager may come up with ideas, select projects and organize portfolio
management at the organization level. Most likely the business units will provide the resources
for the innovation projects, but the innovation manager may have a budget for pilots. The inno-
vation manager does not necessarily operate alone but may have a supporting team or unit.
The innovation manager will usually report to top management.
 Innovation in project-based organizations 237

Source:   Van den Ende, 2021, Chapter 7.

Figure 12.1  The role of the innovation manager

The innovation manager in a project-based firm faces four challenges. First, the scalability
of successful innovation projects is limited. The distributed nature of the organization makes
that novel solutions and processes have a limited reach, and thus often a limited return on
investment, at least initially. The reliance on human capital to differentiate from the competi-
tion further limits scalability. This means that it is challenging to create profit from the port-
folio of innovation activities in a project-based organization.
Second, the level of centralized control for any function is limited in project-based organi-
zations. As a result, the coherence and speed of the innovation programme are also limited.
Business units have annual revenue and profitability targets. They are focused on the short
term and their priorities are not always in line with the strategic priorities of the organization
at large. For instance, people in the business units do not always see the advantage of large-
scale operations, while management is likely to dictate to the innovation manager that the
scale of activities is a priority to increase the return on their innovation investments.
Third, since internal rates are lower than what external clients are paying, it is unattractive
for the business unit to lend their most talented employees to an innovation effort. And when
business units are not inclined to dedicate resources to innovation, it leads to a downward self-
fulfilling prophecy of failures, due to inadequate staffing and low speed in execution.
Fourth, the profitability of the innovation function is highly dependent on the adoption by
the business units over which it has no control. When a business unit has implemented the
innovation only once or a few times, they may lose interest in it and return to their earlier
activities, leaving the innovation in a loss-making condition. Because of the distributed nature
238 Handbook on innovation and project management

of these organizations, there is limited if any incentive for one business unit to assist other
business units with the adoption of novel ways of working.

An Alternative Option: A Separate Innovation Unit

An alternative to the aforementioned innovation manager option is to create a separate unit.

The literature calls this “structural” ambidexterity, while the option of the innovation man-
ager can be labelled as “contextual ambidexterity” (Lavie et al., 2010; Raisch and Birkinshaw,
2008). Structural ambidexterity means that the organization sets radical explorative innova-
tion activities apart in a separate unit to shield them from the demands of the operational units.
The traditional R&D department in companies is an example of structural ambidexterity.
Contextual ambidexterity means that the organization integrates explorative innovation activi-
ties in the operational units. As we mentioned earlier, most project-based organizations follow
the contextual ambidexterity model, with the innovation manager facilitating the innovation
activities that take place within the operational business units.
The separate unit in a project-based organization would be tasked with developing proac-
tively innovative solutions. The unit may either bring the innovative solution to the market
itself or transfer it to a business unit for commercialization. One advantage of creating a
separate innovation unit is that it can avoid the pressure of the business units’ focus on cus-
tomer projects and today’s urgent issues. Another advantage is that in this separate function,
the project management practices can be optimized to deal with innovation projects that are
uncertain, full of ambiguity, prone to failure and require a new skill set (Benner and Tushman,
2003; Tushman and O’Reilly, 1996). The separate innovation unit can be used to ensure that
innovation activities have the same urgency and a dedicated funding source and obtain the
same status as the operational projects. That is, a separate innovation unit provides the advan-
tage of an innovative culture and a test environment that is independent of the operational
context.
However, a separate unit in a project-based firm has considerable disadvantages. An impor-
tant one is that the adoption of the resulting innovations by the parent organization is not a
given. Also, the separate unit may lack sufficient access to the knowledge base of the organi-
zation, which is dispersed in the organization. Because of these disadvantages, few project-
based organizations have a separate innovation unit, and there are many examples in the
literature of project-based organizations that create a separate unit at some point in time, to
dissolve it after a few years again (Brady and Davies, 2004; Eccles et al., 2013).

INNOVATION IN LEGAL FIRMS – MAKING IT WORTHWHILE TO

INNOVATE

Just like other project-based organizations, law firms are distributed organizations that are
good at executing reactive types of innovation. But most of them struggle with all forms of
proactive innovations, whether it concerns the introduction of new offerings, the automation
of business operations, the introduction of new revenue models, the implementation of legal
tech, etc. Until recently, change in those areas was never necessary, since the market for these
services was rather stable. But the coronavirus epidemic has accelerated the need for digital
transformation and with that the need to be able to innovate more proactively.
 Innovation in project-based organizations 239

Digitization requires more than making a form available online. It impacts the business
model of a law firm and requires a significant time and cost investment to set up and imple-
ment these projects. Let’s take an innovation project that involves a customer portal: a website
behind a login that makes it possible for clients to receive online services from a lawyer, paid
or unpaid. It is often one of the most visible parts of a digital transformation strategy in legal
firms, something that any innovation manager could suggest the firm invest in. Since it is not
too difficult to imagine what such a portal should look like – a slightly more extensive version
of the website, with valuable information for the customers, behind a login – the project gets
the green light from management. Building such a portal is also not too difficult for the IT
department.
However, getting a consensus about the content is difficult. Lawyers are not used to having
to collaborate. And in a decentralized organization like a law firm, it is unclear who decides
what service will be put behind the paid wall. There is no clear hierarchical structure among
the practice groups to make such decisions, the innovation manager does not have the authority
to impose decisions and reward structures to compensate for such unbillable time are absent.
And even in the case that the portal gets filled with valuable information from each practice
group and is unveiled to existing customers with great fanfare, who will ensure the portal will
become a business success? So, in most cases, such innovation projects in this type of com-
pany result in endless meetings where a lot gets discussed, but no progress or decisions are
being made. As a result, most innovation projects don’t get anywhere and are a waste of time.
To get better results, a different approach is needed (Blindenbach-Driessen, 2018), one that
recognizes that proactive innovation projects need to be executed with the same rigour and
expediency as projects for clients. The innovation process for proactive innovation projects
needs to start with the future service. What problem should this client portal solve and for
whom? What can the client currently not do and how big of an issue is that? And does that
make it worth it to invest in this opportunity?
Questions like this are typically answered in a business case that describes what the project
entails and in which the costs and benefits are compared. However, for an innovation manager
or dedicated innovation team, these are all near-impossible questions to answer without the
support of the leaders of the practice groups. In the end, the practice groups and business units
guard access to the firm’s clients.

Who Should Do the Work?

Who, then, should invest their time to create the business case? Senior associates and junior
partners are ideally suited to drive proactive innovation projects. They have seen enough to
know what good service entails and to know what is not going well in terms of knowledge
and processes. Interviewing and speaking with clients and other departments within the firm
will help them grow as leaders. Because their time is not cheap and they have revenue and
profitability targets as part of the regular operations, each proactive innovation project must
be worthwhile for the client, the office and the involved talent before anyone starts investing
time.
For the execution of these projects, these senior associates and junior partners are likely
not heavyweight enough. In some cases, that gap can be filled by the innovation manager.
Nevertheless, nearly always, a more senior partner will need to get involved to secure the suc-
cessful execution of the project beyond the business case.
240 Handbook on innovation and project management

INNOVATION IN HEALTHCARE – THE ROLE OF THE

PROFESSIONAL

We can see the challenges of innovating in project-based firms in healthcare organizations.

While healthcare organizations are generally labelled as professional service firms, the organ-
ization of their innovation activities is very much like project-based firms. We use this sector
to showcase the role of the professional in the innovation process.
Traditionally in most countries, healthcare is part of the public sector and not very innova-
tive. The main topics of innovation are medical treatments, in which medical specialists aim to
adapt their treatments to the most recent medical knowledge. Clayton Christensen would label
such innovations as “sustaining” (Christensen, 1997) since they improve the services for cus-
tomers on the traditional performance metric, which is the quality of treatments. Innovating
communication with patients or creating new business models is disruptive because they
break with the dominant trend in the sector. Because digital communication with patients has
a lower quality than face-to-face communication, it can even mean a slight decrease in service
quality. At the same time, such innovations can have advantages on other performance char-
acteristics, such as ease for the patient, frequency of contact with the patient and cost for the
hospital. Such disruptive innovations were unusual in healthcare organizations. Healthcare
organizations did not perceive demand for such innovations either, as medical professionals
had the monopoly over the knowledge and data needed for the latter types of innovations.
Digital transformation and the pressure to reduce the costs of the excessively expensive
medical sector have opened the door for alternative ways to deliver healthcare. In addition,
patients are requiring higher service levels: for instance, in consultation hours and means of
communication with the doctors. As a result, doctors and entrepreneurs have started special-
ist medical clinics, which focus on executing a limited set of treatments in a high-quality and
cost-effective manner. Hospitals have started to invest in customer service, for instance by
improving their customer scheduling systems. And, to reduce operating costs, non-specialized
tasks are transferred from specialists to administrative or lower-educated medical personnel.
However, these kinds of innovation processes in hospitals meet specific barriers. Hospitals
are highly complex organizations, and risks for patients should be avoided at all costs. So,
innovation and new business development activities will always have to go through rigorous
tests or risk assessments before being implemented. Since physicians have a monopoly on
the right to treat patients, it means that the professional identity of medical specialists can be
a barrier, particularly for innovations that may affect their professional image. For instance,
it appears to be hard to get specialists to communicate with patients by email or electronic
device. Although such communication may be handy for patients and may give the option of
providing more real-time monitoring of patients’ conditions, doctors often resist such changes
since they consider them to decrease the quality of their communication and treatment. The
COVID-19 crisis has changed their attitude with respect to online communication, but then
it was for medical reasons, not because of the service level for customers. Reorganizing hos-
pitals to create more specialist clinics for a limited set of treatments can meet substantive
resistance since specialists consider that it diminishes their professionalism. And last, but not
least, it can be difficult for tech start-ups, as non-medical providers, to bring their disruptive
solutions to the market, as they need the assistance of a medical provider to get approval to test
their solutions in practice. Project-based firms, such as IT solution providers, experience the
same type of problem: professionals in those firms are more interested in developing high-tech
 Innovation in project-based organizations 241

and high-quality solutions for existing customers than in disruptive business model innova-
tions that may open new lower-quality but larger-volume markets.
A stand-alone innovation unit could be the solution to these types of problems. However,
as we mentioned earlier, this solution has disadvantages, among which is the lack of access to
knowledge of employees in the business units. Therefore, members of such a separate unit will
have to create strong networks with professionals in the rest of the organization to get support
for their projects. An alternative is creating financial incentive systems for professionals to
participate in proactive innovation projects.

CONCLUSION

In this chapter, we discussed project-based organizations that need a more dispersed innova-
tion and new business development process and organization. We saw that these organizations
must be capable of executing both reactive client-driven innovation and proactive organi-
zation-driven innovation projects. Reactive client-driven innovation is the bread and butter
of these organizations. Proactive innovation requires special processes, infrastructure and
reward structures to make these projects happen successfully. In the current era of digital
transformation, it is a must for project-based firms to also be able to successfully execute
proactive innovation projects.
We discussed success factors for proactive innovation projects in project-based organiza-
tions. Furthermore, we argued that an innovation manager will add much to the effectiveness
of the innovation activities in project-based organizations. Finally, we discussed innovation in
legal firms and healthcare organizations. We illustrated what needs to happen to make proac-
tive innovation projects successful, using the example of legal firms. Lastly, we showed that
the identity of medical specialists is an important driver for, but sometimes also a barrier to,
innovation in healthcare institutions.

NOTE
1. Part of this text is derived from Jan van den Ende, Innovation Management, Red Globe Press, an
imprint of Bloomsbury Publishing Plc.

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Davies, A., Brady, T., Prencipe, A., and Hobday, M. (2011). Innovation in complex products and systems:
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Harvard Business School, Teaching Case 9-313-137.
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construction of complex products and systems. Research Policy, 29(7–8), 955–972.
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organizations. Academy of Management Annals, 4, 109–155.
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 PART III

IMPORTING AND
CROSS-FERTILIZING
13. Collaboration and trust in innovative projects
Niels Noorderhaven

INTRODUCTION: THE PROBLEM OF COLLABORATION IN

PROJECTS

Innovative activities are very often organized in temporary organizational forms, such as
research and development projects or new product development projects. This makes sense, as
such activities are different from organizational activities that are governed by more perma-
nent routines and procedures (Obstfeld, 2012). For the sake of brevity, I will in the remainder
of this chapter refer to all forms of temporary organizations as “projects”. Self-evidently,
projects are distinguished from permanent forms of organization most of all by their tempo-
rariness. Even though some projects may have a lifetime of decades, their essential defining
characteristic is that they will terminate at a predetermined point in time, when a particular
task has been performed or when project principals decide that the planned outcome will not
be realized or is not desirable anymore (Bakker et al., 2016). A second important character-
istic of projects, which is strongly connected to temporariness, is their uniqueness, compared
to the repetitiveness of activities of permanent organizations (Whitley, 2006). One important
corollary of this condition is that the configuration of project participants often is also unique,
in that these have not earlier worked together in the same composition. Although projects can
also be vehicles for sets of activities that are relatively routine (Bygballe et al., 2021), I will
focus in this chapter on “innovative projects”, i.e. projects for the execution of new and/or
unique activities.
Innovative projects bring together actors (individuals and/or organizations) in particular
configurations for a limited period of time and for a unique set of tasks. In such situations,
contributions cannot be specified in advance in any detail, and much emphasis is on creativity
and idea generation (Malhotra et al., 2001). This has important ramifications for the organiza-
tion of collaboration. The mostly strictly limited amount of time available for project execu-
tion and the uniqueness of the task create significant uncertainty, and the professional field of
project management has developed procedures to ascertain predictability and control in spite
of this uncertainty. This ongoing endeavour is embodied in the Project Management Body
of Knowledge (PMBOK), a repository of knowledge continuously updated by the Project
Management Institute.1 The PMBOK brings together procedures and techniques for manag-
ing in particular the scope, time and cost dimensions of a project, and in this way offers a
framework for the organization of collaboration. For instance, in scope management, the work
breakdown structure has a central position. The work breakdown structure divides the totality
of activities to be performed into smaller, coherent tasks that can be assigned to a particular
individual or organizational unit. Connected to each task is also a step-by-step time planning
and an overview of necessary resources and their cost. Taken together, these inputs form a
strong basis for collaboration in the project, for if every party involved performs the tasks
assigned to them, successful project completion in principle should be assured.

244
 Collaboration and trust in innovative projects 245

However, in innovative projects, it is impossible to completely plan activities in advance

and to stick to that planning, as too many factors are unknown, uncertain or unforeseeable.
Hence, improvisation will be necessary. Improvisation in the context of project management
involves spontaneous efforts to find a solution for an unexpected circumstance or problem,
taking a distance from the structured project management process (Malucelli et al., 2019).
This requires trust and collaboration between project participants (McGinn and Keros, 2002).
Moving outside of the formal project management structures implies a leap of faith, and trust
gives project participants the confidence to make this leap.
The problem, however, is that the defining characteristics of projects are likely to impede
the development of trust between project partners. As I will discuss in more detail in the fol-
lowing, the limited duration of projects hampers the accumulation of direct experience in
collaborating with the project partners, while the uniqueness of the task and the project par-
ticipant configuration makes it also less likely that participants know each other from previous
collaborations. In this chapter, I will explore how trust can nevertheless arise in the context of
a project, and how such trust can stimulate the achievement of positive project outcomes by
enabling collaboration between project participants.
Trust as discussed in this chapter can pertain both to the relationships within the project
team, and those between the project team and the project principals. The latter can be higher
managers, but also organizations, in the case of an inter-organizational project. Hence for the
discussion in this chapter, both interpersonal and inter-organizational trust is relevant. Below
I will first discuss the concept of trust, the different types of trust that can be distinguished,
the different sources of trust, and how trust can be formed in and around ephemeral organi-
zational forms like projects. Subsequently, I will consider the consequences of trust in the
context of projects. How does trust influence collaborative behaviours and processes within
projects, and how do these in turn influence project outcomes? Finally, I will discuss struc-
tural and processual measures for stimulating the build-up of trust in projects. In the conclud-
ing section, I will briefly summarize the main conclusions of the chapter.

THE MANY FACETS OF TRUST

Definitions of trust abound, and I will conform to the most frequently used one, by Mayer,
Davis and Schoorman (1995, 712):

the willingness of a party to be vulnerable to the action of another party based on the expectation
that the other will perform a particular action important to the trustor, irrespective of the ability to
monitor or control that other party.

Trust is meaningful only in the context of risk or uncertainty (Nooteboom, 1996). If the actions
of the other party can be perfectly predicted, or if there is no chance of negative consequences,
trust becomes irrelevant. Essential in the definition of trust is that the trustor, with a view on
a desired outcome, takes a risk by betting on the positive behaviours of the other party, the
trustee, on the basis of the expectation that the trustee will not exploit the vulnerability of the
trustor if the opportunity to do so would arise. Some advantages of trust are that it facilitates
knowledge exchange (Uzzi, 1997), reduces transaction costs (Dyer and Chu, 2003), decreases
conflict (Zaheer et al., 1998), facilitates mutual understanding (Nooteboom et al., 1997) and
246 Handbook on innovation and project management

more generally increases efficiency, productivity and financial performance (Krishnan et al.,
2006; Zaheer et al., 1998).
Generally, we can distinguish between three types of trust in terms of what is trusted:
competence trust, integrity trust and benevolence trust (Mayer et al., 1995). All three types
can be important for the outcomes of innovative projects. Competence trust refers to the
trustor’s expectation that the trustee has the ability to fulfil an agreed task (Das and Teng,
2001). Integrity trust concerns the trustor’s expectation that the trustee has the intention to
fulfil the task (Nooteboom, 2002). Integrity trust is based on the perception that the trustee
accepts moral obligations and has concern for the trustor’s interests (Das and Teng, 2001).
Benevolence trust, finally, refers to the extent to which the trustor believes that the trustee
wants to do good to the trustor, aside from egocentric motives (Mayer et al., 1995). In busi-
ness situations this third type of trust is less likely to play a central role (Connelly et al., 2018),
hence we will not further discuss this type of trust here.
Apart from these three types of trust, we can also distinguish between sources of trust
(why does the trustor trust the trustee?). The first important distinction to make is between
reflective and presumptive bases for trust (Marková et al., 2008). As the labels suggest, in the
case of reflective trust the trustor decides to trust on the basis of some degree of deliberation,
e.g. I have worked with the other party before, and I have good experiences, so I trust him or
her. With presumptive trust, in contrast, the trustworthiness of the other is taken for granted,
and the trustor puts himself in a vulnerable position without deliberation. Presumptive trust
also has a dispositional element, as some individuals are more inclined to trust than others
(Kramer, 1999).
Reflective trust and presumptive trust can be based on different sources. Starting with
reflective trust, i.e. the kind of trust that is relatively deliberate, this could be based on spe-
cific characteristics of the other party (this is a person or an organization that can be trusted),
characteristics of the relationship (the other party may not necessarily be trustworthy in gen-
eral, but is in this relationship, for instance, because it is not in his or her interest to act in an
untrustworthy way) or characteristics of the environment (for instance, there are adequate
legal safeguards). Calculative trust is based on the assumption that it would not be in the inter-
est of the other party to violate trust expectations (Lewicki and Bunker, 1996). Reputation can
play a role in this: if the other party has built a strong reputation, it will not want to put that
at risk by betrayal in a single relationship. Reflective trust can also be based on direct experi-
ences in interactions with the other party. Such knowledge-based trust distinguishes between
partners who are more trustworthy (because we know them and have good experiences) and
all others, of whose trustworthiness we have no knowledge (Lewicki and Bunker, 1996).
Presumptive trust can be based on the trustor’s innate disposition to trust individuals and/or
organizations, a characteristic that also varies between cultures (Ferrin and Gillespie, 2010).
It can also be based on the membership of the trusted party of a particular category (Kramer,
1999), for instance, a particular professional group (Bechky, 2006). This is often called cat-
egory-based trust (Ertug et al., 2013). Presumptive trust can also be institutionalized if, in a
particular sector or profession, the trustworthiness of actors is taken for granted (Baier, 1986).
This is strongly related to the existence of expectations regarding the behaviours and skills
connected to a particular institutionalized role.
For the issue of trust in projects it is important to note that while some sources of trust, like
experience-based or knowledge-based trust, take time to be built, other sources can lead to
more or less instantaneous trust between participants in a project (McKnight et al., 1998). A
 Collaboration and trust in innovative projects 247

phenomenon that has been described in this context is that of “swift trust” (Meyerson et al.,
1996), i.e. trust that instantaneously arises in a project, even if the project participants are
strangers to each other. Such swift trust cannot be based on any direct experience regarding
the trustworthiness of the project participants, but can instead be rooted in mutual expecta-
tions connected to institutionalized roles or a well-functioning reputation system (Meyerson
et al., 1996).
Work on swift trust has identified clear and institutionalized roles as an important source
of trust in projects. This has for instance been found in the construction sector, where project
participants place trust not so much because of previous experiences with each other, but on
the basis of the expectation that the institutional environment (e.g. educational system, system
of job qualifications, etc.) will ensure that other project participants will be able to compe-
tently fulfil their roles (Kadefors, 1995). While this may be true in a sector like construction,
where the level of innovation is not very high, reliance on prescribed role fulfilment is likely
to be insufficient for projects of a more open-ended nature and requiring more creativity
(Blomqvist and Cook, 2018).
Moreover, institutionalized roles may offer sufficient ground for competence trust, but this
still leaves open the question of how project participants can have integrity trust. One pos-
sibility is reputation, especially in relatively close-knit contexts where news regarding some-
one’s lack of reliability travels fast (Meyerson et al., 1996). The relatively strong emphasis on
competence trust in projects may also be due to the by-definition restricted time available in a
project, which leads to a strong focus on the task at hand (Meyerson et al., 1996). Nevertheless,
Blomqvist and Cook (2018) on the basis of a review of the literature conclude that the estab-
lishment of interpersonal relationships still is important in projects.
Finally, trust in the context of projects can be interpersonal trust (between individuals
participating in the project) and inter-organizational trust (in the case of a project between
organizations, as in a consortium for the construction of a large infrastructure project). There
is much more research into interpersonal trust than into inter-organizational trust. As a result,
there is much that we do not know, although there are indications that in relations between
organizations, interpersonal and inter-organizational trust are related but distinct constructs
that impact differentially on processes like negotiation and conflict (Zaheer et al., 1998). On
the other hand, there are also indications that practitioners do not actually make much differ-
ence and treat trust in an organization and in its representatives as equivalents (Laan et al.,
2011). In the following discussions, we will therefore not differentiate between trust between
organizations and between individuals involved in a project.
In practice, trust in innovative projects will be characterized by combinations of types
and sources of trust, with the mix differing between situations and conditions (Lewis and
Weigert, 1985). At this point, it is also useful to mention that trust cannot be assumed to be
universally beneficial for project outcomes. Trust can make a party vulnerable to exploitation,
or lackadaisical where a more proactive and vigilant attitude would be better. Overreliance
on trusted partners can also hinder innovation if opportunities to cooperate with others who
could deliver new insights are neglected (Krishnan et al., 2006). This makes attention to the
sources of trust in project contexts, and the soundness of these sources, an issue of consider-
able practical importance.
Before going into the question of how the level and basis of trust at the start of an innova-
tive project can be influenced, I will in the next section discuss how trust can lead to positive
project outcomes through its influence on the collaborative behaviours of project participants.
248 Handbook on innovation and project management

TRUST AND COLLABORATION IN INNOVATIVE PROJECTS

The aim of this chapter is to explore the interrelations between trust, collaborative behav-
iours in innovative projects and the outcomes of these projects. I have already briefly sum-
marized some key aspects of trust. In this section, I will articulate collaborative behaviours.
Collaboration can be seen as an umbrella concept, distinguishing a broad class of behaviours
from other behaviours (non-collaborative and competitive behaviours). Digging a bit deeper,
collaboration can be seen as encompassing two distinctive behavioural categories: coordina-
tion and cooperation (Gulati et al., 2012). Coordination in turn can be defined as “the delib-
erate and orderly alignment or adjustment of partners’ actions to achieve jointly determined
goals” and cooperation as the “joint pursuit of agreed-on goal(s) in a manner corresponding
to a shared understanding about contributions and pay offs” (Gulati et al., 2012, 537 and 533,
respectively). These definitions are not very informative about the behaviours constituting
coordination and cooperation, however. I will first unpack these two categories, before mak-
ing the link with trust.
Coordination is a key topic in organizational theorizing and focuses on how task interde-
pendencies can be managed. At a high level of abstraction, a distinction can be made between
formal and informal coordination mechanisms. The structural approach as prescribed by the
PMBOK is clearly an example of the first and an improvisation of the latter. Other elements of
coordination are task decomposition, allocation of jobs, pooling of resources and communica-
tion (Castañer and Oliveira, 2020). Mintzberg’s (1980) influential framework makes a more
refined distinction between mutual adjustment, direct supervision and three types of stand-
ardization: that of work processes, of outputs and of skills. Of these, mutual adjustment and
standardization of skills can be seen as belonging to the informal category. Mutual adjustment
consists of the informal coordination of work between project participants. Standardization of
skills allows for informal coordination because it makes formal coordination superfluous. The
other three types are on the formal side, with standardization of work processes and outputs
being strongly reminiscent of the prescriptions of the PMBOK.
Although cooperation is doubtlessly a key factor in organizing, this concept has been less
articulated in the literature. In a review article, Castañer and Oliveira (2020) sum up a number
of behaviours mentioned in the literature, including joint activities, the pursuit of mutual gain
or interests and common benefits. Based on the sociological literature on cooperation, Tjosvold
(1984) distinguishes four types of cooperative behaviour: assistance behaviours, communica-
tion behaviours, task accomplishment behaviours and friendliness and support behaviours.
This is conceptually close to the project citizenship behaviours described by Braun, Ferreira
and Sydow (2013): helping behaviour, loyalty to the project goals, compliance with project-
based rules, individual initiative and relationship maintenance. Cooperation outcomes are
typically described in terms of task performance and of satisfaction of the participants (Smith
et al., 1995), and similarly, it seems natural to divide the cooperative behaviours into two types:
task-oriented (assistance, task accomplishment and communication) and relationship-oriented
(friendliness and support behaviours and, again, communication). Communication fits both
categories as it can be geared to task performance (e.g. providing necessary information for
the other participant to do his or her task) or to the relationship (e.g. small talk to strengthen
the emotional bond between participants). Both task-oriented and relationship-oriented coop-
eration behaviours are likely to be necessary to make innovative projects successful.
 Collaboration and trust in innovative projects 249

How is trust related to project coordination and cooperation behaviours? Three prelimi-
nary remarks are in order. First, relationships between types of trust and project collabora-
tion behaviours are complex and likely to be bidirectional. For instance, whereas a high level
of trust can accommodate cooperative behaviours, cooperative behaviours can in turn also
increase the level of trust in a relationship (McAllister, 1995). Second, the literature on the
relations between types of trust and forms of collaboration is fragmented and incomplete,
hence the following discussion will partly be based on plausible speculation rather than empir-
ical evidence. Third, the distinctions between collaboration, cooperation and coordination
elaborated earlier are not made in any precise way in most of the literature.
Having said this, there seems to be little doubt that trust is strongly related to collaboration
(Smith et al., 1995). Various studies have established relations between trust and collaboration,
in general (Chiocchio et al., 2011), or regarding specific types of trust (Zhang et al., 2018) and/
or elements of collaboration (Paul et al., 2016). Likewise, the relationship between trust and
collaboration on the one hand and project outcomes on the other has also been documented
extensively. This is true for project performance in general (Cheng et al., 2021; Strahorn et al.,
2017), as well as for outcomes specifically related to innovation, like knowledge sharing and
exploration (Arranz and de Arroyabe, 2012; Bond-Barnard et al., 2018; Buvik and Tvedt, 2017;
Nygaard and Russo, 2008). At the level of the project team trust is also important because
it promotes psychological safety, i.e. a group climate in which “people feel free to express
relevant thoughts and feelings” (Edmondson, 2012, 118). Psychological safety is especially
important in innovative projects because it provides room for unconventional ideas and inno-
vative proposals. A study of project teams in the ICT and pharmaceutical industries found that
psychological safety was positively associated with both exploitative and exploratory learning
by the team (Kostopoulos and Bozionelos, 2011). These findings and observations make sense
and are not very surprising. Whereas a more fine-grained understanding of the relationships
between types of trust and elements of collaboration would be helpful, the literature as yet
does not offer much guidance in this respect. Consequently, the following discussion will be
speculative.
Distinguishing between competence-based trust and integrity-based trust, it is clear that
while both may be conducive for coordination within projects, this is not equally the case
for all forms of coordination. Starting with competence trust, this type of trust is particularly
important for the coordination mechanism of standardization of skills, whereas standardiza-
tion of processes and of outputs can be seen as a substitute for competence trust. This is also
reflected in criticism of the PMBOK, which can be seen as striving for the latter two types of
standardization (Hodgson and Cicmil, 2007). For mutual adjustment and direct supervision
to be effective, competence trust should also be above a certain threshold. Integrity trust is
particularly relevant for mutual adjustment, as a voluntary adaptation generally implies ced-
ing some advantage for oneself, often in the expectation that the other party will do the same
if necessary (see Ligthart et al., 2016). Integrity trust can also be expected to be important for
direct supervision, for if a project leader is not believed to act in an ethical way, the effective-
ness of this coordination mechanism is undermined (Bhatti et al., 2021). Finally, integrity
trust is also important for coordination on the basis of standardization of skills, as parties
should be confident that the freedom that this type of coordination gives to skilled profession-
als will not be abused. Integrity trust is not important for the standardization of processes or
of outputs, in contrast.
250 Handbook on innovation and project management

Turning now to the elements of cooperation, two of these, offering assistance in general and,
more specifically, helping others in their task accomplishment, can be expected to require a
significant level of both competence and integrity trust to be effective. The other two elements
of cooperation, communication and friendliness and support, are relationship-oriented, and
these will require some level of integrity trust, while competence trust seems less relevant.
The upshot of this brief discussion is that both competence trust and integrity trust are impor-
tant for collaboration, but not each type of trust equally so for all elements of collaboration.
The foregoing discussion has implicitly assumed project participants who are co-located
and can engage in direct interactions. However, projects increasingly become virtual, with
participants located in different geographical regions and time zones. The dynamics of virtual
project teams merit an in-depth discussion that goes beyond the confines of this chapter, but a
few remarks are in place. First of all, studies suggest that in virtual projects intensive commu-
nication is even more important than in face-to-face projects (Zakaria and Yusof, 2020). This
constitutes a challenge because of the more restricted communication modalities available to
virtual project teams, as well as the restrictions to synchronous communication because of
members being in different time zones. Maybe for this reason, sources of trust like reputation,
institutions and calculation tend to be relatively important in such projects (Cheng et al., 2021).
Secondly, there are some indications that behavioural controls are just as or even more impor-
tant in virtual projects in order to establish clear expectations and avoid misunderstandings
(Lukić and Vracar, 2018). At the same time, these control mechanisms may undermine trust,
as they heighten vigilance and make it more likely that shortfalls, even if small, are detected
(Piccoli and Ives, 2003). This is of course also the case in face-to-face projects, but in these
circumstances, it is easier to smoothen small task-related conflicts through intensive informal
communication. Thus the balance between maintaining good relationships and maintaining
sufficient control could be disturbed more easily in virtual projects.
I will now turn to a question of great practical importance: how can both forms of trust be
promoted in projects, especially in non-routine, innovation-oriented projects?

HOW CAN TRUST FORMATION BE PROMOTED IN INNOVATIVE

PROJECTS?

Given the importance of trust for collaboration in projects, and ultimately also for the out-
comes of these projects, it is important to know how the level of trust in a project can be
increased. In the following, I will discuss two categories of measures that project managers
can engage in: structural measures and process measures. Although I will discuss them sepa-
rately, it is important to note that in practical situations the two categories are overlapping.
Starting with structural measures, a number of these have already been mentioned when
discussing sources of trust in projects. First of all, having standardized roles and skill sets is
a powerful factor in promoting swift trust in projects. However, this is often not something
that can be arranged at the project level but depends on formal and informal arrangements
at the sectoral level, or even across sectors, for multiple domains of project organizing. The
work of the Project Management Institute and the promulgation of the PMBOK can be seen
as an example of this. In spite of such work, standardization in project-based industries like
construction and engineering remains a challenge (Choi et al., 2021). This is not only true at
the level of the industry but also within project-based organizations. Bresnen et al. (2004)
 Collaboration and trust in innovative projects 251

describe the efforts of a UK construction firm to introduce a standardized project manage-

ment system, which largely failed because of resistance from project managers. Nevertheless,
role clarity has been shown to play an important role in the emergence of swift trust in project
teams (Curnin et al., 2015). If all participants know their own roles and those of the others,
and each knows how to enact these roles, trust can arise in a project team quasi-immediately.
However, this does not mean that it is impossible to implement structural measures to stim-
ulate trust in projects at the organizational level. Valentine and Edmondson (2015), while
not studying trust, provide some important clues. These authors describe how three types of
“team scaffolds”, boundaries between team members and others, clear role sets and collective
responsibility, enabled employees who worked together for just a single shift to start work-
ing as a team immediately. The boundaries between teams functioned in spite of the lack of
continuity of team membership and led to the formation of a clear in-group for the duration of
the work shift. The standardized role sets (also defining the skills necessary for a given role)
enabled the team members to cooperate on a “plug-and-play” basis. Obviously, this is related
to the standardization strategy discussed earlier. The fact that this was not met with resistance
is probably because Valentine and Edmondson’s case focused on the emergency department of
a hospital, an environment in which skill and role standards are already very strong. Finally,
giving a team collective responsibility for the outcomes is a powerful trigger for collaboration.
Specifically, these “team scaffolds” enabled teams to prioritize mutual efforts, continuously
communicate, help each other and hold each other accountable for outcomes. Such a kind of
setup could also be expected to function for project work and to induce both collaboration and
trust.
In the preceding example, one of the major impediments to collaboration, overcome through
“team scaffolds”, was the discontinuity of group membership. While in some situations this
may be unavoidable, very often it is a variable that managers can manipulate. In the project
literature the metaphors of “shadow of the past” and “shadow of the future” are employed to
indicate that although a project may be temporary, actors in the project may have worked with
one another in the past, and/or may expect to do so again in the future (Ligthart et al., 2016).
In such cases, we can say that project participants (whether individuals or organizations) are
embedded in a network of latent ties, which can be activated at any moment in the future in
the form of participation in a new project (like in the production of television programmes;
Starkey et al., 2000). Having worked together on previous projects may expedite trust forma-
tion in a new project in various ways. On the basis of a case study in the construction industry,
Buvik and Rolfsen (2015) identify four mechanisms. Previous experience helps project partic-
ipants to develop integrative work practices early in the project, helps them to form a common
project philosophy, promotes open communication and contributes to clear role expectations.
In other words, the initial experience-based trust can be augmented further in the new project.
If the parties in a project have worked together in previous projects, experience-based
trust may already be present at the start of the focal project, enabling smooth collaboration.
However, in the context of an innovative project, characterized by little routine and repetition
and a relatively unique task, it is less likely that experience-based trust is present a priori, and
it will be difficult to establish such trust in the project given its limited duration. In this situa-
tion, the expectation of working again together on future projects can still induce a calculative
form of trust. This “shadow of the future” discourages untrustworthy behaviour in the present
project by increasing participants’ willingness to make short-term sacrifices in order to realize
long-term benefits (Klein Woolthuis et al., 2005). This is a form of calculus-based trust, where
252 Handbook on innovation and project management

project participants make efforts to conform to expectations to increase the chance of being
selected for future projects.
Thus managers should take into account that projects are not purely stand-alone phenomena
(Engwall, 2003), and make most of the effects of the shadows of the past and the future, e.g. by
selecting project participants (individuals or organizations) that have worked together success-
fully in the past or by promising new project participation in the future if the present project
is successful (see e.g. Maurer, 2010).
Apart from the structural measures discussed earlier, there are also more processual meas-
ures. First of all, research emphasizes the importance of intensive interaction and communica-
tion for trust and collaboration in projects. Frequent interaction and communication are key,
especially early in a project (Blomqvist and Cook, 2018; Bstieler, 2006). The communication
can be about the content of the project and the tasks involved, but sharing personal information
at the beginning of a project is also related to the formation of trust (Jarvenpaa and Leidner,
1998). Apart from interaction and communication, project participants may also make small
gestures that signal goodwill, like relinquishing compensation for additional hours of work,
which, when reciprocated, may lead to spiralling levels of trust within a project (Swärd, 2016).
A case study of a construction project alliance by Laan et al. (2011) further illustrates how
trust can be built through social interactions in a project. Two interrelated elements are particu-
larly salient in this case study: the importance of physical proximity of project participants and
the importance of transparency. The first element accommodates the second, as illustrated by
the following quote from a representative of the client organization: “You need to see how your
opponent, your opponent of the past, operates. That is what makes trust grow, seeing what posi-
tion people take’’ (2011, 105). The importance of physical proximity for building trust under-
lines that virtual project teams face particular challenges, as discussed in the third section.
Particular behaviours, especially leadership behaviours, are also associated with the emer-
gence of trust and psychological safety in project teams. Edmondson (2012, 135–145) discusses
a number of leadership behaviours that promote psychological safety, including the accessibil-
ity of the leader and treating failures as learning opportunities, while at the same time holding
participants accountable for transgressions of agreed norms regarding task accomplishment.
This is also very relevant in the context of project management, where the emphasis may often
be on accountability without offering the necessary countervailing psychological safety.
Finally, the literature also demonstrates that rituals and symbols can play a role in forming
trust between project participants. An example of a ritual is the project kick-off meeting. Such
a kick-off meeting, which in the case of infrastructure projects is often open to stakeholders
in the environment, like local residents, and serves multiple purposes. Externally, it engages
various groups of stakeholders and legitimizes the project plan. Internally, it marks a “point of
no return”, which can help to strengthen the bond between project participants, who now have
become collectively responsible for bringing the project to a good ending (Van de Ende and
Van Marrewijk, 2018). Intensive communication and interaction as well as rituals are likely
to strengthen the identification of the participants with the project, and with this mutual trust
and collaboration. Hence, these are things that project managers need to plan for and take
seriously.
An example of a symbol that can play a role in creating trust in a project is provided by
Livne-Tarandach and Jazaieri (2020). Although the context of this study is somewhat atypi-
cal (a temporary organization for the management of a summer camp), the mechanism that
these authors describe has more general relevance. Livne-Tarandach and Jazaieri (2020, 5)
describe how in the summer camp a “swift sense of community” arose, defined as “a state
 Collaboration and trust in innovative projects 253

of felt inclusion, joint responsibility for members’ well-being and needs experienced within
a group of people through the seeding and rapid amplification of experiences of momentary
positive regard and widespread sense of influence”. Described in this way, it is clear that a
swift sense of community is strongly related to the concept of “swift trust”, discussed earlier.
In the process of forming a sense of community, the use of a mundane artefact (a bread tag)
as a symbol of bonding between participants plays a role in starting a process of spiralling
sense of community. It is not so hard to imagine that all kinds of artefacts, like coffee mugs or
mousepads, could play such a community-enhancing role within a project.
Whereas we have seen that standardized roles and skill sets are structural characteristics
that help trust to arise quickly (or even instantaneously) within a project, research by Bechky
(2006) shows that this structural mechanism may need to be complemented by processual
means. In the film projects studied by Bechky, these took the form of frequent and enthusiastic
expressions of praise for a role well executed, as well as polite admonishing when this was
not completely the case. A third type of process identified by Becky was role-oriented joking:

[H]umor allowed for expectations and understanding of roles to be displayed in a less direct, and
possibly less threatening, way. It also furnished crew members with a means for role distancing;
humor was a safety valve that enabled them to complain about their role constraints while still enact-
ing roles appropriately and accomplishing their work.
(Bechky, 2006, 12)

While Bechky does not study trust, it is clear that thanking, admonishing and joking all rein-
forced the functioning of role expectations, and hence indirectly also the trust between project
participants based on these. This demonstrates the importance of frequent friendly feedback
on role fulfilment between project participants for stimulating trust.

CONCLUSIONS

In this chapter, I have discussed the relationships between trust and collaboration in the con-
text of projects. Projects, especially those that are of an innovative nature, are inherently
uncertain. The normative theory of project management, as embodied in the PMBOK, aims
to reduce this uncertainty by means of a variety of control mechanisms, but this can never be
fully effective, hence some degree of improvised collaboration will be necessary. In this con-
text, trust is important because it fosters collaboration, just like it is promoted by collaboration
in a positive cycle.
Looking at the concept of trust, a number of useful distinctions can be made. One of these
is the distinction between trust in the other party’s competence versus his or her integrity.
Another dimension in which trust can be articulated is the basis on which it is grounded, like
direct experience, reputation, the membership of the other in a particular category of actors
or institutional arrangements in the environment. Some of these can also be assumed to be
effective in the context of projects, but others much less so, in particular those that need time
to develop (like direct experience).
Trust and collaboration are strongly interconnected, so it is difficult to say which of the two
comes first. Rather, they are mutually reinforcing and together can form a positive spiralling
effect on processes and outcomes of projects. Although both competence-based and integrity-
based trust is important in projects, the extent to which these two are connected to various
aspects of coordination and cooperation (the two components of collaboration) differs.
254 Handbook on innovation and project management

Finally, how can managers in or around projects stimulate trust? A number of structural
and processual measures are available, each of which targets one or more of the sources of
trust discussed in the chapter. Structural measures can for instance aim at establishing clear
standardized roles and skill sets. The disadvantage is that this often needs to be done at the
level of the sector or industry, something on which an individual project or organization has
little influence. Other structural measures aim at increasing the temporal embeddedness of
the project. This can be done by strengthening the “shadow of the past”, by selecting project
participants with whom one has worked successfully in the past. The other option is to create
a “shadow of the future” by creating the perspective of working again with the same project
participants in the future. This will promote both trust and collaborative behaviours in the
present project. Processual measures are for instance the deliberate promotion of intensive
communication and interaction, especially early in the project. These interactions can include
reciprocation of small positive gestures, helping to set off a spiral of trust. Furthermore, ritu-
als and symbols can be used to create a sense of community within a project, which will also
promote trust and collaboration.
While this chapter offers an overview of what the literatures on trust and projects teach us,
it is also clear that there is much that we still do not know. Gaps in academic knowledge are
serious and need to be filled by conducting more studies. But even the limited insights that
research has generated seem to have had little influence on practitioners. A phenomenologi-
cal study among construction project practitioners concluded that “little understanding was
evident regarding methods for building and maintaining trust, nor for repairing trust when
problems arose” (Strahorn et al., 2017, 1). If this observation is representative, it is clear that
much work is needed also in terms of knowledge dissemination.

For Further Reading

• Kenis, P., Janowicz, M., and Cambré, B. (Eds.). (2009). Temporary organizations:
Prevalence, logic and effectiveness. Edward Elgar Publishing.

This book is a good introduction to many aspects of project organization.

• Chiocchio, F., Kelloway, E.K., and Hobbs, B. (Eds.). (2015). The psychology and manage-
ment of project teams. Oxford University Press.
• Mann, L. (2005). Leadership, management, and innovation in R&D project teams.
Westport, CT: Praeger Publishers.

These two books focus on behavioural aspects of project management.

• Marková, I. and Gillespie, A. (Eds.). (2008). Trust and distrust: Sociocultural perspec-
tives. Charlotte, NC: Information Age Publishing.
• Nooteboom, B. (2002). Trust: Forms, foundations, functions, failures and figures.
Cheltenham and Northhampton, MA: Edward Elgar Publishing.

These two books are good introductions to the concept of trust and also cover many applica-
tions. No specific attention to trust in projects.
 Collaboration and trust in innovative projects 255

NOTE
1. www​.pmi​.org​/pmbok​-guide​-standards (retrieved on 5 April 2021).

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14. A cultural evolution theory of balancing
innovative and routine projects
Christoph H. Loch, Stylianos Kavadias and
Svenja C. Sommer

INTRODUCTION

In anthropology, culture is defined as “the transmission from one generation to the next,
via teaching and imitation, of knowledge, values and other factors” (Boyd and Richerson,
1985, 2). This definition emphasizes the nature of culture as socially transmitted knowledge,
which is evaluated and selected via “fitness pressures” on the group. The discussion of cul-
ture in organizational theory is often focused on norms and values (Cameron and Quinn,
2011), although Schein’s (2016) classic definition is closer to anthropology, where culture also
includes knowledge and beliefs as well as technologies and artefacts. Cultural evolution the-
ory uses the mathematical and empirical toolkit from evolutionary biology to examine the
evolution of culture (Brahm and Poblete, 2022).
Projects are ideally suited to test proposals from cultural evolution theory because they
are embodiments of organizational change: projects are temporary organizational endeavours
that use problem-solving to find solutions to novel problems (for those organizations) where
existing standardized processes, with defined solution procedures, prove insufficient. Projects
are therefore key tools for organizations to create and implement change and to learn.
The novel nature of most projects makes it hard for learning to come from pre-planned and
standardized procedures; rather, it is influenced by informal activities and beliefs as well as
tacit knowledge that resides with the people in the organization. Therefore, projects can be
prime examples and drivers of cultural evolution.
Therefore, our research goal is to theoretically demonstrate, in a simple model, how pro-
jects can influence the evolution of culture (especially linked to innovation), specifically, how
the balance between innovative and routine projects (ambidexterity as introduced by Tushman
and O’Reilly, 1996) may evolve in the tension of top-down direction and bottom-up dynamic
learning and imitation behaviours.
We note that this research goal is consistent with an accepted view that an organization’s
strategy does not evolve top-down or bottom-up but through a dynamic interaction between
the two directions (Burgelman, 1983; Loch and Kavadias, 2011; Kim et al., 2014; Hutchison-
Krupat and Kavadias, 2015; Sting and Loch, 2016; Hutchison-Krupat, 2018). Cohen et al.’s
(1972) “garbage can model” illustrated that organizations may drift, and Lovas and Ghoshal
(2000) indicated through a case study that a company’s strategy might be the outcome of
Darwinian evolution. These studies complemented numerous anecdotes where managers
conceded that they did not understand how the behaviour of their project teams evolved.
Still, these studies offered little detail, beyond the general description of evolution, about
the mechanisms that govern the occurrence of drift. A multi-level system view is required to
understand these dynamic interactions.
258
 A cultural evolution theory 259

In anthropology, it is accepted wisdom that cultures develop in bottom-up and undirected

ways that follow evolutionary pressures, but without a strong “strategic” direction – a direc-
tion is “selected in” at the group level (rather than planned). Cultural evolution models are
designed to incorporate a multi-level analysis but have not entered mainstream management
studies, especially not in project management.
This chapter aims to demonstrate the modelling machinery developed in cultural anthro-
pology on the example of the balance between innovative and routine projects. We review a
few fundamental models of cultural evolution, and we adapt one of those classical models to
explore how top-down direction may shape project execution culture and the project balance,
which in turn may constrain and influence the overall strategic direction. Our model shows
how “bottom-up” cultural dynamics among project teams may influence the competitive posi-
tion of an organization, but also how these dynamics are at the same time shaped by the
“top-down’” (competitively driven) performance (or “fitness”) criteria set out by the organiza-
tion’s senior management. Thus, we demonstrate how models of cultural evolution can offer a
multi-level system analysis of the interaction between culture at the project level and strategy.

CULTURAL EVOLUTION THEORIES AND PROJECT MANAGEMENT

A key characteristic of projects is that they deal with “novel” or “unique” problems as opposed
to standard outputs delivered by processes. Therefore, projects require a higher degree of
learning compared to other organizational activities. Such learning happens not only through
pre-planned and conscious actions (see the chapter on managing unforeseeable uncertainty
through learning) but is both emergent (creative and unpredictable) and influenced by culture.
A sociological definition of culture is

a pattern of shared basic assumptions learned by a group as it solved its problems of external adap-
tation and internal integration […] it is a product of joint learning. […] culture expresses itself in
visible artifacts, in expressed beliefs, and in basic underlying assumptions (unconscious, “taken for
granted” values).
(Schein, 2016, 6)

A narrower definition of culture from economics stresses that

the routinization of activities in an organization constitutes the most important form of storage of
the organization’s specific operational knowledge. […] There is no need for anyone to know anyone
else’s job, neither is there any need for anyone to be able to articulate or conceptualize the proce-
dures employed by the organization as a whole.
(Nelson and Winter, 1982, 99, 105)

This is also echoed by Hodgson (1996, 255): “Culture is more than shared information:
through shared practices and habits of thought, it provides the method, context, values, and
language of learning, and the evolution of group and individual competences”. While these
representations of culture are narrower than both the sociological and anthropological views
of culture, they agree with Schein on the subconscious nature of cultural norms.
The fact that structured knowledge and values may evolve in ways that are, at best, partially
understood by anyone at the top of an organization has been widely observed. Within firms,
processes and structures arise partially randomly, e.g., because new employees are hired, or
260 Handbook on innovation and project management

because individual employees invent new rules to improve their daily reality. These processes
and structures “compete” for resources, attention and support from the various stakeholders,
and they are selected based on efficiency and success, where “success” may be subjectively
rather than objectively defined. For example, during R&D portfolio decision-making within
organizations, innovations compete for resources and are selected based on their “success
potential”; this is rarely objective, but it is significantly influenced by the individual guesses
and personal as well as group biases of those participating in this process; project workers
also inherit competencies and know-how from previous project efforts (Basalla, 1988; Mokyr,
1992; Fleming, 2001).
Despite its wide acknowledgement, this viewpoint has not found the “right” machinery
within the management discipline to study it (Brahm and Poblete, 2022; Feylessoufi et al.,
2022). Such machinery exists in the field of cultural evolution in anthropology. The aim of
these cultural evolution models is to take the micro-scale properties of individual behaviour,
aggregate them up to a population and deduce the collective long-run evolutionary conse-
quences of the assumed micro-level behaviours (Richerson et al., 2006). This makes these
models an appropriate “tool” to understand dynamics at the population level as well as at the
underlying individual level.
Moreover, cultural evolution is different from biological (Darwinian) evolution because
traits are not only “vertically inherited” from parents but can be “horizontally” transmit-
ted among peers within the population (and thus “what is transmitted” changes from genes
to packageable ideas). Horizontal transmission happens in two ways – by people with cer-
tain behaviours moving around and by people acquiring information (ideas, practices) from
others by learning and teaching. Thus, cultural evolution emphasizes social learning – the
imitation of “phenotypes” of behaviour from others.1 Social scientists have built reason-
able mathematical representations of the micro-level processes of cultural evolution (e.g.,
Richerson et al., 2006).
These models have enabled social scientists to understand important behavioural dynam-
ics across different levels of decision-making and effort within organizations. For example, if
people meet “randomly”, the spread of knowledge through imitation cannot explain the adop-
tion of collaborative behaviours as long as such behaviours carry the slightest disadvantage to
individuals. Collaboration can spread effectively only when people stably organize in groups,
and selection takes place at the aggregate group level (Hamilton, 1975).
This is the case in organizations: members stay with the organization for a while, and
if they move, they adopt the culture of their new organization. Thus, the same behaviours
“assort” themselves (through people adapting to them) in stable ways. As a result, one organi-
zation’s members are sustainably subject to different social pressures than members of other
organizations with which the first organization may compete.
Specifically, projects function as vehicles that drive cultural evolution: each project tack-
les a new problem, even if the problem is only “slightly” new, such as assembling known
resources at a new location. Therefore it exhibits new experimental behaviours, which may
disappear, or be selected (explicitly or implicitly) to be used again. Thus, projects manifest the
individual or team level of cultural evolution (the inner circle in Figure 14.1).
Multi-level analysis is relevant as the surrounding organization is shaped by the ideas and
procedures that are created in the projects and retained (the outer circle in Figure 14.1); yet, at
the same time, the organization, with its selection criteria and action procedures, influences
the way the projects are carried out. Finally, at the third level in Figure 14.1, the organization,
 A cultural evolution theory 261

Source:   adapted from Loch and Kavadias, 2011.

Figure 14.1  Nested organizational evolution

as a whole, competes with other organizations. This competitive pressure drives group
selection – organizations with effective ideas and procedures (this may mean fast, efficient,
flexible or robust) are more successful and grow. Notably, at all levels of aggregation, all
three characteristics of evolution are present: (partially random) generation of a variety of
behaviours, selection according to some (often noisy) criteria that are stable for a while, and
elaboration and inheritance (Dawkins, 1996).
Overall, models of evolutionary theory offer a set of causal explanations across levels of
aggregate decision-making. They allow us to explicitly consider not only the dynamics that
emerge within the different levels of decision-making, but also the dynamics across those lev-
els. They can describe how behaviours evolve “spontaneously” according to dynamic laws of
social learning that happen at the level of individuals/teams and are not controlled, maybe not
even understood, by senior management (the group level of decision-making). Yet, they can
also identify how management can influence (enable or constrain) this evolutionary dynamic
by setting performance rules, which function as “fitness” measures at the lower level, while
at the same time, the high-level decisions are constrained by the lower-level dynamics. The
possibility to simultaneously address multi-level decisions and their interactions allows us
to make Peter Drucker’s classic quip that “culture eats strategy for breakfast” more precise,
while also identifying its limitations.
We build on an influential basic model of cultural evolution (Rogers, 1989), which considers
whether, and how, cultural imitation increases the fitness of a population. In this model, an
agent population lives in an environment that may switch (with constant probability) between
262 Handbook on innovation and project management

two states that require different behaviour for survival. The probability of switching is a meas-
ure of the predictability of the environment – from stable to volatile. Agents survive in this
environment depending on whether they correctly diagnose the state of the environment and
apply the right behaviour (e.g., if is it rainy and wet, seek shelter, but if it is sunny and hot,
store water and hydrate effectively). Some agents (individual learners) cope with this situation
by obtaining, at some cost, information about the environment and then adapting their behav-
iour to fit the environment (they correspond to “innovators” in our following model). Others
(imitators, or social learners) simply pick a random individual from the population and copy
it. Imitation is less costly than individual learning but does not add any value if one copies
from an individual that has chosen the “wrong” (for the current environment) behaviour (these
agents correspond to the “executors” in our upcoming model).
The outcome of this simple model is surprising. In the long run, there is always a mixture
of individual learners and social learners, and both types have the same fitness as individual
learners alone. In other words, cultural imitation provides no benefit to the population. The
organisms are no better off than they were without any imitation, a result that has been termed
“Rogers’ paradox”. The reason is that each type can “invade” when rare: when there exist few
social learners, it becomes very likely they imitate an individual learner, and thus they get all
the benefits from the individual learners’ efforts without the cost. In this scenario, social
learners have an advantage and can spread. When individual learners are rare, they track the
environment perfectly, whereas most social learners get it wrong as they tend to imitate role
models from the more numerous other social learners who cannot correctly track the changing
environment. In this scenario, the individual learner has an advantage and spreads. In equi-
librium, both types are present and have equal fitness. The result is important on two counts:
first, individual learning is not a stable behaviour (it is not defensible in an environment with
evolutionary competition), as “free rider” imitators might invade the overall population and
benefit. Second, social learning as a strategy does not add fitness at the population level by
itself, i.e. in equilibrium, the average population fitness is equal to the fitness of individual
learners.
Several studies have examined which elements of the Rogers model would have to be modi-
fied for social learning to add value at the population level. Boyd and Richerson (1995) show,
first, that Rogers’ result is robust to spatial variation across groups and to social learners
imitating multiple role models. Second, they show that social learning can add fitness to the
population if individuals can choose to learn only when the possible result of learning looks
sufficiently superior. Third, social learning also improves the population’s fitness if it is cumu-
lative over time, in the sense that even social learners can “experiment around” their behav-
iour adopted from imitation and improve it a little bit. This allows the population to improve
even when many social learners copy from one another. More recently, Brahm and Poblete
(2021) argue that the rise of the corporation in history represents the emergence of groups
within which social learners exhibit lower costs of learning by taking advantage of ideas that
are produced on the outside.
In the next section, we propose a different variation of Rogers’ model. Similar to Boyd and
Richerson (1995), we assume some type of cumulative effect on the level of the individual’s
fitness (where both social and individual learners can benefit from “continuous improve-
ments”), but most importantly, we embed the evolutionary dynamics of individuals within
a firm (group) level competition model. We examine multi-level evolutionary dynamics by
endogenizing the level of fitness that the individuals are evaluated on. Prior models of cultural
 A cultural evolution theory 263

evolution have taken the group environment as given, since they sought to address the typi-
cal situation in nature where, indeed, the environmental conditions are exogenous. However,
intra-organizational dynamics directly affect their organizational environment and its fitness
demands.

A CULTURE EVOLUTION MODEL OF INNOVATION AND ROUTINE

PROJECTS
The evolutionary model, inspired by Rogers (1989), comprises two levels: first, the intra-
firm cultural dynamics capture how project-level learning from problem-solving and imita-
tion is guided by organizational performance measurement. Second, the interfirm competitive
dynamics capture competing organizations choosing their strategic positions (market seg-
ments and technologies) in an effort to maximize their returns. The strategic position of each
firm determines the objectives of each firm’s projects.

Intrafirm Cultural Dynamics

Project teams contribute to the company’s strategic position by executing projects, one per
period. If successful, a project produces value according to the requirements of the market
segment within which the firm operates. For now, generically denote the project value by V.
However, the market requirements may discontinuously change each period with a (station-
ary) probability P. (P may depend on the market segment, which will be discussed in the next
subsection.)
In the spirit of ambidexterity (Tushman and O’Reilly, 1996), there are two project types:
innovative projects that require original new problem solving, and routine projects that repeat
previous solutions obtained from peers with only small changes. Accordingly, there are two
types of employees in the organization (who are fixed in their skills within the duration of
a project but can learn over multiple projects/periods): first, teams of innovators or problem
solvers (who are individual learners in the cultural evolution terminology). These individu-
als always experiment around the established project blueprints to see whether they can find
better responses or solutions. On the one hand, this enables them to respond to changing mar-
ket requirements and hence to capture the value potential of the market segment even when
the task requirements change (whereas “normal project processes” are designed for planned
responses rather than innovation). Note that this behaviour is not only enabling new outcomes
but could equally effectively enable innovation within the project, e.g., experimenting with
new analysis methods or project team communication technologies that better respond to
market requirements. On the other hand, such unrelenting innovation comes at a sizeable cost
C (of invested time as well as “aggravation” to others who do routine work), since these indi-
viduals spend effort each period regardless of whether a discontinuity occurs or not.
Second, routine projects are carried out by teams of project executors (Pedersen and Ritter,
2017) (who are social learners in the cultural evolution terminology). These individuals use
previous solutions, gleaned from colleagues, with small modifications that may achieve
slightly better outcomes or small improvements upon previous practices. These workers do
not spend time exploring new methods or solutions but copy previously used approaches and
practices from other workers in the organization. This is less costly than innovation or original
264 Handbook on innovation and project management

problem solving (c < C) but creates no value when the environment changes while the team
copies these approaches or practices from other executors rather than innovators.
Similar to the cumulative learning in Boyd and Richerson (1995), we consider that the pro-
ject executors add value to the organization by introducing (small) continuous improvements
and modifications of the approaches they copy, adding a value of δ when the environment is
stable or the executor team gets its information from an innovation project team.
The timeline works as follows: at the beginning of each period, project innovators (repre-
senting a fraction rI of the population) start problem-solving to analyse the requirements and
to produce a new customized solution, possibly with new methods (at cost C). While they ana-
lyse and adapt their approach regardless of whether the external requirements have changed or
not, we assume that innovators who realize that they find themselves in a stable environment
can, in addition, incorporate continuous improvements resulting from their interactions with
process workers. Such interactions happen with a probability rS = (1 − rI ) (S for social learn-
ers), which is the fraction of project executors in their organization.
Executors start each period by (randomly) choosing a source of information: if an executor
team happens to choose an innovator team, they are able to use the solution that the innovator
develops, at a lower imitation cost c. In addition, the interaction between the two teams results
in a small improvement of δ (in the spirit of “continuous improvement”) that benefits both.
If, on the other hand, the executor team chooses to get its information from another executor
team, it benefits from the improvement initiatives only if the market requirements remain
stable; in case of a disruption, the chosen approach will result in a project failure and value 0.
The economics of these social dynamics are summarized in Figure 14.2.
This model expresses a conceptual characterization of cultural learning dynamics within
and across projects. Critical assumptions in the model are for now that V > C > c.2
We derive the average project performance (equivalent to the fitness in cultural evolution
models) for the two types of teams, f I and f S, evaluated over the probabilities of being in a

Figure 14.2  Employee fitness depending on behaviour and environment

 A cultural evolution theory 265

stable or disruptive environment and, in the case of executors, the type of team chosen as an
information source.

f I = V − C + δ(1 − rI )(1 − P )

f S = (V − c + δ)rI + [−cP + (V − c + δ)(1 − P )](1 − rI )

= (V + δ )[1 − P + rI P ] – c.

These project performances are subject to evolutionary dynamics as in the original Rogers
model: if executors are rare, they choose (randomly) mostly innovators as information sources
and benefit from their problem-solving, incurring a lower learning cost c. If, in contrast, inno-
vators are rare, they benefit from the fact that the executors mostly fail by choosing wrong
information sources. Thus, the two types of teams will evolve their relative frequencies by
leaving and getting replaced or by changing their modes of problem-solving, prompted by
performance (fitness) feedback. This particular type of evolutionary dynamics is known as a
quasi-birth and death process, and it has been shown to converge to equilibria of evolutionary
stable strategies (ESS) (Boyd and Richerson, 1985).
Formally, given the standard assumption of weak selection, a population of project teams
with shares (rI, 1 – rI ) plays an ESS if a team population using any different relative share of
these strategies achieves a strictly lower average project performance. Consistent with previ-
ous literature (Boyd and Richerson, 1995), we find that there exists a unique equilibrium
(characterized by the two fitness levels being the same) in which the share of innovators is
given by:

VP   C  c 
rI  (14.1)
V 
V 1  P     C  c
Note that this implies the fraction of executors to be 1  rI   . Moreover,
V 
the performance (fitness) of both types of teams ends up being equal at:

f  V  C   1  P  1  rI  (14.2)

As an aside observation, this model overcomes Rogers’ (1989) “paradox” that the presence
of imitation or social learning does not affect the population’s average performance outcome
(similar to other modifications discussed earlier): executors do contribute small continuous
improvements – the average organizational performance in Equation (14.2) is higher than
when there are only innovators present.
The extant literature on cultural evolution theory has naturally taken the contextual param-
eters V, P, C and c as fixed and exogenous (environmental) factors. However, a business con-
text, in particular a project context, usually has these parameters (at least partly) shaped by
firm-level decisions.
Comparative static analysis allows us to explore the impact of these firm-level decisions
(anticipating the examination of organizational-level decisions in the next section): for exam-
ple, the frequency of change P and the potential project value V can be affected by the higher
266 Handbook on innovation and project management

level strategic position and goals of the firm. A higher P may reflect a more volatile market
segment. How do these parameters, which result from higher-level choices, influence the cul-
tural dynamics? We calculate the partial derivatives of rI as

rI P  C  c
 0 (14.3)
V V   
2

rI V
  0. (14.4)
P V  
These results show that if a firm’s senior management seeks a higher project value V, most
often accompanied by higher requirements instability P (the infamous “high risk, high return”
opportunities), it will observe an increasing fraction of innovators in the firm. In other words,
as the project value and the requirements discontinuity increase, project teams will over time
rearrange themselves into a higher fraction of innovative behaviours and practices rather than
executing projects through routine approaches based on past successful efforts. Note that this
happens “culturally” bottom-up rather than by management orders. This is important for the
discussion of what happens when the organization faces its competitive environment, which
we turn to in the next subsection.
Similar analyses can be performed with respect to the type of organizational practices put
into place in firms. An organization that chooses to compete by reducing the organizational
“cost” of problem-solving (C), for example by investing in analysis and problem-solving tools,
 rI 
would naturally see an increase in the fraction of innovators   0  . Similarly, organiza-
 C 
tions which invest in benchmarking and best practice sharing (lowering c) or put in place
continuous improvement initiatives (increasing δ ) would end up with a larger fraction of
 rI r 
executors   0 and I  0 .
 c  
These comparative statics remind us that project management processes, rules, norms and
approaches do not merely achieve a short-term objective, but carry larger implications by
shaping the future behaviours of project teams, and therefore set limits or offer opportunities
for the organization’s competitive strategy. To some degree, the firm’s senior management can
anticipate this when making their competitive choices; we turn to this next.

Interfirm Competitive Dynamics

Suppose we have two firms (the simplest case with which we can demonstrate competitive
dynamics, or “group selection”), and each firm chooses a market segment to compete in. Let’s
suppose there are two segments, a “high end” segment H and a “low end” segment L. Segment
H is characterized by a higher project value VH > VL but also by more frequently changing
market requirements, thus PH > PL; the high-end market segment experiences more frequent
changes in the customer requirements and thus a more volatile business environment.
Depending on which segment each firm decides to operate in, the project teams will shift
their behaviour in response to the performance signals they receive from their organiza-
tional environments; the resulting equilibrium compositions and their performance levels are
 A cultural evolution theory 267

provided by Equations (14.1) and (14.2), which reflect the segment’s project value and volatil-
ity. Formally, we index them as rIH and f H (and the analogue for segment L). For simplicity
of exposition, suppose that a company’s return from operating within a segment for a period
 
is  i  f H or fL i  1, 2 – the overall company performance is the average value output
from a project per period (or equivalently, the sum of the team performances). The company
performances determine the division of revenues by the following competition mechanism,
a simple constant-sum structure: a company operating alone in a segment captures the full
return, while the market value will be split if the two competitors operate in the same segment.
We summarize the firm payoffs in Figure 14.3.
This analysis makes a well-established assumption about the timescale of the evolution
process: any cultural adjustment of the fraction of executors and innovators in the organiza-
tion takes place over a much shorter time window compared to the organization’s strategic
implementation of operating in a certain segment. In other words, attacking a new segment
is a multi-year endeavour, while the adjustment of the fraction of executors and innovators
happens in less time. Therefore, we can use the equilibrium derivations of workforce com-
position and performance (14.1) and (14.2) as “instantaneous” reactions to the choice of seg-
ment. Our assumption is consistent with group selection models in evolutionary theory, e.g.
Hamilton (1975).
We now examine the resulting competitive equilibria: when firms choose to compete in the
same market segment (H, H) and when they, instead, prefer to differentiate and serve different
market segments. The most interesting case for our analysis is the setting where an asymmet-
ric equilibrium exists. It is interesting because the differentiation causes two different cultures
to evolve in a priori identical firms with the same choice sets. For such an asymmetric equi-
1 1
librium to exist the following two conditions have to hold:3 f H > fL and fL > f H .
2 2
We showed in Equations (14.3) and (14.4) that the fraction of innovators in the organi-
zation increases with higher task value V and with higher volatility P. This implies that a
company operating in segment H will have a higher fraction of innovators (it will pursue a

Figure 14.3  Firm payoffs depending on market segment choice

268 Handbook on innovation and project management

higher fraction of expensive but innovative projects) than a company operating in segment L.
However, the comparison is less straightforward for the per-team performances:

f r
 1   1  P  I  0
V V

f r
  1  rI    1  P  I  0.
P V
The performance per project and period increases in the project value but decreases in the
volatility of the market segment. It is therefore possible within the conditions stated so far
that the high-end segment H could be less profitable than the low-end segment, specifically
when the volatility is so much higher that it outweighs the higher project value. The foregoing
general competitive equilibrium conditions, which hold even when f H might be lower than
fL , are complicated implicit equations. Since we are developing this model to demonstrate
how cultural evolution theory might be able to inform us about project management outputs,
we focus on two simpler sufficient conditions for an asymmetric equilibrium to exist in our
duopoly game. (We derive these two conditions in the Appendix.)

Sufficient equilibrium conditions

Two conditions are together sufficient for a separating competitive equilibrium to exist among
two identical firms:

• The high-end segment is more valuable than the low-end segment, f H > fL . This is the
case if the task value difference outweighs the volatility difference (weighted by the frac-
tions of executors):

VH  VL  /   1  PL  (1  rIL )  1  PH  (1  rIH ).

• The value margin generated by problem-solving in the low-end segment environment

is at least 50 per cent of the value margin generated by problem solvers in the high-end
segment:

1
VL  C 
2
VH  C  .
Our equilibrium characterization demonstrates that our simple model offers valid insights (it
“makes sense” – the conditions derived above carry intuitive interpretations). The high-end
segment should be sufficiently valuable (corrected for volatility), and the low-end segment
should guarantee sufficient margins so that both firms have an incentive to differentiate their
strategic positioning and not try to invade the segment of the other firm.
Yet, the more important message from our model and analysis is the following: first,
we show explicitly how top-down management and bottom-up cultural dynamics interact.
Management “dictates”, based on competitive considerations, the target segment and thus the
project values (which become measures of team performance) as well as the requirement vola-
tility P. But cultural dynamics, which are not controlled and may not even be understood by
 A cultural evolution theory 269

top management, produce the executor versus innovator composition (fraction of innovators
rI ) and resulting performance f . The chosen strategic position “directs” culture, but simulta-
neously, cultural dynamics deliver the mixture of innovation versus execution behaviour and
the resulting performance outcomes that constrain or enable the chosen strategy. Top-down
strategy and bottom-up cultural dynamics form a complex interactive system.
Second, we show how projects can represent the drivers of the culture. Of course, culture in
our simple model means something simple, namely the fraction of innovators versus executors
(and thus, how ambidextrous or innovative the organization “feels” as a whole). But although
the selection pressure comes from the environment (and is set at the top), the resulting behav-
ioural adaptations happen at the project level. Thus, the model illustrates how projects, by
their fast turnover, can be the “units of cultural change”. In doing so, the model also illustrates
how simple stylized analyses can direct attention to projects as fundamental evolutionary
drivers of innovation dynamics in organizations.

DISCUSSION AND POSSIBLE DIRECTIONS FOR FUTURE RESEARCH

We have developed a modification of a classic model from cultural evolution theory by Rogers
(1989) to study the cultural dynamics driven by projects and their performance implications.
We depart from Rogers’ model in two ways: first, we add firm-level selection, which repre-
sents the fact that the cultural dynamics that emerge at the individual project level do not
happen in a fixed exogenous environment, but instead, they interact with organizational-level
dynamics arising from competitiveness considerations. Second, we acknowledge a continuous
improvement benefit from routine projects that widens the view of social learning.
The model demonstrates that cultural evolution theory gives us a tool to model multi-level
organizational dynamics, which are required to understand the interaction of top-down and
bottom-up strategy processes as a system. In other words, management chooses dimensions
of competitive success, and the individual adaptation at the project level can end up support-
ing this positioning (“group-level selection”) without management ever making the decisions
on the “right” composition of projects: the mixture of innovation versus routine projects (and
thus ambidexterity in the sense of Tushman and O’Reilly, 1996) is not planned top-down but
emerges. This shows how cultural evolution models can contribute to studying the interplay
between strategic direction and project-level behaviours in a multi-level analysis.
Our model can be used as a language to interpret well-known innovation instances, for
example, the famous invention of Post-it Notes at 3M (Nayak and Ketteringham, 1986). After
the unexpected success of the product (the “too weak” glue that created a new product cat-
egory because the weak adhesiveness enabled removability), co-inventor Art Fry was flown
first class around the world to proselytize the creativity of the product idea and to motivate
other company employees to search for the same kind of innovation. This was a clear instance
of trying to “intensify” social imitation. But how successful was this – how many colleagues
did pick this up? Our model suggests that first, this may depend on which idea actually trav-
elled across minds – the usage of weak glues, or the idea generation from “improbable”
connections, such as between technical characteristics and social application contexts (book-
marks falling out of the church songbook). Second, the effectiveness of imitation will depend
on how people imitate – do they copy random people they meet (in which case flying one
person around may be an unproductive endeavour), or do they copy mainly high-salience and
270 Handbook on innovation and project management

high-status role models, in which case Art Fry’s presentations to crowds may have proven very
effective indeed?
This observation points to a specific extension of our model: like most of the models of cul-
tural evolution, we assume that executors (social learners) copy from randomly chosen others.
Empirically, it is known that social imitation is not purely random. It does not always choose
the most representative, best or even average role models to imitate what they know, but it is
biased: as it is not always clear and easily interpretable what are good role models, imitation
may follow social cues. Three well-known social cue biases have been identified and could be
further explored through cultural evolution models.
First, imitation may be conformist: do what the majority does, no matter whether it cre-
ates value for your project. Once a majority of behaviour is established (and deviation penal-
ized), this may entrench itself even when it is unproductive or even damaging (as long as the
selective pressure of the group, or the organization, is noisy enough that the group does not
get punished or selected out) – this can explain dominant but persistent cultural habits that
look wasteful or unproductive (Boyd and Richerson, 1992). In the context of project manage-
ment, examples are the adoption of certain heavy-handed documentation or the adoption of a
method (such as Discounted Cash Flow analysis, DCF, or Economic Value Add, EVA) simply
because a majority of organizations have done so.
Second, imitation may follow the highest status individuals that a given subject is able to get
in contact with (or observe) (Boyd and Richerson, 1985, Chapter 7): social status is taken as a
proxy of expertise. This was what 3M tried to exploit by flying Art Fry first class around the
world, and this is also what causes teenagers to wear a “hood” (because certain sports stars
do so), young employees to start smoking cigars (because the CEO does) or project workers
to want to conduct a kickoff meeting in a prestigious site (because a highly successful project
manager “role model” has done so in the past).
Thus, imitating high-status individuals can be helpful in spreading desired behaviours. But
it can also have dangerous effects, as sometimes the imitation itself may cause the high-
status “standard”, or expectation, of this behaviour to shift in the population, which then again
changes the level of this behaviour seen in high-status individuals. This may cause feedback
or “runaway” cycles (Boyd and Richerson, 1985, Chapter 8).4
Runaway cycles are well documented in nature: e.g. the exaggerated antlers of extinct stone-
age elk (which perished partially because the antlers became so heavy over many generations
that the males starved too frequently) or exaggerated teeth of (extinct) sabretooth tigers. But
such runaway cycles can also be observed in human behaviour, for example, in bodybuild-
ing world championships that at some point around 1980 became so extreme that many top
athletes damaged their health and some died. In project management, an example is escalat-
ing return expectation followed by imitated cost reduction behaviour, which causes increased
return expectations and may cause a runaway cycle that ends with a hollowing-out of pro-
ject management standards and at some point failure. Project failures from escalating return
demands and tightening budgets are not uncommon. The conditions (i.e. strength of the feed-
back from imitator adoption to the measurement standard of the high-status role models, and
selective pressure on the group) can be modelled. This opens up the capability to characterize
situations where runaway cycles are in danger of occurring.
The conceptual understanding of the connection between high-level managerial perfor-
mance pressures and the (partially autonomous) dynamics of culturally driven behaviour
by many employees at the operational level is powerful and necessary, but it has not been
 A cultural evolution theory 271

explicitly pursued by studies so far, certainly not in the context of project management. The
simple model presented in this chapter introduces (in a basic form) a method to pursue this
connection: strategy and operational-level cultural reactions form a dynamic system, which
results in an emergent combination of innovation and routine projects.
We have also assumed, for clarity of focus on the effects of evolutionary dynamics, that the
two firms are identical. With more work, more complex models of differing firms can be built.
Mentioning only the few parameters present in our simple model, one firm may have more
effective employee habits in continuous improvement and thus a higher δ than a second firm.
Or in one firm the innovators may be able to share more widely their problem-solving (which
3M tried to achieve, and which would change the payoff probabilities in Figure 14.2), or inno-
vators may be taught to apply process improvements themselves (for example, by collaborat-
ing with more people), which would increase their effectiveness in Figure 14.2. The result of
such cultural differences may be that one strategy works in one firm but not in another, or that
the competitive equilibrium may be more lopsided for the benefit of one firm than expected by
those not aware of the cultural differences.
In short, this type of modelling approach offers the potential of adding to our understanding
of the dynamics of managing innovative projects in organizations for the future. Multi-level
models of the type demonstrated here (in its simplest form for illustration) are useful in order
to truly understand the resulting interplay between strategy and cultural dynamics, in project
management and more widely.

NOTES
1. There is evidence that the ability to imitate differentiates humans from animals at least as much as
or more than sheer intelligence (Herrmann et al., 2007). Moreover, human intelligence is likely a
result of social imitation and competition (Dunbar, 1992). Just like biological inheritance, cultural
transmission is imperfect, so the transmission is not always exact. People invent new cultural vari-
ants, making culture a system for the inheritance of acquired variation of behaviours. People also
pick and choose the cultural variants they adopt and use, processes that are not generally possible
in the genetic system.
2. Additional assumptions will be required in order for equilibria to exist in the competitive setting.
3. Note that for firms with different organizational practices, these conditions have to hold for both
firms for a stable equilibrium to exist. The symmetry of considering a priori identical firms allows
us to focus on the effects of the evolutionary dynamics rather than mixing in additional effects of
other (exogenous) differences between the firms.
4. Note that this runaway cycle is fundamentally different from escalation of commitment (Staw,
1981), which refers to a reluctance to give up a failing project because of social pressure and the
perceived need to defend one’s own past actions. Escalation of commitment does not include a
feedback loop, which causes the behaviour to be imitated by others and to be amplified.

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 A cultural evolution theory 273

APPENDIX

Here, we derive sufficient conditions for a separating competitive equilibrium. We can write
the full conditions as follows:

1
VH  C   1  PH  1  rIH   VL  C   1  PL  1  rIL  
2

VH  C   1  PH  1  rIH   2 VL  C   1  PL  1  rIL  

The first condition is subsumed by the stricter condition that the high-end segment is more
attractive (f H > f L), which becomes the condition stated in the text earlier. The second condi-
tion can be rewritten as:

 1  PH  1  rIH   2 1  PL  1  rIL    2VL  VH  C.

By assumption, (1−PH ) < (1−PL), and we have derived that 1  rIH   1  rIL , and therefore
the left-hand side of this inequality is negative. A stricter condition is thus to require that
2VL  VH  C  0 . This is the second condition mentioned earlier in the text.
15. Organizing projects for social innovation
Stephan Manning and Stanislav Vavilov

INTRODUCTION

The concept of social innovation (SI) has become one of the most discussed in recent years
both in innovation research (Cajaiba-Santana, 2014; Dionisio and de Vargas, 2020; Pel et al.,
2020) and innovation practice (The Young Foundation, 2007; Chesbrough and Di Minin, 2014;
Howaldt et al., 2018). SI refers to new ideas, methods and practices that address social prob-
lems in new ways (Mulgan, 2006; Pel et al., 2020). SI is a new innovation paradigm (van der
Have and Rubalcaba, 2016; Nicholls and Murdock, 2012) that acknowledges that innovation
is not only about developing new technologies and business models but also about ways to
directly address social problems and grand societal challenges (Heiscala, 2007; Pol and Ville,
2009; Ghazinoory et al., 2020). In doing so, social innovators seek to change social relations
(Pel et al., 2020) to achieve transformative change in institutional contexts and social prac-
tices (Van Wijk et al., 2019; Cajaiba-Santana, 2014), and “to improve either the quality or the
quantity of life” especially for people on the margins of society (Pol and Ville, 2009, 881). In
addressing systemic change, SI shows important similarities with institutional entrepreneur-
ship (DiMaggio, 1988; Garud et al., 2002, 2007). Historical examples of important SIs include
the introduction of building societies, cooperatives, new childcare and education models, anti-
discrimination laws and other legislation, as well as more recently, microcredit and sustain-
ability standards to address market failures (Mulgan, 2006; Phills et al., 2008; Pel et al., 2020).
A SI perspective urges us to rethink the drivers and purposes of innovation (see also Zott
and Amit, 2016). Fundamentally, SI combines a customer needs focus with an emphasis on
social values and benefits for society (Gaparin et al., 2021). It thus extends the current under-
standing of the composition and purpose of systems of innovation. For example, taking the
case of innovation that reduces air pollution in the US, Ghazinoory et al. (2020) reframe such
innovations from the more conventional notion of technology or industry-driven innovations
to the notion of innovations that utilize technology to address a fundamental social problem.
Similarly, Audretsch and colleagues (2021) argue that the concept of the entrepreneurial eco-
system, including interrelated policies, norms, institutions and cultures, needs to be extended
to account for SI (see also Mair and Gegenhuber, 2021; Manning and Vavilov, 2023). Also, SI
extends our understanding of the factors enabling successful organizing to address large-scale
societal challenges (George et al., 2012; Eisenhardt et al., 2016). One mechanism, for example,
is “open social innovation”, in which networks of developers and contributors are mobilized
to take part in SI contests (Chandra et al., 2021). In sum, the focus on SI helps develop a novel
perspective connecting innovation studies with research on social problems and grand societal
challenges. This chapter contributes to these efforts by bringing in another important perspec-
tive – the role of project-based organizing in SI.
In the process of SI, projects may play a vital role in mobilizing support and changing
social practice (Chandra et al., 2021). Examples include local community projects, civil rights

274
 Organizing projects for social innovation 275

campaigns, crowdfunding projects, fundraising events, international development projects

and institution-building projects, such as the development of new regulations and standards
(see e.g. Mulgan, 2006; Manning and Von Hagen, 2010; Ika et al., 2020). Projects have the
capacity to mobilize resources from critical stakeholders towards joint objectives (Søderlund,
2008), and they can take place at multiple levels – local, national and international (Ainamo
et al., 2010; Manning and Von Hagen, 2010). Yet, our understanding of the opportunities and
challenges of project-based organizing for SI is surprisingly limited. This chapter attempts
to fill this gap by focusing on three important aspects of project-based organizing – project
entrepreneurship, project capabilities and project network organizations – and their implica-
tions for SI.
First, we characterize SI in more detail, followed by a description of three central chal-
lenges: (1) the embeddedness of social innovators in established structures; (2) the manage-
ment of multiple stakeholders; and (3) the embedding of new solutions to achieve social
change. We then discuss how project-based organizing addresses these challenges.

WHAT CHARACTERIZES SOCIAL INNOVATION?

The growing interest in SI is motivated by the observation that innovation matters not only
for the development of new technologies and products but for the transformation of social
structures and practices as well (Mulgan, 2006; Pol and Ville, 2009). Accordingly, SI is often
defined as a multi-level process to develop, implement and scale novel solutions to address
social problems in specific institutional contexts (Van Wijk et al., 2019; Cajaiba-Santana,
2014; Lawrence et al., 2014). By comparison, business innovations are often understood as
technological and process innovations that aim to improve firm performance and result in
profitability and commercial success (Pol and Ville, 2009; Nicholls et al., 2015; Lawrence
et al., 2014; Oeij et al., 2019). Before further examining SI (and the role of projects) it is
important to determine in more detail how exactly SI is similar to and different from business
innovation.
Many scholars argue – and we agree – that SIs show some distinct characteristics that
make them worth studying in their own right. We refer to this as the “narrow perspective”
on SI. In this perspective, SIs are “motivated by the goal of meeting a social need” (Mulgan,
2006, 146). Specifically, they are oriented towards creating new or changing established social
practices along with changes in cultural, normative or regulative structures (Heiscala, 2007;
Neumeier, 2012). As highlighted by Cajaiba-Santana (2014, 45) “the outcomes of social inno-
vation might be manifold, taking the form of new institutions, new social movements, new
social practices, or different structures of collaborative work”. The locus of SI is not a par-
ticular organization, but typically the social system that the innovators inhabit (Phillips et al.,
2015). That said, to promote SI, certain organizations may play a vital role in mobilizing
and coordinating key stakeholders. Such intermediaries may include government agencies
(Audretsch et al., 2021), non-profits (Maclean et al., 2013), social enterprises (Chalmers and
Balan-Vnuk, 2013; Phillips et al., 2019), universities (Bellandi et al., 2021; Arocena and Sutz,
2021) and corporations (Mirvis and Googins, 2018; Dionisio and de Vargas, 2020). They are
motivated to engage in SI due to government mandates (e.g. development agencies), their
social mission and duties towards supporters (e.g. NGOs) or stakeholder expectations (e.g.
firms). However, since SIs typically focus on social value creation for various disadvantaged
276 Handbook on innovation and project management

beneficiaries, they are typically not designed to primarily benefit the innovators but groups of
people in line with the innovators’ social mission (Phillips et al., 2019).
By comparison, what we call the “extended perspective” on SI includes “unintended” SIs
in terms of side products or spillovers of business and technological innovations. In this view,
some business innovations can be understood as “social innovations” insofar as they gener-
ate value well beyond an innovating firm or industry (Pol and Ville, 2009; Van der Have and
Rubalcaba, 2016). For example, commercial innovations such as solar lanterns, water purifica-
tion systems or low-cost laptops have not only changed the landscape of commercial products
but created transformative change in the context of poverty. The main difference to SI in
the more “narrow perspective” is that transformative effects in the “extended perspective”
are not intended by any organization. Rather, social effects are spillovers that are – at least
initially – not deliberately managed. Conceptualizing this type of innovating activity as “bifo-
cal SIs”, Van der Have and Rubalcaba (2016) suggest that business innovation can turn into
SI as innovators start to account for and manage positive and negative spillovers of innovative
activity more deliberately.
However, no matter whether SIs are intended or not, one key constituting factor is the social
impact they generate. After all, SIs are about transformative change (Pel et al., 2020) and thus
it is important to understand whether they actually address any social problem in substantial
ways. Such impact can focus on different geographical levels – local, national/regional or
global (see for examples Table 15.1). Measuring impact is important, for example, in the inter-
national development field, where innovation-based approaches are essential instruments to
address social and environmental issues in the context of poverty (Dyck and Silvestre, 2019),
and where innovators, such as NGOs and international development organizations, heavily
rely on donor support (Watkins et al., 2012).
Various approaches to detecting and measuring social impact exist. First, changes in law
and legislation, or in the adoption of standards and codes of conduct, as a result of SI ini-
tiatives are often considered an important tangible outcome (see for examples Table 15.1;
Mulgan, 2006; Pel et al., 2020). Second, many innovators adopt certain “theory of change”
frameworks or “logic models of social impact” (see e.g. Ebrahim and Rangan, 2014) that
help them measure not only “the immediate and measurable results of an organization” (Wry
and Haugh, 2018, 4), e.g. the amount of green energy produced, but also the “the medium

Table 15.1  Examples of social innovations

Types of social Social impact at local Social impact at national/ Social impact at
innovation level regional level global level
Social innovation Local school Changes in law, e.g. Sustainable
by design (narrow programs, day care antidiscrimination laws, as development
definition) facilities, cooperatives a result of campaigns goals; global labor
standards; Fairtrade
practices
Social innovation as More inclusive More inclusive access to Increasing global
spillover of commercial employment through financial capital through access to information
/ technological new platform-based mobile banking e.g. in sub- thanks to the Internet
innovation (extended work models in rural Saharan Africa and the World
definition) areas Wide Web
 Organizing projects for social innovation 277

and long-term effects of an organization’s outputs on the constituencies that it aspires to cre-
ate value for” (5), e.g. effects on employment and poverty. Third, NGOs and development
organizations increasingly adopt randomized controlled trials (RCT) as a very reliable way
to measure the effectiveness of interventions. RCTs are applied increasingly also in education
and public policy (Banerjee and Duflo, 2011).

THREE CHALLENGES OF SOCIAL INNOVATION

Next, we discuss three major challenges of SI to focus our following discussion of project-
based organizing in the context of SI: (1) the challenge of embedded agency of a social innova-
tor, (2) the challenge of managing critical stakeholders of a social system and (3) the challenge
of embedding solutions to accomplish social change.

The Challenge of Embedded Agency of a Social Innovator

The first central challenge for any individual or organization driving SI – in short: “social
innovators” – comes from the fact that social innovators are (and need to be) embedded to
some extent in the very system they try to change. This is because, while social innova-
tors seek to create social change, their ideas, plans and access to resources are embedded
in existing social and institutional structures (Cajaiba-Santana, 2014). Engaging in SI thus
requires social innovators to partly utilize existing structures but also to some degree “dis-
embed” themselves from them, e.g. by distancing themselves from established templates,
routines and practices that may relate to the very social problem they seek to address (Mair
et al., 2012). Otherwise, rather than transforming social and institutional orders, the efforts
of social innovators may run the risk of replicating existing structures and institutions (Van
Wijk et al., 2019).
In institutional theory, this problem is also known as the “paradox of embedded agency” of
institutional entrepreneurs (Garud et al., 2007). Like social innovators, institutional entrepre-
neurs are actors who take an interest in leveraging resources to bring about new or changed
institutions. However, in order to leverage resources they partially rely on established rules,
frameworks and practices that legitimize and give meaning to their endeavours (see also
Giddens, 1984). Thus, institutional entrepreneurs – and social innovators – must be socially
skilled actors who are able to “narrate and theorize change in ways that give other social
groups reasons to cooperate” (Garud et al., 2007, 962). Framing, translation and reflective
capacities are therefore important tools for social innovators to address entrenched social
problems (Van Wijk et al., 2020).

The Challenge of Managing Critical Stakeholders of a Social System

The second challenge is associated with involving critical stakeholders in the process of SI
and managing them to develop a shared understanding of social change. Because of their
interactive nature and system-level focus, SIs are only possible through collective action
(Cajaiba-Santana, 2014). While social innovators are highly important drivers of SI, SI does
not emerge from the heroic actions of a single individual or organization but rather from the
collective efforts of multiple stakeholders (Cajaiba-Santana, 2014). Thus, SI often requires the
278 Handbook on innovation and project management

inclusion of diverse stakeholders, including socially deprived groups, governments, communi-

ties, market actors, etc. (Oeij et al., 2019). More than commercial innovation, SI thereby often
faces the challenge of powerful opposition from dominant groups, e.g. market actors oppos-
ing new environmental laws because they benefit from environmentally harmful business
practices. SIs also often span geographic boundaries – interconnecting local communities and
their specific needs with transnational networks of funders and supporters (Pel et al., 2020).
In turn, the failure to involve and connect critical stakeholders can impede the success of SI
(Lettice and Parekh, 2010).
The need to engage critical stakeholders often requires the design of interactive spaces (van
Wijk et al., 2019; Furnari, 2014) that allow these stakeholders to discuss and negotiate solu-
tions for shared social problems. To create these spaces, social innovators engage in boundary
work (Zietsma and Lawrence, 2010; Cartel et al., 2019) to involve beneficiary individuals
and groups. In these spaces, social innovators seek to establish a shared perspective among
participants, elicit engagement and cooperation (Cajaiba-Santana, 2014), and manage political
dynamics, tensions, resistance and conflict (Phills et al., 2008; Pol and Ville, 2009). The latter
becomes important not least because social problems and innovations may look very differ-
ent from different viewpoints (Nicholls et al., 2015). Social innovators therefore also engage
in various forms of facilitation to “disembed” participants from established ways of thinking
(Cartel et al., 2019; Mair et al., 2012).

The Challenge of Embedding Solutions to Accomplish Social Change

The third challenge is to embed a solution to a social problem into a wider set of norms,
behaviours and practices (see also Garud et al., 2007). Only when new ways of satisfying
social needs can be embedded in the larger institutional context can a SI get acceptance and
diffuse (Mair et al., 2012). Thus, the process of creating and implementing new solutions to
social problems involves renegotiating established institutions or creating new system-level
conditions that embed and reproduce the solution (Van Wijk et al., 2019).
This challenge resembles the more general challenge of institutional change (e.g. Furnari,
2016; Hoffman, 1999). Prior studies have shown for example the importance of changing
discourse in order to establish and legitimize new practices (Munir and Phillips, 2005). In the
context of technological change, studies show that those innovations that combine familiar
with novel design elements have a higher chance of being accepted, even if their introduc-
tion ultimately changes the social and institutional systems within which they are applied
(Hargadon and Douglas, 2001). In the context of SI, this means that innovators face the chal-
lenge of developing and communicating new norms and practices that embody familiar ele-
ments in order for key stakeholders to accept them. Other studies also show the importance of
setting up locally bounded proto-institutions to “test” the likelihood of effective institutional
change (Lawrence et al., 2002). However, changes are effective only when they get embedded
within interconnected configurations of practices, discourses, business models and regulatory
structures (Levy et al., 2016; Van Wijk et al., 2013).
At the same time, SIs are often dynamic and subject to continuous adjustments (Mulgan,
2006). One example is sustainability standards, i.e. sets of rules and practices that businesses
commit to in order to regulate their social and environmental performance (see e.g. Reinecke
et al., 2012). The study by Manning and Reinecke (2016) shows that sustainability stand-
ards are “modular governance architectures” which may expand, thereby adding or adjusting
 Organizing projects for social innovation 279

modular components over time, in line with changing expectations of critical stakeholders.
This requires continuous SI and re-embedding of new solutions into emerging and changing
frameworks.

SOCIAL INNOVATION AND PROJECT-BASED ORGANIZING

In the process of SI, projects may play a vital role in mobilizing support and changing social
practice (Chandra et al., 2021; Perkmann and Spicer, 2007). Projects can be defined as tempo-
rary systems that are constituted by multiple individual or organizational actors to accomplish
rather complex and partially unique tasks within a limited timeframe (Lundin and Søderholm,
1995; Obstfeld, 2012). Projects have become an increasingly important form of organizing
(Bakker et al., 2011, 2016; Cattani et al., 2011) not least because of their unique capacity
to flexibly mobilize resources from multiple organizations to implement shared objectives
(Søderlund, 2008).
Projects are thus well-suited to promote both commercial innovation (e.g. Al-Laham and
Amburgey, 2011; Du et al., 2014) and SI (Mulgan, 2006; Ika et al., 2020). In the context of the lat-
ter, examples of projects include local community projects, civil rights campaigns, crowdfund-
ing projects, fundraising events, international development projects and institution-building
projects, such as the development of new regulations and standards (see e.g. Hirschman, 1967;
Perkmann and Spicer, 2007; Manning and Von Hagen, 2010; Ika et al., 2020).
Next, we look more carefully at how and to what extent project-based organizing can help
stimulate SI but also mitigate some of the challenges SI is associated with. Using examples
from international development, film impact campaigns and other domains, we thereby focus
on three important dimensions of project-based organizing at the individual, organizational
and inter-organizational levels: project entrepreneurship (individual), project capabilities
(organizational) and project network organizations (inter-organizational). Table 15.2 gives an
overview of how all three aspects of project-based organizing address the major challenges
of SI.

Project Entrepreneurship

One critical driver of both project-based organizing and SI is entrepreneurial action (DeFillippi
and Arthur, 1998; Garud et al., 2007). In general, entrepreneurial action is about forming
and exploiting opportunities (Shane and Venkataraman, 2000; Alvarez and Barney, 2007).
Opportunities may relate to “competitive imperfections” in markets and industries, social
needs and demands, funding opportunities, etc. However, opportunities for action, innovation
and change often remain dormant or invisible, unless individual entrepreneurs spot and exploit
them (Shane, 2003). SI research therefore emphasizes that entrepreneurial individuals play a
critical role in driving SI (Mulgan, 2006; Nicholls and Murdock, 2012). Likewise, the concept
of “institutional entrepreneur” was initially reserved for particular individuals who take an
interest in institutional change and who mobilize support towards that end (DiMaggio, 1988).
To better understand and assess the role of entrepreneurial action in specific relation to
projects driving SI, the concept of project entrepreneurship is critical. Project entrepre-
neurs have been typically defined as individuals who repeatedly develop and pursue pro-
ject ideas and who assemble teams to implement these ideas (DeFillippi and Arthur, 1998;
280 Handbook on innovation and project management

Table 15.2  Addressing social innovation challenges through project-based organizing

Addressing Challenges in Social Innovation Processes

challenges of social Managing embedded Managing multiple Embedding of
innovation… agency of social innovators stakeholders solutions in practice
… through project Promotes combinations Promotes the creation and Connects singular
entrepreneurship of individual and maintenance of individual projects with each
organizational resources networks with potential other by re-engaging
to mobilize and extend project stakeholders for project partners
existing support structures related social innovation and by building on
Facilitates the discovery efforts previously developed
and creation of Helps catalyze and link solutions.
opportunities for social resources from multiple Helps in continuously
change stakeholders while revising social
Introduces reflexivity and promoting project-based innovations by
continuous adaptation to trust through repeated initiating new projects
social innovation processes collaboration with old and new
partners over time
… through project Helps establish Makes identification Helps establish
capabilities mechanisms of and selection of critical sophisticated practices
“disembedding” projects stakeholders a core of measuring project
from established element of project success, including
structures, e.g. by setting planning. immediate outputs
rules to allow for creative Helps establish rules of and long-term impacts
experimentation outside stakeholder interaction May require alliances
established norms that may deviate from between organizations
Promotes reflexivity and established power with different
learning across projects structures to facilitate evaluation capacity
to balance the needs for experimentation for
embedding / disembedding systemic change
… through Provides permanent social Allows multiple Provides platform for
project network space for initiating projects stakeholders to continuing project-
organizations around a shared agenda; continuously work based adaptation
Entails risk of together on a project- of solutions, but is
re-introducing power by-project basis, limited in enforcing
structures that may hinder but privileges those mechanisms for
radical social change stakeholders who have the change due to lean
resources to do so governance structures
and limited resource
commitments

Manning, 2010). Examples include film producers, research entrepreneurs and project lead-
ers in NGOs, firms and development organizations (e.g. Manning, 2010; Manning and von
Hagen, 2010).
Project entrepreneurs are typically motivated by a combination of personal interests in
particular projects and project-based careers, and their institutional role in the field or organi-
zation they operate in (Jones, 2001). For example, Manning (2010) studied an entrepreneurial
 Organizing projects for social innovation 281

European researcher who developed a successful academic career by using his position as
a university professor and his network to repeatedly apply for European funding in support
of related projects. In the context of SI, Manning and Von Hagen (2010) show how entre-
preneurial project managers at a German government-led development agency were able to
repeatedly initiate public–private partnership projects with colleagues at major coffee roast-
ers to experiment with more sustainable coffee growing practices in different local settings.
These projects would drive the development of what became the Common Code for the
Coffee Community – one of today’s major global coffee sustainability standards (Manning
and Reinecke, 2016). Another example of project entrepreneurs in support of SI are so-called
impact producers in film, i.e. campaign managers who use films as vehicles to change people’s
minds and behaviours, and to stimulate changes in legislation (DocSociety, 2021). For exam-
ple, campaign managers at the US-based production firm Participant Media were instrumental
in supporting the Academy Award–winning film Roma and in launching impact campaigns
in both Mexico and the US to strengthen the legal rights of domestic workers – one central
theme of the film (Gilchrist, 2019).
Next, we explore how project entrepreneurship can help mitigate the three major challenges
of SI we discussed earlier: first, project entrepreneurship can help social innovators manage
their embeddedness in both enabling and constraining systemic structures. In practice, project
entrepreneurs often use their affiliations with employers – universities, NGOs, governments
and development agencies – to mobilize teams and financial support for projects (Manning,
2010). To do so, however, they need to navigate the system in effective ways – by acting in
the interest of powerful internal resource-holders, while stretching established frameworks of
action in order to drive social and institutional change (see also Garud et al., 2007).
For example, in order to develop and test new sustainable coffee growing practices (which
later led to a global standard), the aforementioned project entrepreneur at the German devel-
opment agency collaborated informally with expert partners at global coffee firms on a pro-
ject-by-project basis even before any official cooperation with private partners was allowed
by the overseeing government programme. These early experiments allowed this entrepre-
neur to pilot highly successful public–private partnership (PPP) projects at a time when his
employer – the development agency – was eager to demonstrate their ability to carry out PPP
projects after the PPP programme was officially launched by the government (Manning and
Von Hagen, 2010). Project entrepreneurs can thus manage the dilemma of embedded agency
in established structures by mobilizing their individual networks along with their individual
reputations to drive new project ideas.
Second, project entrepreneurship assists with the mobilization of critical stakeholders for
systemic change. One central feature of project entrepreneurs is their ability to develop, main-
tain and mobilize individual networks of potential partners for particular types of projects
(DeFillippi and Arthur, 1998; Manning, 2010). Projects may provide a shared context within
which project entrepreneurs can develop a common language and common ground among
critical stakeholders (Lenfle and Søderlund, 2019), e.g. by organizing and managing interac-
tive spaces on a temporary basis to address and discuss social problems. Thereby, project
entrepreneurs can develop and nurture relationships with critical stakeholders in a specific
context of change on a project-by-project basis (see e.g. Manning and Von Hagen, 2010).
For example, the Common Code for the Coffee Community (4C) is a global sustainabil-
ity standard that was developed by multiple critical stakeholders in the coffee community –
major global coffee roasters, coffee growing associations and NGOs. In mobilizing all these
282 Handbook on innovation and project management

stakeholders, project entrepreneurs played a vital role by repeatedly initiating interrelated

projects in different countries with partially the same, partially new partners. Each project
collaboration served to develop trust between different stakeholders in their ability to work
together towards higher-level change (Manning and Von Hagen, 2010). Another example is
film producer Amy Ziering and director Kirby Dick who jointly developed multiple documen-
taries on sexual assault – The Invisible War (2012) and The Hunting Ground (2015) – which
in combination were instrumental in mobilizing leaders in media and society to support what
would become the #MeToo movement (DocSociety, 2021). Project entrepreneurs can thus play
a vital role in mobilizing critical stakeholders towards social change efforts on a project-by-
project basis.
Third, project entrepreneurs can mitigate the challenge of embedding new solutions into a
broader institutional context. As temporary organizational forms, projects, on the one hand,
have the benefit of providing a “protected space” within which new practices or solutions to
collective problems can be developed and tested, based on limited investments of key stake-
holders (see also Raven et al., 2010; Smith and Raven, 2012; Lawrence et al., 2014). On the
other hand, projects typically have the limitation of “institutionalized termination” (Lundin
and Søderholm, 1995). When projects end, project teams often dissolve and it is highly uncer-
tain whether project objectives will be followed up on beyond particular projects. This has
always been a major concern in the context of foreign aid and development (Hirschman, 1967).
Yet, project entrepreneurs can exploit the experimental flexibility of projects while also
– to some extent – promoting the embeddedness of SI into a broader systemic context. The
key to this is the capacity of project entrepreneurs to repeatedly initiate interrelated projects
(Manning, 2010). This role of project entrepreneurs is well-understood in the film industry,
where new project ideas are often legitimized in reference to previous successful projects in
related domains (Manning and Sydow, 2011). This principle is now used by impact produc-
ers who often engage in multiple interrelated projects over time to drive a common agenda
of social change. In other contexts, such as research and foreign aid, projects also build onto
each other, accumulate knowledge and incrementally drive systemic change (Manning, 2017).
For example, in the context of sustainability standards, project entrepreneurs often initiate
pilot projects to develop and test new sustainable practices and then use follow-up projects
with the same or new partners to further refine and adapt these practices (Manning and Von
Hagen, 2010). This allows SIs, such as sustainable coffee growing practices, to become more
robust and sophisticated over time, while also becoming more adaptable in different contexts
of application (Manning and Reinecke, 2016).
However, more research is needed to more fully understand the benefits and limitations of
project entrepreneurship in the pursuit of SI. For example, if indeed the involvement of project
entrepreneurs is critical in driving SI, how might the individual interests and career aspira-
tions of these entrepreneurs affect the success of SI processes? Also, how do project entrepre-
neurs in the context of SI actually spot “entrepreneurial opportunities” and what is guiding the
idea development process, especially if it is outside any organizational agenda?

Project Capabilities

Another important driver of both project-based organizing and SI is organizational capa-

bilities. In general, capabilities refer to reliable, more or less organizationally specific pat-
terns of resource allocation, management and problem-solving (see e.g. Schreyoegg and
 Organizing projects for social innovation 283

Kliesch-Eberl, 2007). More specifically, in the context of innovation, such capabilities may
refer to practices of generating and transforming ideas into new products, services and pro-
cesses (e.g. Lawson and Samson, 2001). One important element of such capabilities, for any
innovation, is the ability to organize projects in pursuit of innovations. However, since, by
definition, each project is to some extent unique and unpredictable (Lundin and Søderholm,
1995; Obstfeld, 2012), being able to develop reliable, yet flexible organizational capabilities
for innovation projects is a challenging task – even more so when projects aim for structural
or systemic changes like in the case of SI.
To better examine this challenge, we focus, in the following, specifically on so-called
project capabilities which can be defined as sets of managerial knowledge, skills and expe-
rience that are located and accumulated within organizations (e.g. project-based firms) to
establish, coordinate and execute projects (Brady and Davies, 2004; Davies and Brady, 2016).
Established project capabilities within a particular organization could be conceived as a type
of operational capability (Helfat and Peteraf, 2003) whose recurrent application allows us to
manage similar projects over time. This is why project-based organizations are as important
as individual project entrepreneurs in getting projects done. While the latter drive project
ideas and the mobilization of teams, the former provide knowledge, routines and resources
that entrepreneurs employ in the process. When project-based organizations seek to engage
in projects that differ from “routine projects” in terms of their goals, resources, markets and
technology – so-called innovative projects (Brady and Davies, 2004) – they may develop
new project capabilities, especially if those innovative projects are followed up on by similar
projects over time.
In the context of SI, for example, campaign management agencies that specialize in running
campaigns, events and rallies for social causes may develop campaign management capa-
bilities that allow them to draw on familiar practices – marketing, team-building etc. – in
order to professionalize campaigns. Likewise, development agencies develop certain project
capabilities regarding project planning, stakeholder involvement, project evaluation, etc. that
allow them to increase the effectiveness of development projects (Hirschman, 1967). Impact
production firms in film develop special capabilities related to identifying film projects with
impact potential, pitching projects to funding partners, running impact campaigns alongside
film distribution and measuring impact for various stakeholders (DocSociety, 2021).
Project capabilities often emerge from vanguard projects (Frederiksen and Davies, 2008),
which allow for exploring new project practices through trial-and-error learning and exper-
imenting with innovative combinations of resources and capabilities (Brown and Duguid,
2000; Davies and Brady, 2016). To design and conduct vanguard projects, project-based
organizations utilize their existing project capabilities to provide a vanguard project team
with resources, expertise and experimentation space (Frederiksen and Davies, 2008). The
knowledge gained from a vanguard project is captured and transferred to subsequent projects
through project-to-project learning.
One important challenge in developing project capabilities is the tension between providing
some predictability in how projects are organized while at the same time being adaptable to
changing demands and environmental opportunities. Brady and Davies (2016) suggest analyt-
ically distinguishing between operational (and often rather routine-based) project capabilities
and higher-level “dynamic capabilities” that allow organizations to spot new opportunities,
revise existing organizational templates and expand the portfolio of project capabilities.
Similarly, in strategic management, dynamic capabilities were introduced to capture the idea
284 Handbook on innovation and project management

of continuous “renewal” and “adaptation” (Teece et al., 1997). At the same time, critics like
Schreyoegg and Kliesch-Eberl (2007) have pointed out that in order for capabilities to provide
some level of stability and predictability they should not be inherently “dynamic”. Instead,
similar to the conception of Brady and Davies (2016), they suggest a “dual-process model of
capability dynamization” by distinguishing established capabilities at the operational level
(e.g. project capabilities) from capabilities at the “observational level” that allow for continu-
ous monitoring of environmental changes and revisions in capability development.
Next, we discuss in more detail how project capabilities (along with the capacity to revise
and extend them) can help mitigate the three major challenges of SI we introduced earlier.
First, project capabilities can help social innovators deal with their dilemma of being embed-
ded in both enabling and constraining social structures. Prior studies suggest that, for exam-
ple, the effectiveness of international development projects that aim for social and economic
change depends on their ability to elicit trial-and-error experimentation with new social and
economic practices (Ika and Donnelly, 2017; Ika et al., 2020; McKaque et al., 2015). For
example, the value of local sustainability projects in various countries leading up to the forma-
tion of the Common Code for the Coffee Community lay in lessons learnt from locally embed-
ded experimentation with new farming practices, quality control systems, etc. (Manning and
von Hagen, 2010).
In order to allow for such experimentation on a regular basis, project-based organizations,
such as development agencies, need to develop project capabilities that include the creation
of spaces for experimentation and the inclusion of multiple stakeholders (see also Furnari,
2014). Especially, such spaces need to be protected against the pressures and norms of estab-
lished structures – a requirement that is well known in the context of sustainability transitions
(Smith and Raven, 2012; Coenen et al., 2012). This may also involve allowing project partners
to interact in ways that may deviate from established norms and practices in order to “test”
the implications of structural or systemic changes. One good example of such a purposeful
deviation is the “law of two feet” in Open Space large group meetings (see e.g. Owen, 1993)
that authorizes all participants – no matter what social status they have outside the meeting
– to stand up and leave any sub-meetings during the Open Space if they feel that they can
neither contribute to nor benefit from a given discussion or debate. This norm helps unfreeze
established power structures to facilitate knowledge exchange towards collective solutions
everybody can agree on.
Second, project capabilities in support of SI can be designed in a way to facilitate the
involvement of critical stakeholders without whom actual change at the system level would
not be possible. In the context of development, for example, it is critical to identify multiple
stakeholders for every project who will be involved in supporting and implementing project
goals, including donors, local partners, consultants, policymakers, local authorities and target
beneficiaries or communities (Lannon and Walsh, 2020). Similarly, in the context of organ-
izing large group intervention meetings, such as Open Space or Future Search, identifying the
right stakeholders is key in order for these meetings to be productive (Weisbord and Janoff,
2005). One way in which social innovators can develop their stakeholder management capac-
ity is by forming long-term partnerships with support organizations that can be mobilized for
multiple projects. For example, the film impact funding organization DocSociety works with
several funding partners they can mobilize across projects based on prior collaborative experi-
ence (DocSociety, 2021).
 Organizing projects for social innovation 285

However, multi-stakeholder projects are often embedded in multiple institutional contexts

at the same time (Cartel et al., 2019). This may lead to misalignments, for example between
the interests and needs of local communities and the vision of international donors. Based
on the study of a Dutch development organization that was engaged in making the dairy
value chain in Ethiopia more inclusive, Van Wijk et al. (2020) find that various misalignments
between the vision of the donor and the contextual conditions on the ground were responsible
for project failures. More specifically, the lack of local knowledge and overreliance on expe-
rience constrained the ability of the organization to identify and engage with relevant local
parties. It is thus important for project capabilities, such as stakeholder identification, to be
subject to continuous monitoring and adjustment across contexts. This is why higher-level
“observational” capabilities are key.
Also, more than in the case of commercial innovation, effective SI projects require a com-
mitment of lead organizations to address multiple stakeholders simultaneously rather than
treating certain stakeholders as more important than others (Ika and Donnelly, 2017). This
implies that multiple stakeholders also need to get involved in project planning from early
on rather than being invited later (Mikovic et al., 2020). This multi-stakeholder orientation
also facilitates communication about project progress and project value as well as continuous
multi-stakeholder engagement (Yalegama et al., 2016).
Third, project capabilities in support of SI need to also prepare for the challenge of embed-
ding solutions in larger structures to promote effective change. In this regard, assessing
project performance becomes critical. In particular, these types of project performance are
distinguished: (1) project outputs, i.e. the immediate and measurable results of an organiza-
tion’s SI pursuits; (2) project outcomes, i.e. lasting changes in the lives of individuals; and (3)
project impact, i.e. lasting results achieved at a community or societal level (see Ebrahim and
Rangan, 2014; Wry and Haugh, 2018). Focusing on outputs, outcomes and impact of projects,
project-based organizations need to engage in various monitoring and evaluation activities
that often start before a project is launched to create a baseline to compare against, and that
might continue several years after the project is implemented. These evaluation practices need
to be embedded in project capabilities as well as higher-level capabilities across different
project types.
While it can be relatively straightforward to assess immediate and measurable outputs of a
project, such as the number of solar lanterns provided or the number of wells dug, the longer-
term outcomes of the project on individuals and its systemic impact on a large-scale problem
can only be understood over time. Since many organizations that specialize in SI projects are
relatively small and resource constrained, such as NGOs and campaign agencies, assessing
longer-term project impacts can be a challenge. Ebrahim and Ragnar (2014) therefore sug-
gest that social mission-driven organizations should focus on measuring short-term project
outputs and outcomes, whereas resource-rich organizations, such as foundations and impact
investors, can take on the challenge of measuring and evaluating long-term systemic impacts.
For example, organizations like Innovation for Poverty Action and J-PAL specialize in bring-
ing together development organizations and development economists who use sophisticated
techniques, such as randomized controlled trials, to measure the impact of particular interven-
tions on social problems. Another strategy is to build long-term partnerships beyond specific
projects with various impact assessment providers. This is what the impact funding organi-
zation DocSociety has done by working with specialized partners to measure to what extent
286 Handbook on innovation and project management

films and campaigns have changed people’s minds and behaviours or changed regulations and
institutional structures (DocSociety, 2021).
To summarize, project capabilities can be a useful means to tackle some of the major chal-
lenges of SI. However, we need more research to better understand the potential and limita-
tions of project capabilities in this context. For example, if indeed one major challenge relates
to the effective involvement of multiple stakeholders on a project-by-project basis, this raises
the question of how or to what extent these stakeholders also need to get involved in developing
suitable project capabilities. Also, to what extent can project capabilities really prepare for the
complexity and uncertainty involved in systemic change? Finally, which organizational forms
or structures are best suited to support the development and adaptation of project capabilities
in support of SI? Next, we elaborate on one such structure – project network organizations.

Project Network Organizations

In project-based organizing and SI, inter-organizational networks play an important role. In

most project businesses, so-called “project ecologies” emerge in which projects and project
teams emerge from longer-lasting, yet dynamic network relationships (Grabher, 2004; Ferriani
et al., 2009). Prior network ties may both enable and constrain the initiation of projects, team
formation and project success (Sorensen and Waguespack, 2006; Schwab and Miner, 2008).
Similarly, SI processes are often embedded in, and thereby enabled and constrained by, local
and global networks of critical stakeholders (Oeij et al., 2019; Pel et al., 2020).
While network ties can affect projects and SI in various ways, we focus here on the role of
so-called “project networks”, and more specifically, “project network organizations” (PNOs).
PNOs consist of “legally independent, yet operationally interdependent individuals and organ-
izations who maintain longer-term collaborative relationships beyond the time limitations of
particular projects” (Manning, 2017, 1399). Unlike project-based organizations, PNOs reach
beyond the boundaries of any particular organization, incorporating multiple partners for
related projects. At the same time, unlike more fluid and “boundaryless” networks, PNOs are
typically strategically led and have a collective coordination capacity that enables partners to
repeatedly team up for projects. PNOs form around core teams that repeatedly collaborate,
but they also include flexible partner pools which are mobilized to recruit ad-hoc partners who
can complement core teams for specific projects (Manning, 2010, 2017; Starkey et al., 2000).
In the strategic development and coordination of PNOs, both project-based lead firms and
individual project entrepreneurs can play a key role. PNOs have been studied mainly in crea-
tive industries (Grabher, 2002; Starkey et al., 2000), construction (Eccles, 1981), collaborative
research (Manning, 2010) and international development (Manning and von Hagen, 2010).
Even though PNOs have not been discussed much in the context of SI, their potential
importance can be derived from anecdotal evidence. Earlier we mentioned the role of project
entrepreneurs in initiating projects in support of SI. As part of such efforts, project entrepre-
neurs often build PNOs together with core project partners as a more permanent governance
structure to assist the launch of new projects. PNOs may be incorporated in so-called “meta-
organizations” (Berkowitz and Dumez, 2016) whose organizational members repeatedly team
up for SI projects. One example is the Roundtable for Sustainable Palmoil (RSPO) which
regulates the RSPO standard but also serves as a platform for particular project initiatives
(Carmagnac and Carbone, 2019). In other cases, PNOs may be more informal by connecting
core project partners beyond the time limitations of single projects. Examples include PNOs
 Organizing projects for social innovation 287

in the context of film production in general (see e.g. Manning and Sydow, 2011) and impact
campaigns around film in particular. In this context, certain directors, impact producers and
funding organizations may form core project teams that come together repeatedly to run film-
based social change campaigns. Such longer-term ties help develop and maintain trust and
collaborative routines in support of joint projects and larger social change agendas. The crea-
tive team behind the two documentaries The Invisible War and The Hunting Ground (see
earlier) is a good example.
Next, we discuss how PNOs may mitigate the three main SI challenges introduced earlier.
First, PNOs can help manage the social innovator’s challenge of being embedded in both enabling
and constraining social structures by establishing an organizational context – the PNO – which
serves as a social space within which particular SI objectives can be pursued beyond just one
particular project. Instead, PNOs are typically set up around a particular issue and thus help
concentrate resources and commitments of participating organizations and individuals around
that issue on a project-by-project basis (see also Chaudhury et al., 2016). However, like meta-
organizations in general, PNOs typically have very lean governance structures and little over-
head, thus depending a lot on resources from their member organizations (Berkowitz and Bor,
2018). This re-introduces the problem of embedded agency. For example, the development of
multi-stakeholder standards, such as RSPO or 4C, has been strongly influenced by the interests
of powerful corporate members of the meta-organizations that develop the standards. This has
arguably limited the extent to which sustainability standards can radically deviate from estab-
lished practices of commodity food production (see also Levy et al., 2016).
Second, and relatedly, PNOs have the potential to mobilize and retain critical stakeholders
for SI (Berkowitz and Dumez, 2016; Chaudhury et al., 2016), yet they need to find a balance
between being open and flexible enough to incorporate various diverse stakeholder interests
and being specific enough in their agenda to effectively initiate projects in support of SI objec-
tives (Berkowitz et al., 2020). One way to manage this balance is through effective govern-
ance structures that facilitate the collective decision-making of core partners (Carmagnac and
Carbone, 2019; Scherer and Palazzo, 2007). For example, in film production, certain routines
of project idea development can emerge among core project partners over time (Manning and
Sydow, 2011). However, PNOs may also (re-) produce power disparities between different pro-
ject partners. For example, the PNO that was set up to support the launch of pilot projects for
what would become the Common Code for the Coffee Community displayed a global–local
divide (Manning and Von Hagen, 2010): whereas the agenda for most pilot projects was mainly
determined by globally operating partners – coffee roasters and a development agency – who
repeatedly worked together across the world, local partners, e.g. coffee growers, only had a say
in setting up local projects, but had very limited influence on the global agenda of the PNO.
Third, evidence for the ability of PNOs to help embed new solutions into a broader institu-
tional context is equally mixed. One main strength of PNOs is their governance flexibility and
their capacity to serve as platforms for the continuous launch of innovative projects (Manning
and Von Hagen, 2010; Carmagnac and Carbone, 2019). Accordingly, Manning and Reinecke
(2016) link such meta-organizations to what they call a “modular governance architecture”
that helps continuously adapt and expand SIs, such as sustainability standards. However, one
major weakness of PNOs – like meta-organizations in general – is their limited enforcement
capacity as a collective body (Ahrne et al., 2016; Carmagnac and Carbone, 2019). As men-
tioned earlier, the resource base of PNOs is typically thin and the resource commitments of
participating partners are often limited to the objectives of particular projects.
288 Handbook on innovation and project management

Based on this brief review, we encourage future studies to further look into variations of
PNOs in support of SIs. For example, while there is substantial research on meta-organiza-
tions and PNOs in support of sustainability standards, we need to better understand how they
are similar to or different from PNOs in the context of human rights campaigns and other SI
processes. Also, addressing the problem of embedding solutions and committing stakeholders
to longer-term change, it seems critical to study how PNOs may be linked to more stable and
institutionalized organizational structures and legal systems in support of new practices and
regulations.

CONCLUSION AND OUTLOOK

This chapter has reviewed important features of SI along with three key challenges – (1) the
embeddedness of social innovators in established structures; (2) the management of multi-
ple stakeholders; and (3) the embedding of new solutions in social practice to achieve social
change. We then discussed the extent to which project entrepreneurs, project capabilities and
project network organizations can help address these challenges.
Going forward, we invite future research to build on these insights, while also considering
other promising avenues of research interlinking SI with project organizing. For example, one
could study the role of projects in translating commercial innovations into SIs and vice versa.
As argued here, the boundaries between these two types are often fluid, yet we know little
about the mechanisms promoting “spillovers” across these domains. Also, one could examine
further the role of technology-enabled platforms in assisting SI projects, including crowdfund-
ing. For example, to what extent does the increasing demand for crowdfunding generate a
new market for intermediaries specializing in running campaigns for SI? Finally, we need to
better understand the interlinkage of project-based organizing with other forms of organizing
in support of SI.

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16. From “lonely projects” to orchestrating project
innovation ecosystems
Samuel C. MacAulay, Andrew Davies and Mark Dodgson

INTRODUCTION

Research at the intersection of organizations and projects has long grappled with how best
to organize innovation. The present chapter contributes the concept of a “project innovation
ecosystem” to this literature and draws on a case study to help explain its origins and outline
what we see as its value to project scholars. The intellectual origins of this enterprise stretch
back at least to Burns and Stalker’s (1961) classic work distinguishing between mechanistic
organizations, suitable for stable and predictable circumstances, and organic organizational
forms, appropriate for changeable and unpredictable conditions. A mechanistic organization
is typified by high levels of centralization, often siloed, functional and rigid structures. An
organic organization is typified by low levels of centralization and cross-functional and fluid
structures. These distinctions also resonate with Morgan’s (1986) use of metaphors in describ-
ing organizations; specifically, the idea of the organization as a machine and an organism.
Research on project management also has a long history, and much of its extensive lit-
erature is predicated on conditions of stability, predictability and isolation from the environ-
ment, with the assumption that mechanistic forms of organization, with centralized and rigid
controls, are the most appropriate means of delivering planned outcomes (Engwall, 2003).
Stability, predictability and isolation, however, are so elusive in today’s business environment,
in the face of rapidly changing competitive conditions and technologies, that mechanistic
approaches throughout the whole lifecycle of projects can be disadvantageous.
Systems thinking is another well-established influence on the literature on project and
innovation management, encouraging holistic thinking about complex problems by breaking
them down into component elements and determining the means by which they are connected
(Morris, 2013; Davies, 2017; Whyte and Davies, 2021). The notion of such systems echoes the
machine metaphor for organizations. Just as a machine is designed, assembled and operated,
in this view so too can a project or an innovation; it is a case of determining their constituent
components and interdependencies and ensuring their integration.
Better reflecting the uncertainties and unpredictabilities of projects and innovations in the
modern world, the organizational metaphor of an organism rather than a machine has become
more valuable. In the innovation literature, discussion of innovation systems, with their
assumptions that their structures and relationships can be mapped and are relatively static, has
been advanced by notions of ecosystems (e.g. Jacobides et al., 2018; Thomas and Autio, 2020).
This advance recognizes that evolution and adaptation are continuing features of changing
organisms and environments. It is a feature of the innovation literature that is attuned to
endemic uncertainties, the continual emergence of unforeseen challenges and opportunities,
and the need for organizational flexibility and responsiveness (Dougherty, 2016). And it is a
view that shares similarities to a growing stream of literature studying the management and

294
 From “lonely projects” to project innovation ecosystems 295

organization of projects (e.g. Grabher, 2002; Engwall, 2003; DeFillippi and Sydow, 2016;
Davies et al., 2017; Gil and Fu, 2021).
There is much to be gained, in our view, by using the organic/organism metaphor as the
starting point to build bridges between the two neighbouring disciplines of innovation man-
agement and project management, thus improving our understanding of how to manage inno-
vation in projects (Davies et al., 2018). While much of the conduct of projects is of course
mechanistic – without which they simply could not progress – because of the environment in
which they occur, and the uncertainties they face, their delivery relies on features of organiza-
tions that are dynamic, emergent and adaptable. We offer the concept of a project innovation
ecosystem to capture these features of projects, defining it as a formally designed tempo-
rary form of “meta-organization” that is tightly coordinated by a focal project organization
with the aim of using innovation to create new value to be captured by members (Gulati
et al., 2012; Kretschmer et al., 2022). We see this concept as complementary to but distinct
from the established concept of a “project ecology” which better describes a permanent geo-
graphic cluster of project-based organizations that emerge informally over time without the
tight coordination of a focal organization and work in a loosely coordinated way to create and
capture value through different streams of project-based activities (Grabher, 2004; Davies,
2017). Using an illustrative case study, we discuss the challenges that motivated one focal
project organization – Crossrail – to begin designing a meta-organization to manage its pro-
ject’s innovation ecosystem and reveal how understanding project innovation ecosystems can
inform the study of project management.

FROM “LONELY PROJECTS” TO ORCHESTRATING PROJECT

INNOVATION ECOSYSTEMS

The last 20 years have seen an important shift away from studying projects and their manage-
ment in isolation from their broader organizational and institutional context. Projects are no
longer viewed as lonely “islands” (Engwall, 2003), but temporary organizations embedded
in environments that shape their identities, values, reputations and performances (DeFillippi
and Sydow, 2016; Grabher, 2004; Manning and Sydow, 2011; Manning, 2017; Sergeeva and
Roehrich, 2018). Time, place and history are recognized as having a profound influence on
the management and organization of projects (Engwall, 2003; Söderlund and Tell, 2009). We
also know that, far from being isolated from the environment, the effective management and
organization of projects requires the negotiation of a plethora of important strategic interde-
pendencies beyond the boundaries of a focal project (Gil and Fu, 2021; Killen and Kjaer, 2012;
Lobo and Whyte, 2017; Newell et al., 2008). Identifying and exploiting such interdependen-
cies can be crucial to learning and innovation at the level of both project and organization
(Brady and Davies, 2004; Davies et al., 2009; Gann et al., 2012; Lenfle, 2011; Lenfle and
Loch, 2010; Roehrich et al., 2019).
Far from lonely islands, projects are increasingly viewed as being embedded in vibrant
ecologies (Brunet and Cohendet, 2022). The literature studying these “project ecologies” has
grown notably since Grabher’s (2001) foundational paper on the topic. The concept itself has
been used to describe the “relational space which affords the personal, organizational, and
institutional resources for performing projects” (Grabher and Ibert, 2011) and has proven to be
a useful way for project scholars to capture the “interdependencies and informal relationships
296 Handbook on innovation and project management

built up over time, beyond what can be described through portfolio or programme manage-
ment” (Hedborg and Karrbom Gustavsson, 2020). For example, Hedborg et al. (2020) trace
the emergence of interdependencies between three neighbouring construction projects in
Sweden and how the development of social capital facilitated effective coordination. In addi-
tion to serving as an analytical construct, project ecologies have also proven useful as a unit
of analysis for studying intersecting organizational processes, such as field configuring events
(Grabher and Thiel, 2015).
The broad literature on project ecologies provides useful insight into how managers might
cultivate learning within such an ecology (e.g. Ibert, 2004) and offers a starting point for con-
sidering innovation. Existing studies of project ecologies tell us that the complexity of their
interdependencies poses serious knowledge integration challenges to innovators (Newell et al.,
2008) and that the management of complementarities between different types of resources
and capabilities within an ecology will be important to success (Manning and Sydow, 2011).
However, this literature is yet to systematically focus on how organizations strategically
design, develop and orchestrate complementarities in search of innovation. Lobo and Whyte
(2017) arguably come closest in their study of how a global engineering firm’s key projects
shaped the way knowledge about digital delivery was transferred between them and, more
broadly, how this ecology influenced the use of project capabilities to create and capture value.
In contrast to project studies, research on the innovation process in strategy and management
has increasingly centred these forms of agency within studies of “innovation ecosystems” (e.g.
Adner, 2017; Davis, 2016; Jacobides et al., 2018). These different points of focus suggest the
potential for cross-fertilization, but, to date, we have lacked fine-grained empirical data on
the management of innovation in project (rather than firm) ecosystems and thus do not have
a detailed understanding of the forms such interdependencies might take, nor how their com-
plementarities might impact a project’s ability to manage innovation. Without this data, our
knowledge about the management of innovation in projects risks remaining trapped within the
assumptions of the “lonely project” rather than reaching out to embrace the complexity that
comes from orchestrating a project’s innovation ecosystem.
Our chapter seeks to advance this literature through an in-depth case study embedded in
London’s “megaproject ecology” (Davies, 2017; Lobo and Whyte, 2017). We focus on the case
of Crossrail (now called the Elizabeth Line) – at the time, one of the largest and most complex
infrastructure projects in the world – and its attempt to build a proactive strategy for pursuing
innovation opportunities. The data drawn on in this chapter primarily comes from research
we and other colleagues have published on the topic (Davies et al., 2014; DeBarro et al., 2015;
Dodgson et al., 2015; Pelton et al., 2017; Worsnip et al., 2016), but is at times complemented by
additional interviews conducted to both clarify and update information relating to Crossrail’s
efforts to orchestrate an innovation ecosystem around the project.

CROSSRAIL AND THE SEARCH FOR INNOVATION

Crossrail’s CEO, Andrew Wolstenholme, came to the project in late 2011 with an agenda
he wanted to pursue on innovation.1 He had previously worked on major infrastructure
projects – including Heathrow Terminal 5, the Western Harbour Tunnel Crossing (Hong
Kong) and Hong Kong Airport – and observed that, while there was often substantial innova-
tion on these projects, it was rarely organized in a strategic way; “We didn’t formalise it”, he
 From “lonely projects” to project innovation ecosystems 297

lamented. We discussed this view in detail during our initial interview with Wolstenholme
in 2012 to get a better idea of what he meant by formalization; what he meant was that they
lacked a clear strategy for where the client organization would invest in innovation and an
organizational process for identifying, evaluating, selecting, resourcing and operationalizing
innovation opportunities.
This view was broadly shared by members of the executive team. For example, the Chief
Engineer, in reflecting on his experience at a leading engineering and design firm, explained
that his previous firm “used to have a really good system for seeding innovation” which
encouraged employees to put together innovation proposals, which would then be reviewed
by an R&D panel and, if favourably evaluated, funding would be provided for development
and the employees would gain recognition through the process (for a similar approach see
Criscuolo et al., 2017). He strongly believed that projects like Crossrail should have a similar
process because their size and complexity meant that opportunities for innovation often strug-
gled to break through from their local site, gain recognition and funding, and then diffuse
across the programme. Crossrail was an opportunity to fix this, he believed, by providing a
“clear [organizational] path for people” to get “their ideas out there” and gain input, resources
and recognition.
Work thus began in 2012 to design and build the organizational architecture and a broader
strategy for managing innovation within the project.2 Over time, this approach would shift
from managing innovation within the project to orchestrating innovation within the project’s
innovation ecosystem. There was no ready organizational template for what this innovation
process should look like within an infrastructure project. The innovation process that ulti-
mately emerged from this work is documented in DeBarro et al. (2014). To the best of our
knowledge, this was the first time a major project developed and implemented such an organi-
zational process for innovation. Those within the industry considered it a radical innovation.

INNOVATION AT CROSSRAIL

The organizational process for managing innovation was viewed as a success and other major
projects in the London ecology, such as Thames Tideway Tunnel and HighSpeed2 (HS2),
became interested in imitating and building on it. Table 16.1 provides illustrative examples
of what was considered innovation on the Crossrail project. These examples range in nov-
elty from incremental to more radical ideas for innovation. Crossrail’s conception of inno-
vation was developed through discussions with the research team and is thus aligned with
academic definitions of innovation as the creation of new combinations of ideas, knowledge
and resources and taken to include “scientific, technological, organizational, financial, and
business activities leading to the commercial introduction of a new (or significantly improved)
product or service” (Dodgson et al., 2008, 2).

THE CHALLENGE OF ORCHESTRATING INNOVATING AT

CROSSRAIL

There were two key challenges that consistently emerged when Crossrail attempted to orches-
trate innovation. The first came when the timing was critical to value creation and capture.
298 Handbook on innovation and project management

Table 16.1  Innovation on Crossrail

Degree of Examples
Novelty
Incremental 1. High definition drone-mounted camera for site inspections: Produce a video stream
that can be used to carry out site inspections. The stream would make expensive
aerial photographs redundant, reduce the need for field engineers to travel across
sites to carry out inspections, and make it easier to access restricted areas (e.g.
hazardous works; mass movement of plant). Transport for London has successfully
trialled drones for carrying out inspections and monitoring site security.
2. Hydrophobic coating for concrete hopper: The application of a hydrophobic coating
to the surface of concrete hoppers. This coating prevents concrete adhering to the
hopper and speeds up concrete flow. Cleaning and maintenance costs are signifi-
cantly reduced, and the risk profile of concreting is substantially reduced (e.g. lower
risk of clogging).
Intermediate 1. Liftpro App: Lifting operations are a central part of the construction process (e.g.
using an overhead crane to lift steel). These are high-risk activities and detailed
planning is required to ensure they are conducted efficiently and effectively.
Creating a lift plan is currently a time intensive task and requires a lot of traditional
paper and pencil work. The Liftpro App is designed to bring this operation into the
digital age. It stores information on common lifting machines used in the UK and
then applies the standard calculations required to produce a lift plan. The App is
designed to enable a plan to be produced in minutes instead of hours.
2. Tactical Messages on Safety Gloves: Print tactical safety messages on the back of
gloves. For instance, if a site is having problems with finger trapping injuries, a
targeted safety message related to hand safety was developed to reinforce the site’s
safety message (‘‘Don’t give your finger to safety’’).
Radical 1. Heat extraction from grout shafts: Tens of thousands of metres of grout shafts were
developed to help stabilize the ground and prevent subsidence during the excava-
tion process (following the ‘‘Tube a Machenette’’ method). They were originally
going to be backfilled with concrete. However, it is possible that these grout shafts
could be paired with a ground-sourced heat pump to produce geothermal energy.
This energy could then be used to heat and cool Crossrail Stations and the over site
developments that are being constructed above them.
2. Real time micro-positioning system: This innovation uses Bluetooth beacons to
generate high precision location data for mobile devices on construction sites.
Existing technologies, such as GPS and WiFi triangulation, are not accurate
enough nor work underground. The three main areas of application are: (a) use
location data to lock/unlock device functionality according to the safe operating
conditions in a given area. This would make mobile devices safer to use and reduce
resistance to having them on site. (b) Use location data to actively push relevant
data (e.g. engineering drawings) to users rather than having them search through
thousands of documents. (c) Make augmented reality applications easier to use (e.g.
use a tablet to visualise construction sequences associated with a given space). The
difficulty of getting accurate location data is currently constraining the use of aug-
mented reality.

Source:   adapted from Dodgson, Gann, MacAulay and Davies (2015)

 From “lonely projects” to project innovation ecosystems 299

Many innovation opportunities were viewed as being highly attractive in principle, but
unfeasible in practice due to their emergence at an inappropriate “stage” of the project’s life.
Colloquially, these innovation opportunities were said to have “missed the boat”, and exam-
ples included an improved stakeholder management system and the experimental application
of fibre optics to measure tunnel deformation. The timing of their emergence meant that the
window of opportunity associated with that part of the production process would be closed (or
soon to be closed) by the time innovations such as these were available for implementation. As
a result, the innovation either could not be deployed in time (e.g. tunnels would be completed
by the time the fibre optic system could be usefully deployed) or it could not be deployed at
the scale (e.g. there were only a small number of stakeholders left to manage to justify a new
stakeholder management system) required to enable sufficient value to be created and cap-
tured so that an investment could be justified. These sequential, time-based interdependencies
between different phases of the production process were constantly evolving and, depending
on what was happening within the project, they could also be in flux. Understanding these
interdependencies was crucial to effectively identify, evaluate, select, resource and operation-
alize innovation opportunities within the constraints of the project’s ecosystem.
The second challenge came when the multiplex of organizational boundaries spanning
the project ecosystem had to be navigated to create and capture value from innovation. The
innovation team’s identification of an opportunity to introduce an energy demand manage-
ment system provides a typical illustration of the complexity of navigating these boundaries
and how the process shaped innovation. The team was approached by a Tier 1 contractor
who could see an opportunity to reduce the operational energy consumption at the stations
Crossrail was constructing. The energy management system would allow the asset operator
to earn revenue by agreeing to temporarily increase or decrease their energy use (e.g. air con-
ditioning, heating) depending on demand/supply fluctuations within the market.3 There were
now multiple case studies showing that these systems could prove profitable for asset owners
and operators, but the systems did not exist when Crossrail’s design was specified and so lay
outside its current scope. To explore this opportunity for Crossrail, the innovation team had to
mobilize a complex mix of actors from across the project’s innovation ecosystem, including:

• Transport for London (TfL): the future owner of the assets where this system was pro-
posed to be installed.
• Crossrail’s Chief Engineer’s Office: who had responsibility for systems specification.
• Two separate suppliers: these firms provided energy demand management solutions and
could provide advice on the value proposition and requirements.
• Representatives from the ATC joint venture: this organization was responsible for the
system-wide fit-out and commissioning of the central section of the railway and thus
knew which assets could be targeted for management.

As one member described the experience: “Trying to find the right people to talk to, to get
engaged, to even get to the stage where you could understand that this was a good idea, is
very, very challenging”. At the beginning of the process, it was not clear which of the actors
in the ecosystem stood to capture the most value from the opportunity’s exploitation nor who
was best positioned to create this value in the first place. It ultimately took six months of
300 Handbook on innovation and project management

work for the innovation team to identify the right stakeholders, convince them to explore this
innovation opportunity, and then mobilize the right 25 people across these organizations into
a workshop to explore its desirability, feasibility and viability. Their study of this specific
innovation opportunity suggested it was promising but that it should be considered in light of
a much broader insight the group generated: the design of Crossrail’s energy management sys-
tems was likely over-specified. The recommendation therefore was to launch a much broader
review of the energy management strategy and place the demand management solution within
that. This example illustrates how the capabilities, resources and authority required to effec-
tively identify, evaluate, select, resource and operationalize innovation opportunities could be
distributed across actors in the project’s ecosystem, rather than within Crossrail itself.
These two forms of interdependencies could also co-occur. Crossrail’s “Tunnel Energy
Segments” project illustrates how the timing and multiplexity of organizational boundaries
associated with an innovation created substantial managerial challenges. The project was
spurred by the identification of an opportunity to use new heat exchange technology instead of
fan-driven cooling of tunnels. This technology did not exist during the early days of Crossrail’s
design and so the opportunity only emerged once the project was underway (for a detailed
technical description of the innovation, see Nicholson et al., 2014). The original motivation
for pursuing this innovation was that it might be able to substitute or substantially reduce the
railway’s dependence on large fans to meet its cooling needs. Heat exchange was seen as a
desirable alternative to fans because it was less energy intensive, thus improving the railway’s
sustainability. However, since the system had not previously been deployed beyond a small
number of experimental operations in Austria and Germany, significant research was required
to better understand the desirability, feasibility and viability of this innovation opportunity
within the context of Crossrail. To do this, Crossrail had to assemble a multidisciplinary team
from across the project ecosystem, including experts in building services, costing, energy,
fire, hydrogeology, geotechnics, material, mechanic and electrical engineering, structures,
risk management, tunnelling and ventilation engineering. These experts came from a wide
array of organizations, ranging from external suppliers (e.g. Rehau A G+Co), project sponsors
(e.g. TfL) and design and engineering firms working with Crossrail (e.g. Arup). Together, the
team discovered new ways that this innovation might create value beyond the original hypoth-
esis of reducing energy intensity and began investigating them.
In each instance, a promising value proposition eventually ran into challenges when it came
to figuring out how value might be captured from the innovation. First, it was realized that
the system’s ability to transmit energy from below ground to above, thus cooling the tunnels,
could generate enough heat to service the needs of 30,000 people in central London. Selling
this heating to offices, apartments, hospitals, etc. could thus provide a new source of opera-
tional revenue. However, it was difficult to determine the right business model for operating
the system and which organization in the ecosystem would be best placed to deliver it. Was
it the asset owner? The operator? Or did the project’s proponents need to bring a new organi-
zation – such as an energy generator and retailer – into the ecosystem?
Second, the capital costs of building the underground section of the railway could be cut
by reducing or eliminating the need for the infrastructure required to deliver cooling via
fan-based ventilation. For example, when the tunnel’s diameter is sized to enable ventilation,
this could be reduced, along with the need for ventilation shafts. However, it was eventually
realized “that ship had sailed” on Crossrail and the design was now at the point where these
gains could not be realized.
 From “lonely projects” to project innovation ecosystems 301

Third, using tunnel heat to cool buildings in central London would substantially reduce
carbon emissions. For example, it was estimated that switching a 500-bed luxury hotel over
to Crossrail’s heat could reduce carbon emissions by 42 per cent. However, in a similar spirit
to selling heat mentioned earlier, it was not clear ex-ante what the most appropriate business
model would be for capturing value from this resource. For example, would the railway opera-
tor sell carbon credits? Or would consumers (e.g. hotels, offices) be willing to pay for both the
heat and carbon offsets?
Fourth, having tested this idea in practice, subsequent new railway projects with significant
urban tunnelling programmes, such as the UK’s HighSpeed2, would be able to make an adoption
decision and formulate a production plan with greatly reduced technical and market uncertainty.
Fifth, if this project was successful, then the companies that had delivered the world’s first
full-scale tunnel energy system would stand to gain a first-mover advantage in what would be
a new product category. Consequently, there was discussion about the extent to which these
actors (e.g. the joint ventures running the tunnelling contracts, technology suppliers) should be
expected to contribute their own resources to the development and deployment of the innova-
tion. After all, the argument went, were they not the ones who stood to capture the most value
from this innovation’s success in the future? For Crossrail, value might be created within the
capital programme’s delivery, but with the Crossrail organization ceasing to exist once the
railway was handed back to the owner, their ability to capture any future value was limited by
time. However, exploration of this hypothesis was curtailed when the above constraints saw
the project limited to the feasibility studies documented in Nicholson et al. (2014).
In summary, as research into desirability, feasibility and viability progressed, it became
clear that the design options could not be developed fast enough to be included in the final
design and delivery strategy. For example, by the time the benefits of the system were under-
stood, it was too late to re-design the air ventilation and under-platform exhaust systems.
Crossrail could therefore not capture value by reducing capital costs or generate value for
the end operator by reducing energy consumption. Time-based interdependencies foreclosed
these options. Therefore, the team re-orientated their plans in the hope of conducting a smaller
in-field pilot study centred on Tottenham Court Road station (Nicholson et al., 2014) that
would help further reduce uncertainty, but this justification could not ultimately gain the
required approvals. At this small scale, it was clear that the project would simply serve as a
demonstrator, which for Crossrail would mean that sufficient value could not be extracted to
justify an investment. The resourcing would have to come from another stakeholder within
the ecosystem or even beyond it. Research into this possibility failed to reveal another actor
in the ecosystem (or beyond) that could capture enough value to justify the requisite invest-
ment. The value would be spread too broadly across a diffuse set of actors for private firms
to be confident of successfully capturing value, and public actors who could capture value
from the reduction in future uncertainty (e.g. TfL; HS2; Crossrail2), did not have the financial
resources at this time to invest. As one lead proponent put it:

if we can prove [the innovation] on Crossrail through this pilot, when we come to building Crossrail
2, you know, from day one we’ll be saying, well actually this is the way we’re going to design it. The
primary method of cooling for this is going to be tunnel energy segments.

This reality put Crossrail in a unique position to fund the creation of value by reducing the
uncertainty future projects might face in tackling this challenge, but not in a position to
302 Handbook on innovation and project management

capture it. Instead, the value created by the reduction in uncertainty would be captured by
other stakeholders.

LESSONS LEARNT ABOUT MANAGING INNOVATION IN A

PROJECT’S INNOVATION ECOSYSTEM

Reflecting on such cases, the innovation team began to realize that it was crucial to understand
who stood to appropriate the most value from a given innovation and the time horizon over
which this could happen. In each of these cases, the main beneficiaries were outside the core
organization set up to produce the infrastructure (Crossrail Ltd) including either the eventual
asset owner, a concession holder, a contractor or some combination of these actors. The team
learnt a valuable lesson from these cases and changed their approach to resourcing innovation
as a result. When confronted with similar opportunities in the future, they first sat down and
attempted to determine which actors were best placed to capture value from the innovation
and the time horizon in which this would be possible. If these actors were within the project’s
innovation ecosystem, the team could then approach this actor with a proposal for investment,
rather than attempt to make the case for the innovation to be funded internally through the
existing capital budget. This growing realization triggered a much broader reconceptualiza-
tion of the way innovation should be managed at Crossrail. There was a shift from managing
innovation within the bounds of the project, and towards managing innovation within the
bounds of the project’s ecosystem. The team realized that if they wanted to be effective at
managing innovation, they needed to work across interdependencies within that ecosystem
to orchestrate the capabilities, resources and authority required to create and capture value
from innovation. This shift in cognition can be seen in the way Crossrail’s abstract vision of
innovation changed from 2012 (Figure 16.1) to 2016 (Figure 16.2). It goes from an image of

Figure 16.1  Crossrail’s innovation vision 2012

 From “lonely projects” to project innovation ecosystems 303

Figure 16.2  Crossrail’s innovation vision 2016

input-output with Crossrail at the centre, to a vision that foregrounds innovation over time and
the different actors involved in the ecosystem and beyond into the UK’s broader infrastructure
project ecology.
The key obstacle identified to this task was the lack of institutional mechanisms or interme-
diaries available to coordinate collaboration and co-investment in innovation across the UK’s
broader infrastructure project ecology. It was recognized that major infrastructure projects,
such as the Thames Tideway Tunnel and HighSpeed2, did at times face similar opportunities
to create value through innovation. For example, the projects mentioned here all have sizeable
tunnelling programmes. However, there were not strong enough institutional mechanisms or
actors able to effectively coordinate investments in areas of common interest and facilitate
the diffusion of this innovation across relevant stakeholders in each distinct project’s innova-
tion ecosystem. Sensing an important opportunity to bridge this institutional void, Crossrail’s
CEO Andrew Wolstenholme began working with others in the project, such as John Pelton,
to build the institutional scaffolding required to bridge this divide (Pelton et al., 2017). The
result was a new intermediary organization called i3P (www​.i3p​.org​.uk/) whose membership
was composed of major infrastructure client and supply chain organizations whose mission
was to improve the coordination of innovation across the infrastructure project ecology within
the UK.
304 Handbook on innovation and project management

DISCUSSION AND CONCLUSION

The concept of a project innovation ecosystem helps scholars and practitioners move further
beyond the “lonely island” view that for so long characterized project management. It does
this by focusing attention beyond the core project organization itself and on the careful design
of interventions aimed at orchestrating complementarities in search of innovation across mul-
tiple interdependent, but legally distinct, organizations.
A project innovation ecosystem can be distinguished from the established stream of research
on project ecologies. Focusing on a cluster of project-based activities in a geographical area,
the project ecology concept draws attention to the ongoing and enduring network of ties and
relationships, such as the people, teams, firms and institutions, and epistemic communities
involved in the stream of megaprojects established to design, build and transform London’s
infrastructure over the past two decades (Davies, 2017). The personal layers of London’s
megaproject ecology provide a pool of resources, capabilities and relationships that can be
mobilized to support current and future infrastructure projects.
While Crossrail benefited from its participation in London’s megaproject ecology, it
established and orchestrated its own innovation ecosystem to create and capture value with
organizations participating in the project as well as other collaborating organizations (e.g. pro-
fessional institutions and universities). Prior research has tended to assume that an innovation
ecosystem is orchestrated by a focal firm with no defined or obvious end date for when the task
has been completed (Poblete et al., 2022), whereas a project innovation ecosystem identifies
how a focal organization (in our case the client body) designs a structure and process to cre-
ate and capture value for participating members of a temporary organization that dissolves on
completion of its task. An innovation ecosystem established for a project assembles, leverages
and eventually dismantles innovation resources and capabilities distributed amongst parties
and exploits interdependencies between organizations on a temporary basis. This analytical
shift from firm to project ecosystems will be particularly useful in an era that has seen major
projects become increasingly focused on the challenges of innovation to improve performance
and outcomes.
Our case study of Crossrail highlights the innovation challenges that inspired this shift
towards the management of the project innovation ecosystem and discusses its use in prac-
tice. However, there is much more to be learnt about this approach to managing innovation in
projects. An important first step will be drawing on theory to carefully define and understand
the complementarities being managed. For example, are they supermodular complementari-
ties where more of “A” makes “B” more valuable (Jacobides et al., 2018), such as when two
distinct projects might increase the value created by coordinating innovation investments in
tunnelling? Or another form? A second crucial step will be better understanding the mecha-
nisms through which project ecosystems resource innovation and how these choices impact
performance and outcomes. The resources required for innovation are conceptualized as
“organizational slack” within the literature (Cyert and March, 1963; Nohria and Gulati, 1996)
and scholars have traditionally considered temporary organizations, such as the projects we
study here, as being characterized by very little of it (Grabher, 2004). However, in our case,
it was not the case that there was a lack of organizational slack per se. Slack existed within
the project (e.g. in different project contingency budgets) and the broader supply chain, but to
be of use to the innovation programme, this slack had to be actively searched for, discovered
and mobilized. Future research should study the dynamic capabilities (e.g. Davies et al., 2016)
 From “lonely projects” to project innovation ecosystems 305

required to effectively execute this search-discovery-mobilization process as well as the way

the structure of the associated budget shapes the types of innovation generated (Argyres and
Silverman, 2004; Argyres et al., 2020).
This chapter began by recognizing the importance of viewing projects not as isolated
endeavours, but as embedded in a wider set of interrelated activities in a changing environ-
ment. Far from being isolated from its environment, the case of Crossrail helps show how pro-
jects are not only embedded in the environment but can intervene to change the environment
(cf. Whyte et al., 2022). Crossrail’s innovation programme did just this. Many other infra-
structure projects in the UK followed suit by establishing their own innovation programmes
(e.g. the Thames Tideway sewer, Hinkley Point C nuclear power station and HS2 railway).
To prevent innovation from occurring in isolation on each project, most of the UK’s large
infrastructure projects began shifting to a more open form of innovation process institutional-
ized through the i3P community. Together, they share a pool of resources and collaborate on
programmes of innovation aimed at improving the performance and outcomes of many pro-
jects. These shifts in practice make it increasingly important to bridge innovation and project
management. We believe that doing so is the most promising way forward for improving our
understanding of how and why organizations establish innovation ecosystems for projects and
how those innovation activities form part of a wider project ecology.

NOTES
1. An early articulation of these views can be found in a key construction industry report chaired by
Wolstenholme (“Never Waste a Good Crisis”, 2009). The report argued that the industry focused
excessively on passing risk “down the supply chain” rather than on drawing up “opportunities to
create value” (22). This, the review argues, had led to a situation in which the “tap of innovation”
had been effectively turned off in major projects like Crossrail (20). There was a wide range of
initiatives seen as helpful for tackling this problem, ranging from a shift towards life cycle evalua-
tions of cost through to business models structured around new types of vertical integration. By the
time Wolstenholme joined Crossrail, efforts to improve performance had turned from “delivery
model innovation” (Davies et al., 2019) to innovation efforts within the existing delivery model.
2. See Debarro et al. (2014) for an in-depth description of this process and our involvement.
3. Flexitricity is an example of one such offering in the UK: www​.flexitricity​.com​/more​/ how​-does​-it​-
work/

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17. Value management of innovation projects:
contemporary challenges and perspectives
Sophie Hooge and Sylvain Lenfle

INTRODUCTION

The steering of each project’s contribution to the firm’s performance is a core objective of
managers’ tasks from daily routines to the most prospective activity. Project leaders face a
widespread use of the discounted cash flow approach, which assimilates project performance
to monetary dimension and short-term profit, to increase the comparativeness of projects, and
thus, optimize the strategic resources allocation. It’s an unsatisfactory issue known for dec-
ades, in particular for innovative projects: even if the resources planning system allowed man-
agers to efficiently evaluate the business proposals, these tools are also known to hide project
benefits related to organizational capabilities and longer-term business profitability (Baldwin
and Clark, 1994) and, therefore, to hinder innovation (Christensen et al., 2008).
Nevertheless, some tools dedicated to the exhaustive modelling of innovation benefits for
customers have been developed since the 1940s, at the same time as strategic planning. In
new product development (NPD) projects, the gradual process of constructing the value of
the future object – as known as “value management” or “VM” – has referred since the 1960s
to analyses, proposals and choices made in projects to bring about the appropriate value for
the targeted customer of the innovation while minimizing the associated costs (Miles, 1961).
Nowadays, the definition of the value earned from innovative design has enriched and a wide
range of tools are available for project leaders – from ecosystem modelling of beneficiaries
beyond customers and optimized rules for economic assessment to stage-gate process for
internal project stakeholders coordination – to help them to efficiently support project pro-
gress. In this chapter, we investigate how intensive innovation contexts of the 20 last years
have renewed the tools dedicated to performance management of NPD projects for both pro-
ject leaders and decision-makers involved in steering committees. Indeed, as demonstrated by
Baldwin and Clark (1994), to understand the process of project evaluation it is necessary to
distinguish between the project team on one side and the strategic level of the project evalua-
tion committee on the other.
The engineering of project performance is a field fed by international research and prac-
tices for decades: it’s crucial to apprehend the diversity of tools that are available to project
leaders to understand their contemporary challenges and to choose the best data to gather
for efficient innovation project management. A large number of tools have been developed,
tested and optimized to meet the needs of project leaders to describe the potential of a new
product and to warranty its design at the right time for clients: quality language covers a large
range of expectations from functionality to safety or affordability, processes for technical
feasibility and test are well-known, and best time-to-market could be studied with competitive
data analysis. In parallel, resource allocations in complex organizations have led to a specific
engineering of the value analysis created by investments: development and production costs

308
 Value management of innovation projects 309

can be described and tracked in detail in enterprise resource planning (ERP) software that
both supports the strategic decisions to allocate resources in the development of new products.
Therefore we face a dual engineering of the performance of industrial innovation with project
leaders and designers on one hand, and on the other hand, decision-makers and strategists. In
this chapter, we will explain how these two sets of stakeholders have designed and structured
processes and tools of value management by capturing theories and developing management
tools. We will see why value management tools are widely used in companies equipped with
R&D departments and how these stakeholders coordinate. Moreover, we propose to describe
the value management of innovation projects and how actors developed new areas of value
management to face intensive innovation since the turn of the 2000s.
Nowadays, value management in innovation projects systematically requires describing,
enriching, disseminating and analysing a large range of data on the value the not-yet-exist-
ing products (or services) could procure to the firm well beyond its intrinsic profitability.
From a stage-gate point of view, we will examine how value management tools evolved from
simple decision tools to complex information systems shared between project leaders and
decision-makers. Thus, we propose to describe firstly the origin of value management tools in
engineering departments, then to study the contemporary approaches of designing the innova-
tion business model and contribution of innovation projects to firm performance, and then to
underline the main challenges of today’s value management and open perspectives for better
value management of innovation projects.

THE ORIGIN OF VALUE MANAGEMENT IN NPD: THE

ENGINEERING DEPARTMENT’S EFFORTS TO MASTER
FUNCTIONAL DESIGN OF INNOVATION AND RESOURCES
ALLOCATION

This part of the chapter proposes a synthetic literature review of value management history,
which has been an abundant research field in engineering design since the 1960s. It used to be
seen by general management as an instrumental area where specialized researchers propose
and debate complex tools and models to describe expected functionalities of the object to
propose the best technical solution to achieve it. Indeed, functional design, and its main tool
functional analysis (SAVE, 1998), are complex instruments daily used in engineering depart-
ments. Here, to highlight their contemporary contribution to innovation stakes in project man-
agement and the challenges still open for project performance, we propose a description of the
theoretical foundations of value management in NPD.
To do so, we provide an analysis of the literature looking specifically at how performance
is engineered, trying to clarify which theoretical models it is based on. Beyond tools, the
research issue faced by researchers specialized in the field was (and still is) the management
of the novelty of a project’s goals to assure innovation success: what is enough novelty to be
a valuable innovation? How to reduce risk exposure due to novelty? On which NPD project
should the resource allocation be concentrated? These questions require common definitions
of the value of innovation. It supposes a balance between (1) mastering the value of a brief that
one wishes to be singular and creative and (2) being able to impose some reuse of knowledge
and proven performing rules from past experiences to assure the feasibility of the innova-
tion. This refers to the well-known issue in the engineering science of organizing design
310 Handbook on innovation and project management

generativity and robustness (Hatchuel et al., 2011). We will characterize its effectiveness with
the robustness of the knowledge manipulated by project stakeholders in a situation of inten-
sive innovation: diversity of risks and opportunities, multiple uncertainties, questioning gen-
erated by the arrival of unexpected knowledge, and the nature of this previously unknown
information.

The Tools of the New Product Performance: Engineering of Hard and Soft Value
Management

First of all, there is a wide variety of tools for engineers gathered initially under the name
of value engineering. Since the creation of the Value Analysis Functional Approach in the
1940s by Lawrence Miles and colleagues at General Electric (Miles, 1961; Dell’Isola, 1966),
the concept has brought together the tools that allow us to systematically compare the func-
tion provided by the new object and its costs (product value = function/costs). Building on
this approach, when tools are focused on designers’ activities for R&D specifications, the
contemporary academic community referred to it as “hard value management”. They are the
most diffused tools and they support the coordination of thousands of designers in engineer-
ing departments around the world.
Thus, for most practitioners, value engineering is a very precise stage of new product devel-
opment – the functional analysis stage in the systematic design of a product, manufacturing
process or industrial process (Pahl and Beitz, 1977) – and, thus, refers to a measurement tool-
box named “value analysis”. In the 1950s, it even became a profession with the recruitment
of “value engineers” in the US Navy (SAVE, 1998). Through a more and more normalized
process of functional satisfaction inquiry, value analysis techniques help the design teams
first to identify the hierarchy of the client’s functional needs and then to analyse the benefits
provided by proposed solutions, compared to their costs of implementation. This approach
supports the optimization of the quality/price ratio of a product. It has spread throughout the
worldwide industry (e.g. Bowen et al., 2010) and it is now supervised by several international
standards (AS/NZS 4183, 1994; SAVE, 1998; in France, NF X50-153, 1985). Value analysis
is probably the most popular value engineering tool in both engineering and manufacturing
communities. Many methodologies have been proposed for decades, forming an extensive
toolbox, to correctly identify what the customer wants (functional analysis system techniques,
quality functions deployment), eliminate all unnecessary costs (cost analysis methodologies)
or compare several alternatives with multi-criteria analysis methodologies.
Nevertheless, at the end of the 1980s, these tools became more and more difficult to deploy
in NPD of products that compete on the same dominant design, such as the automotive indus-
try, textiles or consumer goods. Developments in the field have then enlarged the scope of
value engineering, taking into account the value created by project stakeholders outside the
boundaries of R&D departments, and for actors beyond the beneficiaries identified in the
functional analysis (users of the object). These approaches are generally grouped under the
name of “soft value management” (Green, 1994, 1997).
Indeed, the value management toolbox prompts designers to focus on their most repre-
sentative customers and reduce the diversity of functions to master the associated quality and
costs, whereas increased competition is required, on the contrary, to enlarge this modelling
of customers and product functionality. This leads to the emergence of a new generation of
 Value management of innovation projects 311

tools, aiming to overcome this challenge and support value engineering in the industry; it is a
transformation of hard value engineering, focused on two main changes:

• Documenting the heterogeneity and dynamics of customers’ functional expectations.

• Reporting on the social process of designing the value of proposals that involve many
internal and external stakeholders of the NPD project beyond R&D engineers.

Its founder, Stuart D. Green, offered then a new definition of VM that enlarged its scope:

A structured process of dialogue and debate among a team of designers and decision makers during
an intense short-term conference. The primary objective of value management is to develop a com-
mon understanding of the design problem, identify explicitly the design objectives, and synthesize
a group consensus about the comparative merits of alternative courses of action. Value management
makes no pretense about finding optimal answers; it is solely concerned with establishing a common
decision framework around which participants can think and communicate.
(Green, 1994, 51)

From this perspective, VM is no longer exclusive to engineering teams in R&D and end cus-
tomers but takes into account the needs and expectations of many other people such as inter-
nal stakeholders (marketing, strategy, industrial design, manufacturing), external partners
(distributors, suppliers) and even employees. Thus, beyond the development of engineering
products, the VM literature has evolved towards a more holistic and upstream approach simi-
lar to strategic project management, the initial information phase of project or construction
programme management (Ellis et al., 2005; Thiry, 2002; Yu et al., 2005). These authors have
in particular underlined the importance of engineering the collective construction of value by
stakeholders: relying on explicit processes and dedicated tools, they can make sense of their
common problems, discuss indices of performance potential perceived individually and build
a common vision of the situation and the different alternatives to seek (Thiry, 2001).
Beyond the debates within the value management research community on the strengths and
weaknesses of existing tools, we have shown that even the broader, “soft” view of value engi-
neering is limited to supporting design teams in a situation of disruptive innovation and break-
through R&D projects (Gillier et al., 2015). Indeed, these tools are only effective under two
conditions: available knowledge of the nature of the object to design and clear identification
of its beneficiaries. These approaches are less diffused in practice and still under research.

Performance Control: Tools for Strategic Decision-Making in NPD Engineering

Simultaneously, another engineering effort was also conducted in the 1950s on the optimiza-
tion of industrial portfolio management, mainly focused on firm investment and profitability
(Baker and Freeland, 1975; Kengpol, 2002). While designers developed an ability to control
the costs of each product’s functionality, decision-makers acquired the ability and the tools
to optimize the allocation of resources on a portfolio of NPD projects. Likewise, the RAND
Corporation and numerous research teams have proposed management tools since the Second
World War to coordinate the players in the resource allocation decision that has been detailed
previously (e.g. Kengpol, 2002; Kavadias and Chao, 2007).
Two avenues were investigated during the past decades: economic optimization based on
expected profitability and selection by experts’ peer review.
312 Handbook on innovation and project management

• First, mathematical programming approaches were created to optimize quantitative

objective functions, mostly economic, for a set of specified and constrained resources.
They are the oldest models developed in the literature. On this basis, return on investment
measurement methods were developed, among which are discounted cash flow calcula-
tions that are, by far, the most developed and used in the industry.
• Second, scoring, classification and checklist assessment approaches are the oldest multi-
attribute methods designed to support critical peer review of portfolios. Multi-attribute
models with strategic goals often provide an interactive process aimed at capturing infor-
mation about projects and then assigning scores for decision-support logic. The best-
known approaches in this category are the multi-criteria hierarchical method by Saaty
named the Analytical Hierarchy Process (Saaty, 1980; Liberatore and Stylianou, 1995),
the Q-Sort approach (Souder and Mandakovic, 1986) and the Delphi method developed
in the 1950s by the RAND Corporation (Kengpol, 2002). If the names have been lost,
they are well known and regularly used in the industry by expert committees mandated
to evaluate and score innovation ideas in scoping/exploration phase of NPD.

Even if the literature presents a wide range of proposals based on value exploration for the
selection of innovative ideas, the next gates of the NPD process (feasibility/business case
building, testing and industrial validation) are dominated by economic tools (Figure 17.1 illus-
trates a classic stage-gate process).
The problem for our topic is that the majority of them have been criticized for their poor
adaptability to risky R&D and innovation projects, in particular, the most widely used: the net
present value (NPV) and the rate of return on investment (RRI). Empirical studies regularly
confirm that few instrumental alternatives are used even in contexts of major innovative pro-
jects or in rapidly changing environments (Bititci et al., 2012; Adams et al., 2006; Henriksen
and Traynor, 1999), despite strong demand that is resulting in an abundant commercial offer
of software to help with multi-criteria portfolio analysis (Morton et al., 2016). The experimen-
tations of new tools that we led in partnership with the Renault automotive firm (Hooge and
Dalmasso, 2015, Hooge and Hatchuel, 2008) constitute a good example of this phenomenon:

Figure 17.1  Stage-gate process with main objectives of stages and gates in the NPD
process
 Value management of innovation projects 313

only the adaptations of the NPV to highlight uncertainties have been integrated into the long
run to the stage-gate process. The other management tools we’ve proposed (quality process
for the innovation design system, review of strategic valuation criteria, stakeholders involve-
ment tracking, etc.) have been regularly reviewed by managers for ten years but have never
been established in the long term. Even though these tools are more accurate for an innovation
project, they are always more challenging to use in project portfolio reviews.
Therefore, economic tools are still the main method used to evaluate all projects in most
firms, even the most innovative ones (Cooper, 2014; Cooper and Sommer, 2018). Economic
tools support a very simple comparison of projects, even if there are few common points
between topics, industrial challenges or time to market. Indeed, the need for tools more suit-
able than the NPV is identified by project stakeholders but no satisfactory solution emerges
despite the presence of numerous engineering proposals. This is critical since the manage-
ment innovative activities desperately need decision-support instruments which fall precisely
into the three deficiencies of traditional management systems, conventionally denounced for
decades by researchers in accounting management (Savall and Zardet, 2008):

• Lack of or very imperfect measurement of indicators of potential value creation, in par-

ticular for intangible investment potential (for example, the performance of a new label of
quality or industrial standard is really hard to model).
• Lack of measurement and management of the intangible investment generated and self-
financed by the company as a source of sustainability (for example, the performance of
new expertise is a blind spot).
• Failure to take into account the cost of malfunctions that destroy real added value (unnec-
essary overloads) or potential (unrecognized opportunity costs).

Throughout the project lifecycle, the loss of management capability that the economical tools
generate should not be underestimated. Operationally, stakeholders no longer know how to
coordinate on extra-financial dimensions and it creates dissatisfaction (exogenous or endog-
enous) since all activities are reduced to their monetary expression in the value space with
devastating effects: the euros being identical, why for an equal amount prioritize one activity,
especially an innovative one, rather than another? Why make a greener product if it is less
economical for the customer? If only the price matters to the consumer, why would it be useful
to invest to improve the product in another dimension of the total cost of ownership (TCO)?
Furthermore, there is a loss of value management skills for both decisional and design
stakeholders. Due to the variety of contemporary expectations about innovation, practitioners
are no longer confident in the choice and scheduling of the design activities for new offers.
Financial optimization neglects, or even eliminates from the accounts, the time and the actors
associated with these activities of elicitation, transmission, delegation of responsibilities and
distribution of activities that allow for innovative objects to exist and be brought to a customer
(Baldwin and Clark, 1994). When optimizing the economic equation of profitability of a new
product, the more the project is piloted by monetary data, the more innovation only appears
as a risk. Generativity in design (i.e. the ability to produce design proposals that are different
from existing solutions and design standards and contribute to the expansion of the identity of
objects’ class1 [Hatchuel et al., 2011; Thomas and Tee, 2021]) induces many forms of uncer-
tainties in the economic equation: uncertainties on price, attainable volumes, difficulties in
314 Handbook on innovation and project management

estimating R&D study times, production costs, sourcing of new materials/parts, etc. These
uncertainties are exactly the space where design activities take place, even though they may
be contrary to the search for reliability and mastery of economic data. Another important
skill in innovation projects is the ability to propose a design robust to a range of uncertainty
or changes in its application context (Zaman et al., 2011). Yet, the conditions of a system’s
robustness, i.e. the independence of design sub-elements and minimum information allow-
ing the realization of the function (Suh, 1990), are no longer observed when one focuses on
local economic optimizations. The resulting couplings of design parameters that have been
linked for economical optimization, by increasing in number, induce a progressive stabiliza-
tion of all elements of the system that forms the technical dominant design. This leads to an
impoverishment of the capacity to generate new designs based on only one part of conserva-
tion. Likewise, the ability to describe in detail who will receive, use and adopt the innovation
proposal is crucial in innovation projects. But user and consumer models are no longer shared
between the different actors who build and manipulate them independently of each other in
departments of marketing, industrial design, purchasing, R&D or external prescribers because
profitability calculations make them invisible. In addition, this remoteness undermines the
vigilance of the changing expectations of consumers-users. In the absence of an active quest
for coherence between consumer and user models, advertising, marketing systems, sourcing
systems, ergonomics and uses of the object are no longer necessarily aligned and the adoption
of the innovation could be badly impacted.
These failures are still at the heart of contemporary research (Sethi and Iqbal, 2008; Lenfle,
2016). Yet, in previous work on piloting innovation in R&D (Hooge et al., 2016; Borjesson
et al., 2014), we were able to verify the hypothesis that existing instruments were abandoned
or challenged precisely for these reasons. However, these specifications are particularly suit-
able for describing the challenges of innovation evaluation: characterizing the creation of
potential, understanding and tracing the impact of investments allowing activities other than
the studied project, identifying destructive disturbances or creating value during design. If
accounting management has helped us to build tools that make it possible to trace the dynam-
ics of inter-project resource consumption in R&D (Hooge and Dalmasso, 2015), tools for

Figure 17.2  Value engineering and performance control tools in the NPD process
 Value management of innovation projects 315

value management of innovation beyond R&D activities remain to be designed. Thus we must
return to the literature to clarify the conceptual models that researchers and contemporary
practitioners share in management to describe the potential of an activity or an investment, a
cost of dysfunction or an opportunity. Indeed, we need a better understanding of the interact-
ing motivations of the innovation stakeholders who manipulate data about project potential
and go into detail about the motivations of innovation investment decisions, to resolve this
conflict of values ​​at the level of instruments. This is the topic of the next section.​

CONTEMPORARY APPROACH OF VALUE MANAGEMENT:

A TOOLBOX TO STEER PROJECTS’ BENEFITS FOR FIRMS

In this section, we propose to highlight what we call a “value space” to manage between
designers and decision-makers. As we have seen, these populations have different percep-
tions of innovation value in, respectively, a design space and a decision space. Here we
propose to describe the components of the value space as an independent management
space (i.e. with specific tools and professionals) whose aims will be to create coordina-
tion between the actors of the two other spaces that contain their tools and stakeholders
(Figure 17.3).
Indeed, the decision to invest in innovation projects results from prior interactions between
several individuals from different departments of the firm, henceforth known as the project
stakeholders (e.g. Lettice and Thomond, 2008; Jepsen and Eskerod, 2009). Building on a
review of the contemporary literature in management science, we propose an analysis of how
this network of internal stakeholders considers innovation assessment through the prism of
business model performance in design space, whereas decision-makers and strategic com-
mittees focus on firm performance in the decision space. This modelling leads us to propose
a characterization of the value space through two dimensions of coordination: innovation
assessment and strategic planning. Therefore we define value management as the coordination
of all the stakeholders of these three spaces in the long run.

Figure 17.3  The value space, a coordination space between decision-makers and

designers
316 Handbook on innovation and project management

Operational Tools for Business Model Performance

Stakeholders of the design space

In the NPD process, very diverse actors are involved in methods for estimating the perfor-
mance of the new product business model. The occurrence of events that may impact the
implementation of a future object is often known but heterogeneous: events could vary in
nature from technology to marketing, law, purchase, etc. Thus, these data are built by a large
range of actors involved in the project according to their areas of expertise. Each profession
produces a set of experiments and tests (prototypes, customer interviews, benchmarking, etc.).
Thus, within the design space, many stakeholders interact with project leaders to describe the
whole benefits and improvements that could be managed through a search for business model
performance (Demil et al., 2018). To coordinate, these stakeholders rely on the traditional
separation of languages in systematic design – functions, conceptual models, embodiments,
detailed parameters – as it is the basis of design department organization (Pahl and Beitz,
1977). However their perspective of what is the object differs. So, we propose to gather them
according to their perspective on the identity of the “object-to-design” (Le Masson et al.,
2010). We could describe their tools of value management through their professional respon-
sibility and involvement roles in the design process (Figure 17.4):

• Providers of the design are mainly engineering designers that focus on the technical
proposal. They are the heirs of the hard value management toolbox and not surprisingly,
contemporary models rely heavily on the distinction between functional requirements
and design parameters put forward in work on design theory as the key to the design
robustness of a technical system (Suh, 1990).
• Receivers of the design are those who will be in direct contact with the innovation or its
users (industrial designers, commercial marketers, sellers, etc.), because either they have
to describe how potential customers will use the innovation, they are going to sell it to a
customer or it will be integrated into the industrial system that they manage.
• Prescribers of the design (purchasers, product marketers, regulators, etc.) impose some
attributes to the innovation both for differentiation and competition and adequation to
industrial rules and regulations.

Figure 17.4  Design space stakeholders of value management in the NPD process

 Value management of innovation projects 317

When they give feedback to project leaders on the benefits knowable to the future object,
actors from the design space could argue on a large diversity of potentials for the customer,
the user, and also the environment of the innovation lifecycle, from sales to recycling. From
a stakeholder perspective (Mitchell et al., 1997), these actors share logics of coordination and
cohesion linked by their legitimacy in the organization, but also to urgency as they also man-
age costs and delays of the firm’s delivery (see Hooge and Dalmasso, 2015 for an extended
classification of innovation project stakeholders). This salient diversity introduces biases in the
quality of data given to the project leader as motivations of “urgent” stakeholders to the pro-
ject completion could introduce disturbances in the expected rationality of the value analysis.

Value in the design space

Knowing the breadth of vision of these actors on the benefits or constraints brought by the
object being designed, the contemporary literature on business models is very interesting to
analyse in detail. Building on an exhaustive literature review we made previously,2 Table 17.1
presents the diversity of value paradigms mobilized by researchers to discuss the main issues
of business model design in innovation projects. Three points are worth noting:

• First, the literature on business model performance distinguished four processes of value
design for the firm: external value design and three types of value creation (collaborative,
internal and competitive). In each process, researchers identified a diversity of innovation
elements, which could explain what supports or destroys the value for the firm, or the
stakeholders of its ecosystem (column 2). To discuss the impacts of these “value objects”,
they mobilized an amazing diversity of theoretical frameworks of performance (column
3). This reflects both the richness and the dynamics of the study of identified objects,
but also the fact that academics are interested in these objects from the point of view of
both designers, prescribers and/or receivers. Thus, performance models vary from engi-
neering approaches of quality-costs-delay to more strategic deployments of the organi-
zational capability to provide a sustainable quality to customers (knowledge-based view
and resources-based view). According to this high diversity, the value paradigms (column
4), i.e. what it means to “do value” at the end in these academic papers, appear richer than
practices focused on economic evaluation might suggest in all fields.
• Second, the economic approaches to the benefits/costs ratio remain dominant. However we
observe a diversity of paradigms within them: some papers will be based on approaches
that reduce the value of income that is distant in time (discounted cash flows, net present
value), while others will consider these flows as equal in value over time, or only focus on
the gains after reimbursements of the initial investments (ROI), or even look only at the
cumulative revenues or the growth of revenues.
• Third, the performance approaches are richer than a purely economic approach. The con-
temporary debate induces a large mobilization of qualitative or multi-criteria paradigms
(e.g. balance of resources according to their competitive specificities in the lineage of
Barney [1991] that assess resources’ rareness, imitability and non-substitutability in addi-
tion to their intrinsic value). Conceptually, it also supports an open discussion of relevant
elements to consider in a benefit/cost approach for the customer (including customer fidel-
ity, the total cost of ownership, affordability and durability), for all beneficiaries of goods
at the firm level (market share, top-management teams efficiency) and at the ecosystem
level (international competitiveness, threshold effect, patents coverage).
 Table 17.1  Diversity of value approach in contemporary literature on business model performance

Performance source Studied value objects Main theoretical frameworks of performance Value paradigm
External value Acquisition – Integration, human resource management, motivations, Value α benefits/costs
capture management stakeholders, corporate venturing
Crowdsourcing and value capture Crowd intelligence, outsourcing Value = benefits €
IT value for business Fluency, quality, reporting Value = ROI €
Value chain – industry architectures BtoB, operational efficiency, subcontracting, outsourcing Value = DCF €
Knowledge and business ecosystems Dynamic capabilities, absorptive capacity Value α benefits/costs //
ζ VRIN
Collaborative value Partnership for R&D Public–private collaboration, resource networks, network Value = threshold effect
creation value (expertise and skills), RBV joint value
Partnership for NPD Open innovation, co-ownership of IP, investment in Value = DCF €
technology, economic levers, risks sharing
Knowledge and business ecosystems Shared value, organizational capabilities Value α benefits/costs //

318
ζ VRIN
Co-creation with customers Value proposition validation, learning, user innovation Value = DCF €
communities
Internal value Innovation value Competition, R&D and intellectual property, Value = NPV €
creation environmental dynamism and technological diversity
Knowledge-based view Core competencies, human resources architecture Value = multicriteria
(management systems, skills, training); NPD and VRIN
creativity
Resource-based view Ambidexterity, R&D intensity, managerial cognition Value α benefits/costs //
ζ VRIN
Corporate governance and performance of firms Operations performance, corporate value, firm strategies, Value = CF​.grow​th € //
corporate board and TMT and organization recovery ζ TMT
Global value chain MNE, operational efficiency, BRICs, base of pyramid, Value = max sales.
logistics, accounting for productive investment quality. min(costs​.del​ay)
 Value chain – global and human resources Worldwide balance of workload, skills diversity Value = ROI €
Value chain –global and innovation capabilities Cultural adaptation of new products, diversity and Value = market share​.
standardization volu​me
Value chain – innovation Competitive advantage, added value, CSR, Value = market share​.
entrepreneurial actions and environmental jolts, positive volu​me
psychological capital
Value management Value analysis, soft and hard value Value α benefits/costs
Competitive value Competition by business model Foresight, BM innovation, value-added, BM dynamics, value = market share​.
creation globalization, creation and capture system bolu​me
CSR – environmental responsibility of business CSR, stakeholder theory Value = multicriteria
context
Innovation value Expectations, environmental dynamism and value = market share​.​nb
technological diversity, established value networks, of new products
competition, R&D and intellectual property
Offer performance Marketing performance: brand value, reputation, value = market share.
customer value, purchase intention, business intelligence, customer value

319
market sensing capability, perceived value
Value of customer CRM, reputation, early adopters Value = customer
fidelity, TCO
Patent value IP, defence, barriers Value = ROI
Firm resources in dynamic environment Ambidexterity, R&D intensity, NPD acceleration Value α benefits/costs
Value innovation Blue Ocean Strategy Value = margin of new
product

Notes:   DCF, discounted cash flow; NPV, net present value; ROI, return on investment; TCO, total cost of ownership; TMT, top management team; VRIN, valuable rare
inimitable non-substitutable.
320 Handbook on innovation and project management

Thanks to this diversity, it’s easier to tackle the challenge of proposing formal performance
models more adapted to contemporary industrial dynamics of competition (open innovation,
high velocity, ultra-competitiveness, sustainability, etc.) than the paradigm of short-term eco-
nomic profitability. These works propose changes in the foundations of the definition of value
that are more profound than the usual criticism of ROI short-termism to focus on what consti-
tutes value, beyond profitability. Doing so, this field gives powerful insights to challenge the
engineering approach of value management in innovation projects as these dimensions are not
deployed in value management tools for the moment.

Strategic Tools for Firm Valuing

The stakeholders of the decision space

On the other side of project value management, decision-makers and strategic committees
focus on firm performance. Their power and ability to improve the firm performance are often
associated with the decision to allocate resources to innovation activities because it’s one of
the most visible actions taken by the executive management. There are a lot of other impacts
they manage: they explain and diffuse within the firm a strategy that presents the expected
utility objective to be reached collectively (vision, common purpose), they develop decision-
making preferences (rule of profit control) and establish a meta distribution of resources (stra-
tegic plan). All these actions embody rules for value management and highlight an expected
strategic playground for innovation projects.
Moreover, through the delegation of restricted areas of responsibility, the representatives of
executive management in the organization – individual “decision-makers” or decision-making
committees – are responsible for deploying the vision and applying the preferences. Thus, the-
oretically, all the decisions taken to allocate resources are consistent across the organization.
To do so, “local” decision-makers rely on in-house strategic material but also on accounting
and purchase teams to optimize resource allocation and on industrial forecast tools (foresight,
technological watch, economic intelligence) to deploy the vision at the level of their delega-
tion. These actors form the decision space of the organization: they are stakeholders with spe-
cific logics of coordination and cohesion linked by their power in the organization, according
to (Mitchell et al., 1997).

The value in the decision space

Building on the same literature, Table 17.2 synthesizes the main sources of firm performance
for decision makers, providing an overview of studied objects and the theoretical framework
of performance mobilized per authors (columns 1 to 3). We added information on the perfor-
mance models of the firm as they are more formalized in firm value research than in business
model ones (column 4) and completed the analysis with the value paradigm of researchers
(column 5).
Four main sources of performance are identified by academics to increase the value of the
firm: (i) corporate governance, (ii) resources management and coalition management, (iii)
value chain and (iv) marketing. As detailed in Table 17.2, value objects range from very clas-
sical objects of governance and strategy (venture capital, funding, added value, commercial
success) to more recent ones (CSR, board management, reputation, etc.). As we expect, due
to the focus on firm profits, the theoretical frameworks and performance models are deeply
rooted in a financial approach to performance (profit growth, operating margin, share value,
 Table 17.2  Diversity of value approach in contemporary literature on firm value

Performance Studied value Main theoretical frameworks of Performance models Value paradigm
source objects performance
Corporate Corporate value Financial performance V(firm) = profits​.grow​th = {EVA, SVA, Value = benefits €
governance market share}
Corporate venture Acquisition, competition V(firm) = fund size (€/nbSU) = f(expected Value = cost reduction €
capital advantage, venture cap capitalization of start-up, equity stake,
expected market share, SVA, portfolio ROI)
Funding (funds) Hedge funds, contrarian funds V(firm) = share value = f(capitalization, Value = DCF €
Financial Volatility Index)
Governance – Corporate boards performance, V(firm) = multicriteria {TMT valuation, Value = CF​.grow​th € //
corporate boards and shareholder impact trust} multicriteria TMT
performance
Shareholder value Maximization, CSR impact, V(firm) = share value = f(market Value = share value

321
reputation capitalization, dividends) growth.dividend €
Resources Networks and Joint value, partnerships, RBV V(firm) = VRIN model of resources Value α benefits/costs //
and coalition ecosystems (RBV and valuation of shared tangible (valuable, rare, inimitable, non-substitutable) multicriteria VRIN
management and KBV) and intangible assets, KBV and V(firm) = multicriteria on knowledge {R&D
organizational performance invest, patent deposits, publications, firm size,
PPP investment, CIR}
Investment in Economic leverage, entry V(firm) = investment size = {threshold Value = DCF €
technology barriers effects, ROI, IP, NPV, R&D annual
investment, publication rates)
Patent value IP valuation V(firm) = IP weight = f(portfolio size, annual Value = patents number /y
rates of deposit, patent licensing, scientific
publications)
(Continued)
 Table 17.2  (Continued)

Performance Studied value Main theoretical frameworks of Performance models Value paradigm
source objects performance
RBV – human RBV, slack, breakdown V(firm) = size.multicriteria {HR skills, core Value = costs € //
resource architecture structure, organizational competencies structures) multicriteria VRIN
performance, HR model of
tangible and intangible assets
RBV – multinational International balances of good V(firm) = firm ranking (market share, stock Value = operating margin
enterprise manufacturing, operations market) (ranking per sector)
management performance, contingency,
idiosyncratism
Value chain KBV – NPD and Incentives and knowledge V(firm) = rate of converted project, invest Value α benefits/costs
creativity maximization R&D, market share new product and CA
Added value Efficiency of operations and V(firm) = efficiency (QCD).safety Value = max SQ min(CD)
stock in value chain

322
Globalization Worldwide markets (sells, ROI, international ranking on market, growth Value = ROI €
manufacturing)
Industry BtoB, integration, V(firm) = operations performance and value = market share​.volu​
architectures subcontracting, buyer/seller efficiency me €
Innovation and new Competition, pioneers, market V(firm) = investments risks valuation (ROI, Value = DCF €
technology exit risks NPV, IP), market share on new products
Reputation Firm identity, organizational V(firm) = share value dynamics (growth and Value = share value.
identity volatility) dividend €
Marketing Commercial success Offer coherence and diversity, v(firm) = f(value proposition, perceived value, value = market share.
brand value, customer value, Bowman Scale, product range, time to market customer value €
perceived value, CRM, product performance, market share)
diversification, customer
satisfaction
 Value management of innovation projects 323

etc.). Therefore they almost systematically mobilize the economic tools for optimizing the
short-term valuation of investments based on profitability calculation models: the return on
investment (net profit divided by total investment, expressed in percentage or rate); and net
present value (with a few debates on the closeness of it standardized rate to the weighted
average cost of the capital). As performance models are more and more sophisticated, greater
details (translating into better data reliability) are available for decision-makers. For example,
work on the calculation of share value, although based on discounted cash flows, mobilizes
volatility calculation tools allowing a richer vision of the arrival of newness on the market
than the modelling of the gains from a new product.
Some research works in the R&D management and engineering research field focused on
the crossroads of the performance of firms and business models’ profitability. In particular,
research on value management tools for NPD project committees focuses mostly on three
dimensions dedicated to decision space stakeholders:

• Simulation tools for the value engineering of economic performance (such as NPV simu-
lation for various scenarios).
• Valuation tools for the industrial property beyond the object (mainly to study the impact
of patents on competition and partnerships).
• Portfolio visualization tools (such as strategic road-mapping) (Phaal and Muller, 2009).

These modelling efforts highlight a key point of value management: the economic value
paradigm – and specially discounted cash flow approach – constitutes a bridge between the
decision space and the design space. The attention and frustrations developed by all stake-
holders on this tool result from this particular status of economic assessments. Indeed, tools
for decision-making include data that all stakeholders are looking at: economic optimiza-
tion models focused on the benefits from the marketing of innovative offers where value is a
function of customer value and the costs that generate it. Nevertheless, the decisional models
study the impact of time on the financial gain in risk (mainly by discounting) but could also
study the profit in progressive capitalization (earn value), looking at the interdependencies of
investments (real options) (Trigeorgis and Tsekrekos, 2018) or the impact of the unknown on
profitability (Le Masson et al., 2019).
However, these instrumental works have traditionally been of concern within the research
community which remains more focused on the management of R&D and engineering activi-
ties, without the ambition to improve value management at the company level. Symmetrically,
scholars publishing in the strategic field or general management have mostly focused on epis-
temic models for business model performance and firm value, opening value meaning at the
firm level but without attention to the specific need of coordination carried by management
tools at the project level. Once again, this dichotomy highlights the division between strategic
and operational management in the research field. Moreover, it results in a damageable lack
of attention from management researchers on the issue of value management as a process
to master between a large diversity of internal stakeholders from both professional areas
(Hooge and Dalmasso, 2015). In an innovation project, the resulting tension peaks. Indeed,
most management scholars focus their research on strategic management. Since the 2000s,
a huge effort has been led in the study of the mechanisms of firm internal value creation,
through cooperation or competition and the associated concepts of capture and absorption of
external value. Simultaneously, a lot of research has emerged on the other hand of firm value
324 Handbook on innovation and project management

(works on shareholder value, CSR impact, and the performance of investment in technology).
All these works are of interest to decision-makers but they are disconnected from the project
management toolbox they are used to handling in their daily work. Thus, it increases their
feeling of complexity and uncontrolled consequences when they need to decide on innovation
investments on the economic assessment of the innovation project.

Characterization of Value Space

To conclude this literature analysis, it appears that a variety of research has led to the devel-
opment of numerous and stimulating foundations of the notion of value in management,
especially to integrate and handle contemporary societal debates. However, on the ground,
practitioners have been suffering daily from the unsuitability of NPV to highlight the potential
of innovation projects they are carrying, and they remain helpless: rather than being inspired
by this stimulating diversity from academia, they feel overwhelmed by an impractical pro-
liferation of concepts. This gap between practices and research is still ongoing and particu-
larly problematic in the case of innovation projects. This leads to a feeling of fragmentation
for value management engineering, although its unification is one of the main objectives of
practitioners.
Indeed, the instrumental elaborations of the new concepts seem poorly effective. This can
be seen with the discrepancies in the valuation of intangible assets in accounting, the creation
of value which refers to different hypotheses in finance and strategy, and the same for the con-
cepts of the value of the brand or the customer value in marketing or even business valuation
and market value in finance and governance. However, our analysis of the recent literature
shows that the underlying formal models are not that varied: the vast majority of tools for
managing the performance of innovation activities remain strongly financialized (focusing
on “outputs” and its beneficiaries). This induces several structuring hypotheses that emergent
contemporary approaches try to overcome to introduce cognitive and social flexibility that is
more representative of the fast-changing environments of contemporary innovation.
Several focal points are therefore possible to design alternative concepts of value in inno-
vation activities and are mobilized by management researchers. They first try to deconstruct
the impact of financial assumptions on the firm, the market and the customer when they are
applied in situations of radical innovation. Then, they focus on the robustness of the models
mobilized by practitioners. On the one hand, some propose to restrict the field of investiga-
tion by temporarily isolating certain actors in the organization and specifically equipping
certain professions so that they can introduce uncertainty and the unknown into their contri-
butions to the construction of the value of innovation. Thus, we observe the development of
instrumentation dedicated to innovation by functions (R&D, production, marketing, HRM,
strategy, accounting/control, finance, administration, governance and shareholders). These
approaches support an increasing ability of experts from these departments to subjectively
describe the probability they associate with an innovation scenario they are discussing with
the project leader in the design space (Figure 17.5). Another approach is to study the estab-
lished forms of involvement of innovation stakeholders (contracts, partnerships, subsidies,
regulations, competition) to renew their instruments to integrate the radical uncertainty and
the unknown. Finally, a third approach consists of analysing the incentive systems at work
in innovation ecosystems which seeks to introduce exogenous valuations encouraging col-
lective action.
 Value management of innovation projects 325

Figure 17.5  Feeding design and decision spaces with data about innovation value

Even if these three approaches encounter the same difficulties with information – identifi-
cation of missing knowledge and treatment of new knowledge – they refer today to radically
different models of social process to design the value without a common understanding of the
concept of value. This inevitably leads to an explosion of concepts manipulated by stakehold-
ers, to document the value of the innovation. Thus, associated evaluation tools are as difficult
to understand for researchers and practitioners in innovation management. However, in the
context of intensive innovation, the competitiveness of companies depends on the efficiency
of their management of innovation projects. Therefore, there is a managerial and instrumental
gap between, on the one hand, the massive use of traditional economic and strategic indica-
tors allowing the evaluation of innovation activities and, on the other hand, the understand-
ing of the strong uncertainties on techniques and markets, and the social complexity of the
motivations allowing the commitment of actors and resources to innovative activities. This
discrepancy felt by the actors is widening quickly in the face of the application of a single per-
formance regime in most organizations, necessary for coordination, but almost systematically
based on a financialized value approach.
This discrepancy leads decision-makers and project managers to interact through two pro-
cesses of data reduction in the value space that we are now able to describe (Figure 17.6). The
main aim of these processes is to support an efficient resource allocation on NPD projects at
the project and portfolio levels.
On the one hand, there is an interactive process of innovation assessment on why the pro-
ject should go on (upper arrow in Figure 17.6). In a portfolio management process, decision-
makers prioritize their resource allocation choices to maximize the benefits from each of
these investments. Decision-makers build on the expected utility they consider the project
could reach. To do so they rely on the data they have about competition and corporate strat-
egy from a diversity of channels: scenarios about the firm’s environment dynamics (mainly
from the firm strategic department) and scenarios about the firm’s internal resources avail-
ability (mainly from accounting stakeholders) and possibilities to externalize or share the
workload (mainly from internal stakeholders of strategic purchase and partnerships). From
these hypotheses, decision-makers give goals to the project leader about the expected perfor-
mance of the project. Building on his/her experience and knowledge of project management
within the firm and in the industrial sector, the leader then converts these goals into perfor-
mance measurement criteria he/she could manage to actively steer the project completion
326 Handbook on innovation and project management

Figure 17.6  The two processes of data reduction in the value space

and distribute the work among the stakeholders of the design space. This presupposes the
existence and clarification of a performance target, shared between the players, to support the
coordination between design space stakeholders. Facing the complexity of data and people
networks, the project leader pre-orders these performance criteria according to his/her per-
ception of strategic importance in the rationales presented to decision-makers during project
committees.
On the other hand, there is a process of strategic planning on how the project should be
conducted (lower arrow in Figure 17.6). Project managers gather subjective probabilities from
the experts involved in the project about the reliability of simulated earnings or losses the
project could generate (from a business model point of view). They also have information
from intermediate objects designed during the projects (technical prototypes as commercial
experimentations). Moreover, they massively expose decision-making committees to model-
ling of the so-called “expert” probability distributions, the reliability of which the decision-
makers assess, then gradually clarify with the progress of the design. As the latter is only
possible in the last steps of NPD processes, the nature and legitimacy of “experts” chosen by
project leaders to highlight the robustness of their work become a key point at the heart of
value management.
All data allow them to present to decision-makers an estimation of the performance the
project could reach, and what they consider the best organization and technical solutions to
adopt to increase the probability of achieving this performance. Confronting these data to
their knowledge of internal resources availability and corporate ambition, decision-makers
estimate the reliability of commercial and industrial options exposed by the project leader.
Then, they deduce from their experience and their knowledge of the other ongoing projects
what they consider a realistic probability of earnings from the future completion of the project.
This situation is an attempt to model uncertainties embedded in the project as recommended
in decision theory, but knowledge is asymmetrical between actors and of a heterogeneous
nature, both on action effects and states of the world (Pich et al., 2002). Moreover, it has been
demonstrated that stakeholders not only managed uncertainty and complexity but were also
unknown in innovation projects (Le Masson et al., 2019; Loch et al., 2011; Stoelsnes, 2007).
Beyond calculus, this particular context induces relational discrepancies between stakehold-
ers that disagree on information reliability. Thus, Loch et al. (2017) show that the knowledge
gap between project managers and the steering committee constitutes an important problem
to steer a project that managers “don’t fully understand”.
 Value management of innovation projects 327

The engineering of the value space aims to establish an efficient place of interaction
between the stakeholders in decision-making and project leaders: innovation assessment on
the one hand and strategic planning on the other hand are not independent and fully sequential
processes, it’s more a redundancy loop to allow the coupling between the value within the two
worlds.

PERSPECTIVES FOR THE VALUE MANAGEMENT OF INNOVATION

PROJECTS
The modelling of contemporary value management in the NPD process allows us to under-
stand the growing difficulty of managing the performance of innovation projects and opens
new perspectives for project management.
Firstly, the management discipline has entered for over ten years into an epistemologi-
cal emulation of innovation purpose within a firm, discussing both the performance of the
business model and the firm as a process of value meaning to be managed (Levillain and
Segrestin, 2019).
Indeed, since the global economic crisis, innovation has become a questionable way of
progress for both industrial and societal sustainability. To this has been added in recent years
the increasing recognition by practitioners of the impacts of industrial and economic activities
on climate change and biodiversity decline and the emergency to reduce energy consump-
tion and transform consumption behaviours (IPCC, 2022). Likewise, profit and technological
abundance are more and more dubious logics of performance to target in innovation pro-
jects: these goals are not rejected but they are insufficient to attract people and fund such
risky activities. All create a strong feeling of discomfort during project reviews that remain
mainly structured on economic simulations of profitability. We try in this chapter to underline
how internal stakeholders of innovation projects, from both design and decision spaces, are
involved in supporting this paradigm shift through a new data collection process. Thus, we
observe the emergence of various conceptual models of firm value design and business model
design (for example, in the renewal of consumer models, in the logic of competition leading to
the sustainability of firms as creative organizations, or in the beneficial dynamics of internal
and external collaborations, etc.). The instrumental maturity of new approaches of value in
NPD processes is unclear for practitioners and largely perceived as less robust when facing
engineering tools of economic performance simulation. Moreover, the “best” level of value
analysis is now largely debated in the literature and practices – is it the firm, the business
units, projects or portfolios, the value chain or the ecosystem? Whereas projects remain on
the operational grid in the vast majority of firms and tools used to evaluate projects are still
embodying the assumption of their independence, mainly due to an accounting process that
isolates them in the cost accounting engineering.
This gap between, on one hand, an open and active epistemic search to redefine the mean-
ing of innovation value, with a diversity of new paradigm proposals between stakeholders
communities, and, on the other hand, a stable engineering of economic tools at the project
level (that is shared by all stakeholders) results in increasing difficulty of mutual understand-
ing between people. Indeed, if strategic and operational communities largely share the same
language on performance management tools – cash flows and growth analysis, return on
investments, market share, etc. – they do not share an extended language of value to describe
benefits from innovation projects. This gap creates daily tensions in the NPD process and
328 Handbook on innovation and project management

more widely in the decision and design networks (Loch et al., 2017). Consequently, the first
main challenge for value management becomes how to build a general theoretical model of
innovation value that supports stakeholders’ generative collaboration beyond the monetary
paradigm.
Fruitful perspectives are still under exploration and the concept of firm value has been
strongly challenged in strategy or governance research for the last 20 years. This leads
researchers and practitioners to work on renewing models to meet contemporary challenges
more than on adapting old ones. Thus, international efforts on the theoretical modelling and
practical implementation of profit-with-purpose corporations are a good example of a large
epistemological debate on what the firm value is (e.g. Levillain and Segrestin, 2019; Segrestin
et al., 2021). On the other hand, we saw that the engineering design literature regularly dis-
cusses the concept of innovation performance through the benefit/cost paradigm. The contem-
porary engineering community builds on it to propose new models and approaches of business
models generation through a rich language of value creation (“benefits”) and complex techni-
cal systems (“costs”) for a large range of stakeholders of the innovation ecosystem far beyond
the actors of the value chain. Beyond previously cited works of design theorists (Hatchuel
et al., 2011; Thomas and Tee, 2021), generativity appears as the new relevant paradigm to
describe innovation benefits and to manage the value space that bridges decision-makers and
project leaders. But as for “firm value”, there is no common model of what is generativity in an
innovation project (see Thomas and Tee, 2021 for an overview of the concept). Consequently
how to manage generativity emergence in NPD processes is a rich perspective to investigate.
If the first challenge of the value management of innovation projects is epistemic, the
second challenge opened up by contemporary changes is one of the evaluation techniques.
There is a specificity to the evaluation exercise of an innovation activity: it is a design project.
Therefore it combines the technical challenges of risk simulation with scenarios that contain
elements of the unknown since learning is at the heart of innovative design. Whereas the defi-
nitions that designers use to describe the potential of the benefits and costs continue to evolve
and enrich themselves (see earlier section), evaluation techniques should be able to take into
account simultaneously:

i) A heterogeneity of risks and uncertainties about benefits and costs within the same
project.
ii) The sudden emergence of unknown elements during the exploration process, which
changes the expected benefits of the project.

Numerous studies on data exchanged in the decision-making process of innovation projects

make it possible to highlight and describe the reliability of the assessment of expected profit-
ability in the value space (Lenfle and Loch, 2010; Lenfle, 2011; Loch et al., 2017; Le Masson
et al., 2019). These authors help to establish a lexicon of data reliability for projects that is
much more elaborate than the classic Knightian division (known and reliable data, risk, and
uncertain, unknown and chaotic data), whose main impact on practitioners is probably the
distinction between different kinds of unknowns in the design process. Thus, they propose
to distinguish “known unknown” from “unknown unknown” to underline that a part of the
unknown is conceivable and identified by design stakeholders (Loch et al., 2011; Stoelsnes,
2007). Le Masson et al. (2019) instruct the technical impact of some “desirable unknowns”3
on the economic evaluation, highlighting the fact that designers voluntarily target proposals
 Value management of innovation projects 329

that do not exist. Gilain et al. (2019) for example show how the generation of unknowns in the
NPD portfolio allows profitable management of the accumulation of heterogeneous uncertain-
ties in the design process of complex technological objects such as aeronautics.
To overcome the technical difficulty, many firms try to reduce the main sources of unknowns
(lack of knowledge and complexity) through the thematic organization of NPD steering com-
mittees. However, recent work by Christoph Loch and colleagues shows that a classic segmen-
tation by nature of the activity – R&D projects, engineering services, organizational changes
and IT projects – exposes decision-makers to similar difficulties of management:

• Diverging interests between stakeholders, which lead to practical issues on the committee
composition and agreement on its goal.
• Quality of interaction between design teams and top managers, which impacts motivation
and control of each stakeholder.
• The novelty and complexity of the project, which induce misunderstanding of project key
drivers and barriers.

This imposes on decision-makers continuous intelligence-gathering and personal involvement

in managing surprises and changes (Loch et al., 2017). We also demonstrate that stakeholders’
interactions in the design space generate massive impacts in terms of involvement or rejection
of innovation projects (Hooge and Dalmasso, 2015). Consequently, the second main challenge
for value management becomes how to build a general theoretical model combining uncer-
tainty and unknown evaluation that supports stakeholders’ desirable and attractive collabo-
ration beyond the monetary paradigm. The avenues we have just mentioned are all interesting
perspectives to explore to develop tools adapted to the value space, both to efficiently instruct
the innovation assessment process and the strategic planning process. We believe that the
most ambitious challenge for value management is to combine both previous perspectives to
tackle the issue of developing a theoretical model of the value of the unknown within the firm
that supports the coherence between this triple dimension of an innovation project: generativ-
ity, desirability and attractiveness.

NOTES
1. The notion of the identity of the object is developed in the section “Operational Tools for Business
Model Performance”, p. 316.
2. In 2016, we carried out a systematic analysis exercise of the management literature mobilizing cen-
trally the notion of value. For this, we selected 20 international journals highly ranked by CNRS,
the French research institution (respectively the five best in four fields of management research –
strategy, general management, innovation and R&D), then we systematically isolated the articles
published since the creation of journals until 2015 in which the authors made a direct reference
to the concept of value in management in the title. In the period 2006–2015, this corresponds to
419 publications, well distributed in each of the four research fields (Hooge, 2020).
3. “Desirable unknown” is a key concept in design as it is the resource that supports the creative
effort at both individual and collective levels. Le Masson et al. (2019, 477) defines it as a concept
in the sense of C-K theory: “an incomplete proposals that guide us towards the emergence of new
values, uses, and identities of objects (e.g., products, services, processes, and business models)
and new knowledge”. From the innovation project perspective, a “desirable unknown” for both the
firm and involved individuals gathers three dimensions: cognitive generative power, collaborative
attractiveness for new organizations experimentation and strategic positioning renewal of the firm
in quickly evolving environments (Hooge et al., 2019).
330 Handbook on innovation and project management

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18. Blending novelty and tradition in creative
projects: how robust project design and
conventionality shape the appeal of
operatic productions
Giulia Cancellieri, Gino Cattani and Simone Ferriani

INTRODUCTION

Projects are presented in the organizational literature as purposeful mechanisms to facilitate

the combination of different resources and competencies and to manage tasks that are time-
limited and typically performed by a semi-temporary collection of individuals with hetero-
geneous expertise who collectively enable the host organization to transition from one state
of performance to a new state (Lundin and Söderholm, 1995; Cattani et al., 2011). Firms
have become increasingly reliant on projects to support the development of new and complex
products precisely because firms generally find it difficult to combine the range of resources
needed to fuel new product development processes (Gann and Salter, 2000; Brady and Davies,
2004; Manning, 2008). Indeed, a vibrant stream of research focuses on how “temporary
organizations, generally projects, are articulated within the continuous, so called permanent
organizations” (Lenfle et al., 2019, 519).
The creative industries provide many opportunities for the observation and analysis of such
project-based forms of organizing (Castaner and Campos, 2002; DeFillippi, 2015). The pro-
duction of theatrical plays (Goodman and Goodman, 1976), movies (Ferriani et al., 2009),
videogames (Ayoama and Izushi, 2003), music (Lorenzen and Fredriksen, 2005; Ordanini
et al., 2008; Sedita, 2008), TV productions (Manning and Sydow, 2011) and advertising
(Grabher, 2004) are all typical examples of contexts where project-based organizing is the
privileged organizing approach to address some of the key challenges associated to the devel-
opment of new products.
Paramount among such challenges is how to establish legitimacy while simultaneously dem-
onstrating novelty (Navis and Glynn, 2011). This challenge reflects two competing approaches
on how to signal the value of a new product to the market. On the one hand, in their search
for market success, firms must organize innovative projects that pique audience curiosity and
generate excitement. On the other, they need to be ready to satisfy the expectations of audi-
ences that “demand familiarity to understand what they are offered” (Lampel et al., 2000,
264). Even if novelty surprises, provokes and entertains audiences, it is understood and appre-
ciated only with respect to the “familiar” against which it is gauged and interpreted (Cattani
et al., 2020; Keuschnigg, 2015; Slavich and Castellucci, 2016; Lampel et al., 2000). This ten-
sion is particularly acute in the creative industries where a few hits dominate the market and
consumers often treat variation as deviant (Phillips and Kim, 2009; Younkin and Kashkooli,
2020). Strategy and organizational scholars have suggested that firms can best address this

333
334 Handbook on innovation and project management

tension by pursuing optimal distinctiveness – i.e. choosing a position that is optimally poised
between being the same and being distinctive – to ensure that firms are “as different as legiti-
mately possible” (Deephouse, 1999, 147; see also Durand and Kremp, 2016; Zhao et al., 2017;
Zhao et al., 2013). Yet questions remain on how firms can configure their product development
projects to pursue an optimally distinct market position.
We address these questions in the Italian opera industry, which we examine in light of recent
work that has focused on the strategic choices that can be made to increase the reception of
new products (Cattani et al., 2017; Kim and Jensen, 2011; Younkin and Kashkooli, 2020).
Italian opera houses are non-profit companies that experience strong pressures to simultane-
ously preserve and deviate from an established tradition as they are expected to both introduce
novelty into their programming strategies and capitalize on the audience’s familiarity with
revered operatic material. As opera houses are project-based organizations where “projects
are represented by shows” (Mariani, 2007, 105) and each staged opera is a new project that
(re)interprets an existing opera, focusing on shows’ (project) characteristics and distinctive
features allows us to examine how tradition and innovation combine in opera houses’ project
design choices and how these choices affect market appeal. To this end, we analysed industry
archives and conducted interviews with opera managers to gain a deeper understanding of
the factors that shape operatic performance. We then used this understanding as a basis for
developing and testing our theoretical arguments.
In line with research on optimal distinctiveness, opera houses can achieve an equilibrium
between preserving and renewing a revered tradition by pursuing what we term a robust project
design strategy. A robust design involves framing novelty in familiar terms through the design
of “the particular arrangement of concrete details that embodies an innovation” (Hargadon
and Douglas, 2001, 478). To bring this to the context under study, in our prior work we have
suggested that opera houses can revive past cultural projects through robust design strategies,
that is, through reinterpretations that preserve what the target audience perceives as the most
familiar aspects of a particular operatic tradition while departing from that tradition on other
more peripheral attributes (Cancellieri et al., 2022). Unlike exploratory projects that “are fre-
quently first-of-a-kind projects, exploring new technology, uses, business models, or strategic
opportunities” (Lenfle et al., 2019, 519; see also Brady and Davies, 2004; Lenfle, 2008), this
project design strategy allows firms to reconcile novelty and familiarity by pursuing innova-
tion projects that remain within the boundaries of tradition. In this study, we examine how
the effectiveness of a robust project design strategy varies with the strength of the tradition
associated with a particular opera, which we measure in terms of opera conventionality. By
conventionality, we mean material that is the expression of a well-known operatic tradition
(e.g. La Traviata, Madama Butterfly, etc.) and is performed very frequently because it appeals
to a broad audience. As a result, even minor deviations from that tradition may elicit poor
evaluation if not outright rejection. If instead the material is less conventional and the target
audience is less familiar with the original work (and therefore, has no clear expectations), pro-
ject design strategies that cross the boundaries of tradition are more likely to be well received.
Accordingly, we suggest that the degree of opera conventionality moderates the effectiveness
of a robust project design strategy; as the level of conventionality of the operatic material
increases, the appeal of a robust design will decline because the target audience perceives the
departure from tradition as being more salient.
We contribute to research on optimal distinctiveness (Deephouse, 1999; Lounsbury and
Glynn, 2001; Slavich and Castellucci, 2016; Zhao et al., 2017) and novelty acceptance (Cattani
 Blending novelty and tradition in creative projects 335

et al., 2017; Hargadon and Douglas, 2001; Sgourev, 2013) by examining the design choices
through which firms seek to be optimally distinctive and improve the appeal of their prod-
uct offering. After illustrating some important features of the tension between novelty and
familiarity in the opera industry and drawing from interviews with key informants that echo
and give nuance to the notion of robust project design, we present our arguments on how con-
ventionality moderates the effectiveness of a robust project design strategy. Next, we describe
our research design, sample, variables and econometric models. After reporting the results,
we conclude with a discussion of the contributions, implications and limitations of our study.

EMPIRICAL SETTING AND HYPOTHESES

Optimal Distinctiveness and Robust Project Design in the Italian Opera Industry

Our empirical setting is the Italian opera industry during the period 1989–2011. Since Italy
is the birthplace of opera, Italian opera houses have been the guardians of tradition and have
devoted themselves to preserving a traditional form of art. In deciding which operas to include
in their repertoires, they often prioritize traditional, pre-20th-century operas that have come
to define operas for many audiences (Gossett, 2008). Examples of traditional operas are La
Traviata by Giuseppe Verdi and La Tosca by Giacomo Puccini. As nonprofit arts institutions
that exist partly to develop opera, however, opera houses also aspire to innovation and artistic
originality which are commonly pursued by including modern and contemporary works in
their repertoires. While this is a key indicator of artistic achievement for opera experts, most
opera attendees prefer traditional to modern and contemporary operas as they perceive the
latter as aesthetically avant-garde and challenging (Jensen and Kim, 2013; Martorella, 1977).
Hence, opera houses that aspire to innovate their artistic programmes run the risk of not
meeting the expectations of their customers. This, in turn, could undermine their success
and survival as government funding cuts and periods of economic contraction have made
Italian theatres more reliant on ticket sales: when they stage modern and contemporary
works, they pursue artistic originality but often fail to attract the attention and support of
the majority of opera attendees; when they stage traditional pre-20th-century works they
are more likely to achieve market success but also forgo opportunities to promote novelty
and artistic originality. This poses challenges for creative project managers: how should
opera houses reconcile artistic exploration with the conservative preferences of current and
potential patrons?
Recent findings suggest that opera houses can introduce novelty in their artistic programmes
and ensure its recognition through a project design strategy that frames novelty in familiar
and comprehensible terms (Cattani et al., 2020; Bielby and Bielby, 1994). Borrowing from
innovation management literature (Hargadon and Douglas, 2001) in our prior work we have
termed this strategy “robust” to denote a product design that has sufficient inherent versatility
to help locate novel product features within the familiar world by invoking valued schemas
and scripts, yet preserve the flexibility necessary to allow for the potential evolution of under-
standing and action that follows use (Cancellieri et al., 2022). In the opera industry, a robust
project design strategy can be effectively deployed through the modern staging production
of traditional operas. The modern staging of traditional operas is robust to the extent that it
blends traditional (and, therefore, familiar) music and dramatic contents with new forms and
336 Handbook on innovation and project management

visual dimensions such as modern scenes, set designs and costumes (Castaner and Campos,
2002; Heilbrun and Grey, 2001).1
Innovative visual elements that take the form of modern staging allow for the creation of
new interpretations of traditional operas by shifting their temporal and spatial coordinates
into the present or near past, thus unveiling their contemporary relevance. For instance, stag-
ing the nineteenth-century operas La Traviata or Rigoletto by Giuseppe Verdi in the present
and so making the protagonists feel contemporary, or presenting Mozart’s Così Fan Tutte as
a modern-day talk show, are all examples of modern staging. In the course of our fieldwork,
several of our informants pointed out that modern staging productions depart from estab-
lished visual interpretations of traditional operas. Through modern staging, opera houses also
update their forms to modern sociocultural trends to find new ways to engage the audience
(Gossett, 2008; Heilbrun and Gray, 2001). As four of our key informants pointed out:

Opera has a traditional identity and modes of representation. In the collective imaginary opera is
Aida, Traviata, Tosca, Madama Butterfly, Rigoletto, Trovatore and so on […] but there is also the
possibility of renewing some established ways of representing traditional operas […] The challenge
is to communicate a traditional identity in a new way through modern reinterpretations.
(Artistic Director # 8)

Opera should be a show of extreme vitality, in constant dialogue with the public and our contempora-
neity. You cannot try to reproduce what a show was in the past because the audience for that show no
longer exists. Therefore, any show that I put on, from my personal experience, is in any case a show
aimed at our contemporaneity and certainly not at the past. Because opera lives on shared codes.
(Stage Director #1)

Opera can survive only through a process of renewal based on stage directions that take the values​​
of our contemporaneity into account.
(Artistic Director # 1)

We cannot offer only traditional staging […] we want to offer new and vital cultural stimuli to our
local cultural community, engage with different audiences in new ways and convince them not to
have prejudicial attitudes towards our artistic offer.
(Artistic Director # 5)

Preserving traditional music and dramatic content, however, facilitates opera-goers’ under-
standing and appreciation of visually innovative productions. Those attributes are the most
important to establish the membership of an opera production in a traditional category – i.e.,
pre-20th-century artistic works that reflect opera-goers’ expectations and preferences. Opera-
goers can indeed more easily interpret the visually innovative aspects of a production as minor
changes that aim to refresh rather than radically transform a traditional style. Thanks to the
modern staging of traditional operas, opera houses can introduce distinctive product forms
and facilitate their acceptance by associating them with the key features of an established
genre or category of the past (Bielby and Bielby, 1994; Shamsie et al., 2009). This strategy
enables firms to preserve certain established features (be the same) but also introduce novel-
ties (be different), thus trying to be optimally distinctive (Deephouse, 1999).
For these reasons and consistently with previous studies emphasizing the benefits of being
optimally distinctive (Zhao et al., 2017), a robust design strategy based on innovative visual
dimensions and familiar content (i.e. traditional operas’ modern staging) allows opera houses
to pursue artistic originality and appeal to opera-goers (Cancellieri et al., 2022). Yet the
 Blending novelty and tradition in creative projects 337

appeal of traditional operas’ modern staging may also depend on other types of product-
level cues that may affect their perceived degree of novelty, as well as the relative balance
between novelty and familiarity in this robust design. One such cue that is likely to affect
the perception of novelty is the degree of conventionality of the operas that are offered in
modern staging.
Previous studies have described conventionality as the “selective adoption of highly salient
and expected attributes” (Durand and Kremp, 2016, 66; Di Maggio and Stenberg, 1985; Kim
and Jensen, 2011; Jensen and Kim, 2013). Conventional cultural products are “performed or
offered frequently because they appeal to broad audiences or are particularly good examples
of a specific genre” (Kim and Jensen, 2011, 240). According to Durand and Kremp, conven-
tionality reflects “a systematic bias toward common programming choices that are already
widely shared and accepted” (2016, 74). Unconventionality, instead, refers to underperformed,
forgotten cultural products of the past that have fallen into disuse (Kim and Jensen, 2011; Di
Maggio and Stenberg, 1985; Pierce, 2000).
In the Italian opera sector, opera houses’ traditional operas have become increasingly crys-
tallized around a canon of classics, whose music and dramas have become well-known and
representative of the Italian opera tradition (e.g. Verdi’s La Traviata, Puccini’s La Bohème,
Mozart’s Don Giovanni) ( Savage, 1994). Conventional operas are defined precisely as those
prominent and salient opera titles associated with well-established music and dramas that are
regularly performed (Kim and Jensen, 2011; Di Maggio and Stenberg, 1985). For example, the
opera La Bohème by Puccini is more conventional than La Wally by Catalani, just as the opera
La Traviata has a higher degree of conventionality relative to the opera La Finta Giardiniera
by Mozart. Less conventional operas are performed much less frequently even if they are not
necessarily innovative (Castaner and Campos, 2002).
Conventional operas are imbued with higher status which, in turn, generates greater expec-
tations from external observers, thus becoming a liability for opera houses contemplating
changes in their repertoires (Durand et al., 2007; Slavich and Castellucci, 2016). These obser-
vations have two important implications. First, programming conventional repertoires implies
directing opera-goers’ attention towards operas subject to social comparison. Because they
have been exposed repeatedly to highly conventional operas, opera-goers can more easily
compare and contrast traditional and modern staging productions of these operatic projects.
Second, conventional operas can hardly be modified without triggering external observers’
scepticism (Dion and Mazzalovo, 2016) because they have acquired the status of iconic cul-
tural products of the past (Martorella, 1977; Gossett, 2008; DiMaggio and Stenberg, 1985)
and, therefore, any attempt to innovate them risks falling into the spotlight of public attention.
As the artistic director of a famous theatre in central Italy explained, modern staging produc-
tions of very famous traditional operas are perceived as major attacks on tradition that are
more likely to upset the audience:

It is very difficult to make Verdi’s La Traviata different from the one that is in the collective imagi-
nary, so risking on famous titles is a challenge. You risk less when the title is less famous and, con-
sequently, the comparison with other interpretations is also less prominent.
(Artistic Director # 4)

According to our informants, when modern staging involves consecrated operas, their strong
connection with highly regarded and venerated music and drama raises the risk that such ope-
ras might be devalued. One, in particular, was very clear about this point:
338 Handbook on innovation and project management

The great repertoire is a series of totems and, therefore, the perception that you are challenging and
destroying a masterpiece is stronger.
(Artistic Director #5)

By contrast, modern staging productions of traditional operas with a lower degree of conven-
tionality are perceived as “sleeping beauties”, that is, lesser-known works of the past with the
potential to be recast in original ways:

It is easier for unknown works to be accepted in modern staging because there are fewer terms of
comparison […] the audience has a great willingness, even unconsciously, to accept new interpreta-
tions of less conventional titles.
(Artistic Director #5)
Modern directions of titles that are performed less have fewer points of reference […] a mod-
ern staging of an obsolete opera such as Rinaldo is more likely to succeed because the title is
unknown.
(Artistic Director #2)

Our interviews suggest that opera-goers are more accustomed to non-interventionist, tradi-
tionalist staging of highly conventional traditional operas: they not only know their music
and lyrics very well but also have some bias towards modern interpretations of the same
repertoires. Indeed, they are still drawn to interpretations of traditional operas littered with
enduring cliché that are as close as possible to the original operatic works and retain their
historical context (Savage, 1994). In contrast, modernist interpretations of less conventional
operas involve less bias as their music and lyrics are unknown to most opera-goers. This has
been clearly expressed by two stage and artistic directors widely renowned for their experi-
mental interpretations of traditional operas:

Less famous titles have a greater chance of success when presented with a modern staging produc-
tion because no-one really knows them and, therefore, does not have prejudices.
(Artistic Director # 9)
Think for example of the underperformed baroque operas. In my opinion they can more easily be
reinterpreted through modern staging productions […] because they are not part of the “untouch-
able” repertoire.
(Artistic Director # 3)

For an innovation to be successful, the novel and the familiar must combine in ways that nei-
ther hide the novelty nor shed the familiar (Cattani et al., 2020; Hargadon and Douglas, 2001).
The perception of newness that stems from modernizing iconic operas of the past obscures
their familiarity, making traditional operas’ modern staging relatively less appealing to opera-
goers. By contrast, the modern staging of less conventional operas appeals more to opera-
goers as they perceive those productions to depart less from a revered tradition. For these
reasons, we argue that the degree of conventionality of revived cultural products (operas)
moderates the effectiveness of a robust design strategy (traditional operas’ modern staging).
We thus hypothesize the following.

Hypothesis: The appeal of traditional operas’ modern staging to opera-goers decreases when
the conventionality of the operas increases.
 Blending novelty and tradition in creative projects 339

EMPIRICAL ANALYSIS

Sample and Data

We collected data on the opera projects staged by the major Italian non-profit opera houses from
the artistic season 1989–1990 to the artistic season 2010–2011.2 Italian opera houses adopt a sta-
gione (season) model, i.e. the production of a number of operas that run independently for a few
days every year. We focused on 42 non-profit organizations staging operas classified according
to the official classification of the Italian Ministry of Cultural Heritage. The first group of these
organizations includes the Lyric-Symphonic Foundations (Fondazioni Lirico-Sinfonica, LSFs).
Known for their prestigious opera seasons, LSFs are private foundations located in the largest
Italian towns. The second and third types are the Traditional Theatres (Teatri di Tradizione,
TTs) and Opera Festivals, whose artistic programmes are smaller in size and realized in a more
concentrated timeframe. LSFs, TTs and Festivals are all funded by public bodies at the national
and local levels. Because of their prestige and long-term tradition, however, LSFs are more heav-
ily funded by the state compared to TTs and Festivals (Cori, 2004). Over the study period, not
all theatres and festivals were active on an ongoing basis. Also, the artistic seasons of some thea-
tres are not comparable with those of other theatres in the sample because of their focus on the
promotion of certain composers (e.g. Pergolesi by the Jesi Fondazione, Puccini by the Torre del
Lago Festival and Rossini by the Pesaro Festival) or their need to fill out their seating capacity
with extremely popular repertoires (e.g. Arena di Verona). Thus, we excluded those theatres from
the final analysis, which is based on a sample of 35 organizations for which comprehensive data
on their productions were available. Our statistical analysis includes 2,627 useful observations.
We collected most of our data manually from the specialist magazine Annuario EDT/
CIDIM of the Italian Lyric Opera, which is widely regarded as the top Italian industry refer-
ence for opera. In developing our hypotheses, we also consulted archival materials and con-
ducted interviews with a sample of opera house artistic and stage directors to gain a deeper
contextual understanding of the main characteristics of traditional operas’ modern staging
and how conventionality influences their appeal. Our interviewees include the artistic and
general directors, as well as the invited stage directors of 12 Italian opera houses. Overall, we
conducted 13 interviews that lasted between 30 minutes and one hour. Table 18.1 reports some
of the most representative quotes.

Dependent Variable

We measured the dependent variable – attendance – as the natural logarithm of the total number
of people present at the opera’s opening and any subsequent re-runs (Cancellieri et al., 2022).
In a series of supplementary analyses (see robustness checks to follow), we also expressed the
dependent variable in terms of occupancy rate to control for an opera house’s seating capacity.
Specifically, we divided the total number of tickets sold by the number of available tickets.

Independent Variables

Traditional operas’ modern staging (robust project design). Following previous research
(Savage, 1994; Gossett, 2008), we codified operatic projects that reinterpret traditional operas
340 Handbook on innovation and project management

Table 18.1  Modern staging of traditional operas and conventionality: representative

quotes

Modern staging “Opera has a traditional identity and modes of representation. In the
collective imaginary opera is Aida, Traviata, Tosca, Madama Butterfly,
Rigoletto, Trovatore and so on […] but there is also the possibility of
renewing some established ways of representing traditional operas […] The
challenge is to communicate a traditional identity in a new way through
modern reinterpretations” (Artistic Director # 8).
“Opera should be a show of extreme vitality, in constant dialogue with
the public and our contemporaneity. You cannot try to reproduce what a
show was in the past because the audience for that show no longer exists.
Therefore, any show that I put on, from my personal experience, is in any
case a show aimed at our contemporaneity and certainly not at the past.
Because opera lives on shared codes” (Stage Director #1).
“Opera can survive only through a process of renewal based on stage
directions that take the values ​​of our contemporaneity into account” (Artistic
Director # 1).
“We cannot offer only traditional staging […] we want to offer new and
vital cultural stimuli to our local cultural community, engage with different
audiences in new ways and convince them not to have prejudicial attitudes
towards our artistic offer” (Artistic Director # 5).
Opera “It is very difficult to make La Traviata different from the one that is in the
conventionality collective imaginary, so risking on famous titles is a challenge. You risk less
when the title is less famous and, consequently, the comparison with other
interpretations is also less prominent” (Artistic Director # 4)
“Less famous titles have a greater chance of success when presented with a
modern staging production because no one really knows them and, therefore,
does not have prejudices” (Artistic Director # 9).
“Modern directions of titles that are performed less have fewer points of
reference […] a modern staging of an obsolete opera such as Rinaldo is more
likely to succeed because the title is unknown” (Artistic Director # 2).
“It is easier for unknown works to be accepted in modern staging because
there are fewer terms of comparison and also because the great repertoire is
a series of totems and, therefore, the perception that you are challenging and
destroying a masterpiece is stronger” (Artistic Director # 5).
“Think for example of the underperformed baroque operas. In my opinion
they can more easily be reinterpreted through modern staging productions
[…] because they are not part of the ‘untouchable’ repertoire” (Artistic
Director # 6).

through innovative staging dimensions and alter taken-for-granted visual attributes as tradi-
tional operas’ modern staging (robust design). We use the term traditional operas for all operas
characterized by pre-20th-century music styles and dramatic contents. All operas whose com-
posers were born before 1881 were classified as traditional operas as they display a tonal music
system and traditional narrative standards.3 By contrast, all operas composed after 1881 were
classified as modern operas as they display chromaticism, atonality, disturbing systems of
 Blending novelty and tradition in creative projects 341

musical expression and the use of plots that by traditional narrative standards go nowhere
(Heilbrun, 2001; Kim and Jensen, 2011; Jensen and Kim, 2013; Lindenberger, 2007; Griffiths,
1994). Examples of traditional operas’ modern staging include performances of Macbeth tak-
ing place in an airport terminal, La Bohème at a ski resort and Rigoletto in a timeless and bare
modern setting. We created a dummy variable that is equal to 1 if the opera is a traditional
opera’s modern staging, and 0 otherwise.
We identified traditional operas’ modern staging following a two-step procedure. First, we
read the plots of each opera in the original formulation of the temporal and spatial character-
istics of the text. We relied on the Opera Book by Kobbé (2007), a very authoritative source
that details the plot of more than 500 operas. Next, we analysed and coded the visuals of all
operas that the sampled theatres produced over the period 1993–2010 (from the artistic season
1993–1994 to the artistic season 2010–2011) based on the Annuario EDT/CIDIM. Visuals
include pictures of each opera production. This visual analysis allowed us to classify operas as
“traditional staging” or “modern staging” – with the latter displaying a 20th- or 21st-century
or an abstract and timeless setting. We double-checked our coding by visually inspecting
online pictures and examining the reviews of each opera published in the Annuario as well as
specialized websites. Table 18.2 shows examples of some of the reviews we collected to clas-
sify operas as “modern staging”.
Opera conventionality. Conventional operas are well-known and popular operas performed
frequently because they appeal to a broad audience, while unconventional operas are new
or underperformed operas of the past that have fallen into oblivion. We operationalized this
variable using DiMaggio and Stenberg’s (1985) measure of theatres’ repertoire conventional-
ity. Conventionality measures the number of times each opera in a theatre’s repertoire was
produced by all opera companies in the population in a given period (see also Pierce, 2000;
Jensen and Kim, 2011, 2013). Following the same approach, we counted the number of times
opera companies stage a particular opera during the four artistic seasons prior to the current
one. The first year in our statistical analyses is 1993 (artistic season 1993–1994) and the cor-
responding conventionality measure refers to the years 1989–1992. The higher (lower) the
index, the higher (lower) the opera’s conventionality.

Control Variables

We included several control variables – at the opera house and opera production levels – to
rule out alternative explanations for our results.
Opera house status. The status of a theatre acts as a signal of quality that is likely to affect
attendance. We determined the (high) status of a theatre by looking at whether it is a Lyric and
Symphonic Foundation (LSF): LSFs are indeed known for their prestigious opera seasons. We
thus created a dummy variable that is equal to 1 if an opera house is a LSF, and 0 otherwise.
Opera music style. Some music styles are more popular than others (Martorella, 1977). We
considered the following styles: Baroque (1600–1750); classic (1750–1820); early and mid-
late Romantic (1820–1920); modern and contemporary (1920–nowadays). Styles are mutually
exclusive as operas embrace only one style (Parker, 2001; Heilbrun, 2001; Fisher, 2005). For
each style, we then created a binary variable that is equal to 1 if an opera belongs to that style,
and 0 otherwise.
Popularity of the composer. The operas of some composers are more frequently staged.
The variable composer popularity then measures the number of times all opera houses staged
342 Handbook on innovation and project management

Table 18.2  Traditional operas’ modern staging: reviews

Title and composer Stage Review Source

director
Gianni Schicchi Lorenzo “Mariani relied on television imagery to La Nuova
by Giacomo Mariani transform the relatives of the protagonist Sardegna;
Puccini 1996–1997 into the characters of the Addams family. An L’Unione Sarda
exhilarating update”.
La Traviata by Irina Brook “Irina Brook changed the usual places of the Opera Click
Giuseppe Verdi 2005–2006 opera, to transfer the countryside around Paris
to an unidentified beach. She selected an old
swimming pool inside an industrial archeology
pavilion as the most suitable environment for
Alfredo’s meeting with Violetta and Flora’s
grotesque and disturbing party”.
La Bohème by Aldo “Aldo Tarabella set La Bohème in a post-war Opera Click
Giacomo Puccini Tarabella Paris. He deliberately emphasized the spirit of
2006–2007 precariousness of the young people who live in
a sort of aerial village metaphorically located in
the clouds. The director chose to contextualize
the work in a different period from the original
one”.
La Cenerentola by Daniele “This production of La Cenerentola will be GBOpera
Gioachino Rossini Abbado remembered as ‘the kitchen Cinderella’: a small
2009–2010 yellow laminate kitchen at the center of the
scene, in perfect 60s style, is in fact the element
that gives a spatial and temporal connotation
to the fairy tale of this modern Angelina, while
underlining her servile condition”.
La Traviata by Graham “Graham Vick proposed a radical updating of Il Giornale
Giuseppe Verdi Vick Verdi’s opera, between the kitsch and the pop della Musica
2003–2004 art, in a present that could be set in the 60s
onwards, but also in the near future”.

the operas of a composer during the four artistic seasons before the current one. The higher
(lower) the index, the higher (lower) the composer’s popularity. The first in our analyses is
1993 (artistic season 1993–1994), so the variable refers to the years 1989–1992.
Coproduction. Since the costs of producing an opera are very high, co-productions repre-
sent a cost-saving strategy that allows theatres to reduce their expenses by sharing them with
other opera houses. We created a binary variable that is equal to 1 if the opera was coproduced
with other theatres, and 0 otherwise.
New staging. A new staging is characterized by visual attributes (e.g. set design, costumes
and stage directions) that no other opera house has ever presented before. For example, a
theatre can stage the famous opera Aida by Giuseppe Verdi ex novo with new set designs, cos-
tumes and stage direction; alternatively, the same theatre can buy a production of Aida, whose
visual elements have already been presented elsewhere, and integrate them into its offer. Only
 Blending novelty and tradition in creative projects 343

the first case is an example of new staging. We controlled for the effect of new staging by cre-
ating a binary variable that is equal to 1 if the opera is a new staging, and 0 otherwise.
Eclecticism and popularity of the stage director. The stage director is one of the artistic
leaders of an opera production. We control for the eclecticism and popularity of the stage
director because they can influence ticket sales by determining opera attendees’ perception
of the status and popularity of opera productions. Some opera productions are directed by
eclectic stage directors who are also active in low-brow cultural fields (e.g. cinema or televi-
sion). An eclectic identity can challenge the status of a high-brow cultural form like the opera
and influence its appeal by determining whether it is perceived as a “pop” reinterpretation of a
high-status genre. We considered eclectic those directors who are simultaneously field insid-
ers and active in at least one popular cultural genre. We accounted for the effect of stage direc-
tors’ eclecticism by creating a binary variable that is equal to 1 if the stage director is eclectic,
and 0 otherwise. The popularity of the stage director was measured as the number of produc-
tions each individual artist directed in the past (during the previous three artistic seasons).
Reputation of the conductor. We accounted for the reputation of the conductor, the figure
responsible for the musical aspects of the production, by looking at whether s/he won the
Abbiati Prize in the category “Best Conductor”.
Repertoire size. Theatres with larger repertoire sizes tend to have more financial resources
to increase the quality of their productions, experiment, promote their artistic seasons and
schedule more operas of different styles, which may in itself affect attendance. We measured
this variable as the number of opera productions each theatre staged in a given season.
Time dummies (artistic season). We included dummies for each artistic season in the model
to control for macroeconomic trends and other time-invariant effects.

Model

We tested our hypotheses by estimating three-level mixed-effect linear regression models,

which include both fixed and random effects. Because opera productions are nested within
individual operas (La Traviata versus La Wally) and individual operas are nested within opera
companies, we considered the opera production as level 1, the individual opera (or title) as
level 2, and the opera company as level 3. We obtained our estimates using STATA version
13. We report significance levels based on Huber–White robust standard errors to control for
any residual heteroscedasticity across panels.

RESULTS

The descriptive statistics and correlations for our measures are presented in Tables 18.3
and 18.4, respectively. To evaluate whether multicollinearity is affecting our estimates, we
computed the variance inflation factor (VIF) for each model and found that the highest VIF
statistics were below the recommended value of 10 (Hair et al., 1995), suggesting that multi-
collinearity is not an issue.​
Table 18.5 presents the results of the multilevel mixed-effect linear regression model in
which the natural logarithm of the total number of tickets sold is the dependent variable.
Although the coefficients are not displayed, all models include year dummies. In Model 1 and
Model 2, we included the variables of theoretical interests measuring, respectively, traditional
344 Handbook on innovation and project management

Table 18.3   Descriptive statistics

Variable Mean Std. dev. Min Max

1. Attendance 5,359.997 4,799.269 44 28,788
2. Modern staging 0.345 0.475 0 1
3. Conventionality 8.560 8.599 0 38
4. Theatre status 0.440 0.496 0 1
5. New staging 0.411 0.492 0 1
6. Coproduction 0.371 0.483 0 1
7. Director eclecticism 0.242 0.428 0 1
8. Director popularity 5.427 6.477 0 42
9. Conductor rep 0.093 0.290 0 1
10. Baroque 0.046 0.210 0 1
11. Classic 0.138 0.345 0 1
12. Mid and late Romantic 0.567 0.495 0 1
13. Modern and contemporary 0.025 0.156 0 1
14. Repertoire size 5.770 2.462 1 14
15. Summer opera 0.030 0.172 0 1

operas’ modern staging and opera conventionality separately. To guard against multicollinear-
ity and facilitate the interpretation of the regression coefficients, we used the standardized val-
ues of opera conventionality (similar results are obtained by using unstandardized values and
are available upon request). In Model 3, we introduced the two-way interaction effect between
traditional operas’ modern staging and opera conventionality. Model 4 is a baseline model
that includes only the control variables. The model estimates suggest that an opera production
is more likely to appeal to opera-goers when the staging theatre has (high) status and when
it is directed by eclectic artists. Operas directed by highly popular stage directors are more
likely to be positively recognized by opera-goers and increase attendance. An opera produc-
tion characterized by a Baroque or contemporary music style is less appealing to opera-goers
than a production with a Romantic music style, and coproduced operas are also less attractive.
Model 5 (our full model) includes the variables of theoretical interests – traditional ope-
ras’ modern staging and opera conventionality separately – the interaction effect between
them and the control variables. The relationship between traditional operas’ modern staging
and attendance (our dependent variable) is positive and significant (β = 0.085; p < 0.001). In
line with our theory, opera productions are more likely to appeal to opera-goers when they
merge modern visual dimensions with traditional music and dramatic contents (i.e. traditional
operas’ modern staging). Similarly, the conventionality of the opera that is being staged has
a positive and statistically significant effect on attendance. The interaction effect between
traditional operas’ modern staging and opera conventionality is negative and significant (β =
–0.040; p < 0.05). The result suggests that the appeal of traditional operas’ modern staging
to opera-goers is lower when the conventionality of the opera increases, thereby lending sup-
port to our hypothesis. The overall fit of the full model improves substantially relative to the
 Table 18.4   Correlation matrix

Variables 1 2 3 4 5 6 7 8 9
1. Attendance 1.000
2. Modern staging 0.104*** 1.000
3. Conventionality 0.191*** –0.007 1.000
4. Theatre status 0.670*** 0.121*** –0.051*** 1.000
5. New staging 0.029 0.022 –0.170*** 0.072*** 1.000
6. Coproduction –0.337*** 0.072*** –0.062*** –0.315*** –0.074*** 1.000
7. Director eclecticism 0.055*** –0.022 0.087*** 0.017 –0.079*** –0.003 1.000

345
8. Director popularity 0.005 –0.021 –0.025 –0.019 –0.081*** 0.014 0.124*** 1.000
9. Conductor rep 0.261*** 0.042** –0.055*** 0.200*** 0.064*** –0.060*** 0.042** –0.003 1.000
10. Baroque –0.135*** 0.038* –0.193*** 0.023 0.091*** 0.040** –0.023 –0.038* –0.071***
11. Classic –0.059*** 0.011 –0.109*** –0.042** 0.008 0.005 0.057*** –0.036* 0.065***
12. Mid and late Romantic 0.146*** 0.006 0.247*** 0.037* –0.036* –0.015 –0.082*** 0.001 0.061***
13. Modern and contemporary –0.055*** –0.117*** –0.151*** 0.053*** 0.054*** 0.012 –0.017 –0.006 –0.001
14. Repertoire size 0.534*** 0.087*** –0.086*** 0.655*** 0.080*** –0.201*** 0.004 –0.024 0.194***
15. Summer opera –0.135** –0.111*** –0.022 –0.158*** 0.141 –0.096*** –0.064*** –0.046* –0.049*

Note:  ** p < 0.01, * p < 0.05.

346 Handbook on innovation and project management

Table 18.4  
(cont’d)

Variables 10 11 12 13 14 15
1. Attendance
2. Modern staging
3. Conventionality
4. Theatre status
5. New staging
6. Coproduction
7. Director eclecticism
8. Director popularity
9. Conductor rep
10. Baroque 1.000
11. Classic –0.088*** 1.000
12. Mid and late Romantic –0.253*** –0.458*** 1.000
13. Modern and contemporary –0.035* –0.064*** –0.184*** 1.000
14. Repertoire size 0.048** –0.037* 0.013 0.110*** 1.000
15. Summer opera –0.008 0.024 –0.017 –0.028 0.220*** 1.000

Note:  *** p < 0.01, ** p < 0.05, * p < 0.1.

baseline model, but also Model 2 and Model 3 as indicated by the change in the value of the
log-likelihood and the other statistics. For example, with respect to the baseline model, the LR
test (χ2[L4 – L5] = 255.50 with p-value < 0.001 for 3 d.f.) and the AIC test (3,663.326 versus
3,413.829) indicate a significant improvement.
We conducted several additional analyses to check the robustness of the results. First, we
removed all the control variables in Models 1, 2 and 3 (Table 18.5) to make sure that the results
are not driven by the control variables and find that the results remain the same. Next, in a
series of additional analyses reported in Table 18.6, we estimated a model in which the depend-
ent variable was expressed as the theatre occupancy rate per opera production. Following the
lead of previous studies (e.g., Gilhespy, 1999; Hand and Riley, 2016), we chose the occupancy
rate because it captures an opera house’s ability to fill its seating capacity. We measured the
occupancy per opera production by dividing the total number of attendees by the number of
available tickets. The new results suggest that the occupancy rate is higher for modern than for
non-modern staging of traditional operas. At the same time, our main hypothesis is supported:
attendance of modern staging productions (expressed as their occupancy rate) is lower when
the operas’ conventionality increases (Table 18.6, models 6 and 7). We also included opera
houses’ fixed effects in order to control for factors that differ across theatres but are constant
over time (time-invariant differences between theatres), so the estimated coefficients of the
models are not biased because of omitted time-invariant factors that may affect ticket sales.
Third, rather than focusing only on the opera conventionality, an alternative test of the
arguments exposed in our hypothesis is to focus on both the opera and the composer conven-
tionality. Conventional composers are more popular than others and their operas and com-
positional styles are well-known and highly regarded by different types of opera attendees.
 Blending novelty and tradition in creative projects 347

Table 18.5  Determinants of attendance (mixed effect ME linear regression)

Dep variable: attendance (log)

Model 1 Model 2 Model 3 Model 4 Model 5
Modern staging 0.090 ***
0.094 ***
0.085***
(3.67) (3.81) (4.40)
Conventionality 0.214 ***
0.230 ***
0.186***
(10.57) (10.54) (12.57)
Modern staging* –0.043 *
–0.040*
Conventionality
(–2.33) (–1.96)
Theatre status 1.754*** 1.805***
(40.86) (41.23)
New staging 0.017 0.046†
(0.56) (1.67)
Coproduction –0.069 **
–0.059*
(–2.46) (–2.10)
Director eclecticism 0.118***
0.082**
(4.57) (3.20)
Director popularity 0.005 ***
0.006***
(3.38) (5.00)
Conductor reputation 0.066 0.089
(1.08) (1.38)
Baroque –0.753*** –0.649***
(–5.53) (–5.00)
Classic –0.101† –0.076†
(–1.93) (–1.64)
Mid and late Romantic 0.110*** 0.066***
(4.56) (2.77)
Modern and contemporary –0.436** –0.269*
(–3.06) (–2.02)
Repertoire size –0.022* –0.018†
(–2.22) (–1.82)
Summer opera –0.425
(–16.62)
Time dummies Included Included Included Included Included
_cons 7.627*** 7.651*** 7.617*** 7.579*** 7.534***
(143.09) (152.53) (150.23) (119.05) (128.56)
Log lseudoLikelihood –1,972.986 –1,812.680 –1,800.451 –1,767.663 –1,639.914

Notes:  t statistics in parentheses. † p < 0.10; * p < 0.05; ** p < 0.01; *** p < 0.001. Early Romanticism is the compari-
son music style. Conventionality standardized. 2,627 obs. Standard errors are heteroskedastic-consistent (“robust”).
Theatre fixed effect included in the models.
348 Handbook on innovation and project management

To account for both the conventionality of the opera and the composer, we created three new
binary variables that correspond to different levels of conventionality. The first variable is
equal to 1 if both the opera and the composer conventionality are higher than the 75th per-
centile. The second variable is equal to 1 if both the opera and the composer conventionality
are lower than the 75th percentile. The last variable is coded 1 if either the conventionality of
the opera or the composer is higher than the 75th percentile. We tested whether the effect of
traditional operas’ modern staging varies depending on the different levels of conventional-
ity. The new results confirm the previous ones: the modern staging of traditional operas is
less (more) appealing for high (low) levels of conventionality of the operas and the compos-
ers (Table 18.6, models 9–12). Our argument that conventionality makes the modern staging
traditional of operas less appealing to opera-goers is, therefore, supported for both the opera
and the composer conventionality. Fourth, we estimated all the models without the La Scala
theatre because of the unique status of its productions in the Italian opera industry and found
that the results are not affected. Finally, as festivals usually have few productions per season,
in a supplementary analysis we estimated the models without including them: the results,
which are available upon request, were not affected. Overall, the main results are robust to a
broad range of robustness checks, therefore, further supporting our conclusions.

DISCUSSION

In many cultural industries like opera, theatre, musicals and so on new projects often rely on
the (re)interpretation of past work. Although entirely new operas, theatrical pieces or musicals
are also produced, most staged performances are interpretations of existing work. Some of
these interpretations are very close to the original, while others tend to deviate from it to a
greater or lesser extent. These pressures are particularly acute in cultural industries, in which
firms need to satisfy the expectations of audiences that demand, at the same time, familiarity
and novelty (Lampel et al., 2000). While audiences expect novelty, they only appreciate it to
the extent it does not depart too much from established artistic forms and traditions. The abil-
ity to reconcile competing demands has been an important focal point for scholarship at the
interface of strategic management and institutional theory.
In the context of operatic projects, firms can improve customers’ perceptions of value by
designing robust projects that introduce novelties while also preserving the most familiar
aspects of a tradition (Cancellieri et al., 2022). A central theme in research on exploratory
projects is how firms can improve their ability to innovate by setting in motion fewer rou-
tines. Some of these trajectories involve “substantially new projections of alternative future
outcomes and undetermined, emerging combinations of ideas, people, and resources in efforts
to achieve those outcomes” (Obstfeld, 2012, 1575). With a robust design strategy, by contrast,
firms pursue trajectories that combine both routine and non-routine activities. In other words,
they introduce novelty while preserving the familiar and, by doing so, can more effectively
appeal to their target customers. The effectiveness of this strategy, however, also depends on
the conventionality of revived cultural projects – in our setting, how frequently traditional
operas have been staged and, therefore, the extent to which the public has been exposed to
them. Confirming the moderating effect of conventionality, the results indicate that the mod-
ern staging of less conventional operas is more appealing to opera-goers than the modern
staging of conventional operas.
 Table 18.6  Robustness checks (mixed effect ME linear regression)

Dependent variable Model 6 Model 7 Model 8 Model 9 Model 10 Model 11

Occupancy Occupancy Attendance (log) Attendance (log) Attendance (log) Attendance (log)
Modern staging 0.028*** 0.026*** 0.140*** 0.123*** 0.013 0.014
(3.56) (3.42) (5.24) (5.22) (0.25) (0.28)
Conventionality 0.073*** 0.063***
(9.56) (8.96)
Modern staging * Cconventionality –0.013* –0.012*
(–2.50) (–2.17)
High conventionality level 0.486*** 0.394***
(10.39) (10.76)
Moderate conventionality level 0.342*** 0.261*** –0.144*** –0.132***
(7.24) (7.60) (–4.35) (–3.85)
Low conventionality level –0.488*** –0.394***

349
(–10.39) (–10.76)
Modern staging * high conventionality –0.127* –0.108†
(–2.35) (–1.94)
Modern staging * moderate conventionality –0.065 –0.055 0.061 0.053
(–1.48) (–1.18) (1.26) (1.06)
Modern staging * low conventionality 0.127* 0.109†
(2.35) (1.94)
_cons 0.612*** 0.588*** 7.499*** 7.503*** 7.986*** 7.897***
(31.77) (24.02) (130.78) (125.47) (147.65) (116.97)
Control variables Not included Included Not included Included Not included Included
Time dummies Included Included Included Included Included Included
Log pseudolikelihood 1,102.682 1,180.666 –1,856.398 –1,691.955 –1,856.398 –1,691.955
Number of observations 2,441 2,441 2,627 2,627 2,627 2,627

Notes:  t statistics in parentheses. † p < 0.10; * p < 0.05; ** p < 0.01; *** p < 0.001. In Models 8 and 9 low conventionality is the comparison conventionality level. In Models
10 and 11 high conventionality is the comparison conventionality level. Standard errors are heteroskedastic-consistent (“robust”). Theatre fixed effect included in the models.
350 Handbook on innovation and project management

These findings have important implications for understanding how firms can become opti-
mally distinctive. Prior research has not clarified how firms can increase the distinctiveness
of their product offerings without facing legitimacy challenges that may compromise their
performance. By affecting the relationship between robust design strategies and project or
firm-level performance, conventionality identifies an important boundary condition for deter-
mining to what extent firms can afford to pursue distinctiveness, while still meeting the
expectations of their target audience. In our setting, reinterpreting highly conventional operas
strengthens the perception of departure from a revered tradition, thereby reducing the appeal
of robust design. By contrast, robust project designs of less performed traditional operas (e.g.
I Lombardi alla Prima Crociata and Un Ballo in Maschera by Giuseppe Verdi) tend to be
more appealing because they are not perceived to depart from the traditional opera canon. In
the context of project-based organizations, therefore, the tradeoff between being the same and
being different takes on a slightly different meaning: different projects can differ as to where
and how firms strike the balance between the two imperatives.
Several questions, however, demand further investigation. First, the strategies firms adopt
to become optimally distinctive may have a different meaning to distinct groups of external
evaluators. Prior research has indeed largely overlooked how firms can adapt their strategies
to specific types of evaluators whose support is of primary importance for their success.
Different audiences may exhibit unique expectations for distinctiveness as well as openness
towards novel product offerings (Cattani et al., 2014; Pontikes, 2012; Zhao et al., 2017).
Evaluative heterogeneity not only stems from the coexistence of multiple audiences but also
from diversity within each audience type (Cattani et al., 2020). Previous studies have shown
that different customer segments (e.g. relational versus transactional) may vary in their eval-
uative frameworks and attitudes towards novelty (Voss et al., 2006; Kim and Jensen, 2011).
In our own research on the operatic industry, we have shown that different segments within
the opera audience (e.g. season- versus single-ticket holders) may react differently to the
modern staging of traditional operas. Indeed, individuals may vary in their use of generic
schemas depending on their expertise, and different schemas may accommodate smaller
or greater changes in a configuration of attributes (Cancellieri et al., 2022). Cultural firms
could therefore exploit this heterogeneity between audiences (e.g. opera-goers versus critics)
and across segments of the same audience to tailor their strategies around the expectations
of their key customer segments and, in so doing, reconcile the tension between familiarity
and novelty.
Another factor that may shape the relative balance between novelty and familiarity in the
modern staging of traditional operas is the identity of the stage director – that is, the leading
artistic figure responsible for the development of the visual dimension of an opera production
(e.g. scenes, stage direction, costumes). For instance, opera critics anoint some insider direc-
tors as dissidents for their visually innovative productions. Over time, therefore, the names of
these directors become a pre-attendance signal of novelty, creating an expectation of novelty
of the show even before the opera-goers attend the opera. For this reason, when dissident
directors are responsible for the modern staging of traditional operas, opera-goers may antici-
pate that the show will depart from accepted standards, thus making a robust project design
strategy less effective. The effect of a dissident director, however, might be tempered in the
case of less conventional operas because the public is less familiar with them and, therefore,
does not know what to expect. These are all areas that future research may find worth explor-
ing more deeply.
 Blending novelty and tradition in creative projects 351

Although the unique features of the opera industry may limit the generalizability of our
findings, individual firms across different industries (e.g. fashion, movie, automotive, travel,
watches, toys and leather goods among others) often face pressures to simultaneously pre-
serve and deviate from an established tradition and, therefore, base their new product devel-
opment projects on the revival of traditional products. Consider reinterpretation strategies
that move iconic products of the past (e.g. Volkswagen’s New Beetle, the Fiat 500, the BMW
Mini Cooper and the Orient Express) into a new social and temporal context, updating their
features to harmonize past and present (Brown et al., 2003). In the movie industry, the remake
of famous classic movies such as Agatha Christie’s novels Death on the Nile or Murder on the
Orient Express often serves the purpose of moving their characters and plots into the present,
while speaking to their enduring characteristics. Also, products and brands with heritage can
be revived even if they have little reputation or are completely forgotten by the market except
for a few experts. In the watchmaking and fashion industries, for example, long-abandoned or
forgotten brands such as Dubois and Fils and Madeleine Vionnet have recently been revived
and successfully relaunched (Dion and Mazzalovo, 2016). Future studies exploring how the
revival of products with different degrees of conventionality affects the success of robust
design strategies and the achievement of optimal distinctiveness in different industries will
help test the generalizability of our framework.

NOTES
1. An opera production is a complex product consisting of three main components: the music score
(defined as a printed or handwritten notation that uses symbols to indicate the instrumental and
vocal melodies to be performed by musicians and singers), the dramatic text (a libretto containing
the story of the opera) and the staging (the stage directions, set designs and costumes that deter-
mine an opera visual appearance) (Parker, 2001).
2. From the artistic seasons of the sampled theatres we excluded musicals, operettas and
concert-operas.
3. Some operas composed by composers born before 1881 such as Schoenberg’s Moses und Aron and
Erwatung are stylistically modern. We therefore reclassified them as modern. At the same time,
some operas composed by composers born after 1881 are stylistically traditional. For example,
Stravinsky’s The Rake’s Progress is set in the 18th century and the style of the music is deliberately
like the music from that period. Thus, we reclassified these operas as traditional.

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 PART IV

CASES AND CONTEXTS

19. Systems engineering as foundation and target
for complex system innovation
Stephen B. Johnson

INTRODUCTION

This chapter describes the evolution and current state of systems engineering (SE), the socio-
technical partner of project management (PM), which together are critical for innovation in
large, complex technological projects (LCTP). As stated by Morris (1997, 2), “The evolution of
project management has been closely related (a) to the development of systems engineering in
the US (United States) defence/aerospace industry and to engineering management in the pro-
cess engineering industries”. For large projects that involve new or improved technologies, SE
is the primary link between management, engineering teams and the product’s technologies.
Engineering and management originated together. Ancient engineering projects included
pyramids, canals, roads, bridges, temples, palaces, fortifications and ships. Many required
state-of-the-art mathematical and technical skills. In a few cases, we know individual “engi-
neers”, though the term is anachronistic. The first pyramid was designed and built by Imhotep,
the Pharoah’s minister and “engineer”. The engineer Sostratos built the Pharos Lighthouse of
Alexandria. Mathematician and engineer Archimedes built ships, drydocks and weapons for
his home city of Syracuse (de Camp, 1960).
Management as a profession originated in US railroads in the mid-19th century (Chandler,
1977). Its underlying methods, called systematic management, improved communication and
documentation that enabled executive managers to control mid-level managers and office
workers (Yates, 1989). Many leading railroad managers trained at the US Military Academy
at West Point and served in the US Army Corps of Engineers, planning, organizing and super-
vising construction projects such as dams, roads and fortifications. These engineering-based
skills were key to the new management profession.
Scientific management developed around the turn of the 20th century to control manufac-
turing and production processes using time and motion studies, and rewards for improved effi-
ciency (Aitken, 1960; Nelson, 1992). Starting with scientific management founder Frederick
Taylor, engineers collaborated with managers to design factory floors and assembly lines and
to train and direct factory workers.
The next phase of management evolution was systems management (SM) and its engineer-
ing component, SE. Developed in the mid-20th century, SM extended managerial control
over scientists and engineers on LCTPs. SE is the set of methods engineers use to coordinate
and control LCTP design, integration and verification. It is tightly linked with PM, and as
explained by Morris (1997, 216), “The integration and, particularly, systems engineering ori-
gins of project management were too often overlooked. Indeed, the systems engineering ori-
gins are still virtually ignored”. This chapter makes a small contribution to address Morris’s
concern, by highlighting SE’s historical importance to PM and as a critical aspect of current
LCTP management.

356
 Systems engineering for complex system innovation 357

DEFINITIONS

I begin with definitions. A “project” is an integrated set of tasks of finite duration to create,
build, verify and deploy a product. “Project management” is the set of methods to organize
and control a project. I use the concept of innovation as distinct from invention, as described
in Nelson (1993). In this chapter, I emphasize LCTPs, defined as large projects that develop
complex technical products. These products are typically innovations as they include innova-
tive (evolutionary) technologies, and at least when first developed the methods to manage and
integrate those technologies are also innovations.
“System” is defined in the narrow engineering sense as “a combination of different ele-
ments, which together are intended to achieve human utilitarian goals not achievable by
the elements alone”. For example, Earth, considered a biogeological system, is excluded as
humans did not purposely design it. A “national innovation system” is excluded as it is not
designed explicitly to be an integrated innovation system. Art is excluded for having no utili-
tarian purpose. Aircraft, computers and rockets are systems because they are designed for
specific utilitarian purposes.
The International Council on Systems Engineering (INCOSE, 2021a) defines SE as “a
transdisciplinary and integrative approach to enable the successful realization, use, and retire-
ment of engineered systems, using systems principles and concepts, and scientific, technologi-
cal, and management methods”.

THE ORIGINS OF SYSTEMS MANAGEMENT

Systems management is the combination of PM, SE and systems analysis (SA), evolving
together in the middle of the 20th century as integral parts of LCTPs (Johnson, 1997). Aspects
of SM’s origins are narrated in several books, including Johnson (2002a), Johnson (2002b),
Hughes (1998) and Morris (1997). In this section, I emphasize the major methods and lessons
for SM that originated in mid-20th century LCTPs, highlighting key aspects of SE and its
relationship to PM and innovation.

Systems Analysis

Systems analysis refers to the application of scientific and mathematical methods to assess the
feasibility and use of a system and/or its constituent technologies. It evolved from operations
research (OR), which originated in the Second World War (WWII) to improve operational use
of technologies such as radar, anti-submarine weapons, fighters and bombers, convoy protec-
tion and strategic bombing (Trefethen, 1954). After WWII, researchers at the newly formed
RAND Corporation (Smith, 1966) extended OR methods to the assessment of the feasibility
and effectiveness of possible future systems. This was called “systems analysis”, supporting
system trade studies and project funding decisions (Hughes, 1998, 154–160). Under the lead-
ership of Dr Ivan Getting and his deputy Colonel Bernard Schriever, the United States Air
Force (USAF) instituted SA for technology development planning in the early 1950s (Johnson,
2002b, 41–45; Getting, 1989, 225–230). Schriever, who had an aerospace engineering master’s
degree and was the USAF’s Scientific Liaison after WWII, soon became the most important
figure in SM’s development and diffusion (Johnson, 2002c, 32–33; Sheehan, 2010).
358 Handbook on innovation and project management

Significance: LCTPs typically require mathematical and physical assessments under the
label “systems analysis” to assess the feasibility and performance of future systems and of
their constituent technologies and to select among possible future systems and their constitu-
ent technologies.

Project Management

The essence of PM is to organize tasks based on the product’s technical characteristics. Before
WWII, managers (often an engineer or an architect or working closely with them) typically
provided only top-level direction because specialist workers understood their jobs, tools and
technologies and how these related to other specialities in the given application. This failed
under one of two conditions: the interactions between product components were complex, or
the product’s component technologies were themselves complex or novel. Projects with these
characteristics appeared in the 1930s and 1940s, most often associated with military projects
for nuclear weapons, aircraft and ballistic missiles. These were often organized to mirror
product structure.
Some complex projects, such as the German V-2 ballistic missile led by Wernher von
Braun, had strong, technically capable project managers (Neufeld, 1995). Others were man-
aged by committee, such as the US Manhattan Project to build the atomic bomb (Rhodes,
1986; Lenfle, 2008) and the Army Air Force’s B-29 bomber and P-61 fighter projects (Van der
Meulen, 1995; Lonnquest, 1996, 213–214). Prior to these two aircraft, the Army Air Forces
used a “fly before you buy” method, in which a company developed and delivered an air-
frame for government flight testing. If selected for manufacturing, the military would later
add radios and weapons onto and inside the delivered airframes. By contrast, B-29 and P-61
weapons were integrated directly into the airframe design, requiring much earlier and tighter
technical coordination.
By the early 1950s, two main issues drove the implementation of PM in the USAF, the Army
Air Force’s successor. First, missiles required an assembly line to enable testing, as each mis-
sile flew only once. Missile and assembly line designs had to occur in parallel, requiring sig-
nificant technical coordination. Second was technical obsolescence exposed by Korean War
combat, as Soviet fighter jets outclassed the USAF’s predominantly propeller-driven aircraft.
The USAF needed advanced jet aircraft, and quickly. Bernard Schriever led a committee that
studied the issue. It advocated future-oriented SA to select new aircraft and enhancement of
project manager authority. The USAF soon enshrined these recommendations in new regula-
tions (Johnson, 2002b, 39–54; Converse, 2012, 235–237).
Soon afterwards, Schriever was assigned to lead the Atlas intercontinental ballistic mis-
sile (ICBM) project. When the Eisenhower Administration made Atlas the nation’s highest
defence priority in September 1955, Schriever streamlined PM by removing dozens of USAF
and DoD concurrences and approvals for all ballistic missile projects.
Significance: LCTPs should implement product-based (project) organization structures,
significant project manager authority and minimized external influence.
Schriever’s team created a project control room in which project schedules were maintained,
project managers could review official programme status and visitors were impressed. This
required weekly data gathering to keep official schedules current. Monthly “Black Saturday”
status meetings were instituted to discuss major issues and assign actions to resolve them
(Johnson, 2002b, 77–78).
 Systems engineering for complex system innovation 359

The Navy’s Polaris submarine-launched ballistic missile programme adopted many USAF
ICBM PM methods. It additionally developed, used, and propagated the computer-based
scheduling tool PERT (Program Evaluation and Review Task) (Sapolsky, 1972; Raborn, 1963;
Converse, 2012, 535–547).
Significance: LCTP management requires timely and detailed status reporting, task sched-
uling and managerial-technical coordination to resolve technical and schedule issues.
Mirroring DoD developments, US military contractors formed PM organizations and added
their own nuances. Among them was “matrix management”, which enabled corporate func-
tional organizations to assign engineering personnel across multiple projects and to review
project technical work (Bergen, 1954; Lanier, 1956; Ames, 1963).
Significance: Organizations managing multiple LCTPs should implement matrix manage-
ment to review projects and assign personnel to them.

Systems Engineering

SE is the third leg of the SM triad, developed on interwar, WWII and early Cold War LCTPs
related to air defence and ballistic missiles.1

Anti-aircraft gun directors: Massachusetts Institute of Technology (MIT)

One source of SE was the US Navy’s WWII Mark-56 gun director project. The Mark-56
was an anti-aircraft weapon that fired shells at enemy aircraft detected by radar. Gun direc-
tors use inputs such as wind speeds and the target’s altitude and range over time to pre-
dict an aircraft’s future position using mechanical and eventually electronic computers, and
automatically point the gun so its shells intercept the target. MIT project head and physicist
Ivan Getting established a coordinating group to “integrate the computer and the radar into
a functioning whole”. By 1945 Getting formalized “system integration”, which entailed the
authority, responsibility and information required to check all designs, test prototypes and
pre-production models, disseminate technical information to the government and contractors
and assist in establishing test procedures and training. This required access to government-
contractor correspondence, facilities, personnel, drawings, specifications and key meetings
and conferences (Mindell, 2002, 265–275; Getting, 1989, 161–186).
Significance: Systems integration requires authority and access to all relevant technical
documentation, personnel and meetings to ensure technical coordination and consistency
and check for errors.

Anti-aircraft guided missiles: Bell Telephone Laboratories

While precursors existed to support Bell Telephone’s telephone network (Mindell, 2002, 113–
118), SE truly began at Bell Telephone Laboratory (BTL) in fall 1945 on the US Army’s Nike
ground-launched anti-aircraft missile (Fagan, 1978). One novelty was the “holistic” technical
integration of disparate technologies and disciplines, including rocket motors, electronics,
radar, guidance and control and munitions. By 1950 BTL was describing SE as a critical
activity (Kelly, 1950) with project line authority (Johnson, 2002b, 65–66). That year, BTL’s
SE department head began teaching SE at MIT and by 1954 at BTL as well (Hall, 1962,
vii–viii). Arthur Hall used material from the BTL internal course to develop his 1962 book
A Methodology for Systems Engineering. These technical and educational developments
exposed elite engineers and military officers to SE’s technology integration methods.
360 Handbook on innovation and project management

Significance: An organization’s LCTP SE is enhanced by giving it line authority, establish-

ing an SE department and formally teaching SE methods.

Ballistic missiles: Germany, the US Army and USAF

Johnson (2002a, 2002b) provides details of SE’s development in ballistic missile programmes
both in the USAF and the US Army. I will highlight aspects of this story as they relate to the
formation of SE’s original content.
Nazi Germany’s V-2 project, whose precursors began in the early 1930s, was an impor-
tant origin point for SE and PM. Physicist Dr Wernher von Braun was its manager and chief
engineer. Both in Germany and the US, he imported and cultivated government in-house
technical expertise to perform and lead technical work. This included most leaders of the
V-2 “rocket team” that emigrated to the US after WWII. These “arsenal” methods included
detailed data collection and personal feedback in which von Braun himself performed the
technical integration function as well as managing schedules and budgets (Von Braun, 1956;
Tompkins, 1993; Neufeld, 1995). His team launched the first ballistic missile in 1942, and the
first successful US satellite in 1958. Upon transfer from the Army to the National Aeronautics
and Space Administration (NASA) in 1960, his team developed the Saturn V moon rocket
(Neufeld, 2007; Converse, 2012, 619–627; Sato, 2005). Though this was not known at the
time, Von Braun’s personalized SE methods were very similar to those of Sergei Korolev,
the Soviet Union’s ballistic missile Chief Designer, who launched the world’s first ICBM, the
first satellite Sputnik in 1957, and the first human into space in 1961 (Siddiqi, 2000). Both von
Braun’s and Korolev’s teams remained intact over decades, learning by testing and trial and
error from numerous failures on essentially the same product lines of rockets. These long-
duration, highly skilled teams developed immense managerial and technical skills, though
these applied almost exclusively to rocketry and its technologies.
Significance: The functions of SE can be successfully performed by stable teams of highly
skilled and experienced individuals with relatively little bureaucracy.
The USAF’s ICBM programmes, which began in the mid-1950s, needed “concurrency”, a
term Bernard Schriever coined to describe the rapid parallel development of all facets of the
ICBM programme. Without long-duration technical teams such as those of Von Braun, the
technical integration of simultaneously developing complex artefacts was daunting (Johnson,
2002b, 77–82).
To address these challenges, Schriever hired the Ramo-Wooldridge Corporation (RWC)
as the “systems engineering and technical direction” (SETD) contractor, with line authority
to integrate the work of the military and contractors (Johnson, 2002c; Dyer, 1998, 174–175).
RWC founders Simon Ramo and Dean Woodridge both had physics doctorates and at Hughes
Aircraft had developed a “total systems approach” for the Falcon air-to-air missile to holisti-
cally design and test all missile components together. In 1953 they founded RWC and hired
numerous scientists and engineers with advanced degrees (Dyer, 1998, 167–179). In 1956,
RWC’s SETD responsibilities and tasks were formally defined. Responsibilities were (1) the
solution of subsystem interface problems to ensure technical and schedule compatibility, (2)
surveillance of subsystems and the overall design and (3) establishment and revision of sched-
ules and contractor progress monitoring from the technical perspective. RWC tasks included
SE, technical evaluations, experimental investigations, task planning, maintaining specifica-
tions and R&D plans, preparing work statements, directing contractors and maintaining the
project control room (Johnson, 2002b, 88–89).
 Systems engineering for complex system innovation 361

Early ballistic missile flight tests were discouraging. Atlas’s flight tests failed more often
than they succeeded, while the Titan ICBM failed roughly one-third of the time. Many fail-
ures were traced to mismatches between the launched missile and the missile’s design as
documented in drawings and specifications. Multiple technical groups were making changes
at the same time with insufficient coordination, with sometimes disastrous consequences
(Johnson, 2002b, 89–96).
To address this, managers and engineers expanded the WWII-inspired method of “con-
figuration control”. During the war, vehicles and weapons were often proven unreliable or
ineffective. To keep production lines rolling yet still update the designs and manufacturing
lines, engineering committees documented required changes in a “change record system”
and collected them into “blocks” of changes implemented at the same time. For example,
the Boeing B-17C bomber required multiple changes, which were grouped into a prospective
new B-17D configuration. The production line was stopped to change the production line
tooling and procedures and then re-started with the updates (Holley, 1989, 510–547). Missile
testing required these methods during design and testing since missile testing required a
production line.
Configuration control was tied to the “design freeze”, which halted localized design changes
to enable all parties to update their designs assuming all others held their designs fixed. This
allowed each group to design their components to mate (interface) and operate correctly with
others. After freezing the design, any proposed change was presented to a “configuration
control board”, which required all parties to determine whether their own components must
also be modified. Changes were assessed against the “baseline” of the system’s previously
approved, “frozen” technical design configuration.
By the mid-1950s, aviation contractors maintained their own configuration control practices
(Wood, 1962). In the USAF, the critical step was configuration control’s elevation from local
company practices to a standard government-mandated process. This likely first occurred in
fall 1959 on the Minuteman ICBM project, when RWC adopted configuration control based
on Boeing’s methods. RWC then ensured configuration control’s implementation on all USAF
ballistic missile programmes using its SETD authority.
Significance: Design freezes and configuration control are critical methods for LCTPs to
enforce technical coordination and integration of design changes.
Configuration control evolved to become configuration management (CM), which is simply
the attachment of cost and schedule estimates and commitments to a proposed design change
managed via the configuration control process. Before management funded a change, the
change proposal had to include cost and schedule estimates from all affected parties. The
chief engineer ruled on the technical validity of the change and ensured technical coordina-
tion. The project manager made the final decision to authorize the change, which released
funds and updated the schedule. CM is the heart of LCTP systems integration to ensure tech-
nical, schedule and financial coordination and is also how management gained control over
engineering teams. Evidence suggests that CM originated on the Minuteman ICBM project,
with project manager Colonel Samuel C. Phillips either creating or recognizing the method.
Minuteman likely first created Interface Control Documents, which provide a single stand-
ardized location to collect detailed design information on both sides of an interface between
components. This required the organizations on each side of the interface to negotiate and
agree on document contents. Minuteman also featured “functional analysis” that defined the
capabilities (functions) that the system must provide, which became system requirements
362 Handbook on innovation and project management

(Wilson, 1963, 229–230). Since Minuteman met its cost and schedule goals, its methods were
soon adopted elsewhere.
Significance: Configuration management links cost and schedule to technical capabili-
ties and changes, enabling the project manager to control the project’s engineering teams.
Functional analysis is an important method to define the system’s required capabilities and
requirements.
RWC’s SETD role with government-like authority caused trouble with aerospace contrac-
tors, including RWC itself. The SETD role was not very profitable compared to production,
and RWC chafed under its government-mandated ban from hardware production because of it.
Other contractors resented RWC because it acquired their detailed design information, which
could give RWC a competitive advantage. After a merger with Thompson products to become
TRW, attempts to separate SETD work from other TRW projects failed to appease critics.
Congressional hearings in 1960 on the subject led to the separation of TRW’s SETD role into
a new non-profit company, the Aerospace Corporation, that worked exclusively for the govern-
ment. Ivan Getting became its first president (Dyer, 1998, 224–249; Getting, 1989, 385–407).
Significance: SE supports both top-level management and lower-level technical coordi-
nation. If project management is divided among organizations, then SE tasks must also be
divided and compartmentalized to avoid institutional conflicts.
The US Army also developed ballistic missiles at the California Institute of Technology’s
(Caltech) Jet Propulsion Laboratory (JPL), building first the Corporal and later the Sergeant
short-range ballistic missiles (Koppes, 1982). The USAF story of difficult technical integra-
tion problems, mismatches between design drawings and flown missiles and adoption of
design freezes and configuration control was replicated in JPL missile and later spacecraft
efforts (Johnson, 1998; Johnson, 2002a, 82–92; Hall, 1997). JPL was transferred to NASA in
1959 and evolved configuration control methods on deep space missions to the Moon, Venus
and Mars, becoming the core of its SE methods. JPL’s early history shows that similar techni-
cal issues often lead to similar SE methods.

Computing and software SE: air defence and SAGE

Another particularly important origin for SE was the Semi-Automatic Ground Environment
(SAGE) air defence computer programme, as it developed the SE used in the computing and
software industries. SAGE originated from an MIT WWII project to develop an aircraft train-
ing simulator and analysis tool for the US Navy. Central to this goal was a reliable “real-time”
computer called Whirlwind, which proved extremely difficult to build, leading to huge cost
increases and schedule delays. In 1949 the USAF took over the programme and directed it
towards air defence command and control, which uses radar signals to compute the positions
and directions of Soviet bombers so operators could direct fighters and missiles to destroy
them. Renamed “Project Lincoln” in 1951 and then separated from MIT to become Lincoln
Laboratory in 1952, the project selected International Business Machines (IBM) to manu-
facture the computer. In 1954 Lincoln contracted with BTL and Western Electric for com-
munications to radar sites, combat direction centres and interceptor groups (Johnson, 2002b,
117–126; Redmond, 2000, Chapters 2–11, 15, 24; Hughes, 1998, 15–54; Pugh, 1996, 199–220).
Lincoln’s complex technologies required parallel pursuit of alternate technologies and
designs (concurrency), while the need for error-free continuous operation drove efforts
to achieve high reliability despite the many new technologies. As new radar equipment,
missiles and aircraft became available they were integrated into the rapidly expanding air
 Systems engineering for complex system innovation 363

defence system design, training and operations. The hugely complex computer program-
ming needed to integrate radar and weapon systems, display results, store the data and
generate training data grew far beyond the wildest predictions. To address this, Lincoln
developed its own SE mechanisms of design freezes, block changes, user interactions and
comprehensive documentation (Johnson, 2002b, 130–165; Hughes, 1998, 55–58; Campbell-
Kelly, 2004, 36–41).
Computer programming was increasingly farmed out to the RAND Corporation, which
threatened its research mission. These programming tasks were separated to form the non-
profit System Development Corporation (SDC), which became the world’s largest software
company at that time. Similarly, Lincoln’s SE tasks were overwhelming its research mis-
sion and in 1959 were transferred to the new non-profit MITRE Corporation. Lincoln, SDC
and MITRE trained hundreds of computer programmers in software-oriented SE, who
subsequently moved to other budding computer and software companies (Redmond, 2000:
Chapters 30–31; Hughes, 1998, 58–64).
Significance: The technical and organizational complexity of air defence programmes and
their software led to the creation of a major variant of SE in the computing and software
industries, with non-profit SE corporations supporting military management of software and
air defence.

Systems Management

“Is it true that a knight of yours killed a dragon with his bare hands?” the prince asked.
“Quite true,” replied Arthur.
“Surely that knight must rank first among all the knights of the Round Table,” the prince opined.”
“Not so,” said the King. “In fact, that knight ranks 173rd. The knights who rank foremost among
the knights of the Round Table are those who write the guide books for dragon slaying. As a matter
of fact, the guide books say that you are supposed to slay a dragon with a sword, so killing one with
bare hands shows an improper understanding of the correct procedure.”
(Ed Bensley, Lincoln Laboratory Division 6, late 1950s, quoted in
Jacobs, 1986, 164–165)

Under Schriever’s leadership, the new Air Research and Development Command (ARDC)
united the related but separate threads of SA, PM and SE to form systems management.
ARDC included aerodynamic systems (aircraft and winged missiles), ballistic missiles and
space systems and electronic (air defence and command and control) systems, which were to
be managed with common methods as much as possible. This did not prove possible, since
ballistic missile SE methods defined top requirements at project start, while electronic system
methods assumed that requirements and technologies evolved as new technologies and weap-
ons became available. Schriever restricted these evolutionary methods to electronic systems
(Johnson, 2002b, 186–197).
New regulations ensured the primacy of ballistic missile management methods. The Air
Force Regulation 375 series for systems management imposed procedures defined in docu-
ments for project offices, concurrency, CM and reliability (Morris, 1997, 47–49), and pro-
moted via courses, newsletters and conferences (Johnson, 2002b, 210–211). In the early 1960s,
the US Department of Defense (DoD) adopted the USAF 375 series as the basis for its own
standards (Johnson, 2002b, 197–214; Hughes, 1998, 160–166), adding a preliminary design
phase to provide detailed cost estimates prior to project authorization, cancellation or delay to
address issues (Johnson, 2000; Poole, 2013, 32–35).
364 Handbook on innovation and project management

NASA’s human spaceflight programme adopted USAF SM methods by hiring TRW’s

George Mueller, who in turn hired Minuteman programme director Samuel C. Phillips to
manage the Apollo manned lunar programme. Mueller convinced Schriever to temporarily
assign over 100 USAF officers to NASA to improve management, contractor oversight and
operations (Johnson, 2002a, 113–136). Phillips’ primary management method was CM, which
he imposed in April 1964 (Phillips, 1970, 22–24; Johnson, 2001). Along with NASA’s skilled
personnel, these methods were a major part of NASA’s “original technical culture” (McCurdy,
1993, 11–99).
Seen from overseas, Apollo’s success was both impressive and alarming. Apollo and the
computer industry were aspects of an “American Challenge” in which methods of organiza-
tion were critical (Servan-Schreiber, 1971; Spencer, 1970). After a series of failures to build
the cross-national Europa launcher, European leaders founded the European Space Agency,
which included collaboration with NASA’s Space Shuttle programme by building Spacelab,
largely to learn the PM and SE “secret of Apollo” (Johnson, 2002a, 143–208).
Numerous OR, SA, SE and PM publications appeared from the late 1940s through the
1960s. Kimball (1951) was the first OR book, with many others following. Goode (1957)
was the first SE book, with a few others published by 1970. Similarities between the OR
and SE fed Flagle’s (1960) book combining them, and many other OR and SE books showed
significant overlap (Johnson, 1997, 911–913). PM books followed, starting with Kast and
Rosenzweig (1963a) based on presentations and papers from a conference with key figures
including Schriever, Ramo and von Braun. This fed their Organization and Management: A
Systems Approach (Kast and Rosenzweig, 1963b). Baumgartner’s (1963) Project Management
was probably the first with that name. Hajek (1965) highlighted the linkage of PM to engi-
neering. PM ties to SA were emphasized in Cleland’s (1968) Systems Analysis and Project
Management.
Professional societies and journals followed. Operations research came first, with the first
publication of the Operational Research Quarterly in 1950 and the OR Society founded in
1953 (OR Society, 2021). The Project Management Institute was created in 1969 and much
later in 1990, the International Council on Systems Engineering (INCOSE, 2021b) (Johnson,
2013).
Significance: Systems management methods quickly spread through project adoption, pub-
lications and professional societies starting with but not limited to American and European
aerospace and computing industries in the 1960s and 1970s.

TRADITIONAL SYSTEMS ENGINEERING

With our focus on SE, we will take the NASA Systems Engineering Handbook (NASA, 2007)
as a typical example. The following lists the Handbook’s table of contents, with short sum-
maries added. The Handbook is a good summary of “traditional systems engineering” (TSE).
While 1960s SE was not formally described to this degree, the concepts and processes devel-
oped at that time are the basis of this 2007 NASA publication. The top-level numbers (1, 2, 3,
etc.) are the Handbook’s top-level section numbers, but the lower-level numbering differs so
as to emphasize key content.

1. Introduction
2. Fundamentals of Systems Engineering
 Systems engineering for complex system innovation 365

a. The Common Technical Processes and the SE Engine. The ‘SE Engine’ refers to
common groupings of ‘system design processes,’ ‘technical management processes,’
and ‘product realization processes’ applied recursively throughout the project.
3. NASA Program/Project Life Cycle
a. This section describes the project phases sequence: program formulation; program
implementation, Pre-Phase A concept studies; Phase A concept and technology
development; Phase B preliminary design and technology completion; Phase C final
design and fabrication; Phase D system assembly integration and test, launch; Phase
E operations and sustainment; Phase F Closeout.
4. System Design
a. This section describes the processes and considerations that apply in the project
phases: stakeholder expectations definition, technical requirements definition, logi-
cal/functional decomposition, and design solution definition.
5. Product Realization
a. This section describes the phases of building, integrating, verifying and validating
the product prior to use: product implementation, product integration, product veri-
fication, product validation, product transition.
6. Crosscutting Technical Management
a. This section describes the management processes applied across the major phases
describe in previous chapters: technical planning (including work breakdown struc-
ture), requirements management, interface management, technical risk manage-
ment, CM, technical assessment, decision analysis.
7. Special Topics
a. This section includes miscellaneous topics: contracts, integrated design facilities,
selecting engineering design tools, human factors engineering, and environmental,
nuclear safety, planetary protection, and asset protection compliance.
8. Appendices. Several topics are elaborated in appendices, including guidance and exam-
ples for how to write good requirements, how to create and having templates for verifi-
cation matrices, validation plans, SE management plans, integration plans, CM plans,
interface requirements documents, and so on.

The Handbook emphasizes the processes to be applied within the project life cycle, provid-
ing a checklist and guidance for tasks to be performed. It defines key management methods
(work breakdown structures, CM, risk management) and documentation types (requirements
documents, interface documents, risk documents). TSE specifies communication and cross-
checking processes and information generation for financial, schedule and contractual track-
ing systems. The Handbook is oddly silent on the division of responsibilities between the
project manager(s) and systems engineer(s).
Other organizations developed their own SE handbooks and standards. The International
Standards Organization (ISO) 15288 SE standard drew from the ISO software standard
12207 as a starting point when its development began in the 1990s (Weilkiens, 2007, 16–20).
This and other corporate, governmental and international standards for SE are much like the
NASA Systems Engineering Handbook described earlier, with variations to account for local-
ized organization use or as a general guideline across industries and countries.
Significance: Traditional SE was standardized by organizations and professional societies
primarily based on SE methods developed in the 1950s and 1960s aerospace and computing
industries.
366 Handbook on innovation and project management

Benefits, Problems and Limitations

The initial methods of SM from late WWII through the early 1950s organized the rapid devel-
opment of large novel complex systems, most prominently guided missiles, ballistic missiles
and air defence systems. After a variety of test and flight failures and major cost overruns and
schedule delays in the late 1950s and early 1960s, SM became more conservative. Improved
test methods, configuration control and then CM aimed to improve system reliability and
reduce cost increases and schedule slips. For USAF ballistic missiles and JPL’s spacecraft,
SM implementation decreased failure rates from roughly 50 per cent to under 10 per cent
(Johnson, 2002a, 221–225). SAGE’s spiralling costs and lengthening schedules became less
drastic. Cost increases in NASA’s manned space programmes decreased from more than
700 per cent on the Mercury capsule managed without SM to less than 300 per cent on Gemini
as SM implementation began (Johnson, 2002a, 130–131). In 1963, Apollo projected gigantic
cost increases and missing its “before the decade is out” deadline. As SM was implemented
from 1963 to 1968, Apollo ultimately met its deadline and its cost increases were far less than
projected in 1963.
Significance: Compared to prior methods, on average SM improved system reliability and
decreased LCTP cost overruns and schedule slips.
SM made project development costs and schedules measurable earlier in projects. Morris
(1997, 59–60) documented cost overruns from 20 per cent to 460 per cent on projects between
1959 and 1980. For the 1,449 projects for which he had data, only 12 finished at or under
original estimates. On the whole system failure rates decreased but failures did not disappear.
These failures along with continuing cost and schedule problems provided ample targets for
criticism of PM and SE.
To illustrate, I list here some of NASA’s major failures from 1985 to 1993.

• When combined with three Titan launch vehicle failures from 1985 to 1988, the
1986 Space Shuttle Challenger explosion left the US with no reliable capability to launch
large spacecraft (Burrows, 1999, 577–578).
• The Hubble Space Telescope’s $1.5 billion cost was triple its original estimates, and when
placed in orbit in 1990 its optics were found out of focus (Smith, 1993; Burrows, 1999,
598–600). Though in-space repair by Shuttle astronauts ultimately saved the mission,
initially it was a major management embarrassment for NASA.
• The Galileo Jupiter probe’s communication antenna only partially deployed in April 1991,
dramatically reducing its scientific data return (Meltzer, 2007; Ulivi, 2007, 223–225).
• The Mars Observer was lost in August 1993 just prior to reaching Mars. Its cause was
never definitively diagnosed (Ulivi, 2007, 328–335).

Determining the causes of these failures required first understanding the specific technical
failure, and then tracing backwards further to identify the usually human errors that led to
it. These included poor communication, risk underestimation, test reductions to save money,
use of components for longer lifetimes or in environments for which they had never been
designed or tested, and socio-psychological factors such as role-reversal and power asym-
metry (Johnson, 1999; Vaughan, 1996; Heppenheimer, 1999). Most technical failures are ulti-
mately traceable to human individual cognitive and social-communicative errors or failures
(Johnson, 2010).
 Systems engineering for complex system innovation 367

Significance: SM and TSE processes reduce the chance that errors cause system failure
and predict cost overruns and schedule slips, but they cannot prevent poor decisions, funding
shortfalls, political pressure, technical hubris or simple mistakes.

ATTEMPTS TO IMPROVE OR REDUCE SE

After the failures described, by the mid-1990s NASA management was deeply concerned with
PM and SE, which appeared both expensive and ineffective. The US DoD was equally con-
cerned and attempted reforms similar to NASA; these will not be described here. Following
Challenger, NASA moved Shuttle programme management from Johnson Space Center in
Houston to NASA Headquarters and created an independent headquarters safety organiza-
tion. With little authority and ambiguous relationships with NASA’s field centres, the lat-
ter had little influence (Leveson, 2008, 251–254). One lasting change was the adoption of
probabilistic risk assessment. Through the 1990s, the simultaneous cost pressures of flying
the Shuttle and developing the International Space Station led to workforce reductions that
compromised SM’s ability to identify and fix problems (Johnson, 2010, 307–309).
The Total Quality Management (TQM) fad spread in the early 1990s, as Western man-
agers attempted to learn and apply the methods underpinning Japanese dominance in con-
sumer electronics and automobiles (Tsutsui, 1998). Experiments with TQM mostly failed,
because it is based on gathering statistical data from large numbers of operational products to
guide product improvement. This had little relevance to typical one-of-a-kind NASA missions
(Johnson, 2010, 302–304). JPL experimented with “re-engineering” methods to revamp its
design and management processes. These too were largely ineffective, since re-engineering
is most useful to improve standard operational processes that applied poorly to one-of-a-kind
spacecraft development (Westwick, 2007).
Significance: Management methods based on repetitive or large-group statistical data
such as TQM and re-engineering often have little applicability to LCTPs, since this data does
not typically exist at the beginning for one- or few-of-a-kind development projects.
A more plausible approach to reducing SM cost and increasing its effectiveness was based
on Lockheed’s Skunk Works aircraft development projects that featured small, co-located,
highly competent teams and minimal documentation. The Skunk Works designed the innova-
tive twin-tailed P-38 fighter in WWII, the Cold War U-2 and SR-71 reconnaissance aircraft
and the F-117 Stealth fighter at relatively low costs. Its feats were widely publicized in the
1980s and 1990s (Rich, 1994). Dan Goldin, a former TRW executive who became NASA
Administrator in 1992, advocated a strategy of launching numerous “faster, better, cheaper”
(FBC) spacecraft using Skunk Works approaches in which one could take risks. This con-
trasted with the few, complex and expensive “flagships” like JPL’s Galileo and Cassini probes
to Jupiter and Saturn (McCurdy, 2001, 42–52).
Expanding on a prior “smallsat” initiative called Small Explorer for Earth-orbiting space-
craft, Goldin initiated the Discovery and New Millenium programmes for small deep space
missions. NASA selected six projects in 1994, including Mars Pathfinder, which landed on the
Red Planet in July 1997 with its little rover Sojourner. NASA then embraced the FBC para-
digm for all Mars missions. In all, NASA used the FBC approach for 16 new spacecraft in the
1990s (McCurdy, 2001, 55–60). The results were mixed, and of the five Mars missions, three
failed in 1999: Mars Climate Orbiter, Mars Polar Lander and Deep Space 2 (McCurdy, 2001,
368 Handbook on innovation and project management

14–30; Harland, 2005, 239, 330–339). Their failure causes repeated some of those described
previously: test reductions to save money, communication gaffes and lack of personnel and
resources. JPL abandoned FBC and reinstated full SM.
After the 2003 Shuttle Columbia disaster, the ensuing investigation indicted NASA’s “cul-
ture” as a primary cause since many of the factors that caused Challenger were repeated: cost
reductions, schedule pressure, poor decisions, risk underestimation and organizational mis-
communications (CAIB, 2003). NASA implemented technical fixes to the remaining Shuttles,
tightened safety criteria and effected two institutional changes. The first was the creation of
an “independent technical authority” to guarantee separate and anonymous communication
channels to report safety concerns and to institute independent safety reviews. The second was
the creation of the NASA Engineering Safety Center (NESC), consisting of independent tech-
nical discipline experts to investigate safety concerns and improve safety-related engineering.
Personnel surveys to address NASA culture issues were halted (Johnson, 2010, 312–314).
Why did NASA’s 1990s attempts to change or improve SM mostly fail? TQM and re-engi-
neering failed because these required data from repetitive manufacturing and operations that
did not exist for NASA’s spacecraft. This same issue hinders the applicability of methods
studied in so-called “high-reliability organization” research (LaPorte, 2006). The failure of
Skunk Works methods was only partial as these continued for some small Earth-orbiting
satellites. Skunk Works approaches depend on the co-location of small teams of experienced
personnel with some new, enthusiastic, energetic and promising engineers. A small core team
can be familiar with the entire project through frequent discussions and meetings, which
quickly identify and address issues. External interference and documentation are minimized,
but small “tabletop” reviews and the classical SM phases and reviews are required, though
with reduced membership. Compared to SM, core team members have more responsibility
and authority, and can call on external experts as needed. Formal cross-checking and report-
ing are replaced with small-group dynamics (McCurdy, 2001, 89–105, 122–137).
These small-group methods can succeed but require strict preconditions. The project must
accept significant risk. It cannot be too large or complex and depends on inspired leader-
ship and energetic, creative personalities. Critically, Skunk Works projects rely on traditional
organizations to provide experienced personnel, since they don’t have training resources or
time. Lastly, once repetitive operations begin or if the next project is very similar to the pre-
vious project, creative, energetic personnel get bored and begin making mistakes or move
elsewhere, and are replaced with less experienced personnel, which also leads to higher error
rates.
Significance: Management and engineering methods based on small-group dynamics can-
not usually be sustained on LCTPs, due to their scale, complexity, duration or dependence
on traditional projects to train personnel.

MODEL-BASED SYSTEMS ENGINEERING

The problems that SM and TSE were created to address continue to worsen, while their meth-
ods have barely changed. This is primarily due to the dramatic increase in computing capa-
bility, which stores and processes orders of magnitude more data at a far lower cost than in
the 1960s. Countless products and services are far more capable and flexible due to comput-
ers. They are also much more complex, and computers are used to manage that complexity.
 Systems engineering for complex system innovation 369

Engineers use computer models to investigate the current or future system and how it might
fail. Problems discovered by modelling and simulation can often be addressed long before the
real software and hardware is created, increasing reliability and decreasing cost. Expansion of
these computer-based methods inspired model-based systems engineering (MBSE) and paral-
lel research into model-based project management.
Using software models to model and assess system performance and behaviour is typical in
computer science and classical engineering disciplines (CED). Modelling is enabled by spe-
cialized languages, such as the FORTRAN and BASIC languages developed in the 1950s and
1960s to translate high-level statements into low-level code (Campbell-Kelly, 2004, 34–36).
For SE, developing the specification for Systems Modeling Language (SysML) began in the
early 2000s as a collaboration between INCOSE, the International Standards Organization
(ISO) and the Object Management Group (OMG). OMG issued the SysML 1.0 specifica-
tion in September 2007, upon which companies based commercial tools that added graphical
user interfaces and other capabilities to visualize, analyse and use models created with their
tool (Friedenthal, 2012, xvii). When SysML tools, such as No Magic’s MagicDraw, Sparx
Systems’ Enterprise Architect and others appeared, SE organizations in academia, govern-
ment and industry began experimenting with them. To date, lower costs, improved schedule
control and improved reliability have mostly not yet appeared. It takes time for organizations
to learn how best to use these new tools.
System modelling is a prominent feature of CEDs. For example, mechanical engineering
is based on the laws of mechanics and dynamics as well as the empirical properties of mate-
rials. Mechanical engineers learn the relevant physics and mathematics and apply them by
developing and analysing system models. A mechanical engineer will build a computer model
of the system’s physical structure and movement using the laws of force, acceleration, stress
and strain, along with models of the environment in which it functions. Analyses using these
models estimate system performance and are used to support design trades and decisions.
CEDs operate using a spiral process of creating a design, building a model of the design, using
the model to estimate performance, updating the design based on these estimates and then
repeating the process. As the system is built and tested, empirical system characteristics and
behaviours are used to update the models, which narrows the differences between simulated
and actual performance.
CEDs achieve levels of system performance and reliability far greater than TSE. One key rea-
son is that CEDs formalize communication around their models. First, communication is largely
constrained to topics related either to the actual system design or testing or how to relate that
information to the model of that system. If an error exists through cognitive mistake or social
miscommunication, model execution will typically spew out erroneous results (“garbage in,
garbage out”). The resulting investigation identifies and fixes the error in the design, the model
inputs or in the model itself. Through this dynamic, model-based communication processes are
much more precise and reliable than communication without such models and create “islands of
rigour” in a sea of imprecise natural language communication (Johnson and Day, 2016).
By contrast, TSE operates via CM-based processes that coordinate review and response
to design changes as represented in multiple natural-language documents (Johnson and Day,
2016). MBSE aims to improve on or replace TSE through the use of models. Once a system is
modelled, automated error checking can enhance human review. It is also possible to automate
portions of document generation. Prospectively these will reduce errors, costs, and develop-
ment schedules.
370 Handbook on innovation and project management

Significance: System modelling re-orients engineering communication around models,

which limits the topics being communicated and enables automated error checking and doc-
ument generation, making communication more precise and reducing system error rates.
System failure is almost invariably traceable to human individual or social communicative
mistakes. Failure during operations is typically blamed on operators. When humans err in
manufacturing, the result appears in a single copy of the design (one car in an assembly line
has a flaw). This is often called “random part failure” though it is seldom actually random.
Human design mistakes create “common cause failures” that exist in all copies of the system.
Humans are usually the ultimate cause of failure, which is unsurprising since we design, build
and operate systems. To paraphrase a comic strip, “we have met the enemy, and they are us”.
In LCTPs, when CM estimates cost increases or schedule slips, these indicators are often
projecting that “if the project continues on the current plan, with the same resources, sched-
ules, and technical assumptions, then the product will fail”. This makes the topic of failure
critical to LCTP project managers and systems engineers alike.
Significance: Cost increases and schedule slips are usually proxies for projected LCTP
technical failure.
Research on the nature of failure and on developing social and technical means to address
it is critical and ongoing. Failure studies range from the sociology of “normal accidents”
(Perrow, 1984) to organizational means to create high-reliability organizations (Wiedlea,
2011) and the theory and application of “system health management” (SHM). The latter can
be viewed as the “dark side of SE”. For every function and component that exists in a system’s
design, those functions and components may fail. SHM addresses how to identify, prevent
and mitigate those failures (Johnson, 2011). Since cost overruns and schedule slips are mostly
due to predictions of technical failure, understanding the nature of and then using resources
to reduce the chances of technical failure will paradoxically lead to smaller cost overruns and
schedule slips. Since most technical failure is ultimately due to human individual cognitive or
human social miscommunications, MBSE’s potential to improve communication and uncover
errors just like CEDs holds out a beacon of hope that SE (and PM as well) can be significantly
improved.
Significance: Understanding the nature of failure and developing means to address it are
central to the improvement of both SE and PM for LCTPs. MBSE has the potential to reduce
error rates and hence the probability of failure, which in turn will reduce development cost
overruns and schedule slips.

CONCLUSION

Petroski’s (1982, 2006) books on the history of engineering demonstrate that creating success-
ful and reliable engineering products is linked directly to the experience of the failure of such
products. He demonstrates a pendulum swing over the course of human generations within
a discipline from initial design conservatism leading to success, followed by confidence in
which architects and designers reduce design margins to lower costs or create aesthetically
pleasing products. This confidence becomes over-confidence, leading to designs that are so
risky that they fail. The reaction to failure is a new round of conservative designs as their
lessons are learned, and the cycle starts again. These are social and cognitive phenomena as
much or more than technical ones.
 Systems engineering for complex system innovation 371

The story of SM and of SE on LCTPs reifies this narrative. Petroski’s pendulum swings can
be seen in the USAF ballistic missile and NASA’s human spaceflight histories. Concurrency
is a hallmark of confidence to rapidly create novel systems. So too are attempts to reduce the
bureaucracy of SM using Skunk Works methods. Failure marks the limits of this confidence,
and the resulting conservatism can be seen in the development of configuration management,
the standardization of SM or the re-imposition of SM.
Recent efforts in MBSE are the latest examples of innovation to reduce costs and improve
schedule discipline. Historically these have reduced reliability. However, MBSE’s promise
of early detection and removal of errors so as to reduce system failure rates as the means by
which cost and schedule benefits accrue would also make the system more reliable. Whether
MBSE fulfils these hopes is yet to be seen, but the evolution and capabilities of SE have been
and will continue to be a major consideration in its partnership with PM on LCTPs.

NOTE
1. There were several other “systems approaches” that developed from the 1920s through the 1950s,
which contributed in a minor way to the main threads listed in this section mainly by inspiring
“holistic thinking” that created a favourable environment for systems concepts. These included
Gestalt psychology of scholars like Kurt Lewin, social systems theory promoted by Talcott Parsons
and others, the engineering and business systems approaches of the office machine industry (what
would soon become the computer industry) and telephony in the Bell system. These will not be
addressed further here.

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20. Corporate innovation and agile project
management
Kate Davis and Jeffrey K. Pinto

INNOVATION AND AGILE: BETTER TOOLS TO ADDRESS PRESSING

NEEDS

Introduction to Agile

In general, it has been recognized that an innovation is a new idea, which may be a recombina-
tion of old ideas, a scheme that challenges the present order, a formula or a unique approach
which is perceived as new by the individuals involved (Rogers, 1983). By this definition, inno-
vations consist of both new technical and administrative ideas: technical innovations repre-
sent new technologies, products and services while administrative innovations represent new
procedures, policies and organizational forms (Van de Ven, 1986). In fact, Van de Ven (1986)
rejected the distinction between various forms of innovation, preferring to look at them as a
combination since most innovations consist of new technical and administrative components.
Fagerberg and Verspagen (2009) further offer a definition of innovation as “new combina-
tions” of existing knowledge and resources; the distinction between invention (new ideas) and
innovation (implementing these in practice); the classification of innovations into product,
process and organizational innovation; and the radical nature of their social and economic
impacts (making distinctions between revolutionary, radical and marginal or incremental
innovations).
It is against the backdrop of significant corporate and societal demands for new goods
and services (the innovation mandate) that the practical means for addressing these concerns
emerged in the form of projects. Early efforts to accelerate innovation emerged from Toyota,
in the form of its approaches to lean and quality. These innovations tended to focus on physi-
cal products and their rapid prototyping, development and continuous improvement. However,
as the global economy grew increasingly software-driven and computer-centric, methods for
innovation had to move beyond the narrower product economy and address the broader mar-
ketplace. Back in the late 1980s and early 1990s, for example, a transition started to take place
within the corporate environment, as it related to innovation and new product development,
particularly in software and information technology (IT) systems. Failure rates for these pro-
jects, as reported in Chaos Reports, were disappointingly high and had remained so for years.
Among the reasons for this often-abysmal record was a critical and recurring failure to gain
client acceptance and use of new systems. Thus, even when projects were managed efficiently,
they failed at the final hurdle, when customers for whom they were developed often received
them with a lacklustre response and limited actual use.
Since the turn of the millennium, traditional highly structured approaches to project man-
agement are decreasing in effectiveness for many project types and a new project planning
methodology is required. As an example, consider the fields of IT (including software) and

375
376 Handbook on innovation and project management

new product development, where customer/consumer needs continually change, meaning the
end result cannot be visualized. To accommodate this, many organizations value flexibility
and proactivity to opportunities or changes mid-stream.
Agile project management (agile PM) reflects a new era and differs from traditional pro-
ject management by recognizing that the old approach of carefully “planning the work and
then working the plan” does not take into account the reality of many modern organizations
and projects. Heedlessly following the original plan throughout would make no sense as the
project progresses through the execution stage. Agile PM recognizes the importance of these
evolving needs and allows for an incremental, iterative planning process – one that stays con-
nected to clients across the project life cycle.
Agile PM offers an alternative to the traditional, “waterfall” planning process, which uses
a linear, sequential life cycle model following a logical series of steps. For example, under
waterfall, each stage in a software development process follows the completion of the previous
stage; first, requirements are fully gathered, and then the system is designed, implemented and
tested. Finally, it is fully deployed and subject to maintenance. In such a model, each phase
must be completed fully before the next phase can begin. At the end of each phase, a review
takes place to determine if the project is on the right path and whether or not to continue or
discard the project. In the waterfall model, phases do not overlap. The waterfall project devel-
opment process works well when:

• Requirements are very well understood and fixed at the outset of the project.
• Product definition is stable and not subject to changes.
• Technology is understood.
• Ample resources with the required expertise are available freely.
• The project is of relatively short duration.

Although originally rooted in software development, agile project delivery methodology

offers applications for many of the common concerns and themes in innovation (for example,
new product development projects). As firms seek to innovate to achieve a competitive advan-
tage, first-mover advantage and technological breakthroughs, they face an equally challenging
conundrum: how to most efficiently manage projects shrouded in uncertainties? Perhaps the
uncertainties are technological in nature (“Can this new idea actually work?”), sociopolitical
(“Will the public and regulatory agencies be receptive to this new product or service?”) or
economic (“Can this innovation actually become profitable and self-sustaining?”). Given the
sometimes enormous monetary outlays necessary to complete these innovative projects, it is
understandable that corporate senior managers would seek to rationalize project development
cycles as much as possible, in order to keep a firm handle on cost and delivery (hitting product
launch windows). Thus, we have the curious juxtaposition of innovative new products being
committed to standard, rationalized project management practices that work well for deter-
ministic (easy to plan) ventures.
But what happens if requirements change in the middle of the project’s development? Or
the customer delivers a new set of “critical” features that must be part of the final product? Or
when a new technological innovation allows our team to streamline the software we are work-
ing on to make it more user-friendly? What if the initial assumptions or project scope were
poorly communicated or a competitor beats us to the market with an identical product? Under
these circumstances, the decision to lock into a fully articulated project scope, set in stone at
 Corporate innovation and agile project management 377

the outset of the project, can lead to critical problems. With more and more projects support-
ing new product development initiatives that need the flexibility to change course midstream,
the waterfall model can lead to a rigid process that will not deliver value to the customer,
either because their needs are constantly changing or because they did a poor job of initially
articulating exactly what the project was supposed to do.
Consider an example: Google Glass was launched in 2013 as a product intended to bring
information, in the form of a tiny, glasses-attached screen, to the public. It was marketed as
the latest in mobile smart technology and Google was confident that its expensive but trendy
product would do well, once the public had a chance to experience and ultimately, embrace it.
A high price, coupled with significant aesthetic, safety and an unclear set of functions doomed
the product.

Unfortunately, the Glass failed because the creators neglected to define and validate the users and
what problems it was solving for them. Instead, they assumed the product would sell itself even
without real solutions or value, that its hype would be enough to appeal to everyone.
(Yoon, 2018, 1)

The Google Glass fiasco represents another example of the reasons why Agile project devel-
opment was promoted as an effective means to realize product innovation in a manner that is
both efficient and market-driven. Although first set within the confines of traditional software
development, its applications were quickly broadened to other classes of projects for which
user acceptance (and initial knowledge of their real needs) was paramount and where poor
responses could quickly cost these firms millions in capital and goodwill. Part of the reason
for this poor responsiveness to new products and services was the way traditional project
management was structured. That is, the industry standard process (waterfall) to develop soft-
ware and other new products was often rigid and time-consuming, making it difficult for the
developers to keep up with the needs of the business and/or market demand. To advance a
new flexible approach to project development, a meeting of 17 software developers took place
in Utah to address the recurring problems of failing projects, and the Manifesto for Agile
Software Development was the output of this meeting (Beck et al., 2001; Rigby et al., 2016).
This Manifesto identifies the 12 principles of agile development (Beck et al., 2001):

1. The top priority is customer satisfaction through early and continual delivery of valuable
products.
2. Embrace change no matter what stage of the process, as this is Agile’s competitive
advantage.
3. Deliver frequently – with time interval from one to four weeks.
4. Stakeholders and development teams must communicate and/or collaborate daily for the
duration of the project.
5. The projects should be built around empowered and motivated team members. Provide a
safe environment to work in and the support they need to succeed.
6. In person communication is the most effective and efficient way of conveying information
both to and within the development team.
7. Completed, functional work is the primary measure of forward progress.
8. Agile processes should yield viable and sustainable development creating an environment
where developers and stakeholders are able to maintain a constant pace indefinitely for
the iterative work identified.
378 Handbook on innovation and project management

9. Agility is enhanced by a continuous effort to achieve technical excellence and superior

design quality.
10. Simplicity is key and identifying all the work that is not needed is essential.
11. Self-organizing teams create the best requirements, designs, and architecture.
12. The team reflects on how to be more effective/efficient at regular intervals throughout the
project, then takes actions to adjust behavior accordingly.

One major theme behind these principles is, when facing uncertainty, to try something that
you will believe will work, get feedback and adjust your model as needed (Beck et al., 2001).
Agile is built on the belief that this evolutionary approach is more efficient (Dingsøyr and
Dybå, 2008); that is, by taking this iterative development approach, agile does not rely on a
fixed set of up-front requirements or specifications (Serrador and Pinto, 2015).

WATERFALL VERSUS AGILE

Elements of Waterfall Project Management

Waterfall project management is an approach that follows a linear and sequential process to
complete projects dictating that a project must complete one phase prior to the next phase
beginning. Common waterfall phases are:

1. Requirements – the analysis gate of the project, reviewing the initiative, project problem
definition and corporate strategy alignment.
2. Design – scope definition, i.e. what the project will and will not do. “Locking down”
requirements and scope.
3. Change control – changes are frowned upon, and any requested follow a strict change
control process where each requested modification is fully vetted by a change control
board, where the impact of time, scope and cost are scrutinized prior to a change being
accepted or rejected.
4. Implementation – the project is executed, and the work defined in the design phase begins.
The manufacture and build start here and changes follow a rigid process.
5. Verification – all output from the project is rigorously tested for conformity to expected
standards and initial project scope targets.
6. Maintenance – the product or project falls into a warranty period to address potential
fixes or upgrades. Should these arise, the project reverts to the requirements phase and
the process starts anew.

Advantages of Waterfall Project Management

The waterfall methodology offers several strengths for project execution. First, the method
follows a logical and sequential pattern. Fair (2012) noted benefits that include the linear-
phased approach creating dependencies that help connect project phases clearly, thus allow-
ing both stakeholders and project developers to have a clear view of the current phase and
anticipate what is next. The project’s progress (or lack thereof) can be pinpointed, diagnosed
 Corporate innovation and agile project management 379

and triaged. Second, the heavy upfront planning can help cut down on unnecessary changes
to scope and garner stakeholder agreement at the start of the project. Traditional project plan-
ning can be used as a catalyst to get the project moving in the right direction and to develop
a strong backlog (prioritized lists of tasks or user stories that are waiting to be completed)
(Quist, 2015). Third, quality is planned upfront so there that fewer “surprises” when products
are delivered. Finally, waterfall provides project transparency in the form of documentation,
phase signoff and storage of project artefacts. That is, the waterfall methodology promotes the
requirement for formal documentation (Quist, 2015).

Limitations of Waterfall

While the obvious appeal of waterfall lies in the linear, progressive nature of a locked-in
development cycle, there are several limitations and challenges with applying waterfall. With
this methodology, for example, no working product is produced until most of the work steps
are completed, creating a “take it or leave it” scenario during the acceptance phase. Therefore,
the quality and detail of the requirements are critical in waterfall deployments. The require-
ment-gathering sessions for large projects can last weeks and if the subject matter experts are
not engaged, then requirements can be missed. Since there is little flexibility in the process,
there is a tendency for teams to add more features than those needed as they know this is their
chance to get what they want (Boehm, 1996). This, in a sense, is a variation of scope creep
and can lead to costly “nice to have” features and functionality, which can add complexity to
the design and increase the delivery time (Serrador and Pinto, 2015). Change requests must
follow the same approval process as the business case and, if submitted after the design has
been completed, are often not worked on until after the original business case is completed.
Other problems with planning and delivery include rigidness and lack of flexibility of
the mindset, extinguishing creativity and limiting stakeholder input or making stakehold-
ers feel unheard as the focus is on systems rather than people (Nichols et al., 2015; Quist,
2015). Stakeholder input is also collected at the beginning of the project and the end user
generally gets the “finished product” as opposed to being able to comment incrementally. The
research by Nichols et al. (2015) studied the appropriateness of choosing a project methodol-
ogy for small teams in both academia and industry. They found several shortcomings with the
waterfall method. The study cited that all the project features (from high to low priority) are
designed and developed before any are implemented, which limits stakeholder input.
Voluminous documentation requirements and process recording can also slow project pro-
gress and place a drain on resources, and significant investment has been made in the project
before results are ever produced or tested. A failure anywhere in the project life cycle may
jeopardize the scheduled completion.

THE AGILE APPROACH

One of the critical differences between agile and traditional project planning relates to the
nature of the roles that key members assume. In a traditional project planning process, the
project developer’s viewpoint is considered the most important. Developers are looking at the
project from the inside perspective; that is, how long will development take? How many work
380 Handbook on innovation and project management

packages and tasks are necessary to complete the project? Project developers are interested in
tasks because they allow them to accurately and efficiently plan the work and build their cost
estimates. The more detailed and specific the project is made, the easier it is to create these
plans and estimates.

Tasks versus Stories

User stories are different and very important for understanding the real needs of the client
(“voice of the customer”). They are written by or for customers as a means of influencing
the development of the functionality of the product. The more the customer can explain what
they do, what they need and how they can make use of the product to do their job better, the
clearer the user story becomes and the better able the scrum team will be to achieve these
goals. Stories have value because they identify the actual work that needs to be done with the
completed product or system. Once stories have been validated, they can then be decomposed
into tasks. The key lies in recognizing the need to first listen to user stories to identify the
specific value-added the project will provide. For example, a project that ignores the voice
of the customer can be well-managed, brought in on time and under budget, but provide no
real value to the customer because it was done without regard to first identifying critical user
stories (what they need to do their job better).
Another agile characteristic that demonstrates the importance of the voice of the customer
is the emphasis on product features, as opposed to creating detailed product work breakdown
structures. We assume in an agile environment that project scope characteristics are inevitably
going to change over the course of the project’s development. As a result, it makes little sense
to invest heavily in time and effort to develop a sophisticated statement of scope for the overall
product. Instead, agile focuses on getting the product features right: the pieces of the product
that deliver functional value to the customer. Listening to customers’ stories and defining the
project’s critical deliverables in terms of features reinforces the critical nature of the ongoing,
closely linked relationship the scrum team must maintain with clients.

Steps in Agile

The agile process follows a series of steps that allow the methodology to combine the flexibil-
ity needed to respond to customer needs with a formal process that creates a logical sequence
in employing agile planning (Schwaber and Beedle, 2002). The scrum process involves a set
of meetings that manage the project development process through (1) sprint planning, (2) daily
scrums, (3) development work, (4) sprint review and (5) sprint retrospective. During the sprint,
three guidelines shape the process:

1. No changes are made that would endanger or modify the sprint goal. Once goals for the
sprint are agreed to, they are not to be altered in the middle of the sprint.
2. Quality goals do not decrease. During the sprint, the team cannot modify the goals or
sacrifice quality standards that were first agreed to.
3. Scope may be clarified and renegotiated between the product owner and the development
team as more is learned. As the team discovers technical problems or opportunities dur-
ing the sprint, they are passed to the product owner for consideration on whether or not to
modify the project scope.
 Corporate innovation and agile project management 381

Sprint planning
The sprint planning session identifies the work to be performed through the collaborative
work of the entire scrum team. Sprint planning is time-boxed to a maximum of one full day
(eight hours) for a one-month sprint. For shorter sprints, less time is required for sprint plan-
ning. The scrum master ensures that the event takes place and that all members of the scrum
team understand its purpose. The session introduces the sprint backlog to the development
team and coordinates their efforts to achieve the backlog items. Sprint planning answers the
following questions:

• What can be delivered in the increment (time-box) resulting from the upcoming sprint?
• How will the work that is needed to deliver the increment be achieved?

Daily scrums
The daily scrum is a short (15-minute) event that allows the development team an opportunity
to synchronize their activities and create a plan for the next 24-hour time window. During
the meeting, members of the development team explain what they accomplished in the past
24 hours to meet the sprint goal, state what they intend to work on during the current day and
identify any problems that might prevent the development team from completing the next
sprint goal. Daily scrum sessions are for information purposes; they only intend to keep team
members in the communications loop and identify any positive or negative trends affecting
the project. Daily scrums also include reference to the burndown chart, detailing the latest
information on the status of backlog items completed (“burned down”) since the last scrum
meeting.

The development work

The development work is the time when the actual work of the project is done during the
sprint. These are the set of goals that must be achieved during the sprint and are represented
on the burndown chart as either in progress or completed. Development work must be heavily
coordinated between scrum team members to ensure that no efforts are being wasted or work
is being done on non-sprint items. Figure 20.1 shows an example of a burndown chart for a
sprint that assumes the following details:

• Sprint duration – 15 days.

• Team size – five members.
• Hours/day – eight hours.
• Total capacity – 600 hours.

Sprint reviews
A sprint review is held at the end of the sprint to inspect the completed increment (the sprint
backlog) and make changes to the product backlog if needed. During the sprint review, the
scrum team and other key stakeholders work closely to verify what was done on the sprint.
Based on these results and any subsequent changes to the product backlog, the scrum team
now plans the next things to be done to add value, including product features that need com-
pleting or modifying. Sprint reviews are informal meetings; they are not status meetings, and
the presentation of the completed sprint backlog is only to encourage team feedback and col-
laboration. The result of the sprint review meeting is a modified product backlog and an idea
382 Handbook on innovation and project management

Source:   Pinto, J.K. (2019). Project management: Achieving competitive advantage (5th ed.). Upper Saddle River,
NJ: Pearson, 394.

Figure 20.1  Sample burndown chart

of the sprint backlog items that will be addressed in the next sprint. During the sprint review,
the activities to be addressed include the following:

• The product owner explains complete and incomplete product backlog items.
• The development team discusses what went well during the sprint, problems it ran into
and how those problems were solved.
• The development team demonstrates complete work and answers questions about the lat-
est sprint.
• The product owner discusses the current product backlog status and predicts likely com-
pletion dates based on progress to date (if needed).
• The entire group collaborates on what to do next so that the sprint review provides useful
input to subsequent sprint planning.
• Review how the marketplace or potential use of the product might have changed the next
most valuable thing to complete.
• Review the timeline, budget, potential capabilities and marketplace for the next antici-
pated release of the product.

Sprint retrospective
The sprint retrospective meeting is held to evaluate how the previous sprint went; what worked,
what did not work and where potential improvements can be made to the sprint process. A
valuable sprint retrospective should also include an action plan for identifying and implement-
ing improvements to the process. The scrum master works with the scrum team to constantly
 Corporate innovation and agile project management 383

improve communications and identify improvements that will be introduced during the next
sprint. In this way, each sprint is not only about getting the work (the product backlog) done
but also used to generate enthusiasm for the next sprint while creating a more efficient and
productive team.

INNOVATING WITH AGILE

Although there are multiple variations of agile, the basic building blocks of agile remain
consistent. With agile, the working team is cross-functional and is made up of members from
different parts of the organization that come together to work on a specific goal. This team
should include a representative for the end users and/or customers. Agile team members are
not assigned specific roles but are supposed to be self-organizing. The team works collabora-
tively and seeks to deliver solutions in an iterative and adaptive manner (Beck et al., 2001). To
foster this collaboration, it is often recommended that the team works in the same location and
has daily meetings to discuss goal progress and any roadblocks or delays. Work is completed
incrementally and in short time frames (frequently referred to as sprints or iterations). At the
end of the sprint or iteration, feedback is gathered from stakeholders, and the team would fold
the feedback into the next iteration. The goal is to have a functioning viable product at the end
of each sprint that evolves and improves through each iteration until its final state.

Agile Project Life Cycle

The most basic and common stages of agile methodology are plan, design/develop, test, deliver
and review. Because the work is broken down into smaller increments, each of these stages is
much shorter in duration than traditional methodologies. These agile stages are not starting
and stopping points, as agile is grounded in continuous improvement, therefore after the last
stage is completed, the team immediately starts to plan for the next iteration.

Agile Variations

There are differences in the framework among the variations of agile methodology. These
frameworks are grounded in the agile philosophy, values and principles; however, the way work
is executed and managed is slightly different. These methodologies include Crystal, Dynamic
Systems Development Methodology, Feature Driven Development, Extreme Programming,
Kanban, Lean Software Development and Scaled Agile Framework (SAFe) (Scaled Agile,
2021; Chow and Cao, 2008). No variation is arguably better than the other, but some are
better suited for a particular working environment than others. For example, Lean Software
Development and Extreme Programming are designed for software deployments; however,
scrum and SAFe have been consistently leveraged for projects outside of the software develop-
ment space and are commonly applied to new product development and other service innova-
tions. Following is an overview of a few of the most popular versions in use today.

Agile scrum methodology

Although estimates vary, agile scrum methodology is practised more often than other meth-
odologies in firms that have implemented agile (Dikert et al., 2016). Scrum methodology gets
384 Handbook on innovation and project management

its name from rugby where the team rallies around the ball to carry it forward and places
priority on collaboration and teamwork. Scrum is believed to have been first used in relation
to software development (Takeuchi and Nonaka, 1986). The scrum framework was created
to provide an incremental and iterative approach to managing complex work, leveraging fre-
quent assessment and adaption in an empirical way to drive the work (Takeuchi and Nonaka,
1986). This model places importance on the customers/stakeholders and ensures that the work
is being driven by them while acknowledging that their requirements and initial conditions are
highly likely to change. There are four main roles in scrum, which are the stakeholders/cus-
tomers, product owner, scrum master and development team (Chow and Cao, 2008). Scrum
places importance on gaining continuous feedback from the customer/stakeholder to ensure
alignment. The customer/stakeholders work with the product owner who acts as their repre-
sentative to the scrum team. The scrum team is facilitated by the scrum master who keeps the
team on task and functioning within the agreed time frames and framework (Chow and Cao,
2008). In scrum, the planned or scheduled iterations (also known as time-boxes) are referred
to as “sprints” (Chow and Cao, 2008) and are detailed in “The agile approach” section of this
chapter.

Agile lean software development

The term “lean software development” was coined in 2003 by Mary and Tom Poppendieck
in their book, Lean Software Development: An Agile Toolkit, which highlighted lean prin-
ciples and tools and how they complement agile practices. Both lean manufacturing and
agile methodologies believe in iterative and continuous improvement, with heavy empha-
sis on eliminating waste to improve value to the customer/stakeholders (Poppendieck
and Poppendieck, 2003). Lean software development provides a streamlined approach by
eliminating unnecessary waste and activity which, in turn, allows for more products to be
delivered in less time. However, achieving this requires a dedicated/specialized team which
makes it harder to scale (Baseer et al., 2015). The five phases of lean software development
are analysis, design, implementation, testing and evaluation (Poppendieck and Poppendieck,
2003). The seven lean software development principles are summarized here (Poppendieck
and Poppendieck, 2003):

• Eliminate waste – Reduce defects and unclear requirements, minimize unnecessary or

scrap code, avoid starting work that is not completed and task switching.
• Build quality in incremental development paired with continuous feedback – Leverage
test-driven development and automate manual tasks.
• Create knowledge – Provide the tools and infrastructure to document and catalogue valu-
able learnings, code reviews, knowledge sharing and training.
• Defer commitment – Do not commit to decisions months in advance or without fully
understanding the requirements of the business. Continue to collect and analyse data.
• Deliver fast – Avoid unnecessarily complex business requirements or solutions that are
over-engineered.
• Respect for people – Empower teams, promote productive conflict, communicate effec-
tively and operate transparently.
• Optimize the whole – To deliver value quickly to customers, the value stream (end-
to-end process flow) needs to be optimized, but before it can be optimized it must be
understood.
 Corporate innovation and agile project management 385

Agile Transformation (from Waterfall to Agile): Challenges for Innovation

A transition from waterfall methodologies to agile can be a complicated undertaking and

the larger the corporation and typically the more diverse the work is that they manage, the
larger the lift is. More and more firms recognize that integrating technological advancements
in the workplace requires greater flexibility than traditional methods can provide, as well as
the ability to deliver products more rapidly to keep pace with evolving customer needs and
market demands (Almeida, 2017). The transition from traditional waterfall methods to agile
is not always easy, as agile is a philosophy and therefore requires a change to not only the way
we work but how we think about work. As Laanti et al. (2011) noted, agile transformation
is an organizational culture change. Any organizational change can face challenges, but the
transition from waterfall to agile should not be simply considered a process change. It is also
a change that impacts more than just the teams that are supporting the agile work. Middle
managers, stakeholders within the business, as well as upper leadership all need to buy in and
support the change and the new ways of working.
Often when firms wish to be more innovative and adaptive, they rush to implement agile, so
that they can reap the purported benefits of shorter delivery times (Doshi and McGregor, 2018;
Serrador and Pinto, 2015). When organizations implement change, there will always be some
level of resistance. Changing to agile is no different in that regard. According to research,
some of the top challenges are listed in the following subsections (Dikert et al., 2016).

Lack of commitment to agile

An agile transformation requires leadership to understand what agile is. The way the transi-
tion is implemented can impact how well it is adopted by the organization. Agile is supposed
to grow “organically” within a corporation, not forced down as a mandate (Beck et al., 2001).
When teams are given a direction without leaders defining a clear path or plan to implement,
then some team members may not believe the firm is truly committed to agile and that the
direction is more of a whim (flavour of the month). Others will become anxious, agitated and
sceptical over the lack of clarity and start to push back (Dikert et al., 2016). Leadership does
not always understand what is required of them to support the new way of working. Challenges
arise when leaders hold teams to prior delivery plans made before the conversion, requiring
firm commitments and not balancing the workload for the new agile team (Dikert et al., 2016).
This is an issue during the transformational period, as teams that are overloaded with work
and/or struggling to meet aggressive deadlines cannot learn a new way of working (Dikert
et al., 2016). In bottom-up agile deployments, challenges emerge when the management layer
of the organization has not been included in the transformation planning and therefore does
not feel vested in its success (Dikert et al., 2016). In this case, the teams will struggle to get
the support they needed to push work forward and work will stall.

Lack of knowledge and training

A clear priority when converting to a new methodology is to train all the teams involved –
not only the working teams but the teams that would be expected to support these teams.
However, when firms are short-staffed and/or ramping up, training may be deprioritized over
work. Training is also a cost and is often postponed due to budgetary constraints (Miller and
Haddad, 2012). Even when workers are trained, there could be challenges faced when apply-
ing the concepts learned. Challenges arise when there is a lack of coaching or guidance from
386 Handbook on innovation and project management

subject matter experts for teams to help them apply the learned concepts to the actual work
they were managing (Dikert et al., 2016). These challenges can result in team members not
understanding the roles of the team or their individual and collective responsibility for the
work to be done, resulting in poor productivity. This is especially true in firms where team
members are accustomed to functioning in a prescribed way. For example, when we consider
the role of a developer, since in a traditional role they would sit within the IT team and have
little exposure to other teams in the organization, they may not have familiarity with the
larger organization’s functions and/or the business acumen of their working peers and feel
lost (Almeida, 2017). Lack of training for the management teams that support or interact with
the working teams is another challenge. Often this is not seen as a priority and is treated as
a “lunch and learn” type of training which may not give the level of understanding needed to
support the new way of working.

Organizational structure
We noted previously that the transformation to agile affects all work groups within the firm.
Therefore, firms that operate in more of a hierarchical manner will struggle with this change
as they are not structurally capable of supporting an agile framework. Silos are the byproduct
of these traditional, hierarchical organizations, where work is assigned from the top down
with little cross-pollination of ideas or knowledge sharing. These siloed teams often compete
against each other for recognition and bragging rights for new innovations. This makes col-
laboration difficult and cooperation is only obtained by escalating upward. In fact, Doshi
and McGregor (2018, 29) stated, “The stronger an organization’s silos, the more people will
solve for the needs of their silo, versus the needs of their team”. These work habits come
into direct conflict with the new ways of working as knowledge sharing, collaboration and
cross-functional teams are paramount to agile’s success (Almeida, 2017). The hierarchical
structure often does not empower teams to make decisions or resolve conflict, so these skills
may be lacking even at the mid-tier levels of management. Role ambiguity also becomes a
pain point during agile transformations, as in traditional organizational structures roles and
responsibilities are well-defined. It is no wonder that there is confusion, conflict and frustra-
tion when these team members are now placed in cross-function teams and expected to work
autonomously.

Scalability
Managing one agile team may not cause a ripple in a larger organization; however, challenges
often arise when organizations are faced with supporting multiple agile teams. Part of the
issue is that agile teams are set up to work autonomously but are dependent on other teams for
some work items. Thus, when multiple agile teams are requiring work items from these same
teams, a bottleneck is created. To further complicate the issue, these external teams have their
own work and their own set of priorities. As noted by Dikert et al. (2016), there is difficulty
in “striking a balance between self-organizing agile teams focusing on their own goals and
those of the broader organization. Lack of respect for the wider organizational context can
result in coordination challenges” (quoted in Tendedez et al., 2018, 171–176). Teams are thus
placed in the position of competing for the same resources. During a transformation when not
everyone is as familiar with agile methodologies, they may not see the incremental work from
the agile teams as being as important as the “essential” or “foundational” work it is compet-
ing with. From a software development perspective, agile practices can lead to downstream
 Corporate innovation and agile project management 387

system issues; developers writing code supporting agile work can conflict with teams who
are trying to create a more unified architecture (Dikert et al., 2016). Testing can also be a
challenge when scaling agile. As part of the iterative process, agile teams must have access
to a testing environment. Because this is not always taken into consideration, it can become
another source of delays.

THE ADVANTAGES AND DISADVANTAGES OF AGILE

Agile strategies provide superior customer value in a changing environment (Readman et al.,
2006), partly due to a hyper-collaborative stakeholder interaction philosophy. Because it does
not require the same documentation and process rigours of waterfall, data suggests that agile
products are developed and get to market at a much faster rate, with serious business implica-
tions, and can be used as a competitive advantage (Cooper and Sommer, 2016a). The advan-
tage of agile PM and particularly the scrum-based approach is its simplicity (Cervone, 2011).
Agile self-managing teams are advantageous as they promote more satisfied employees, with
lower turnover and lower absenteeism (Nils et al., 2010). The level of stakeholder engagement
is consistently cited as a satisfier and contributor to project success (Kisielnick and Misiak,
2017) with flexibility allowing clients to provide feedback to the team to change their minds,
add, remove and change features without strict change control. There is also a large degree
of transparency to the project schedule as the project sprints are fixed within a certain time
box. At a higher level, research from Hobbs and Petit (2017) revealed that the real advantage
of using agile approaches identified in the literature included a working environment that sup-
ports team creativity and productivity, rapid adaptation to change and value for the customer
because of better identification of needs.
Despite the recognized benefits of agile, there are some shortcomings that need to be
considered, particularly as they relate to corporate innovation policies. Research from Nils
et al. (2010) indicated that self-autonomous teams can be difficult to implement, and they
risk failure when used in inappropriate situations or without enough leadership and support.
Another challenge within agile teams is the need for constant communication. As noted by the
research of Levesque et al. (2001), when the roles that group members play become increas-
ingly specialized, there is a corresponding decline in the amount of time that team members
spend working or communicating with each other. Not all individuals, team and management
support, have the skill set to be able to accept the rapid-fire (negative and positive) feedback
and, as such, may withdraw from the team. Agile uses a top-down approach in defining and
estimating scope to eliminate the waste (time and money) of spending many weeks defining
requirement details that may never be implemented or that may be outdated by the time the
team is ready to build the feature. However, at some point in the cycle, the scope needs to be
locked down. If it is not, the cycle will continuously loop, and the next phase will never be
reached (Sliger, 2010). It is also difficult for novice agile project managers to enforce some of
the most important facets of agile, such as not requesting or making changes during a sprint
(Cervone, 2011). While client feedback is one of the central tenants of agile, it needs to be
managed so that it does not become overburdening. A Rally Software Development study
found that the most common question asked by project managers, upon hearing of this new
agile approach to planning and scope management, is “What am I supposed to tell my boss/
customer when he asks when we’re going to be finished?” (Sliger, 2006, 7). Agile PM’s lack
388 Handbook on innovation and project management

of documentation may also pose a problem as audits (both internal and external) generally
require a full review of project documentation. This can be overcome by partnering with the
auditors ahead of time to ensure that project documentation is created and retained. Finally,
there are cultural hurdles to successfully implementing agile. The “agile mindset” must be
adopted at the top management level and a servant leadership style enacted where the leader
places the focus of the team first, understands their challenges and works diligently to remove
impediments that prevent the team from performing at the highest level.
Agile offers some interesting commonalities and implications for another standard delivery
system for new product development projects and other forms of organizational innovation: the
stage-gate model popularized by Cooper (1990). Stage-gate, in its original conceptualization, is
a top-down, macro model that shares many characteristics with waterfall project management:
most notably, a structured process model that incorporates a series of decision gates, which
follow steps in new product development, from the initial idea, through assessment, business
case development, development, testing and validation to final product launch. Cooper argued
that the lack of uniformity (discipline) in the new product development process doomed many
new ventures at the outset. On the other hand, stage-gate can be moulded to incorporate
agile processes as well. For example, Cooper and Sommer (2016b) have argued that stage-
gate and agile offer a hierarchical organizing method that works symbiotically, combining
the advantages of stage-gate macro organization (across projects and nested families of new
products) with the flexibility of immediate user responsiveness and ability to quickly pivot to
embrace new goals and requirements. As Cooper and Sommer (2016b, 521) noted:

When Agile and Stage-Gate are integrated, and then utilized for manufactured or physical product
development (hardware), Agile is normally applied as the project management method within the
stages in Stage-Gate. That is, the stages remain, and Agile is applied within some stages. The Scrum
method is the particular Agile method that seems most appropriate for hardware development, and
indeed, is the method used for all the hardware case studies uncovered so far in industry.

Thus, it is clear that agile is not intended to replace a stage-gate approach to innovation so
much as it is a complementary project management methodology that can offer the best of
both worlds: a method for managing a structure across stages as well as the agility to adapt to
new requirements and user needs within the stages.
Another interesting area for further development relates to the scalability of agile solu-
tions to innovation projects, not as a function of the number of agile teams, but in a broader
sense. That is, we previously noted that agile originated within software engineering and
has a strong track record for incremental, more specific or limited projects (what Hobbs and
Petit [2017] refer to as the “Agile sweet spot”). Indeed, Hobbs and Petit (2017) noted that the
transition of agile into larger organizations, or to its use on a more macro, organization-wide
level, is fraught with risks, many of which are related to recognizing that the transition to
agile is a radical change that puts extra pressure on business unit managers to prioritize their
needs, commit to an innovation mindset and assign sufficient resources and autonomy to their
agile teams. This sense of ambiguity regarding the efficacy of agile in large settings or with
an assortment of product groups (not just software, but services and other physical products)
poses some key research questions ripe for future study.
A final question for future research links the firm’s innovative behaviour to agile practices.
Research currently suggests that project teams with a positive internal climate, including par-
ticipative safety, support for innovation and task orientation are significantly correlated with
 Corporate innovation and agile project management 389

R&D project performance (Pirola-Merlo, 2010). The conditions that characterize agile project
teams and techniques can be nurtured when attention is paid to the manner in which the
teams are organized and supported. These agile teams, in turn, are often successful at com-
pleting R&D or other innovation projects. It would be useful to explore additional research
that directly applied agile methodologies to a range of project ventures – for example, pro-
jects whose uncertainty level assigns them differential placement on a continuum from non-
innovative to highly complex and uncertain. Assessing the viability of agile practices across
this range of innovation levels would yield important knowledge for how to get the most out
of agile in project innovation settings.

GUIDELINES FROM PRACTISING INDUSTRY PROFESSIONALS

Recognizing that challenges relating to agile include the process of transitioning from tradi-
tional, waterfall methods to this approach, we undertook a brief set of interviews with industry
professionals to ascertain their thoughts on how best to manage the process, as well as solicit-
ing any advice and/or guidelines they could offer to those considering adoption of agile. The
following is a representative set of quotes from some of these interviews:

If I have to establish guidelines for agile implementation, I would identify the client profile before
the kickoff, any legal issues that may impact the methodology, and I like to combine some of the
characteristics of the methods, such as SAP to show how it would be when finished in the kickoff, or
in the SCRUM method, variating the time lengths of sprints or daily meetings.
There are basically two guidelines: Instruction of new employees and how the project workflow
is set up. This should be a detailed guideline to ensure every team member is aware of the entire
workflow. The second guideline which we set up are standardized agenda items in meetings to make
sure relevant information is addressed and non-relevant is moved to other communication channels.

CONCLUSIONS

Projects continue to drive corporate innovation and serve as the principal engine for deliver-
ing added value to modern organizations, both public and private. Because innovation (techni-
cal and administrative intermingling, in the eyes of noted scholars such as Van de Ven [1986])
remains a sine qua non for organizational competitiveness, it is paramount that promising
new methodologies are investigated to demonstrate how they can be adapted to spur and sup-
port future organizational innovation. And yet, there is an underlying paradox in the manner
by which projects have been historically managed, i.e. project failure rates remain depress-
ingly high across most classes of projects. In 2017, PMI research indicated that 28 per cent of
projects were deemed failures and only 60 per cent of projects met their stated goals. Thus,
organizations with a clear mandate to emphasize innovative product and service solutions are
both supported and, in some sense, constrained by the project management efforts in support
of their ventures.
It is due to an emphasis on projects and a concomitant recognition of their limitations
that agile has been found to support new innovations in organizations. Firms are looking for
ways to maintain a competitive advantage and many executives believe that by adopting agile
practices, they can deliver products faster and at a high quality. The 2017 PMI study also
390 Handbook on innovation and project management

indicated that 71 per cent of the firms surveyed were using agile approaches for their projects
sometimes, often or always (PMI, 2017). Research performed across the industry does seem to
provide evidence that agile methodologies can result in greater project success within certain
industries – particularly IT or those with frequently changing requirements or the desire for
early working prototypes. When goals and solutions are unclear and there is high volatility,
there is a particular need for alternative approaches to managing projects (Fernandez and
Fernandez, 2008). Despite the evidence that agile projects have higher success rates than
waterfall, agile adoption does not appear to be a “silver bullet remedy” for project failure. As
the research of Serrador and Pinto (2015, 1050) points out, “[Agile] has achieved best success
to date within certain settings; notably, high technology, healthcare, and professional service”.

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392 Handbook on innovation and project management

APPENDIX I: GLOSSARY OF TERMS

Burndown chart – Shows remaining work in the sprint backlog. Updated every day and dis-
played for all scrum members to see, it provides a quick reference of the sprint progress.
Development team – The organizational unit responsible for delivering the product at the end
of each iteration (sprint). Typically, the development team is cross-functional and self-
organizing; that is, they collectively determine the best way to achieve their goals.
Product backlog – A prioritized list of everything that might be needed in the completed
product and the source of requirements for any changes to be made to the product. The
product backlog is never “final”; it evolves as the product and the business setting in
which it will be used evolve. It constantly changes to identify what the product needs to
be appropriate, competitive and useful. The product owner controls the product backlog.
Product owner – The person representing the stakeholders and serving as the “voice of the
customer”. They may be a member of the project organization but must take the “outside”
user’s viewpoint in representing customer needs. The product owner creates user stories
that identify their specific needs for the product.
Scrum – In the sport of rugby, a “scrum” is the restarting of the game following a minor
infraction. In agile PM, scrum refers to the development strategy agreed to by all key
members of the project. Scrum meetings involve assessing the current status of the pro-
ject, evaluating the results of the previous sprint and setting the goals and time-box for
the next iteration.
Scrum master – The person on the project team responsible for moving the project forward
between iterations, removing impediments or resolving differences of opinion between
the major stakeholders. The scrum master does not have to be the project manager but
does have a formal role in enforcing the rules of the scrum process, including chairing
important meetings. Scrum masters are focused solely on the agile project development
process and do not play a role in people management.
Sprint – One iteration of the agile planning and executing cycle. So, the sprint represents
the actual “work” being done on some component of the project and must be completed
before the next scrum meeting.
Sprint backlog – The set of product backlog items selected for the sprint, plus a plan for deliv-
ering the sprint goal. The sprint backlog is a forecast by the development team about what
functionality will be in the next time-box increment and the work needed to complete that
functionality. The team controls the sprint backlog.
Time-box – The length of any particular sprint which is fixed in advance during the scrum
meeting and typically varies between one and four weeks in length.
User stories – A short explanation in the everyday language of the end user that captures what
they do or what they need from the project under development. The goal of the user story
is to gain their perspective on what a correctly developed product will do for them.
Work backlog – The evolving, prioritized queue of business and technical functionality that
needs to be developed into a system.
21. Projects, capabilities and innovation: Rome’s
Jubilee as a vanguard project for the Italian
Civil Protection Department
Eugenia Cacciatori and Andrea Prencipe

PROJECT CAPABILITIES AND INNOVATION

Project capabilities refer to the “distinctive managerial knowledge, experience and skills, which
are located within a single organisation (a firm) and are required to establish, coordinate and
execute projects” (Davies and Brady, 2016, 314). The notion of project capabilities was first put
forward by Davies and Brady (2000) and emerged from an effort to improve understanding of
innovation dynamics in industries supplying complex customized goods, such as construction,
engineering design, aerospace, software and telecommunication networks, where production
activity is carried out through projects. These “project-based industries” are a critical part of
the economy because they are a large share of it and because they tend to produce complex,
technology-intensive investment goods that feed the economic and innovation activities of the
rest of the economy (Hobday et al., 2000). In these industries, innovation displays dynamics
different from those characterizing the mass manufacturing contexts of mainstream innova-
tion studies. In project-based contexts, innovation is often driven by specific clients’ demands,
takes place together with the production phase during the project, involves the coordination of
technical capabilities and innovations distributed among a large number of partners coordi-
nated by a systems integrator, and is constrained by demands for reliability and often regula-
tion to a much higher degree than most manufacturing goods (Davies et al., 2011; Gann and
Salter, 2000; Miller et al., 1995)
Firms operating in these industries, which are often described as “project-based firms”
(PBFs) (Gann and Salter, 2000) or “project based organizations” (Hobday, 2000), face dis-
tinctive challenges in their innovation activities.1 A key such challenge stems from each pro-
ject being an ad-hoc, temporary and typically fairly autonomous organization, with its own
structures and, at times, distinct organizational identity. This leads to projects being good at
innovating, but bad at transferring innovation and learning across projects and to the firm as
a whole (e.g. Gan and Salter,1998; Hobday, 2000; Scarbrough et al., 2004). PBFs were seen
as particularly challenging environments for the development of firm-level capabilities. A
firm’s capabilities embody its knowledge of how to do things. They take the form of organi-
zational routines, that is, stable organizational processes developed by trial and error as the
firm works out how to carry out its activities (Nelson and Winter, 1982; Salvato, 2009). Thus,
when innovating, a project would develop its own capabilities by developing new dedicated
routines, but the learning embedded in these routines would be very difficult to transfer to
subsequent projects because routines are highly tacit and context-dependent, and thus difficult
to transfer (Szulanski, 1996). The temporary and ad hoc nature of projects was thus seen as a
major obstacle to developing firm-level routines that would effectively embody learning at the

393
394 Handbook on innovation and project management

project level (Bresnen et al., 2005; Gann and Salter, 2000).2 In other terms, PBFs seemed to
be condemned to continuously “re-invent the wheel” in each new project, thus innovating and
then forgetting their innovations without developing their own capabilities. This would limit
the innovation capacity of PBFs, as innovation is cumulative and path-dependent (Dosi, 1988).
Despite these misgivings, a body of research emerged highlighting the role of firm-wide
capabilities in firms operating through projects (Lampel, 2001) and beginning to unpack
the complex relations of continuity between firms and their projects (e.g. Engwall, 2003;
Ibert, 2004). In the context of this growing focus on the role of firms in project-based con-
texts, subsequent research showed that PBFs do indeed develop capabilities at the firm level.
Specifically, PBFs enter into new markets through “vanguard projects” (Brady and Davies,
2004). These vanguard projects, which are set up as a conscious innovation effort at the
strategic level of the firm, initially build upon existing resources and capabilities but modify
and complement them in order to develop new ones. The strategic level of the firm then acts
as a facilitator for the transfer of learning and capabilities, for instance setting up new dedi-
cated divisions, which support the use and further development of the new capabilities into
projects that are similar in terms of market or product. Thus, subsequent projects of the same
type (e.g. turnkey telecommunication networks) reuse elements of previous projects generat-
ing “economies of repetition” (Davies and Brady, 2000) and “economies of recombination”
by innovating through new combinations of existing elements or the integration of new and
old elements (Grabher, 2002, 2004). Thus, explorative vanguard projects usher into more
exploitative projects. The punctuation of the sequence of regular exploitative projects with
explorative vanguard projects leads to different project “eras” in the evolutionary path of pro-
ject-based firms producing complex products and systems (Söderlund and Tell, 2009). Similar
dynamics have been also found in other industries, with for instance Shamsie et al. (2009)
finding distinct strategies of “replication” and “renewal” projects for a Hollywood studio as
it expands and consolidates in new markets. Project capabilities thus offer important insights
into how the innovative activities of project-based firms balance the needs for customization
and innovation for new categories of projects with the need for efficiency and standardization
for more routine projects.
In PBFs operating in complex products and systems, there is thus a complex dynamic
between the firm level and the project level when innovation is concerned, with project capa-
bilities sitting alongside traditional functional capabilities (such as engineering, planning and
manufacturing) and guaranteeing the ability of firms to draw upon these functional capabili-
ties residing at firm level to bid for and execute specific projects and manage client relation-
ships (Davies and Brady, 2000; Ethiraj et al., 2005). Davies and Brady (2016) further develop
this framework by distinguishing between project and strategic capabilities. While projects
capabilities and operational capabilities are developed and located in the projects, strategic
capabilities located at the centre of the organization play a crucial role in making the strategic
decision to pursue a vanguard project, making sure it has access to adequate autonomy and
resources and then making sure that learning and systematization of the newly acquired pro-
ject capabilities take place (see also Davies et al., 2018).
Research on the role of project and strategic capabilities in mediating the patterns of inno-
vation of project-based firms has been expanded in a number of directions. Lobo and Whyte
(2017) examined how firms innovate in their existing markets by adopting digital delivery and
showed that attempts of employing economies of repetition prevail in the first phases and are
then followed by economies of recombination across different partners in later phases. This
 Projects, capabilities and innovation 395

work thus provides a more fine-grained analysis of the project capabilities as they develop
across different partners. Similarly, Manning and Sydow (2011) extend the discussion of pro-
ject capabilities beyond the production of complex goods and services to filmmaking and
show that economies of repetition are favoured when projects are highly similar (and thus less
innovative) and economies of recombination when projects are less similar (and thus more
innovative). Second, another stream of work has looked at project capabilities in the context
of “mega projects”, that is, very large autonomous projects that are typically set up to man-
age large-scale events or infrastructural projects, such as for instance major airport terminals
(Davies et al., 2009; Zerjav et al., 2018) or the Olympic games (Grabher and Thiel, 2015).
These very large projects might have limited chances to develop their own project capabilities
and thus must rely on their participating organizations to provide them.
Whereas the idea of project capabilities has allowed a much-improved understanding of
innovation processes in project-based firms, we know little about how capabilities are formed
in vanguard projects (Davies and Brady, 2016). In what follows, we use the case of how the
Italian Civil Protection Department developed capabilities for the management of major public
events on the basis of its capabilities in emergency management to identify micro-conditions
and processes that may help build new project capabilities in vanguard projects. Specifically,
we look at how social networks and artefacts play an important role in the development of
project capabilities in vanguard projects.

CAPABILITIES DEVELOPMENT AT THE ITALIAN CIVIL

PROTECTION DEPARTMENT

Methods

The evidence that we use to illustrate our discussion comes from a study of the Italian Civil
Protection Department (CPD) – the central government department that is in charge of coor-
dinating the response to emergencies in Italy. From 2001 to 2011, the CPD remit included
ensuring the orderly proceeding of major public events. The study was prompted by what at
the time appeared to be its successful handling of the enormous influx of pilgrims in Rome
occasioned by the funeral of the head of the Roman Catholic Church, Pope John Paul II, in
2005. The setting was ideal to investigate the question of how a project-based organization can
build upon and expand its capabilities to take on new project types. The study, carried out in
2006, involved three main phases. In the first phase, we analysed press reports of the funerals
and gathered publicly available documentation on and by the Italian CPD. This preliminary
analysis showed that the management of John Paul II’s funeral required the cooperation of
numerous organizations, including the National Railways, Rome City Council, the Police, the
Red Cross and the National Health Service. These organizations were “brought together” in a
“Coordination Working Group” headed by the CPD (Paolini, 2005). Further, press accounts
suggested that the CPD had reapplied past experiences in managing the funeral – primarily
the experience of the World Youth Day during the Jubilee in 2000 (La Repubblica, 2005a)
and the NATO summit in 2002 and Bush´s visit in 2004 (La Repubblica, 2005b). On the basis
of this material and available literature, we formulated broad research questions centred on
how new project capabilities emerge. As our study progressed, it became clear that the move
into managing major events was routed into a critical vanguard project, the Jubilee 2000 in
396 Handbook on innovation and project management

Rome, and then took shape through several other early projects. This provided a further focus
for our analysis.
In the second phase, we approached the CPD for an interview that would enable us to recon-
struct the development and evolution of its capabilities in managing major public events. We
carried out two rounds of interviews with respondents in a “workshop” setting. The workshop
setting was proposed by the CPD. While we were initially puzzled by the approach, our initial
interactions showed that this “team” approach was coherent with the way they worked, and so
accepted as we believed that this would provide us with further insights into the CPD’s way
of working. The two authors and a research assistant were hosted in the Operation Room in
the main CPD building, which is where representatives of the CPD and partner organizations
gather to manage an emergency or a major event.
Before the first interview workshop, we circulated a description of the research project, con-
taining the research questions, to the interviewees. At the start of the workshop, we presented
our research and its objectives. The workshop participants included the Director of the Major
Public Events Office and six CPD division managers (our key interviewees) and some other
CPD representatives. During the presentations from our interviewees, we interposed to ask for
clarifications and debated some of the issues raised to obtain a more in-depth understanding,
interacting with the other participants. The two authors and the research assistant took notes
during the presentations, recording verbatim sentences and expressions that were particularly
valuable in illuminating the CPD’s point of view. We also acquired copies of the PowerPoint
presentations used by the CPD during the workshop.
The first workshop/interview round lasted half a day – from 9:00 am to 1:00 pm. Immediately
after that, we met and discussed the major issues raised by the presentation. Our research
assistant produced the first set of notes in the days immediately after the meeting, which also
included points needing clarifications. We then integrated the research assistant’s notes with
our own, producing a summary document. We further circulated the summary document
among ourselves, outlining the key themes and issues emerging from it. We also identified
the elements we considered should be pursued further in the next round of interviews. We
exchanged ideas and raised questions through emails, conference calls and face-to-face meet-
ings. During these interactions, we reached an agreement that the material and information
we had so far gathered showed that, in the CPD’s account, three elements were key to its abil-
ity to reapply past experiences to “similar”, although “rare” events: (1) what our interviewees
described as an “authoritarian” system that endowed them with broad and effective powers to
coordinate (in the sense of command and control) the activities of other organizations; (2) the
existence of a common, formative experience in managing the activities of the Jubilee 2000 in
Rome (our vanguard project) among a core group of people that then went on to occupy
key leadership positions in the CPD and in other public sector institutions that are regularly
involved in these major public events; and (3) a very simple set of high-level procedures, sup-
plemented by archives of materials used in previous events, to help coordination among the
various organizations involved. Points (2) and (3) were closely aligned with the aims of our
study, and thus we decided to focus on these last two elements. We contacted the CPD to ask
for another workshop meeting with the Director of Major Public Events and three – from the
original six – CPD division managers to pursue these themes further.
During the second workshop, the two authors met with the three interviewees in the
Operation Room for a discussion that lasted approximately two hours. Drawing on informa-
tion obtained in the first workshop, we focused on aspects related to: (a) how the initial core set
 Projects, capabilities and innovation 397

of participants was established and who acted as interfaces among the organizations involved
in emergencies or major events; and (b) the role of tools and methods used to encode learning
and how this enabled the redeployment and adaptation of the project capabilities of the CPD.
We took notes and gathered further documentary material. After this second workshop, we
first developed a separate summary report, and then we integrated the additional data and
ideas into our collaborative report. We mailed a draft of the document setting out our empiri-
cal results to the CPD, including verbatimquotes, to gain feedback.
The evidence presented draws on the workshop, interviews and documentary sources
and describes the structure and operation of the CPD at the time of the study. Our evidence
has some limitations, in that it is based entirely on sources from the senior CPD manage-
ment, internal documents and news reports. This evidence provides an extensive overview
of how the CPD accounts for its own methods and performance, but it does not provide an
equivalent account from CPD partners, and the lack of direct observations means that we
have indirect access to actions. This notwithstanding, CPD capabilities have been recog-
nized in other studies (OECD, 2010), despite having been subject to intense judicial scrutiny
in recent years (Di Camillo et al., 2014). In addition, as we illustrate in the following, this
account matches what we know of capabilities in project environments sufficiently well to
provide a useful illustration, while also highlighting themes that might be pursued in further
research.

The Italian Civil Protection Service

The basic structure of the Civil Protection Service at the time of the study had been devel-
oped in the early 1980s when the CPD was restructured and set up as a dedicated government
department reporting directly to the Italian Prime Minister and administratively separate
from the local civil protection bodies.3 At the time of the study, the CPD was located in Rome
and employed around 600 people. During non-emergency periods, civil protection activities
are integrated into the regular activities of the various ministries and local authorities. If there
is a national emergency, the Prime Minister declares a state of emergency, and responsibility
for coordinating activities is assumed by the CPD. The Prime Minister appoints a commis-
sioner, typically a member of the CPD, with the power to formulate executive orders, with
which public administration bodies as well as private organizations and individuals have a
legal obligation to comply.
The declaration of a state of emergency produces a change in the organizational structure
of the National Civil Protection Services into a project-based structure, organized around
temporary tasks. Relief operations require coordination of the activities of a large number
of organizations, ranging from the public sector organizations (including the army and the
national health service) to transportation companies and a host of voluntary associations.
During emergencies, the activities of these organizations are coordinated through the Civil
Protection Executive Committee, chaired by the head of the CPD. Coordination of activities
is ensured through what one of our interviewees described as an “authoritarian system”, in
which the CPD makes executive orders based on the expert opinions of high-level representa-
tives of the organizations represented in the committee. The seniority of these representatives
in the hierarchies of their own organizations enables rapid implementation of decisions.
Between 2001 and 2011, the CPD’s responsibilities included the management of “major
public events”. Our interviewees argued that this extension of the CPD’s responsibilities was
398 Handbook on innovation and project management

based on the similarity of the issues involved in dealing with large numbers of “displaced”
persons in both a major event and an emergency – an example of “labelling” as a technique to
generate capabilities paths in temporary organizations (Manning and Sydow, 2011). Defining
a public event as “major” depends on its impact on a community’s ordinary life course, the
involvement of a large number of participants and the need for special organizational, trans-
port, safety and logistics measures. Major public events and emergencies are managed simi-
larly beginning with the “Declaration of a Major Public Event” by the Prime Minister and the
appointment of a commissioner.

Creating Networks: The Jubilee Agency

The CPD’s ability to manage major public events derives from its capabilities in emer-
gency management and the experience gained from the celebration in Rome of the Jubilee
of the Catholic Church in 2000. During our fieldwork, the Jubilee experience emerged as
a major contributor to (a) the creation of specific expertise to manage major events, which
included the development of specific artefacts, and (b) the development of social relation-
ships that support CPD operations and the deployment of the artefacts developed as a
result of (a). In order to show how the project capabilities for major events emerged out
of the CPD’s emergency project management techniques, and the role of social networks
and artefacts in enabling this adaptation, we focus first on the Jubilee experience – the
“vanguard” project.
The Jubilee Agency was key in the development of the CPD’s ability to manage major
public events since it allowed the combination of people and experience of the CPD and the
Coordination Services Office of the Rome municipality. The Jubilee Agency was an independ-
ent body set up in 1995 by the municipality of Rome in collaboration with other public sector
bodies to coordinate the numerous events taking place in the city to celebrate the Jubilee of the
Catholic Church in 2000. The Jubilee Agency worked in collaboration with the Coordination
Services Office of the Rome municipality, which had been set up in 1998 to manage public
events in Rome. These were numerous as Rome is a capital city, as well as a major religious
and cultural centre. The Jubilee Agency – in collaboration with other parts of the public
administration – was responsible also for developing a Welcome Plan. The Welcome Plan was
designed to manage what was expected to be the higher-than-usual inflow of visitors to Rome.
As part of the Welcome Plan, the Jubilee Agency was responsible for basic services, e.g. health
and mobility. Franco (2000, 45, emphasis added) describes that:

The Jubilee Agency had the role of technical advisor – partaken by Rome City Council, Rome
Province, Lazio Region and composed of 150 people – that helped Rome City Council to planning
… that is develop sector plans on various topics, e.g. transports, health.

Sector plans, which are discussed in the following, are central to the management of major
public events.
Management of the Jubilee was organized along similar lines to an emergency. A Situation
Room (viale Baculli) had the high-level coordinating function of the CPD Executive Committee,
while the Operations Rooms was in charge of operational responses. The Operations Room
(in Tor Vergata) managed the two main Jubilee events, on 1 May 2000 and 19–20 August
2000. The Operations Room represented the CPD’s contribution to the management of the
 Projects, capabilities and innovation 399

Jubilee and was modelled directly on emergency management. Sector plans were developed
specifically for the Jubilee and mostly by other organizations than the CPD.
The Jubilee Agency’s and the Coordination Services’ experience was crucial for creating
continuity across different major public events, not only for the artefactual infrastructure it
developed (e.g. sector plans, Operations Room) but also because it established a network of
long-term relationships among participants. CPD staff worked within the framework provided
by the Agency in running the Operations Room for the major events in the Jubilee. There, they
worked side by side with people at the Jubilee Agency and the Coordination Services. Several
former Jubilee Agency and Coordination Services Office employees have been appointed to
senior roles in various organizations involved in the CPD Executive Committee. Our inter-
viewees argue that this significantly facilitated collaboration amongst the CPD and those
organizations involved in managing major public events because certain types of procedures
were common background and CPD staff could trust their former colleagues to provide a reli-
able evaluation of the situation.
The work of the Jubilee Agency provided a focus for collaboration between Coordination
Services and CPD personnel. When the Agency was disbanded in 2001, new legislation trans-
ferred responsibility for the management of all major public events to the CPD. A core group
of people previously involved in the Jubilee Agency moved to the CPD, which established
core expertise in the area of events management. At the time of our interviews, several sen-
ior members of the CPD had been involved in the Jubilee arrangements. These included the
Department Head, Mario Rossi (Director of the Major Public Events Office), Grazia Bianchi
and Marco Grigi (Emergency Plans and Special Activities Service) and Dario Verdi (Director
of the Organization and Implementation Office), who had all worked for the Jubilee Agency.4
Mario Rossi was appointed Vice-Commissioner for the Jubilee Agency, from a position in
National Civil Service; Dario Verdi acted as the liaison between Rome City Council and the
Jubilee Agency. Mario Rossi had been Deputy Director of the Mayor of Rome’s Cabinet, with
responsibility for mobility, and had experience in managing public events. He was the only
one of our interviewees who, prior to joining the Jubilee Agency, had relevant experience.
Mario Rossi was ultimately made responsible for the Jubilee Operations Room.
Grazia Bianchi and Marco Grigi participated in organizing Jubilee celebrations, as mem-
bers of the CPD’s Emergency Planning Service, which they had joined in 1999. Marco Grigi,
Grazia Bianchi and a small group of people who joined the service in 1999 continued to
work together. According to Marco Grigi, working together “gives our group strength and
reinforces our authority”. Marco Grigi and Grazia Bianchi first worked with Dario Verdi and
Mario Rossi in the Jubilee Agency Operations Room.
Bianchi remarked that:

Past becomes essential for our work. When we hire new people, they are trained on the job working
closely with an older – in terms of experience within CPD – mentor.

In our interviewees’ view, the movement of personnel over the years has strengthened the
CPD’s links with other organizations, such as the army, the police, the fire service, etc. Grigi
stressed that these changes resulted in losses in the organization’s “historical memory”.
However, these were partly compensated by the “operational core” of those managing the
emergency and major event services remaining stable – and especially the Emergency Plans
and Special Assignments group where he and Bianchi worked.
400 Handbook on innovation and project management

Dario Verdi was of the opinion that:

Personal relationships do weaken, as they are a function of the work context. In other words, you
lose internal relationships, but you gain external ones. With Fabrizio Gialli, we had to interact as he
was at Air Force and we had to relate with him for the control of air space. He has now joined CPD.

Artefacts and the Development of Project Capabilities: The Event Planning Method

The CPD’s expertise in managing emergencies is summarized in the “Augustus method”,

an emergency response framework that was developed by a CPD task force in 1997–98 (for
details see Galanti, 1998). In 2001, the “event planning method” for the management of major
public events was developed on the template of the Augustus method, drawing on the Jubilee
experience. The major public event planning method consists of:

• A coordination plan.
• A list of the areas that need to be addressed.
• A set of sector plans targeted to the areas that need addressing and consisting of:
• “Guidelines”, essentially “to do” checklists.
• “Objectives” of the plan.
• “Output” from the planning process.

These elements are complemented by the archive of previous sector plans and material on
previous emergencies/major public events.
The archive of plans and materials from previous events is an important resource for the
CPD when planning new events.

For instance, during our latest national exercise, we wanted to test the new procedure to send SMS
[i.e. text messages via mobile phones] to the population. I went straight to the folder to get the forms
we used with the telecom operators during the black out in September 2003 [when they first experi-
mented with this].
(Bianchi)

When we planned for the Pope’s funeral the first thing we did was to take the sector plans for the
Jubilee and look at them.
(Bianchi)

The interviewees considered that access to already developed sector plans covered 70 per
cent of the effort required to manage an event in Rome. However, this does not hold for other
regions/cities with less experience of major events and/or fewer established links:

If we had to plan something in Bari, we would have about 30% of the work done, as we have much
less experience there.

Sector plans were important in helping coordination with organizations with which the CPD
has not previously collaborated.

There are two moments: one is the interfacing at the table of the Executive Committee, but then we
also “get into” the other organizations through the sector plans. Sector plans are solutions to each of
the issues that need to be addressed. A major event requires a mobility plan (outlining how people
 Projects, capabilities and innovation 401

will get to and leave from the place of the event, where they will stay during the event, where road
signs will need to be put, etc.), a security plan, health and safety plan.
(Grigi)

Keep in mind that we do rely on the specific expertise of each organization sitting around the table
to get things done. Therefore, we tell them what are the factors that they need to take into account
and what we need, but then it is their task to develop the plan.
(Bianchi)

We usually deal with very competent people, who are a bit lost because they have never dealt with a
major public event before. So what we do is to tell them what they need to look at.
(Verdi)

Therefore, the sector plans provide the parameters for the plans developed by other organiza-
tions. The only plan developed solely by the CPD is the “coordination plan”. Bianchi again
told us

Our real strength is our ability to interface [with all the organizations involved in managing an emer-
gency or major public event] and to decide what organizations we need to [be] involved. We can vary
the numbers according to the situation.

The planning method structure is modular allowing the CPD to assemble the elements
required for a particular situation (see e.g. Bigley and Roberts, 2001). Modularity applies both
horizontally (each specific sector plan and its elements can be exploited according to the spe-
cificities of the context) and vertically (different levels of local administrations, e.g. regional,
provincial and local, can be involved or not according to need).
Similarly, sector plans are hierarchical. For instance, a critical decision would be identify-
ing the access and exit routes for the public, health professionals, police, etc. Dealing with
the competing needs for access and exit routes creates a structure for the management of the
event around which the other decisions are taken. While the CPD used debriefs, the methods
are the scaffolding that makes it possible to incorporate the knowledge gained through them.

We do debrief after an emergency and we adapt the methods as a consequence – but there’s very lit-
tle time so that the methods are updated more in practice than formally. In fact, formally the “Event
planning method” has not been modified since its development.
(Bianchi)

DISCUSSION AND CONCLUSIONS

Previous research has highlighted some key characteristics of project capabilities and the pro-
cess of their development. First, project capabilities are specific to classes of projects, which
are similar in terms of products and industries (Davies and Brady, 2000) – for instance, pro-
ject capabilities for Private Finance Initiatives projects in UK construction are different from
project capabilities for turnkey telecommunication networks projects in the communication
industry. The similarity in context among projects within each class allows economies of rep-
etition (Davies and Brady, 2000) and recombination (Grabher, 2002, 2004; Lobo and Whyte,
2017). Second, project capabilities emerge through a Penrosian process in which “vanguard
projects” in new, related, classes of projects make use of and adapt existing resources and
402 Handbook on innovation and project management

capabilities (Brady and Davies, 2004; Manning and Sydow, 2011). Third, the strategic level
of PBFs plays a key role in the development and nurturing of project capabilities through the
selection of vanguard projects and by actively managing the processes through which capa-
bilities are first developed and then transferred within the organization (Brady and Davies,
2004; Davies et al., 2018).
Our detailed study of the development of the capabilities for the management of major
public events at the Italian CPD is consistent with previous literature and enables us to pro-
vide more evidence about the micro-processes whereby existing capabilities and resources are
adapted to create new capabilities in vanguard projects and then refined in subsequent projects
to give rise to new, mature capabilities. Our evidence points to the crucial importance of two
mechanisms for the transfer of learning in project contexts, i.e. social networks and artefacts.
Whereas the importance of these mechanisms in learning in projects is well established in the
literature on project-based organizing, we highlight here their importance for project capabili-
ties’ development.
In the CPD, social networks linked key members of organizations involved in the man-
agement of emergencies and events. These network relationships, fundamental to the effec-
tiveness of CPD operations, emerged through the workings of an organization – the Jubilee
Agency – which was created to manage the Jubilee event – the vanguard project for the devel-
opment of project capabilities related to the major public events. The individuals who acted as
interfaces between the Rome municipality, the Agency and the other organizations involved
in managing the Jubilee acted as brokers and assumed key positions in the networks related
to events and emergencies. Those who subsequently joined the CPD brought with them indi-
vidual know-how, the relationships established through the Jubilee experience and tools and
methods or artefacts allowing the encoding of reusable knowledge. Others joined other organ-
izations with whom the CPD frequently interact, ensuring a shared understanding of what
managing a major event entails.
Our case illustrates, coherently with the literature on project-based organizing, the social
embeddedness of projects and the crucial importance of social networks in the context of
projects, particularly in the management of expertise and careers (e.g. Grabher, 2002, 2004;
Sydow et al., 2004). Individual expertise and, relatedly, the mobility of people are key mecha-
nisms in the transmission of learning across temporary projects, including the important role
they play in sustaining and reproducing project capabilities across time and organizations
(Grabher and Thiel, 2015). Starkey et al. (2000) argued that networks act as latent organiza-
tions. Latent organizations can endure in latent form over long periods and might only partly
be re-activated in a re-occurring (organizational, personal) constellation (Starkey et al., 2000).
Latent organizations – in the particular circumstances of large and unpredictable events (like
disasters) – rely on brokers for their activation, re-configuration and sustainability (Starkey
et al., 2000). The brokers constitute network nodes that function as link pins, relied on and
trusted by other parts/members (Maurer, 2010; Meyerson et al., 1996).
CPD network relationships share several elements of latent organizations, which are reac-
tivated through the declaration of major public events. Rather than reconstituting the organi-
zation as in the TV networks, here it is more a matter of reactivating latent processes. In
addition, our case shows that the formation of social networks is a crucial aspect of the emer-
gence of new projects capabilities and that new project capabilities emerge from common
shared experiences which lead to the merging of previously separated capabilities. Our case
also shows how the personal networks that emerge during these events enable the re-activation
 Projects, capabilities and innovation 403

of these capabilities across projects and organizations. Unlike the case of the London games
(Grabher and Thiel, 2015), we do not have here a “breathing organization” that absorbs and
expels individual capabilities. Rather, we have a latent network that was first established dur-
ing the vanguard Jubilee project and then keeps evolving among a relatively limited number
of key organizations that might need to operate together – but do not always.
Networks can act also as social devices allowing the creation of shared mental models –
what Bigley and Roberts (2001) call cognition management methods. The CPD case shows
that the knowledge embodied in networks allows the identification of appropriate organiza-
tional interfaces among participating organizations. Grabher (2007), who studied the organi-
zation of the 2006 Football World Championship, show that some people were given jobs
not on the basis of their “home organization’s” task domain, but because observation during
past major events suggested that they were able to handle specific types of problems. Our
case shows that vanguard projects provide the settings in which core social networks are
formed and then sustain the “repetition” of project capabilities in subsequent projects (see also
Grabher and Thiel, 2015).
Our case analysis also illustrates how the project capabilities in managing major public
events emerged from integrating and adapting heterogeneous collections of artefacts that were
contributed by different organizations, similar to what is shown by Lobo and Whyte (2017).
Some of these already existed and were adapted to the new context (e.g., the operations rooms,
the Augustus method becoming the event planning method); some of them were developed
from scratch for the specific circumstances (the sector plans). Thus, economies of recombina-
tion appear to be important in the early phases of establishing project capabilities, and then,
when the new capabilities are stabilized, economies of repetition take over – the opposite pat-
tern as observed by Lobo and Whyte (2017).
Sector plans encode experience-based learning about how to deal with a set of issues that the
CPD encounters regularly. Their checklist structure ensures that whatever is relevant is consid-
ered and selected in or out of a specific project. These methods are cues to action repertoires
stored in technical specialist bodies of knowledge and in the personal experience of people in
applying them. These cues are complemented by stockpiles of examples of previous implemen-
tations that provide partial solutions to the new problem (e.g. Cacciatori, 2008; Feldman, 1989)
(i.e. as one of our interviewees argued, the existence of already developed sector plans consti-
tutes about 70 per cent of the work needed to plan anything in Rome and perhaps 30 per cent in
the case of other towns, e.g. Bari). This set of artefacts provides resources for individual agen-
cies, enabling them to “repeat” organizational capabilities with sufficient flexibility to enable
meeting the local conditions but sufficient consistency to enable coordination among actors.
Indeed, research on routines dynamics has noted, in a study of civil protection in Germany,
that artefacts dealing with processes perceived as stable across projects describe workflows,
whereas for processes that were perceived as unstable across projects they described tasks
(Danner-Schröder and Geiger, 2016). Notably, the lists of areas that need addressing and the
sector plans in their general format were used primarily to support the repetition of project
capabilities across different networks of actors, i.e. to enable the CPD to draw on the capabili-
ties of other, and possibly new, partners while adapting them to needs of both major public
events in general and the specific event being planned in particular. The archives of past plans
were instead used primarily as a means to sustain capabilities across time, within the CPD.
The vanguard projects and later, early projects, developed new capabilities by establishing
new social networks and new collections of artefacts partly derived from previous capabilities.
404 Handbook on innovation and project management

These social connections, methods and tools provided the anchors of the new capabilities and
a way to redeploy them in subsequent projects of the same kind. Methods and tools provide
anchors, which, without overloading actors with details, make it possible to adapt to specific
circumstances and simultaneously maintain continuity across different contexts. Thus, they
act as complements to the skills and capabilities of individuals in the context of social net-
works for the re-enactment of project capabilities. During a major event or emergency, sector
plans selectively define the organizational interfaces to be activated and the ensuing network
relationships that will enable the re-enactment of previous experience. Artefacts in the CPD
created and cemented channels of collaboration amongst individuals that became important
and beneficial components of subsequent projects.
There are several areas in which research on project capabilities can further proceed. First,
in our chapter, we have provided initial insights on the role of social networks and patterns of
connections in enabling project capabilities, and Manning and Sydow (2011) and Thiel and
Grabher (2015) provide further analysis and insights. Yet, there is space to further deepen
these insights, investigating in more detail their role in the development of new capabilities,
particularly in the context of complex products and systems. Connectedly, we might need to
further develop the concept of project capabilities to better account for the multiorganizational
nature of projects.
Second, our analysis of the role of artefacts and the processes whereby they were inherited
from previous “traditional” projects, mixed, matched and expanded shows that a focus on
artefacts is a promising route to study how project (and strategic) capabilities emerge and
evolve over time. Here, routines dynamics (Feldman et al., 2021), with its intensive study of
the role of artefacts in routines, can provide many useful insights.
Third, much of what we know about project capabilities relies on a rather sharp distinction
between “new and innovative” and “old and repetitive” projects. This distinction is clearly
supported by the evidence in the field, in that participants clearly identify (at least ex-post) the
role of particular projects as game-changers. However, the literature suggests that the distinc-
tions between “new” and “old” types of projects are enacted by participants through multiple
means, rather than being “out there”. For instance, Lobo and Whyte (2017) show how the
enactment of project capabilities relies on “aligning” practices aimed at making economies of
repetition possible. Thus, organizations can actively shape the project with the aim of config-
uring it in ways that are more familiar, even though success in doing so might be only partial.
Additionally, Manning and Sydow (2011) show how participants judge the similarity between
film projects on the basis of multiple different factors such as genre, cast and format so that
similarity is a vector rather than monodimensional. They also show how project participants
actively use “connecting practices”, such as labelling, that construct and highlight elements
of similarity, and this “helps embed new projects” into sequences that offer different oppor-
tunities for expansion and renewal. More attention to these practices and how they influence
project capabilities and innovation in project-based contexts is warranted.

ACKNOWLEDGEMENTS

We would like to thank the Dipartimento della Protezione Civile for providing access and the
interviewees for contributing their time and expertise. A special thank you goes to Stefano
Ciavela (Dipartimento della Protezione Civile – Emergency Planning and Management) for
 Projects, capabilities and innovation 405

sharing his deep knowledge of the department and helping us in organizing the fieldwork.
The chapter reflects the authors’ interpretation of the case study data and cannot be attrib-
uted to the Dipartimento della Protezione Civile or its employees. Dajana D’Andrea’s work
as a research assistant is gratefully acknowledged. The chapter has benefited from comments
and suggestions from Gernot Grabher. Partial funding from the Italian Ministry of Research
(Grant No. RBNE0389NY) is gratefully acknowledged. Usual disclaimers apply.

NOTES
1. In the rest of the chapter, we use PBFs as shorthand for both project-based firms and project-based
organizations.
2. For a review of routines in project-based contexts see Cacciatori, E. and Prencipe, A. (2021).
Project-based temporary organizing and routines dynamics. In M. Feldmam, B. Pentland, L.
D’Adderio, K. Dittrich, C. Rerup, and D. Seidl (Eds.), Cambridge handbook of routines dynamics
(pp. 407–420). Cambridge: Cambridge University Press.
3. The primary Civil Protection Service units are at municipal level and report to the respective
mayors of the (over 8,000) Italian municipalities. There are also provincial, regional and ministe-
rial civil protection services, and the police services, the armed forces, the fire services, etc. are
integral parts of the service. One of our interviewees remarked that “In Italy, each citizen is part of
the Civil Protection Service”.
4. Names are pseudonyms.

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22. Digital project capabilities and innovation:
insights from the emerging use of platforms in
construction
Jennifer Whyte, Luigi Mosca and Shanjing (Alexander) Zhou

INTRODUCTION

Digital information is transforming project-based industries. Characterized as information

that is shareable, accessible remotely, searchable and updateable (Whyte, 2019), it has become
pervasive in projects. Significant growth in computing power has been accompanied by its
growing importance (Whyte and Levitt, 2011). Digital information is now ubiquitous across
all aspects of project conception, set-up and delivery, creating new connections through the
lifecycle and across portfolios and programmes of projects.
Digital information is changing the relationships between project-based firms and the pro-
jects on which they work. Research has examined how digital project capabilities are devel-
oped by firms in project-based industries through their work on projects (Lobo and Whyte,
2017) to gain value from the use of digital information. Firms use many digital tools, where
digital tools are the various software packages used to manipulate digital information.
Innovation in the digital tools used in projects is ongoing, for example, in new software for
well-established areas of project management, such as scheduling and budget management, or
in developing areas such as project analytics and digitally enabled product platforms (Mosca
et al., 2020; Zhou et al., 2021; Jones et al., 2021). Project-based firms are found across project-
based industries, such as construction, aerospace, energy, mining and defence industries, as
well as disaster recovery and the growing industries to mitigate and adapt to a changing cli-
mate. In these industries, digital information and its manipulation through digital tools bring
connections across projects into view.
While manufacturing industries and project industries are differently organized (Hobday,
1998), manufacturing industries are involved in the supply chains associated with the delivery
of projects. In this chapter, we argue that digital information problematizes the point at which
the production systems that are involved in manufacturing (organized as continuous flow)
meet the delivery of complex product systems (organized through projects).
We observe that some firms in project-based industries are beginning to invest strategi-
cally in digitally enabled product platforms, and also to work with government investments to
develop solutions that can be used across multiple projects. A digitally enabled product plat-
form consists of (1) design configurator software; (2) an extendable “kit of parts”, with core
components; and (3) a set of design rules that sets out the possible configurations in terms of
hierarchy and interfaces. These enable a known set of components to be used in multiple ways
to develop a wide set of designs from a pre-existing set of products, with known supply chains
(Gawer, 2009; Simpson et al., 2001). Firms seek to gain a competitive advantage from plat-
form strategies through economies of scale and scope in design, manufacturing and assembly.

408
 Digital project capabilities and innovation 409

In our ongoing research, we empirically study leading practices in construction. We use the
insights from this empirical work to extend our understanding of digital project capabilities and
innovation, asking the theoretical question: “How does the use of digitally enabled product plat-
forms change the relationship between project-based firms and projects?” In the next section,
we synthesize literatures to provide a theoretical background to address our question, drawing
on work on project complexity and delivery models, digital project capabilities and digitally
enabled product platforms. In the following section, we introduce the case of UK construction
and the emerging use of platforms, providing examples from our ongoing research. The subse-
quent section then sets out the changing relationship between projects and firms, identifying five
ways that project-based firms are changing their innovation strategies and relationships with the
projects on which they work as a result of using digitally enabled product platforms. We close
with a discussion of how insights derived from this case of the emerging use of platforms in con-
struction can inform work on digital project capabilities and innovation in project-based indus-
tries in the context of the changing relationships between manufacturing and project organizing.

BACKGROUND

A knowledge-based perspective on the firm, focusing on capabilities, competence and learning

(Grant, 2002), has been used in work on project capabilities that draws attention to how firms
in project-based industries develop new capabilities through their work on projects (Brady and
Davies, 2004; Davies and Brady, 2016; Zerjav et al., 2018). Recognizing that the discontinuous
and temporary nature of project-based models of production creates problems for learning in
project-based firms (Gann and Salter, 2000), scholars have started to articulate how a wider
context of learning is provided by the (mega)project ecology that encompasses firms and pro-
jects (Grabher, 2004; Davies, 2017). To understand the nature of projects and firms’ activities,
our approach is to see projects as future-oriented, structured as a desire (Nightingale et al.,
2011), and to take a knowledge-based perspective on the firm, which focuses on capabilities,
competence and learning (Grant, 2002).
To situate this work in debates on innovation and project management, in the following we
consider the three strands of literature that are relevant to developing a new understanding of
how digitally enabled project platforms change the relationship between projects and firms:
these are (1) project complexity and digitally enabled project delivery models, (2) digital pro-
ject capabilities and (3) digitally enabled product platforms.

Project Complexity and Digitally Enabled Project Delivery Models

Projects are described by Nightingale et al. (2011, 229) as “future orientated, temporally dis-
crete, organizational structures that involve processes that move from an idea to an outcome,
by changing the world to match the idea, or a modified version of it”. Their delivery model, as
suggested by Davies et al. (2019), describes how the multiple parties involved in a project are
organized and managed to create and capture value on a one-time basis and disbanded when
the task is completed (Davies et al., 2019). In delivering complex product systems, the project
is a locus of innovation, with user involvement and collaboration between suppliers, regulators
and professional bodies to negotiate and develop new product designs, methods of production
and post-delivery innovations (Hobday, 1998).
410 Handbook on innovation and project management

Across different markets, projects and firms have varying relative sizes. Firms thus have
differing levels of influence over how digital delivery is set up on projects, with greater influ-
ence when they are a major player dominating a project and a more negotiated influence when
they are working in an inter-organizational megaproject. Lobo and Whyte (2017) found that
firms seek to influence the set-up of digital delivery on projects to align it with their capa-
bilities. Shenhar and Dvir (2007) draw attention to the differing levels of complexity in pro-
jects, where a “systems” project integrates components and subsystems into a single system to
achieve a specific goal, and a “systems of systems” project involves a programme of work to
integrate an array of individual systems.
The delivery of complex product systems, organized by projects, is a profoundly different
form of organization to a mass production industry, organized by flow (Hobday, 1998). In the
delivery of complex product systems, there is often detailed work with customers through
projects to deliver bespoke products (Hobday, 1998). There is, however, the potential to use
modular architectures and standardized components that are delivered through manufactur-
ing approaches. For example, even for the most complex facility, there may be the potential
to use a small number of standard off-the-shelf doors across the facility, rather than to design
every door individually.
The point at which the production systems that are involved in manufacturing (organized as
continuous flow) meets the delivery of complex product system (organized through projects)
is variously discussed in the literature as a decoupling point. Related terms are used to draw
attention to different aspects of this transition, such as “customer order decoupling point”
or “supply chain decoupling point”. In manufacturing, this is also related to the sequence in
which engineering (developing products) and production (producing products) activities take
place. In manufacturing (organized as continuous flow) engineering is performed before the
production takes place (Wikner and Rudberg, 2005). At the customer order decoupling point
there is a customer commitment and activities are no longer speculative (Wikner and Rudberg,
2005): the push of products towards delivery meets the pull from one or more customers. This
usually coincides with the point at which the production systems that are involved in manu-
facturing (speculative production, organized as continuous flow) meet the delivery of complex
product systems (committed production, organized through projects).
The characteristics of projects vary dramatically as they increase in size, duration, com-
plexity and the extent to which they require inter-organizational complexity. Table 22.1 com-
pares digital innovation and decoupling points in projects of different complexity.
In altering the nature of deliverables and the visibility across supply chains, digital informa-
tion is creating new opportunities to question and contest the locus of this point of connec-
tion between different production systems. To mobilize digital tools in this context, firms in
project-based industries need associated capabilities.

Digital Project Capabilities

Project capabilities are the capabilities of the firm to engage in the delivery of projects (Davies
and Brady, 2000). They are “the specific knowledge and experience required to engage with
internal or external customers, develop bids or offers, and set up and implement projects”
(Brady and Davies, 2004) and are specifically those capabilities that “eliminate variance in
project outcomes (to control costs and add value)” (Nightingale et al., 2011, 215). Project capa-
bilities are “co-created” across the boundaries of the project and the firm (Söderlund, 2005),
 Digital project capabilities and innovation 411

Table 22.1  Contrasting digital innovation on projects of differing complexity

Systems projects Systems of systems projects

Timescales for delivery Years Decades
Digital innovation on Digital innovation can take place Digital innovation becomes
projects across a portfolio of projects required on the project itself
because of the relatively short because of the relatively long
delivery timescales delivery timescales
Decoupling point – point at Digital technologies enable Sub-projects and sub-system
which the complex product management of the process to delivery can be procured in
industry (delivered through facilitate the potential to move the ways that support moving the
projects) interacts with the decoupling point to be able to do decoupling point to be able to do
manufacturing (product) more standardized work and use more standardized work and use
industry offsite strategies offsite strategies

with the firm building capabilities through project work that uses existing knowledge while
also developing new knowledge (Söderlund et al., 2008).
Such capabilities are central to competitive advantage in project-based firms (Brady and
Davies, 2004) in industries that deliver complex product systems. While they are mobilized
at the operational level (Davies and Brady, 2016) they also become important in innovation
strategy, especially as firms operate in the uncertain environments of complex projects. In
such environments, some capabilities are owned or controlled by the firm and others are
accessed via other firms (Helfat et al., 2007). Lobo and Whyte (2017) describe how firms
develop digital project capabilities to engage with the integrated software that is becoming
used to manage projects.
A relatively stable technological environment is required for this learning (Nightingale
et al., 2011; Lobo and Whyte, 2017). When the technologies change radically, then it is hard
for the firm to develop and use digital project capabilities to achieve better organizational
performance and gain competitive advantage. Hence, to make use of existing digital project
capabilities, firms seek to align the project set-up with their existing digital project capabili-
ties, and then must actively reconcile these capabilities where they are not aligned (Lobo and
Whyte, 2017). The development of digital delivery strategy is influenced by many stakehold-
ers, including government policy, funders, software vendors, standards and advice from previ-
ous projects, as well as such firms that will bid to be part of the supply chain, and hence where
firms are not able to fully align the project digital delivery strategy with their own capabilities,
they have to develop new capabilities to reconcile their capabilities with those required by the
project (Lobo and Whyte, 2017).
Digital project capabilities are at the operational level of existing routines and processes,
whereas aligning project set-up and reconciling with digital delivery are described as exam-
ples of the dynamic capabilities that firms need to innovate by developing and changing these
digital project capabilities. Leiringer and Zhang (2021) discuss these hierarchies of capabili-
ties in project-based organizations and further articulate two levels of dynamic capabilities,
with first-order capabilities that change existing routines and processes, and second-order
capabilities that facilitate modification of the lower-order capabilities. While the boundaries
between such levels are not well or consistently articulated in the literature, we see this as
412 Handbook on innovation and project management

pointing to the dynamics across organizational levels and timescales as firms learn how to
fulfil digital delivery.
As well as focusing on digital project capabilities, there are other innovation strategies that
firms in project-based industries can pursue. Nightingale et al. (2011) identify how project-
based firms can invest in capital by making changes to “generate scale economies by reducing
unit costs across multiple projects, and need to be planned before the start of the building
process”. Thus, Hall et al. (2020) observe incumbent firms developing digital manufacturing
capabilities and seeking integrated supply chains to deliver a core product-based solution in a
variety of customizable forms. They also observed digital technology companies joining the
sector as new entrants on the basis of these capabilities. Table 22.2 describes and compares
digital project capabilities and digital manufacturing capabilities.

Digitally Enabled Product Platforms

By enabling a known set of components to be configured and used in multiple ways, product
platforms alter the point at which a complex product industry, organized by projects, interacts
with a mass production industry, organized by flow. As digital information creates more vis-
ibility across supply chains, the competitive strategies of firms are thus changing to make use
of certainty where it is available, taking advantage of the economies of scale and scope that
can be achieved where production is organized by flow.
Central to a product platform is that a core set of components are shared across a product
family (Simpson et al., 2001), with this sharing extending firm’s modular strategies (Zhou,
Mosca, and Whyte, 2023). Where this product platform is digitally enabled, components are
configured using software that embeds rules as to how these components fit together; thus a
digitally enabled product platform consists of the design configurator software, extendable
“kit of parts” with core components and set of design rules.
We observe that developing digitally enabled product platforms or engaging with wider
initiatives to develop these (Mosca et al., 2020; Zhou et al., 2021; Jones et al., 2021) is one
emerging strategy used by firms in project-based industries. This strategy combines digital

Table 22.2  Project-based firms’ digital strategies – developing project and manufactur-

ing capabilities

Digital project capabilities Digital manufacturing capabilities

Logic of production Project-based (complex product Product-based (flow-based)
system systems)
Nature of capabilities Skills to digitally enable project Skills to digitally enable supply-chain
delivery, e.g. through visibility and management, manufacturing, logistics
integration of digital information and modelling (Hall et al., 2020)
across the project ecology (Lobo
and Whyte, 2017)
Factors in project- Focus on innovation at the project Focus on innovation at the product
based firms’ level – developing capability in configuration and portfolio level –
involvement in bidding for and delivering projects developing economies of scale across
innovation projects
 Digital project capabilities and innovation 413

information, accessed through design configurator software, and a modular product develop-
ment strategy that enables efficiencies in design, manufacturing and assembly. As such, it is an
extension of modular manufacturing approaches, utilizing digital information to make deci-
sions about design configuration more readily visible and available in projects. As the digitally
enabled product platform is itself malleable and extendable and dependent on an evolving
innovation ecosystem (Hilbolling et al., 2021), work is required to establish and maintain the
range of components and complements that are managed through the platform. The use of
digitally enabled product platforms within an innovation ecosystem thus introduces dynam-
ics that present specific challenges. Using and recombining the design of platforms and their
core and peripheral assets (Hall et al., 2020; de Reuver et al., 2018; Henfridsson et al., 2018)
enables reduced transaction costs, faster decision-making and efficient communications.
While this strategy requires significant upfront investment, it also places the firm in a sys-
tems integrator role at the sub-project or project on which it works. On systems projects (such
as housing) this is usually the whole project level, and the product architecture can be defined
at project set-up with an early design fix. On major infrastructure projects, there are likely to
be a range of different levels at which systems integration is addressed and emerging com-
plexities and uncertainties that need to be addressed across the programme delivering systems
of systems (Whyte and Davies, 2021). On such projects. questions arise about how firms and
projects interact, especially where there is work on platforms involving different actors in the
innovation ecosystem, with firms developing proprietary (or open) platforms for use with their
supply chain and industry-wide developments.

THE CASE OF UK CONSTRUCTION

To understand how the emerging use of digitally enabled product platforms may change rela-
tionships between project-based firms and projects, we examine the case of UK construction.
Our analysis relies on multiple sources of data collected over the past ten years to explore
how UK construction firms are changing their business models and adopting digitally ena-
bled product platforms. This data includes about 100 semi-structured interviews, site visits,
industry events and about 50 firms and industry reports (Zhou et al., 2021; Jones et al., 2021).
The UK construction case has been purposively selected as a particularly challenging sec-
tor in which to implement a platform-based approach, as it is a mature industry in which pro-
jects are inter-organizational in nature (Sydow and Braun, 2018), with loose coupling between
projects and firms (Dorée and Holmen, 2004) and no dominant firms. In addition, while man-
ufacturing approaches have been available for application to construction for more than three
decades, only recently have they begun to be widely adopted (Barlow et al., 2003; Jones et al.,
2021). The role of government and other project owners is increasingly recognized (Winch
and Cha, 2020). In the UK, there is also a concerted industry-wide innovation effort, working
with the government as a major project sponsor. For example, to suit new digitally enabled
ways of working, government policymakers seek to improve delivery by changing incentive
structures, procurement methods, stage-gates in delivery processes, standards used and client
communication (Kendall, 2021; Mosca et al., 2020; HM Government, 2020).
To develop a digitally enabled platform for the delivery of government-sponsored
projects – enabling changes across firm boundaries – the Construction Innovation Hub was
set up to promote offsite construction, coordinating the implementation of a platform-based
414 Handbook on innovation and project management

approach and working alongside the associated firms.1 This Hub seeks to meet growing
demand by providing an industry-wide solution that is not owned by a specific project-based
firm, though it is available to project-based firms to use. Thus, projects and firms that seek
to implement and develop digitally enabled platform strategies operate within the context of
these wider government and industry initiatives (Whyte, 2019), with some firms (both firms
in the project-based industry and firms developing digital technologies) seeking to champion
and mobilize wider developments that support their own agendas.
Using construction as the case, this section considers some examples of digitally enabled
product platform strategies in systems and systems of systems projects. Table 22.3 shows these
two contrasting cases, illustrating them using the examples of housing projects and infrastruc-
ture megaprojects. The housing sector delivers systems projects in which firms have a large
influence over the projects on which they work. Infrastructure megaprojects deliver systems
of systems projects in which firms negotiate as part of a wider inter-organizational project.

Systems Projects – Housing

The product platform approach and the use of a design configurator, with a kit of parts and a
set of design rules, have been most extensively used in the UK housing sector. Through this
approach, firms combine and reuse digital design components on multiple projects leading to
a strategy based on a portfolio of projects, rather individual projects. This enables a known set
of components to be configured in multiple ways to develop a wide set of designs from a pre-
existing set of products. This platform approach adds efficiency to a sector that can be rela-
tively easily productized. However, the competitive strategy of firms in this sector is affected
by market dynamics, which involves central and local government agencies involved in city
planning and the release of land, which can make it hard to achieve the forward pipeline of
work for firms to obtain funding for major capital investments. There is a range of strategies
for taking a manufacturing approach, with Hall et al. (2020) identifying different relational,
project-based spinoff, vertical integration or digital systems integration strategies.
In the case of similar projects, firms can benefit from the economies of repetition by exploit-
ing organizational changes, routines and learning processes to manage a growing number of
similar projects at lower cost and more effectively (Davies and Brady, 2000; Brady and Davies,
2004) Where there is the economics of repetition, manufacturing approaches in construction

Table 22.3  Contrasting digital innovation on projects of differing complexity in the case

of construction

Systems projects Systems of systems projects (e.g.

(e.g. housing projects) infrastructure megaprojects)
Examples (and 101 George Street, Croydon, UK London and UK megaprojects – HS2
approximate cost) (~£180m) (+£40bn), Tideway (£3bn)
Digital strategies Firms play a significant role, as they Projects (and delivery clients) play a
may purchase land and act as developers significant role and may hand digital
or work with developers. Planning information over to owners and
authorities play a significant role in the operators
release of land
 Digital project capabilities and innovation 415

can drive down costs and improve quality. The digitally enabled product platform is particu-
larly useful for mass-customizable product offerings, providing a digital interface that enables
both more flexible decision-making and economies of scope. Many firms are taking steps to
modularize their products, as loose coupling between modules enables different configura-
tions of product components to satisfy customer needs (Peltokorpi et al., 2018). Modular firms
are developing product platforms, seeking to gain value through the recombination of a kit of
parts while allowing common interfaces across components. Zhou et al. (2021) explore how
an architectural design firm, such as Bryden Wood, is investing in digital solutions to work
with clients to show them the effects of various design constraints, the options that are avail-
able and the trade-offs that may have to be made.
Bryden Wood is a well-known example of a firm investing in digitally enabled product
platform strategies, and it is, according to its website, a company of “creative technologists,
designers, architects, engineers and analysts”. As a design consultancy, Bryden Wood is a
classic example of a firm that works as a project-based firm (Salter and Gann, 2003). Yet
Bryden Wood has instead been seeking to change the industry structure, publishing reports,
papers and open code to advocate for a platform-based approach – focusing on reusing compo-
nents across a portfolio of projects rather than addressing each project separately in delivering
buildings and infrastructure (e.g. Masters and Johnston, 2019). It has created a space in its
headquarters to host clients on-site and enable them to brainstorm and discuss the delivery of
their projects at the project set-up stage. Bryden Wood is developing digitally enabled product
platforms as configuration tools, such as Prism and Seismic, aiming to set some of the com-
mon design rules and regulations that shape design, at the same time enabling a large amount
of design work to be performed efficiently and at scale (Pullen et al., 2019). For Shenhar and
Dvir (2007), systems integration is central to projects, and the design configuration tools and
pre-defined design rules associated with digitally enabled product platforms provide a means
for this integration.
Housing is an area of construction in which firms are pioneering platform solutions (Jansson
et al., 2014; Mosca et al., 2020), and the interest in how relatively standardized systems pro-
jects such as housing can take up offsite production has previously been explored in the litera-
ture. Gann (1996) advocates for a view of construction as a manufacturing process by drawing
analogies between housing delivery and the delivery of cars (drawing examples from Japan
where major conglomerates deliver both). Barlow et al. (2003) describe the related potential
for mass-customized solutions to housing. The development of digitally enabled product strat-
egies by firms such as Bryden Wood suggests that digital manufacturing capabilities, as well
as digital project capabilities, have become important, with firms strategizing and developing
innovation focusing attention on portfolios of projects rather than on individual projects.

Systems of Systems Projects – Major Infrastructure

In the delivery of major infrastructure, the integration of many systems on the project is a
major challenge, involving the coordination of multiple stakeholders and technologies at dif-
ferent levels of maturity (Sapolsky, 2003). An example of such a major infrastructure project
is Crossrail, a major railway through the centre of London now known as the Elizabeth Line,
on which construction began in 2009. Project managers on such major complex projects have
to make key decisions about the project set-up about where and how to work with a supply
chain partner (that potentially operates more like an original equipment manufacturer [OEM]
416 Handbook on innovation and project management

in the car industry, controlling that whole product). At this stage, project managers set out the
playing field for innovation on a project as well as the approach to systems architecture, mak-
ing decisions that affect the ability to modularize and develop modular (rather than in-situ)
solutions.
The more complex systems of systems projects can have very long timeframes, with infra-
structure megaprojects acting as long-term projects (Brookes et al., 2017) taking decades
to deliver assets that are expected to operate for more than a century. While such delivery
programmes have begun to incorporate innovation programmes like Crossrail (Davies et al.,
2014) there is a specific need to consider digital delivery in these innovation programmes as
the long timescales involved in developing infrastructure contrast with the rapid change in
associated hardware and software over the same period. The strategy of a previous generation
of projects (e.g. HS1) to hold the technologies of delivery stable through the delivery stage no
longer works for the current generation of projects.
To take a product-based approach requires an early design “fix”, but this is not easy to
achieve where there are emerging complexities and uncertainties at the programme (systems
of systems), project (systems) and subsystem levels (Whyte and Davies, 2021). Thus, there are
upfront questions about systems integration (Whyte and Davies, 2021); coordination and col-
laboration (Tee et al., 2019), and where there are potential changes in technology and design,
a more flexible, progressive design approach may be taken (Gil and Tether, 2011) to handle the
emerging integration issues. An example of this is at London Heathrow Terminal 5, where the
decision was made to decouple decisions about the roof from the more uncertain and chang-
ing decisions about baggage handling technologies, by developing the structure of the roof as
a large shed (Tee et al., 2019), with a significant span and no supporting columns in the main
space, to be able to accommodate a wide range of technological solutions to baggage han-
dling. Thus, decisions about systems architecture become crucial in enabling the programme
to encompass emergence in areas of complexity and uncertainty, while also enabling more
efficient manufacturing strategies to be used where there is repetition and certainty.

FIVE INSIGHTS FROM THE EMERGING USE OF PLATFORMS IN

CONSTRUCTION

Drawing on the case of UK construction, we identify five ways in which digitally enabled
product platforms change the relationship between firms and projects.

Firms Take a Product- Rather Than Project-Based Strategy

Firms that develop digitally enabled product platforms employ a product-based rather than
a project-based strategy. There is a strategic focus on shifting the decoupling point between
the project-based activities and those organized as a flow, to benefit from economies of scale
and scope through the use of a kit of parts and design configurator. This is because a prod-
uct-based strategy allows firms to run in parallel engineering (developing products) and pro-
duction (producing products) activities by reusing pre-engineered and pre-designed digital
models embedded in kits of parts and design configurators. Thus project-based firms seek to
innovate by working with the manufacturing supply chain to develop their products and their
configuration, building and using new digital manufacturing capabilities, and prioritizing
 Digital project capabilities and innovation 417

these above digital project capabilities through learning from specific projects. As we explore
in the remaining four insights, this has implications for innovation, relationships with projects,
project set-up and competition.

Firms Increasingly Manage Innovation at Portfolio Level Across a Set of Projects

Relatedly, through a digitally enabled platform-based strategy, project-based firms increas-

ingly seek to manage innovation at the portfolio level across a set of projects. Rather than
focus on the individual project, they invest upfront in a kit of parts and then seek to establish
rules as to which projects to take on in order to exploit their capabilities.
As platform strategies require upfront decision making, in bidding for work, there is atten-
tion to the choice of projects on which a platform strategy can be used, and to aligning projects
to the platform strategy. For example, a firm such as Bryden Wood creates space in its office
for clients to do early strategic work on how to conceptualize their projects, well ahead of the
procurement phase. Bryden Wood, like other incumbent firms in this project-based industries,
uses the digitally enabled product platforms they develop to codify and reuse their accumu-
lated project-based knowledge (see also Jones et al., 2021).
While the product platform approach and the use of a design configurator enable the recon-
figuration of designs to particular projects to achieve economies of scale and scope, firms seek
to work across a portfolio of projects on which there are a core set of common components and
processes. The design configurator and platform approach thus provides a stable set of core
components and processes across a portfolio of projects, where peripheral components and
processes are configurable to adapt to different projects.

Firms Seek to Influence Project Set-Up

Project-based firms have less flexibility to adapt their strategy during the delivery of a project
where they use a digitally enabled product platform strategy. More decisions need to be made
upfront. Hence, rather than both trying to align the project to the pre-existing capabilities and
then reconcile to the project strategy, firms put more emphasis on influencing project set-up to
ensure the alignment of the project with a digitally enabled product platform. The work that
firms such as Bryden Wood do with their major (and often repeat) clients is indicative of the
associated work of educating the client to use this approach. For example, GlaxoSmithKline
(GSK) used “Chips”, a set of predefined modules developed by Bryden Wood based on exist-
ing standard functions across project portfolios. Such a platform approach enabled GSK to
procure with high clarity and build quickly.

Competition Is between Digitally Enabled Product Platforms

In the UK construction sector, we noted that where projects’ owners and operators sponsor a
platform-based approach and project-based firms have platform solutions, tensions may arise
regarding which solutions to use. Projects’ owners and operators may have their own standard
sets of components, may require bespoke solutions or may own a digitally enabled product
platform. Hence, where there is a more stable supply chain, competition may become focused
on the advantages and disadvantages of different platforms and may require adaptability on
behalf of the project-based firm. An example of this is Laing O’Rourke’s work on hospitals,
418 Handbook on innovation and project management

where they had a standard mechanical and electrical solution, but the client required their
own standard mechanical and electrical solution so that they could manage assets across their
portfolio in operations.
Some firms retain a dual business model, with a division in the firm that is using a platform-
based approach, while other divisions are more project-based and can work with clients that
have not set out a modular approach to their projects.

Industry-Level Initiatives Change the Relationships between Projects and Firms

In a project-based industry like construction, one reason that we observe industry-level initia-
tives to build product platform approaches is that innovation is distributed. Project sponsors,
clients and managers make key decisions that affect the use of a digitally enabled product
platform and the associated design configurator in the project set-up phase.
While smaller projects may be relatively commoditized, in complex (system of systems)
projects, the project managers set out the playing field for innovation throughout the delivery
of the project in the project set-up phase. The approach to systems architecture has a signifi-
cant impact on the ability to modularize and develop platform-based solutions.
The UK presumption in favour of offsite is designed to enable project-based firms to
develop product-based solutions. While project-based firms, such as Laing O’Rourke and
Bryden Wood, are developing their own digitally enabled product platform approaches, there
is also the opportunity for major projects and clients, and the government is seeking to develop
its own platform for use on government projects.

DISCUSSION AND CONCLUSIONS

This chapter explains how digital information is transforming project-based industries by

exploring how digitally enabled product platforms are changing the relationships between
project-based firms and the projects on which they work. This has implications for scholars of
innovation and project management, as it draws attention to innovation across industries that
are organized by flow and that are organized by projects.
We extend this work on innovation by observing that taking a digitally enabled product
platform strategy, with a design configurator, kit of standard components and design rules,
changes the relationship between firms and projects. The literature on innovation within a
project-based firm identifies how firms engaged in multiple projects work closely with clients
and end-users to develop different and highly customized products for each project (Gann and
Salter, 2000). These firms build project capabilities to win work and to shape client priorities
and requirements, particularly during project delivery as the firm develops and reconciles the
capabilities of the firm with those of the project.
We contribute to the project capabilities literature (Davies and Brady, 2016; Brady and
Davies, 2004) by illustrating how project-based firms develop new capabilities to manage
innovation at the portfolio level across a set of projects. In the project set-up phase, project
managers are required to make key decisions to use their digitally enabled product platform
across multiple projects.
We note how such project-based firms are investing in digital manufacturing capabilities
rather than digital project capabilities, to gain benefit from economies of scale and scope
 Digital project capabilities and innovation 419

across a portfolio of projects. Where firms can persuade projects to use their digitally enabled
product platform, then the platform approach enables project-based firms to develop a set of
designs for different projects from a pre-existing set of products, with established manufac-
turing supply chains. Thus, using the digitally enabled product platform on multiple projects
enables firms to work with supply chains and clients to explore the design space, altering
parameters to rapidly develop different options and agree on bespoke solutions using a kit of
parts with relatively few new or bespoke components.
In this chapter, we use the UK construction sector as a case study to understand the chang-
ing relationships between project-based firms and the projects on which they work. While
project management literature has developed a clear understanding of how project-based
firms innovate (Davies et al., 2009), coordinate with other firms (Whyte and Lobo, 2010) and
learn across projects (Davies and Brady, 2000), we articulate how the introduction of digi-
tally enabled product platforms problematizes the point at which the production systems that
are involved in manufacturing (organized as continuous flow) meet the delivery of complex
product systems (organized through projects). We explore how project-based firms develop
product-based as well as project-based strategies, and how, to align the project delivery with
their capabilities (Lobo and Whyte, 2017), this leads project-based firms to bid for projects
in which product platforms can be used. While the use of such platforms is relatively new in
project-based industries such as construction, we believe it is an important area for further
research as platform technologies are also transforming other sectors.
In this chapter, we also provide a contribution to the decision criteria process in product
development projects (Steffens et al., 2007) by providing evidence of how project-based
firms influence their stakeholders, such as government policy, funders and suppliers to
ensure the alignment of the project with the design requirements of digitally enabled prod-
uct platforms. We provide a novel perspective on competition in the project set-up phase as
project-based firms will compete with each other influencing their stakeholders to sponsor
the use of their own digitally enabled product platforms and standard sets of components
and solutions.
Directions for further research include how digital information is enabling increasing trans-
parency across industries that are organized through different production systems, raising
questions about the point at which manufacturing industries (organized as flow) and complex
product systems industries (organized as projects) connect with each other. This is an area that
would benefit from further empirical research. We know that not all project-based industries
are the same, with varying degrees of coupling between organizations. An example is the
loose coupling of firms and projects in construction (Dorée and Holmen, 2004) with firms
having relatively little decision-making power in large systems of systems projects relative to
project sponsors, clients and managers). While loose coupling suggests the need for industry
transformation initiatives, we know relatively little about the factors that lead to success as
industries transform and as they work across different logics of production.
There is an interesting research question about modular strategies and the commonality of
components and related processes across projects. How much can components hold stable?
Where do they need to use the design configurator to have a flexible offering that meets cus-
tomer demands? Firms such as Bryden Wood build project capabilities using digitally enabled
product platforms for a specific type of project; then in a later stage, some of the components
and processes can be reutilized and extended to other types of projects. Thus, across different
types of projects, Bryden Wood need to make strategic decisions to maintain a stable portion
420 Handbook on innovation and project management

of unchanged components, while some other components can be configured from time to time
to suit the needs of individual projects.
Scholars could build on the ideas developed in this chapter to develop empirical studies of
the constraints on a firm’s ability to take a product- rather than a project-based approach in
industries that deliver complex projects, and the impact of government regulation on innova-
tion in these innovation systems. Strategy scholars could also explore how product platforms
are changing coordination dynamics, informal and formal organizational structures (Mosca
et al., 2021) and the business models of project-based firms (Kujala et al., 2010; Jones et al.,
2019). Scholars working on capabilities could extend this work to examine further how inno-
vation in digitally enabled product platforms changes the formation and distribution of novel
capabilities.

NOTE
1. Although platform approaches are becoming used on much higher-rise housing developments in
Asia, the UK platform-based approach is focused on relatively low-rise developments (up to four
stories) for flexible use, with ceiling heights of up to 3 m and floor spans of no more than 9–12 m.
The Platform Design Programme from the Construction Innovation Hub defines the specifications.

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23. Innovation and big science projects
Mark Dodgson and David Gann

INTRODUCTION

Big science projects increasingly underpin scientific progress and improve knowledge about
phenomena that are fundamentally important for humankind. They are defined by Hallonsten
(2016) as scientific activities that demand big infrastructures and big organizations to oper-
ate these infrastructures. Projects such as CERN, the European Organization for Nuclear
Research in France and Switzerland, ITER, the international fusion project in France, the
Square Kilometre Array radio telescope in Australia and South Africa and the International
Space Station involving the USA, Canada, Europe, Russia and Japan advance scientific
knowledge and understanding in fields such as energy, space and health with the potential for
solving existential threats to humanity. Collectively they have budgets of hundreds of billions
of dollars and produce major benefits for innovation in industry.
The contributions made by big science projects to industrial innovation are, however, often
both unpredictable and under-appreciated. The particle physics laboratory CERN, for exam-
ple, aims to understand the conditions that existed within a billionth of a second of the Big
Bang, and it has had significant impacts on industry and society, from computer science to
health and civil engineering.1 The world wide web and the laser are classic examples of tools
developed to help undertake scientific experiments. Some of these benefits are planned and
expected, some occur through serendipity: no one foresaw the industrial applications of the
web or lasers. The most important industrial innovations resulting from big science invest-
ments can occur when the focus is directed towards conducting the most adventurous science,
rather than their commercial outcomes.
Many innovations developed in big science projects for the purpose of designing, building
and operating them will be applicable in different, often commercial, circumstances. Some
of these are planned, and others may emerge serendipitously. Benefits to industry are real-
ized early on, upstream in creating and developing the construction and engineering capa-
bilities and innovations in supply chains to deliver large and complex scientific facilities and
equipment. They extend downstream through commercialization and industrial application of
innovative technologies and outcomes that emerge from science. These benefits are allied to
activities undertaken midstream, or instream, through the myriad collaborations and solutions
provided by industry necessary for the conduct of large-scale experiments. Valuable skills are
developed in all stages of big science projects that have potential use in industry.
Big science projects have consequences for innovation in a number of industries and sec-
tors, including the following:

• Construction industry. Constructing the often highly complex facilities for big science
projects can involve significant advances in construction technologies. Building the Large
Hadron Collider at CERN, the world’s largest and most powerful particle accelerator

423
424 Handbook on innovation and project management

which consists of a 27-kilometre ring of superconducting magnets 100 metres under-

ground, for example, involved major advances in tunnelling technologies.
• Manufacturing industry. Producing complex equipment, often with new and advanced
materials, can involve substantial advances in machining, materials handling and assem-
bly. Operation and maintenance of the UK Atomic Energy Authority’s fusion reactor,
for example, has involved major advances in the manufacture of robotics for challenging
environments. There is a history of instruments being developed for scientific experi-
ments with subsequent transformative effects on industry, such as the laser.
• Data and digital technologies. Big science projects produce enormous amounts of data.
CERN, for example, was producing over 200 petabytes of data by 2017. Collating, distribut-
ing and analysing such volumes of data requires innovative methods: in CERN’s case involv-
ing over 14,000 scientists distributed around the world. As is well known, Tim Berners-Lee
invented the world wide web at CERN for automatic information sharing among scientists.

While the study of innovation in large projects is receiving increased attention (Davies et al.,
2017), recent research tends to focus on infrastructure projects, exploring cases such as air-
ports, air traffic control systems and railways. There is very little contemporary research
on innovation in big science projects, and there is value in this being remedied, not least
because of their broad significance for the wider study of innovation and project management.
Specifically:

• Whilst they may eventually address a market need and build innovative capability in
industry, this is not their primary motivation. They are science-driven innovations.
Research has long debated the relative significance of “science-push” and “market-
demand” influences on innovation, with the latter arguably assuming greater importance
in recent years. It may be time to reassert the crucial contribution made by science to
overall patterns of innovation.
• As science-driven innovations, their development relies on significant input from scien-
tists aiming to undertake their experiments. They are user-led innovations. These are not
direct users, as in the case for example of surgical or sports equipment, but more assembly
of users combining to conduct complex experiments.
• As such innovations demand high technical specifications that may be price insensitive,
they can raise levels of capability amongst suppliers, who may for example undertake
R&D they would otherwise not attempt. They provide opportunities for the development
of advanced and robust designs in upstream innovations within supply chains.
• As the intellectual property (IP) created from these projects is allied to basic science,
commercial entities wishing to profit from it need sufficient absorptive capacity to appre-
ciate its value and ability to transfer it into commercial applications. This may involve
commercial partners investing more in R&D than they may otherwise do.
• Projects involve using particular inputs to produce a certain outcome at a certain time,
price and quality. Research shows how innovation in projects is necessary as inputs
improve and expected outcomes change (Davies et al., 2017). Research in big science
projects has an additional level of uncertainty, as they are experiments. While elements
and components involved in their design, build and operation are known, experiments
are conducted to explore the unknown. They possess degrees of risk and uncertainty not
commonly found in most large, complex projects, whose planned outcomes are clear,
even if their delivery is often troubled.
 Innovation and big science projects 425

• They have lengthy time horizons. Commercial returns from investments can take many
decades to materialize, extending perspectives in the portfolios of participating private
companies.
• They demonstrate important synergies between public and private investments. Public
investments in big science projects are long-term public goods, and can essentially de-
risk subsequent investments by the private sector that can take commercial advantage of
the accumulated knowledge from public investments.
• Collaboration is a crucial feature of their creation and operation. They commonly rely
on extensive connections with universities, providing physical manifestations for theory
testing and the most advanced engineering knowledge. They involve extensive connec-
tions with industry, not only creating knowledge from experimentation but articulating,
demonstrating and translating that knowledge for value creation in industry. As conduits
between theory and practice, they require extensive skills in managing collaboration
between partners with very different purposes and expectations.
• International collaboration is essential for their conduct. As well as the broad interna-
tional community of scholars that inform them, their scale often requires dedicated finan-
cial and intellectual resources beyond the reach of single nations. At a time of increasing
fracturing of international agreements and agencies, they demonstrate the value of work-
ing across borders and political divides and show how this can be achieved.
• They are crucibles for systems integration, one of the greatest challenges for innovation
and project management. They commonly involve the integration of different sciences
and their integration with technology and engineering in the delivery of experiments on
budget and time. As Thomas Hughes (1998) has shown in his study of major US projects,
such as ARPANET, large science and technology projects are crucibles for new manage-
ment practices, including the management of systems integration.
• They provide opportunities for the creation of co-located clusters of innovation, compris-
ing ecosystems of scientific research, large and small businesses, and support services in
property, law and finance.

Without exploring all these features of big science projects for the study of innovation and
project management, this chapter will offer insights into a number of them. Its intention is to
highlight the value of adding big science projects to the range of research sites for these litera-
tures and to encourage future research in this area. Past studies of such large projects, such as
Hughes (1998), refer to their consequences for industrial innovation without exploring them in
detail. This chapter will study this issue using the case of fusion power, a quintessential big sci-
ence project that aims to contribute to overcoming the challenges of climate change. As climate
change is a fundamental threat to human existence, all knowledge that can assist to alleviate
it is highly valuable, including insights from innovation and project management. As such, the
chapter also aims to emphasize the crucial requirement of project and innovation management
to contribute to the battle for environmental sustainability and the search for net zero.

THE CASE OF FUSION POWER

Fusion power offers a path towards a clean and sustainable energy mix.2 Solving the climate
emergency requires the creation of carbon-free, safe and clean methods for producing electric-
ity, and there are massive challenges to be faced if we are to achieve net zero.3 Longer-term
426 Handbook on innovation and project management

basic research, conducted at pace and scale, is critically important, and fusion power provides
an example of big science projects designed to address this critical need. Fusion research
is advancing rapidly,4 and recognizing its potential, governments are investing significantly,
alongside increasing interest from the private sector.5 Fusion research illustrates the many
ways that immensely complex and difficult scientific projects can stimulate innovations in
industry.

ITER
ITER is a massive international scientific collaboration designed to prove the feasibility of
fusion as a large-scale and carbon-free source of energy. ITER is one of the most complex sci-
entific, engineering and construction projects ever attempted. Construction began in 2005 on
a site the equivalent of 50 soccer pitches, and it will involve over one million components with
ten million parts, and require from 110 MW to 620 MW of power, with the latter enough to
power 1.25 million homes for an hour. Its central Tokamak reactor will be ten times larger
than any other fusion reactor and is the most complex machine ever designed. It will weigh
the equivalent of three Eiffel Towers and will have 100,000 kilometres of superconducting
coils (with strands a kilometre long), creating a magnetic field strength three million times
the strength of the Earth’s magnetic field. The magnet’s designers have calculated that their
forces can reach 60 meganewtons, or twice the thrust that a NASA Space Shuttle requires for
lift-off. The Tokamak will be contained in a 30-by-30-metre cryostat, and within a space of
three metres, there will be temperatures of 150 million degrees Centigrade and –269 degrees
Centigrade. Design of the facility on the CATIA computer-aided design system involves two
trillion bytes of data, and its construction requires two cranes that can lift the equivalent of
two fully laden Boeing 747s.
Currently, 3,000 people work at ITER, with around 15,000 contributing worldwide. It is
supported by 15 other facilities around the world, testing and developing supporting innova-
tions, and is part of a related, larger international fusion research community. ITER presently
has seven members (known as Domestic Agencies): the European Union, Japan, South Korea,
Russia, the United States, China and India, 35 countries in all. The UK remained a member
after it left the European Union in 2020. The research community includes EUROfusion,
which is a consortium of fusion research centres in the EU, plus Switzerland and Ukraine, and
organizes and funds European fusion research benefitting over 100 laboratories and nearly
2,000 researchers.
Major components are being manufactured in Italy, Spain, Germany, Japan, South Korea
and India. The massive magnet coils, for example, are being built in Europe (14), Japan (nine),
Russia (one) and China (one). The central solenoid is being manufactured in the USA, and the
cryostat is being made in India. Despite major efforts to ensure quality control and integration
of components – all suppliers, for example, use the same stainless steel from a company in
France – international coordination has proven extraordinarily challenging.
Problems emerge simply because of the complexity of the project, which “pushes sci-
ence and technology to its limits” (Claessen, 2020). That being said, the ambitions for ITER
have scaled back from its initial intent. Originally the expectation was to achieve ignition
and sustained burn in the reactor – that is, generate power. “Ignition” is to excite a plasma
in the Tokamak to a state where it will heat self-sustainably. Presently, ITER is a research
 Innovation and big science projects 427

demonstration facility, rather than a power plant. Any heat produced will be cooled and then
released into the atmosphere. Should ITER prove successful, and it is due to begin experiments
in 2025, there are proposals to create a fusion power station known as DEMO (Demonstration
Power Station), followed by a commercial station, creating electricity for the grid, known as
PROTO.
ITER’s CODAC (Control, Data Access and Communication) computer network system
connects all 30 different plant systems in the facility and is a major means for integrating the
project. A Plant System Design Handbook and a suite of software called the CODAC Core
System ensure that central control and plant systems can communicate. The underlying basis
is a widely used open-source software called EPICS (Experimental Physics and Industrial
Control System) which is also used in many other big science projects.
CODAC also provides the control system for the plasma and central data archiving.
Experiments will generate an enormous amount of data which will be analysed by physicists
around the world. As in CERN, the central archive has the responsibility of collecting all the
data produced and making that data available to the scientific community.
There are numerous scientific and technological unknowns in the project, including for
example the reaction of the materials in the vessel to radiation and the replacement and dis-
posal of the Tokamak’s walls. For the reaction in the vessel, the facility will require 10 per
cent of the world’s tritium, 4 kg, and the – as yet unachievable – ability to manufacture tritium
at scale will be essential.
There have been continual criticisms of ITER’s leadership and management. Khatchadourian
(2014) reported that many engineers and physicists at ITER believe that delays were self-
inflicted, having little to do with engineering or physics and everything to do with the way that
it is organized and managed. He describes how a building was cancelled to save money, but
alternative arrangements proved too expensive and it subsequently proceeded at greater cost.
Claessen (2020) cites a senior manager who admitted that the problems faced were more to do
with management and logistics than technical. All these challenges need to be considered in
light of the extent of ITER’s ambition, which in the words of Seife (2008) is “the most ambi-
tious international scientific project ever attempted”.

THE UK ATOMIC ENERGY AUTHORITY (UKAEA)

The UKAEA is the UK government’s agency responsible for the development of fusion power.
It is host to the Joint European Torus (JET), which is in many ways the precursor and pro-
genitor of ITER. Based in Culham near Oxford, JET began operating in 1983 and is due to
be decommissioned in 2025. It holds the world record for energy production from fusion
at 16 MW and is the only fusion machine to demonstrate reactions from the combination
of Deuterium and Tritium, believed to be the most efficacious of hydrogen isotopes for the
production of plasmas for fusion reaction. JET has crucially demonstrated the value of the
Tokamak design, which has led this to be the dominant design of fusion reactors around the
world. Fusion requires extraordinary temperatures and pressures, with temperatures exceed-
ing ten times hotter than the centre of the sun. JET has demonstrated a number of crucial
breakthroughs for the management of plasmas in the vessel and the dispersal of excess heat.
In 2009–10, for example, JET introduced a new beryllium/tungsten plasma-facing wall to test
this configuration for ITER.
428 Handbook on innovation and project management

Organizationally, JET is collectively used by around 350 scientists from all European
fusion laboratories under the umbrella of the EUROfusion consortium. Its operation, mainte-
nance and upgrading are the responsibility of the Culham Centre for Fusion Energy (CCFE),
a part of the UKAEA, which is under contract from the European Commission and involves
around 400 engineers and technical staff.
The CCFE is part of the UK Atomic Energy Authority (which conducts a wide range of
experiments which not only have scientific value but also commercial potential). They include:

• Testing materials and components in extreme conditions.

• Controlling fuels hotter than the centre of the sun.
• Extracting extreme heat without damaging components.
• Producing and storing fusion cells.
• Maintaining and replacing components robotically.
• Bridging the gap from experiment to power plants with advanced simulation.

As well as JET and its work on high-performance plasmas, the UKAEA also includes a num-
ber of complementary organizations. They include MAST-U, dedicated to managing heat
exhaust; H3AT, for Tritium use, storage and transport; RACE, for robotic handling; MRF, the
Materials Research Facility; and FTF, the Fusion Technologies Test Facilities. The Authority
also possesses significant advanced computing and digital design capabilities. All these
capabilities are being directed towards the creation of STEP (Spherical Tokamak for Energy
Production), the UK’s first prototype fusion energy production plant, due to begin operating
in 2040.
Operationally, although relatively small with around 2,000 employees, the UKAEA is
complex in a number of senses. This includes the complexity of the science which requires
the integration of different knowledge bases, often at the global forefront of understanding,
and the further integration of that knowledge with practical technologies and engineering.
It also involves the explorations of experiments with the demands of delivery. The roles
of the Authority’s Chief Operating Officer, for example, include ensuring everything is
in place for operations – people, power, quality and safety controls, IT and engineering
support – and also to deliver on the EU’s JET contract. There is a Project and Programme
Management Office to assist with delivery, and a stage gate system is used to filter and
manage projects.
As a government laboratory, the UKAEA has traditionally seen its role as providing knowl-
edge to enable innovations in the private sector, but it has also recently introduced a system
to track and manage its own innovation projects, which may for example lead to spin-outs.
Around ten innovation projects are currently being developed, and the integration of the pro-
ject and innovation management systems is being explored.

BIG SCIENCE PROJECTS AND THE DIRECTIONS OF INNOVATION

EUROfusion has produced a roadmap to align priorities in R&D for the delivery of fusion
energy.6 It identifies eight crucial missions to address the challenges of fusion power, suggests
timescales and discusses key issues such as training, education and knowledge management,
industrial involvement and international collaboration
 Innovation and big science projects 429

Using an innovation perspective it is possible to draw out a number of principles underlying

EUROfusion’s roadmap. These include:

• Close integration of theory, modelling and experiment. This will require expertise in
high-performance computing, physics and engineering and measurement techniques. The
capacity of “eScience” to collect, integrate and interpret data from discovery to applica-
tion is a key tool in contemporary innovation (Dodgson et al., 2005).
• Flexibility in designs and the ability to respond to new research findings. This flexibility
in design also allows for testing and adaptation during development and relies on the use
of digital prototyping. So, for example, DEMO is being designed as ITER is in its con-
struction and early operation phase and is capable of being adapted as results from ITER
emerge. The use of “innovation technologies” and processes of concurrent development,
with manufacturing beginning before designs are concluded, and practices such as late
design freezes, are common in advanced innovation management.
• Progressive shift in the role of industry from being a provider of high-tech components
to delivering commercial fusion power plants. This will entail industry being involved in
all stages of design. Innovation studies show the advantages of suppliers and users being
actively involved in design processes.
• Continual innovation and improvement in the performance of the plasma, components and
systems to increase efficiency, reduce costs and ease operability. Innovation studies show
the importance of continuous and incremental innovation for improved performance.

Big science projects have implications for industrial innovation upstream and downstream.

Upstream Innovations

Manufacturing and constructing ITER’s facilities have enhanced industrial capabilities and
stimulated innovations upstream. A review by the European Commission found the project
will generate more value than it costs and that companies working for ITER improved their
capabilities and opportunities outside of fusion. The report found that as a result of their ITER
contracts, 12 per cent of industrial participants developed new cutting-edge technologies for
use in areas other than fusion.7 For example, companies have risen to the challenge of creat-
ing the world’s largest magnets and they have developed technology for precision welding of
stainless steel vacuum vessels on a scale never seen before.8 In his book about ITER, Michel
Claessens reports cases of firms in other areas which improved their technological skills
through working on fusion with ITER.
UK firms have already benefited from well over £650 million in specialist engineering and
technology contracts to build ITER, and they have extended and deepened their capabilities
in the process.
Empirical evidence of the upstream benefits for industrial firms of participating in big sci-
ence projects is demonstrated by Castelnovo et al. (2018) in a study of the Large Hydron
Collider at CERN. CERN granted these authors access to LHC procurement data from
1995 to 2008. During this period there were 1,296 suppliers with at least one order of over SFR
10,000, from 35 different countries, for a total of 11,969 orders. Three-quarters of the suppli-
ers in the sample had fewer than 250 employees. CERN currently has a procurement budget
of around 500 million euros. The study gathered balance sheet data for more than 350 of
430 Handbook on innovation and project management

these companies from 1991 to 2014, which include the years before and after the first order
was received from CERN. It found a statistically significant correlation between procurement
and company R&D, knowledge creation and economic performance. Essentially, procurement
from CERN led to product and process innovation and ultimately higher profitability in high-
tech suppliers. There was no such relationship with low-tech suppliers. The authors provide
evidence that an appreciable part of public investment in big science is returned to society in
the form of increased profits for high-tech firms, particularly for innovative SMEs.

Downstream Innovations

JET is a complex machine that experiences vast heat and material changes that require remote
handling technologies. RACE, the Remote Applications in Challenging Environments pro-
gramme, which supports and sits alongside JET, is developing robotic technologies that can be
used in a variety of extreme conditions found in industries including nuclear, petrochemicals,
space, construction and mining.9
An example of downstream connections is provided by Oxbotica, a related Oxford
University spin-off developing autonomous vehicle software using 10 km of on-site private
roads at the UKAEA to carry out vehicle testing. Oxbotica uses computer vision, machine
learning and artificial intelligence to enable vehicles to operate autonomously in any environ-
ment in sectors including aerospace, automotive, construction, logistics and mining.10
As another indicator of the active role played by CERN in promoting engagement down-
stream with industry, it has had a knowledge transfer organization for over 20 years, created to
demonstrate the importance and impact of fundamental research investments. This organiza-
tion has established a CERN network of ten member state incubator centres.

DISCUSSION

In their analysis of the economic returns to basic research, Salter and Martin (2001) argue
its economic benefits are both real and substantial and take a number of forms, including:
(1) increasing the stock of useful knowledge; (2) training skilled graduates; (3) creating new
scientific instrumentation and methodologies; (4) forming networks and stimulating social
interaction; (5) increasing technological opportunities and diversity and the capacity for sci-
entific and technological problem-solving; and (6) creating new firms. Salter and Martin also
refer to some of the behavioural and managerial benefits of basic research. These include the
way skills are developed in networks to improve the capacity of organizations and countries
to absorb externally sourced knowledge and enhance the ability to translate knowledge into
practice, and how these are assisted by the mobility of researchers from scientific institutions
into industry.
The “social” implications of big science projects are crucially important elements of learn-
ing about innovation in the private sector. Another study of the LHC by Autio et al. (2004)
offers a framework for understanding how industrial firms contributing to big science projects
develop social capital, increase their learning potential and derive innovation benefits. Social
capital is developed in a number of ways, including through the development of shared lan-
guage, goals and visions, access to social networks and the building of trust. These occur as
congruence is built around the focus of the project, with shared objectives and shared access to
 Innovation and big science projects 431

international networks. As Hameri (1997) put it: “major science centres act like a myriad web
of professional and highly individualistic people where the interfaces must be built around
carefully planned technological objectives”. Supplier companies can use their contributions to
big science projects as reference sites for further international business.
Learning occurs as industrial firms have access to diverse areas of knowledge, often beyond
their experience, that lead to projects that may involve the combination of previously unrelated
technologies. Because of the long-term objectives and relatively protected nature of budgets,
industrial firms may work in a differently paced and more “benign” environment than is nor-
mal for them, providing the “slack” necessary for their experimentation and enhancing their
opportunities to learn. Furthermore, because of the very high technical standards required in
big science projects, industrial firms have opportunities to learn about testing and delivering
to very demanding specifications.
The long-term and clearly focused nature of the resources invested in big science projects
can also encourage industrial firms to increase their investment in R&D. Such projects pro-
vide innovation benefits for suppliers because they reduce the uncertainties to which firms are
exposed. These projects also expose industrial firms to technical complexities and new com-
binations they would not otherwise encounter, improving their abilities to innovate complex
products and solutions to problems.
Because of these benefits Autio et al. (2004) suggest that while big science projects may not
always be financially lucrative, technological benefits outweigh financial considerations. This
is especially the case, they argue, because contributing to them increases opportunities for
higher-level learning and radical innovation in industry.

CONCLUSIONS

Investing in big science projects not only benefits science but also plays an important role
in improving the innovation performance of industry. The scale, complexity and long-term
nature of big science projects, such as fusion reactors, provide opportunities for their indus-
trial suppliers to learn and improve their innovation performance. Big science projects can,
for example, act as an important first customer for emerging technologies and can provide
valuable IP for exploitation downstream.
Managers of big science projects need to balance the ambition and costs of their experi-
ments, mindful of the opportunities to plan and encourage industrial collaboration and the
economic benefits this can bring. They access regular tools of innovation and project manage-
ment, such as stage gates. But both upstream and downstream innovations derive from invest-
ments instream, necessary for the conduct of scientific experiments. Scientific projects that
have the most demanding, and sometimes most risky, new requirements in order to undertake
experiments can have the highest potential for upstream and downstream benefits. In the long
term this means that industry can benefit most when scientific projects are at their most ambi-
tious. As Hughes (1998) points out, the attraction for the best scientists and engineers of work-
ing on large projects lies in the ways they can choose and work on problems that advance the
particular science and engineering fields that interest them. When scientists and their support
teams design experiments to address the most difficult and demanding scientific problems,
their depth of knowledge and ingenuity often produces highly imaginative, innovative and
practical solutions. Industry has the opportunity to benefit from these solutions, which would
432 Handbook on innovation and project management

not emerge without investment in basic science and accessing the knowledge and skills scien-
tists and their support teams possess. Just as the development of COVID-19 vaccines relied on
decades of fundamental research, solutions to other existential threats will similarly draw on
knowledge and expertise accumulated over many years.
To assist in justifying their massive budgets, big science projects commonly make claims
to their upstream and downstream benefits, put in place innovation and project management
processes to encourage the flow of knowledge and innovations into industry, and make efforts
to publicize these valuable contributions. Less visible are the innovations necessary to create
and operate the science projects in and of themselves. While the tools of project and innova-
tion management assist the transformation of scientific knowledge into commercial applica-
tions, perhaps the greatest stimulus to innovation lies in the unbounded curiosity of scientists.
Thomas Hughes demonstrated how large science and engineering projects generate and
benefit from new management practices. We contend that big science projects warrant much
greater future attention from researchers in project and innovation management, including the
ways they stimulate innovation upstream, downstream and instream. The areas this research
should address include:

• Project and innovation management skills in the design, procurement, manufacture,

assembly and operation of big science projects.
• Strategic leadership in big science projects in providing direction and space, or organiza-
tional slack, for innovation.
• Policy towards basic science and the value of investing in big science projects for their own
sake, i.e. changing the balance of investment justifications and priorities, and, rather than
investing with the primary intention to produce upstream and downstream benefits, invest-
ing to maximize instream innovations, which may ultimately be the source of greatest value.

NOTES
1. www​.weforum​.org​/agenda ​/2019​/06​/ how​-deep​-science​-shapes​-the​-future
2. www​.weforum​.org​/agenda​/2020​/12​/fusion​-experiments/
3. www​.iea​.org​/reports​/net​-zero​-by​-2050
4. https://phys​.org​/news​/2021​- 08​-nuclear​-scientists​-hail​-fusion​-breakthrough​.html
5. https://time​.com ​/6123622​/nuclear​-fusion​-viability/​? utm ​_ source ​=twitter​&utm ​_ medium​= social​
&utm​_campaign​=social​-share​-article​&utm​_term​=climate
6. www​.euro​-fusion​.org​/eurofusion​/roadmap/
7. See Claessens, M. (2020). ITER: The giant fusion reactor. Springer.
8. www​.iter​.org​/whatsnew​/print​/88
9. https://race​.ukaea​.uk ​/about​-race/
10. www​.oxbotica​.com/

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Collider at CERN. Research Policy, 47(9), 1853–1867.
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Index

Aben, T. 111 Alibaba 63

Abernathy, W. Allen, T.J. 41
Management Science 187 Amazon 24
adaptive model 16 ambidexterity 65, 70–72, 219, 263
Additive Manufacturing Centre 208 ambidextrous approach 210
“additive manufacturing” factory 209 ambidextrous programme management 168, 169,
Adlbrecht, G. 111 176–7, 180, 181–2
Adner, R. 227 characterization 177–9
Aerospace Corporation 362 as orchestration process of ambidexterity
aerospace-generated systems approach 4 179–81
agency theory 116n10 projects, programmes and ambidexterity
agile 375–80 169–71
advantages and disadvantages of 387–9 towards an orchestration of ambidexterity 181
agile project life cycle 383 American Challenge 364
daily scrums 381 analysis, levels of 36, 40
development work 381 macro level 47–50
guidelines from practising industry meso level 44–7
professionals 389 micro level 41–4
innovating with 383–7 Analytical Hierarchy Process 312
lack of commitment 385 ancient engineering projects 356
lack of knowledge and training 385–6 Andersen, B. 115
lean software development 384 anti-aircraft guided missiles 359–60
organizational structure 386 anti-aircraft gun directors 359
principles of development 377–8 Apaydin, M. 82
scalability 386–7 Apollo 364
scrum methodology 383–4 case 195n2
sprint planning 381 projects 25–6
sprint retrospective 382–3 a posteriori 73
sprint reviews 381–2 Apple 15
steps in 380 Apple New Product Process (ANPP) 4
tasks versus stories 380 a priori 69, 70, 72–4, 251, 267, 271n3
transformation 385 architectural innovation 87
variations 383 architectural system innovations 91
waterfall versus 378–9 Aristotle 102
agile methods 195n2 Army Air Force’s B-29 bomber and P-61 fighter
agile mindset 388 projects 358
agile project delivery methodology 376 Arrow, K. 187
agile project management (agile PM) 376, 377, Art Fry 269, 270
387 artificial intelligence (AI) 23–4, 46
agile self-managing teams 387 assistance behaviours 248
agility 68 Association for Project Management (APM) 6
Ahern, T. 202 ASTRID project 125, 130
Aida (Verdi) 342 dates and events of 132
air defence 362–3 description of trajectory 131–4
Air Force Regulation 375 series 363 evolution of goals and timeframes 138
Air Research and Development Command hybridization in project stakeholders’ agenda
(ARDC) 363 and power relationships 139–42
Alchian, A. 187 as hybrid project 134–5

434
 Index 435

identity 135–9 Brahm, F. 262

observed trajectory of 142 Braun, T. 248
replacing in technopolitical context 131 Braun, Von 360
Atlas intercontinental ballistic missile (ICBM) breakthrough projects 14–15, 189
project 358 Bresnen, M. 250–51
Audretsch, D.B. 274 Brighton Group 49
Augustus method 400 Brown, S. 109
Autio, E. 430, 431 Bryden Wood 415, 417, 419–20
autonomous mobility initiative 177, 178 Burley, Walter 102
autonomous team structure 14 Burns, T. 66, 68, 87, 116n8, 294
business model performance, operational tools for
Baldwin, C.Y. 308 stakeholders of design space 316–17
ballistic missiles 360–62 value in design space 317–20
Barlow, J. 415 business-related strategy 80
Bartlett, C. 153 Buvik, M.P. 251
BASIC 369
Baumgartner, J.S. 364 Cacciatori, Eugenia 23
Bechky, B.A. 253 Cajaiba-Santana, G. 275
“being nuclear,” for a project 142, 144–5 calculative trust 246
Bell Telephone Laboratory (BTL) 359–60 calculus-based trust 251–2
benefit exploitation 223–4 campaign management agencies 283
benevolence trust 246 Cancellieri, G. 22
Ben Mahmoud-Jouini, S. 20, 159, 169, 180 Carlile, P. 111
best-fit management style 95 Castañer, X. 248
Bettis, R. 115 Castelnovo, P. 429
Bezos, Jeff 63 Catalani, A.
Bianchi, G. 399, 401 La Wally 337
Biedenbach, T. 224 category-based trust 246
bifocal SIs 276 CATIA computer-aided design system 426
Bigley, G.A. 403 Cattani, G. 22
big science projects 423 CCFE see Culham Centre for Fusion Energy
consequences for innovation 423–4 (CCFE)
contemporary research on innovation in 424–5 CEA 130, 131, 133–6, 139–41
and directions of innovation 428–9 CERN 423, 424, 427, 429–30
downstream innovations 430 Channel Tunnel 144
fusion power, case of 425–6 Chapman, C. 212
investing in 431 Charue-Duboc, F. 20, 159
ITER 426–7 Chirac (President) 131
social implications of 430 Christensen, C.M. 15, 220, 240
UKAEA 427–8 “Innovator’s Dilemma” 87–8
upstream innovations 429–30 Christiansen, J. 106
Big Science R&D projects 9 Christie, Agatha
BioBarrier project 196n13 Death on the Nile or Murder on the Orient
Björk, J. 115 Express 351
Blindenbach-Driessen, F. 21, 235 Cicmil, S. 47, 129
blitz projects 90, 92 C-K theory 329n3
Blomqvist, K. 247 Claessens, M. 427
bootlegging 13 Clark, K.B. 13, 14, 87, 127, 173, 195n6, 220, 226,
bottom-up agile deployments 385 308
bottom-up cultural dynamics 259 classical contingency theory 87
bottom-up projects (CE) 71 classical engineering disciplines (CED) 369
Boulding, W. 110 Clegg, S.R. 50
Boyd, R. 262, 264 Cleland, D.I.
Brady, T. 62, 158, 171, 173, 186, 188–9, 226, 233, Systems Analysis and Project Management
283, 284, 393, 394 364
436 Handbook on innovation and project management

Cochrane, R.A. 88 corporate globalization 164

CODAC (Control, Data Access and corporate issues, corporate entrepreneurship
Communication) computer network system 427 69–71
cognition management methods 403 corporate rejuvenation 72
Cohen, M.D. 258 Così Fan Tutte (Mozart) 336
Cohen, W.M. 126 Covin, J.G. 65, 72
collaboration 253, 260, 425 creative projects 128, 189
defined as 248 critical stakeholders, of social system 277–8
in innovative projects 248–50 Cropley, D.H. 82
problem in innovative projects 244–5 Crossan, M.M. 82
collaborative behaviours 248 cross-fertilizations 38
collaborative research projects (CRPs) 108 between domains 36
commercial innovation 276, 278, 279 cross-functional team 235, 236
Common Code for the Coffee Community (4C) cross-project learning 211
281, 284, 287 Crossrail 304, 305n1, 415, 416
communication 248, 252 challenge of orchestrating innovating at 297,
communication behaviours 248, 250 299–302
competence-based trust 249 innovation at 297, 298
competence trust 246, 250 innovation programme 305
complementarities 296 innovation vision 302–3
complex innovation ecologies and ecosystems 24 and search for innovation 296–7
“complexity of faith” 111 Culham Centre for Fusion Energy (CCFE) 428
complex product systems, delivery of 410 cultural anthropology 259
complex projects 128, 130, 142, 358 cultural evolution 260
concept (and technology) development 105 fundamental models of 259
concurrent engineering approach 68, 179 cultural evolution theory 258
concurrent exploration 190 and project management 259–63
“configuration control” method 361 culture, definition of 258, 259
configuration management (CM) 361 culture evolution model 263
conformist 270 interfirm competitive dynamics 266–8
consolidated process 80 intrafirm cultural dynamics 263–6
construction industry 423–4 sufficient equilibrium conditions 268–9
Construction Innovation Hub 413–14
contextual ambidexterity 169 daily scrums 381
contingency 112, 113 data and digital technologies 424
contingency theory 87 Davies, A. 22, 36–8, 46, 62, 81, 127, 158, 171,
controlled stage-gate process 5–7 173, 186, 188–9, 226, 233, 283, 284, 393, 394,
conventional cultural products 337 409
conventional operas 337, 341 Davis, J.H. 245
modern staging of 338 Davis, K. 23
Cook, K.S. 247 Death on the Nile or Murder on the Orient
Cooper, R.G. 10, 11, 13, 81, 105, 115n4, 222, 388 Express (Christie) 351
cooperative behaviours 248–50 DeBarro, T. 297
Coordination Working Group 395 De Brentani, U. 106
corporate entrepreneurship (CE) 60, 73–5 decision space
corporate issues 69–71 stakeholders of 320
design issues 68–9 value in 320–24
link between disciplines and theoretical fields “Declaration of a Major Public Event” 398
of PM and 65–6 De Dreu, C. 116n11
management issues 66–8 DeMeyer, A.
organizational issues 66 Managing the Unknown 17
and PM, differences, similarities and DEMO (Demonstration Power Station) 427, 429
complementarity 66 design-build-test 88
stories feed mythology of superheroes 62–5 design issues, corporate entrepreneurship 68–9
strategic issues 71–3 design management, entrepreneurial logic of 68
 Index 437

design space electronics industry 66

stakeholders of 316–17 Eling, K. 104, 105, 110
value in 317–20 Elizabeth Line 415
“desirable unknown” 328, 329n3 emancipatory (type 3) research 39
development projects 128 emerging strategies 226–7
development work 381, 382 energy management systems 300
Diamond Model 88, 89 “engine of innovation” 3
Dick, Kirby 282 Engwall, M. 81, 129, 143, 192
Dietrich, P. 111 enterprise resource planning (ERP) software 309
differentiated managerial processes 190 entrepreneurial action 279
digital information 408 entrepreneurial orientation 225, 228
digitalization 46 entrepreneurship 64
digitally enabled product platform 412–13, 415 EPICS (Experimental Physics and Industrial
digitally enabled project delivery models 409–11 Control System) 427
digital monopolies, domination of 61 equivocality 110–12
digital platforms 23–4 eScience 429
digital project capabilities 410–12 ESS see evolutionary stable strategies (ESS)
digital technologies 5 EUROfusion 428, 429
digital transformation strategy 239 European Green Deal 25
digitization 239 European Motors 201, 202, 205–10, 214
Dikert, K. 386 event planning method 400–401
Dille, T. 129 evolutionary dynamics 271
DiMaggio, P. 341 evolutionary stable strategies (ESS) 265
disruption 87, 91 evolutionary theory models 261
disruptive innovation 176–7, 189 experience-based learning 403
“disruptive technologies” 15 experience-based trust 251
dissipative equilibrium 109 experimental learning processes 189
DocSociety 285–6 experimentation 190
Dodgson, M. 22, 23 expert probability distributions 326
Doshi, N. 386 exploitation
Dougherty, D. 194 in innovation management literature 126–7
downstream innovations 430 in project management literature 127–9
Doz, Y. 155 situated approach to analyse hybridization of
Driouchi, T. 114 129–30
Drucker, Peter 261 exploitative projects 189
“dual-process model of capability dynamization” exploration
284 in innovation management literature 126–7
Dugan, R. 189, 190 innovation-oriented learning and 204
Dunne, D. 194 in project management literature 127–9
Duosport 215, 216 situated approach to analyse hybridization of
Durand, R. 337 129–30
Dvir, D. 5, 62, 88, 111, 128, 186, 188, 410, 415 of technology and market 190
Reinventing Project Management 17 exploratory projects (EPs) 62, 142
Dyer, J. 108 advancement in 191–2
dynamic capabilities 283–4 deepening cases, broadening scope,
strengthening theory 192–5
early contractor involvement (ECI) 108 definition 188–9
Ebrahim, A. 285 emergence of research on 186–8
ecosystems 294 learning in 204–6
EDF 131, 133, 135, 137, 139, 140 management of 188–92
Edkins, A. 102, 107 managerial principles 190–91
Edmondson, A.C. 251 problem-solving cycles of 205
Einstein, Albert 43 extended perspective, on social innovation 276
Eisenhardt, K. 109 external stakeholders, integrating of 224
Ekrot, B. 224 Extreme Programming 383
438 Handbook on innovation and project management

face-to-face projects 250 German V-2 ballistic missile 358

Fagerberg, B. 375 Getting, Ivan 357, 359, 362
Fair, J. 378 Ghazinoory, S. 274
FairPhone 44 Ghoshal, S. 153, 258
Ferreira, A.I. 248 Gilain, A. 329
Ferriani, S. 22 Gillier, T. 193
financial portfolio 219 GlaxoSmithKline (GSK) 417
firm valuing, strategic tools for global economic crisis 327
stakeholders of decision space 320 “Global Entry” programme 172
value in decision space 320–24 global innovation management (GIM) 149, 150, 156
“first-of-a-kind” 134, 144 of MNCs 159–63
“first-of-their-kind”/“vanguard projects” 128 global innovation projects (GIPs) 149–50, 159–63
flexitricity 305n3 global innovation strategies, organizing for 152
flying car 214, 215 globalization
Flyvbjerg, B. 144 of innovation strategies 150–52
Ford, Henry 2 of projects 149
formalization 109–10 globalized innovation processes
FORTRAN 369 interplay between projects, subsidiaries and
Framatome 135, 137, 140, 141 corporate functions 158–9
Freeman, C. 12, 48, 50 projects as learning opportunities in 157–8
friendliness and support behaviours 248, 250 global projects 9
Frishammar, J. 111 Goldin, Dan 367
front end of innovation (FEI) 101, 102, 114 Goode, H.H. 364
networks 108 Google 63–4
people 107–8 Google Glass 377
process 105–7 Grabher, G. 49, 129, 295, 403, 404
frugal innovation strategy 151 Green, S.D. 311
Fujimoto, T. 127, 195n6 Griffiths-Hemans, J. 116n4
functional analysis 309 Grigi, M. 399
functional team structure 14 Grover, R. 116n4
fusion power, case of 425–6 Groves, L. 187
future orientation 225 Guerineau, M. 153, 159
fuzzy front end of innovation 104–5
contingency 112, 113 Habermas, J. 36, 38, 39
for discontinuous innovation 106 Hajek, V.G. 364
formalization 109–10 Hall, Arthur 359
uncertainty and equivocality 110–12 Hall, D.M. 412, 414
“Fuzzy Front End of Innovation” 83 Hällgren, M. 191
Hallonsten, O. 423
Gabriel, K. 189, 190 Hameri, A. 431
GAFAMs 61, 63 Hamilton, W.D. 267
Galbraith, J. 111 hard value management 310–11
Gann, D.M. 23, 233 Hargadon, A. 41
“garbage can model” 258 Harrison, J.W. 20
Garcias, F. 20 Hatchuel, A. 28, 173
Gates, Bill 63 healthcare, innovation in 240–41
Gatignon, H. 88 Heatherwick, Thomas 4
Gaubinger, K. 105 heavyweight project management model 66–7
Gehry, Frank 4 heavyweight project manager 235
Gemünden, H.G. 21, 173, 192, 194, 210 heavyweight team structure 14
General Electric (GE) 152 Hedborg, S. 296
General Motors 15 Henderson, R.M. 87
Generation IV International Forum 146n6 Herstatt, C. 104, 110
Georget, V. 19 HighSpeed2 (HS2) 297, 301, 303
Geraldi, J. 19, 36, 43–4, 108, 111, 224 high-tech 91
 Index 439

Hirschman, A.O. 50 Innovation for Poverty Action 285

Hitch, C. 187 innovation management
Hobbs, B. 387, 388 globalization of 150–57
Hobday, M. 2–3, 9, 12, 14–16, 18, 48–49, 93, 113, literature, exploration and exploitation in 126–7
232, 383, 408–410 parallel evolution of 81–2
Hodgson, D. 47 Innovation Management (van den Ende) 241n1
Hodgson, G.M. 259 innovation manager, role of 236–8
Holzmann, Vered 20 innovation-oriented learning 204
Hooge, S. 22 innovation project management, in ambidextrous
housing, systems projects 414–15 strategy 169–71
Hughes, T. 425, 431, 432 innovation/project process model
human intelligence 271n1 activities in 83–6
human resource factors, PPM 222, 224–5 combined definition of 82
The Hunting Ground (2015) 282, 287 contingency model for 87–92
hybridization, ASTRID project 139–42 idea management phase 83
hybrid projects 125, 142, 170 managing in VUCA world 92
Hymer, Stephen 151 product commercialization phase 83
product realization phase 83
Iansiti, M. 173 innovation projects
IBM Emerging Business Opportunities 194 decision-making process of 328
idea hidden dimension of 47
genesis 104 identifying commonalities across in 45–6
selection 105 identifying contingencies and designing
ideation management 223 contexts for 48–9
identity 329n1 new forms of 46
inclusive approach 38 perspectives for value management 327–9
incremental innovation 87 political dimension in and around 49–50
individual learners 262 role of emotions in 43
IndusGaz 156–7 role of societal innovation in 49
Industrial Process Engineering Expertise value management in 309
Network (IPEN) 156, 157 innovation/project strategy 92–3
information processing 106 globalization of 150–52
information processing theory (IPT) 111 macrostrategy versus microstrategy 93
innovation project strategy 93–6
around projects 38 innovation studies
coordination in engineering company 236 contrasting types of innovative projects 14–16
at Crossrail 297 diverse theoretical foundations of 12
in healthcare 240–41 fields of 37
integrated research themes and perspectives levels of analysis see analysis, levels of
19–23 projects conceptualized in 11–16
joint framework of project management and project uncertainty and innovation process
90, 91 12–13
joint roots and contrasting trajectories 16–17 revolutionizing new product development
in legal firms 238–9 13–14
in management of projects 38 innovative project portfolios 228
project capabilities and 393–5 innovative projects 128, 283
versus project management 5, 6 contrasting types of 14–16
project society and challenge of 4–6 culture evolution model of 263–9
projects, operations and 2–3 management of 1–6
reconnecting and developing domains of past and present of 3–4
knowledge 17–19 problem of collaboration in 244–5
through projects 38 projects, innovation and operations 2–3
innovation contingency 87–8 project society and challenge of innovation 4–6
framework 90–92 trust and collaboration in 248–50
innovation ecosystem 304 trust formation promoted in 250–53
440 Handbook on innovation and project management

“Innovator’s Dilemma” (Christensen) 87–8 Jazaieri, H. 252

institutional entrepreneurs 277 JET see Joint European Torus (JET)
institutional theory 51, 277 Jiang, M. 21
instructionist approach 17 Jobs, Steve 63
integrity-based trust 249 Johnson, S.B. 22, 360
integrity trust 246, 247, 249, 250 Joint European Torus (JET) 427–8, 430
intellectual property (IP) 424 Jordan, G. 102
interdependencies, forms of 300 Journal of Operations Management 17
interfirm competitive dynamics 266–8 Journal of Product Innovation Management
intermediate projects 211 (JPIM) 104
and learning cycles 214 J-PAL 285
internal contingency factors 227 JPL missile 362
internal-entrepreneurial projects 63 Jubilee Agency 398–400, 402
International Business Machines (IBM) 362 Jullien, B. 159
international collaboration 425 Junni, P. 169
International Council on Systems Engineering
(INCOSE) 357, 364, 369 Kadefors, A. 129
internationalization, through project lineage Kagan, E. 109
160–63 Kanter, R.M. 14, 128
international management 164 Katz, R. 41
International Project Management Association Kaufmann, C. 227
(IPMA) 6 Kavadias, S. 21
International Standards Organization (ISO) 365, Kessel, R. 187
369 Kester, L. 221
inter-organizational innovation projects 25 Khatchadourian, R. 427
inter-organizational/inter-institutional projects 130 Khurana, A. 105, 115n4, 116n5
inter-organizational networks 286 Kidder, Tracy
inter-organizational trust 247 The Soul of a New Machine 43
interpersonal trust 247 Kim, W.C. 220
inter-project learning mechanisms 173 Kimball, G.F. 364
intertemporal integration 107 Klein, B. 187
intrafirm cultural dynamics 263–6 Kliesch-Eberl, M. 284
The Invisible War (2012) 282, 287 Klingebiel, R. 227
i3P 303, 305 Knight, F.H. 12
Italian civil protection department (CPD) 402–4 knowledge
capabilities development at 395–401 evaluation and sharing of 214
event planning method 400–401 internal networks of 155–6
Jubilee Agency 398–400 reconnecting and developing domains of
methods 395–7 17–19
structure of 397–8 knowledge-based perspective 409
Italian opera industry 334 knowledge-based trust 246
control variables 341–3 knowledge-constitutive interests 36, 38, 39, 41,
correlation matrix 345–6 42, 50, 51
dependent variable 339 knowledge gaps 213
descriptive statistics 343–4 knowledge governance strategy 211
independent variables 339–42 knowledge management 175, 224
model 343 Kobbé, G.
multilevel mixed-effect linear regression Opera Book 341
model 347 Kock, A.H. 21, 110, 173, 192, 194, 210, 224, 227
optimal distinctiveness and robust project Kodak 61
design in 335–8 Koen, P. 104–6, 109, 112
robustness checks 348, 349 Kopmann, J. 223, 226
sample and data 339, 340 Korolev, Sergei 360
ITER 426–7, 429 Kotnour, T. 203
iteration 204, 216n1 Kremp, P.A. 337
 Index 441

Laan, A. 252 Lundin, R. 157–8

Laanti, M. 385 Lyric-Symphonic Foundations (LSFs) 339, 341
La Bohème (Puccini) 337
La Finta Giardiniera (Mozart) 337 Ma, Jack 63
Laing O’Rourke 417–18 MacAulay, S. C. 22
Langerak, F. 116n4 macro level analysis 47–8
large, complex technological projects (LCTP) identifying contingencies and designing
356, 358, 370, 371 contexts for innovation projects 48–9
defined as 357 political dimension in and around innovation
“large-engineering projects” 9 projects 49–50
La Tosca (Puccini) 335 role of societal innovation in projects 49
La Traviata (Verdi) 335, 336 macrostrategy 93
Lavie, D. 169 Magnusson, M. 115
La Wally (Catalani) 337 “mainstream projects” 14
leadership behaviours 252 “major public events” management 397–8
lean software development 383, 384 “Making Projects Critical” network 47
Lean Software Development: An Agile Toolkit management issues, corporate entrepreneurship
(Poppendieck and Poppendieck) 384 66–8
learning 202–3 management of projects (MoP) 7
novel and exploratory projects Management Science (Abernathy and
204–6 Rosenbloom) 187
risky/uncertain projects 203–4, 206 Managing the Unknown (Loch, DeMeyer and
routine projects 203, 206 Pich) 17
learning/knowledge theories 51 Manhattan projects 4, 25–6, 187, 196n7
learning schemes 202 Maniak, R. 19, 20, 116n9, 177, 211
legal firms, innovation in 238–9 Manning, S. 22, 36, 49, 278, 280, 281, 287, 395,
Lehner, P. 228 404
Lehtonen, M. 144 manufacturing industry 424
Leiringer, R. 411 Manufacturing Planning Department 201
Le Masson, P. 328, 329n3 March, J.G. 87, 126, 128
Lemond Automobiles 215 Markham, S. 102
Lenfle, S. 7, 20, 22, 127, 128, 137, 170, 188–90, Marsh, S. 107
194 Martin, B. 430
Leonard-Barton, D. 126 Martinsuo, M. 106
Levesque, L. 387 Massachusetts Institute of Technology (MIT) 359
Levinthal, D.A. 126 mature PPM organization 223
Lewin, Kurt 371n1 Mauborgne, R. 220
Lewis, M.A. 20 Mayer, R.C. 245
lightweight team structure 14 MBSE see model-based systems engineering
Lindkvist, L. 205 (MBSE)
lineage, defined as 173 McGregor, L. 386
lineage management 116n9 McKean, R. 187
Little, T. 111 McNamara, Robert 6
Livne-Tarandach, R. 252 mechanistic organizations 66, 294
Lobo, S. 296, 394, 403, 404, 410, 411 Meckling, W. 187
Local Innovation Fund (LIF) 156, 157 medium-tech 91
Loch, C.H. 7, 21, 62, 128, 171, 188, 191, 193, 194, megaproject ecology 296, 304
221, 326, 329 megaprojects 9, 128, 130, 142, 144
Managing the Unknown 17 meso level analysis 44–5
Lockheed Martin 14 hidden dimension of innovative project 47
London’s Crossrail railway project 19, 81 identifying commonalities across innovations
Long, X. 108 in projects 45–6
long-term factors, PPM 222, 225–7 new forms of innovative projects 46
Lovas, B. 258 meta-organization 295
low-tech 91 meta-rules 69
442 Handbook on innovation and project management

#MeToo movement 282 human spaceflight programme 364

micro level analysis 41–2 manned space programmes 366
predicting and designing behaviours 42–3 original technical culture 364
surfacing precarity of project-based work 44 Phased Project Planning 7
understanding emotions and relationships Space Shuttle programme 364
43–4 National Civil Protection Services 397–8, 405n3
microstrategy 93 “national systems of innovation” 48
Midler, C. 20, 116n9, 157–9, 176, 177, 191, 192, Nelson, R.R. 187, 357
194, 210, 211, 226 Nespresso 171
Miles, L. 310 nested organizational evolution 260–61
Miles, M.P. 72 network ambidexterity 169, 181
Mintzberg, H. 92, 94, 248 Nevison, J.M. 203
missions 25–6 NewASTRID project 133, 136, 137, 141
MITRE Corporation 363 new concept development (NCD) 105
mobile payment service (M-Pesa) 154 new product development (NPD) projects 101,
model-based systems engineering (MBSE) 102, 308
368–71 versus fuzzy FEI projects 109
“modular governance architectures” 278–9 origin of value management in 309–15 see
modular innovation 87, 91 also value management (VM)
Montoya-Weiss, M. 115n4 tools for strategic decision-making in 311–15
moonshots 25–6 up-front homework of 104
Morris, P.W.G. 7, 115n1, 356, 366 value engineering and performance control
Mosca, L. 23 tools in 314
Mozart, W.A. “newstream projects” 14
Così Fan Tutte 336 new-to-the-market 90
La Finta Giardiniera 337 new-to-the-world 88, 90
Mueller, George 364 NGOs 277, 281, 285
Müller, R. 112, 224 Nichols, G. 379
multidisciplinary team 235 Nightingale, P. 409, 412
multi-home-base model 151, 152 Nils, M. 387
multi-level analysis 260 Noorderhaven, N. 21
multi-level organizational dynamics 269 “No Project Is an Island” study 81
multilevel perspective (MLP) 26, 49 novel projects
multinational corporations (MNCs) 149–50 learning in 204–6
central coordination 156–7 need for knowledge governance in 210–11
competitive advantage of 159 project learning process for 212, 213
global innovation management of 159–63 novelty 90
global innovation strategy of 154 impact on project management 88
internal networks of knowledge 155–6 nuclear projects 130, 144–5
subsidiaries, roles of 153–5
transnational model of 151 Object Management Group (OMG) 369
multi-project approach 171 O’Driscoll, T. 115n4
multi-project lineage management 168, 174, 176, Oliveira, N. 248
178 Olkiluoto EPR 146n5
multi-stakeholder projects 285 “one size fits all” approach 7, 62, 188
Musk, Elon 15, 43 open innovation 43–4
Opera Book (Kobbé) 341
Nagji, B. 220 opera conventionality 341
narrow perspective, on social innovation 275, 276 opera-goers 336, 338, 344
NASA Engineering Safety Center (NESC) 368 opera houses 334, 335, 337
NASA Systems Engineering Handbook 364–5 opera production 351n1
National Aeronautics and Space Administration operations research (OR) 357
(NASA) 18, 360 opportunity
Apollo programme 25 analysis 104
approach to project planning 13 identification 104
 Index 443

optimal distinctiveness 334–5 Poppendieck, Tom

in Italian opera industry 335–8 Lean Software Development: An Agile Toolkit
optimism bias 116n6 384
Orange 154–5 Porter, M.E. 92
O’Reilly, C.A. 15, 169 portfolio balance 219
organic company 66 portfolio complexity 221
organic organizational forms 294 portfolio decision processes 221
organizational ambidexterity 126, portfolio management model 73
127 portfolio managers 226
organizational ingenuity 194 portfolio stakeholders 223
organizational intractability 115 Poskela, J. 106
organizational issues, corporate entrepreneurship power conversion system (PCS) 136
66 power relationships 139–42
organizational learning cycle 226 practice theories 51–2
organizational practices 266, 271n3 practitioner-research 233
organizational process 80 Prencipe, A. 23, 211
organizational slack 70, 304 pressurized water reactors (PWRs) 131
organizational structure, agile 386 presumptive trust 246
organizational theory 258 Private Finance Initiatives projects 401
“contingency school” of 127 private PFEs 106
Oxford AstraZeneca 24 private sector, projects in 2
proactive innovation projects 232, 233
Panama Canal project 47 management of 234–6
“paradox of embedded agency” 277 processual measures 252, 254
parallel trials 205, 216n1 professionalism, in corporate venturing
Park, D. 115n3 management 60
Parsons, Talcott 371n1 programme evaluation review technique (PERT)
Participant Media 281 188
path dependence 221, 225–6 project-based firms (PBFs) 112, 393–4, 402,
Payne, J. 116n11 405n1, 408
PDCA cycle 203 competitive advantage in 411
Peirce, C.S. 196n16 digital strategies 412
Pellegrinelli, S. 170 industry-level initiatives, relationships
Pelton, John 303 between projects and 418
Pemsel, S. 211 influence project set-up 417
people-related capability factors 224 manage innovation at portfolio level 417
permanent organizations 333 product rather than project-based strategy
Petit, Y. 387, 388 416–17
Petroski, H. 370 see also project based organizations
Pfizer BioNTech 24 project-based learning 233
Pharos Lighthouse of Alexandria project-based organizations 2, 4, 232, 295, 334,
356 393, 405n1
Phillips, Samuel C. 195n2, 361, 364 infrastructure and decision-making processes
Pich, M.T. 88, 128 232
Managing the Unknown 17 innovation in 232–4
Pinto, J.K. 23, 110, 390 role of innovation manager 236–8
“planned emergence” regime 174 see also project-based firms (PBFs)
PMBOK see Project Management Body of project-based organizing 279
Knowledge (PMBOK) project capabilities 282–6
Poblete, J. 262 project entrepreneurship 279–82
Pollack, J. 67 project network organizations 286–8
Pope John Paul II 395 project-based strategy 416–17
Poppendieck, Mary project-based work, surfacing precarity of 44
Lean Software Development: An Agile Toolkit project capabilities 282–6
384 and innovation 393–5
444 Handbook on innovation and project management

project complexity 409–11 Project Management Journal 17, 191

project contingency 88–90 project management literature, exploration and
project design, in Italian opera industry 335–8 exploitation in 127–9
“Project Diamond” 88 project manager career systems 224
project ecology 286, 295 project network organizations (PNOs) 286–8
literature on 296 project networks 286
project economy 5 project-oriented agency 26
project entrepreneurship 279–82 project performance 285
project front-end (PFE) 101–4 project portfolio management (PPM) 168, 170,
networks 108 219, 227–8
people 107–8 challenges of 220–21
process 105–7 future preparedness 220, 225
project categorization implications for 113 human resource factors 224–5
project identity 139, 142–3 long-term factors 225–7
projectification 4, 101–2 objectives of 219–20
project inflexibility 190 strategic frame factors 225
project innovation ecosystem 295, 304 success factors 221–7
from “lonely projects” to orchestrating 295–6 traditional success factors 222–3
managing innovation in 302–3 up- and downstream factors 223–4
project learning process 202, 212–14 project portfolio management information
for novel projects 212, 213 systems 223
see also learning projects 201
Project Lincoln 362–3 conceptualized in innovation studies 11–16
project lineage management 168, 174–6, 181–2, defined as 279
210, 226 definition of 357
as new strategic management perspective globalization of 149
173–4 interplay between subsidiaries, corporate
sequence of projects with increasing value functions and 158–9
171–2 as learning opportunities in globalized
theoretical fields 172–3 innovation processes 157–8
project management (PM) 60, 73–5, 164, 186, project society 4–6
358–9 project stakeholders 315
and CE, differences, similarities and agenda 139–42
complementarity 66 project strategy
cultural evolution theories and 259–63 defined as 93–4
definition of 357 elements of 96
dinosaur mythology not agile enough 60–61 parts of 94–5
innovation versus 5, 6 structure of 94
integrated research themes and perspectives project studies 129
19–23 fields of 37
joint framework of innovation and 90, 91 levels of analysis see analysis, levels of
link between disciplines and theoretical fields project-supported organizations (PSOs) 158, 159
of CE and 65–6 project-to-project capitalization 176
novelty, complexity and flexibility 9–11 project tracking 175
parallel evolution of 81–2 project uncertainty 12–13
projects versus operations 7–8 PROTO 427
sociotechnical partner of 356 prototype reactors 134
systems approach to 5–7 psychological safety 249
as vector of innovation 61–2 emergence of 252
Project Management Body of Knowledge public PFEs 106
(PMBoK) 7, 244, 248–50, 253 public–private partnerships (PPPs) 106
project management embraces theory 7–9 projects 281
project management flexibility 9–11 Puccini, Giacomo
Project Management Institute (PMI) 6, 82, 187, La Bohème 337
195n1, 244, 250 La Tosca 335
 Index 445

Q-Sort approach 312 routine projects 128, 142, 283

Quinn, J. 109 culture evolution model of 263–9
learning in 203, 206
Rabl, M. 105 Rubalcaba, L. 276
radical innovation projects 87, 187, 193 runaway cycles 270
Raisch, S. 169
Rally Software Development study 387 Salter, A.J. 233, 430
Ramo, Simon 360, 364 Salter, S. 114
Ramo-Wooldridge Corporation (RWC) 360–62 Samset, K. 114
RAND Corporation 12, 16, 187, 311, 312, 357, Sapolsky, H. 196n14
363 scalability, agile 386–7
randomized controlled trials (RCT) 277 Scaled Agile Framework (SAFe) 383
random part failure 370 Schein, E.H. 258
Rangan, V.K. 285 Schoorman, F.D. 245
Rank, J. 225 Schreyögg, G. 284
rapid manufacturing project 201, 202, 205–10 Schriever, Bernard 357, 358, 360, 363, 364
R&D footprint 152–3 Schultz, C. 220
R&D portfolio decision-making 260 Schumpeter, Joseph 50
reactive customer-oriented innovations 233 Schumpeterian “creative destruction” 4
reactive innovation 233, 234 science-driven innovations 424
real options reasoning 226, 227 scientific management 356
“re-engineering” methods 367 scope management 244
reflective trust 246 scrum methodology 383–4
Reid, S. 106 Second World War (WWII) 357, 358
reimbursements of the initial investments (ROI) Semi-Automatic Ground Environment (SAGE)
317, 320 362–3
Reinecke, J. 278, 287 separate innovation unit 238
Reinertsen, D. 115n4 Serrador, P. 390
Reinventing Project Management (Shenhar and Shapin, S. 196n7
Divir) 17 Sharp, D. 114
Remote Applications in Challenging Shenhar, A.J. 5, 20, 62, 81, 82, 88, 111, 128, 186,
Environments (RACE) programme 430 188, 410, 415
Renault Logan case 160–63 Reinventing Project Management 17
research and development projects/ new product Shuttle Columbia disaster (2003) 368
development projects 244 Skunk Works 14, 367, 368
Research Policy 48 Slevin, D.P. 65
reverse innovation strategy 152 Small Explorer for Earth-orbiting space-craft 367
Richerson, P.J. 262, 264 “smallsat” initiative 367
risk management process 212, 213 Smith, A. 102
risky/uncertain projects, learning in 203–4, Smith, P. 115n4
206 social capital 430
Rizova, P. 111 social innovation (SI) 274–5
Roberts, K.H. 403 challenges of 277–9
Roehrich, J.K. 20 characterizes 275–7
Rogers, A.R. 263, 265, 269 embedded agency of social innovator 277
“Rogers’ paradox” 262 embedding solutions to accomplish social
role-oriented joking 253 change 278–9
Rolfsen, M. 251 managing critical stakeholders of social
Rosenbloom, R. system 277–8
Management Science 187 and project-based organizing 279–88
Rosenkopf, L. 169 social innovators 274
Rosenthal, S. 105, 111, 115n4, 116n5 embedded agency of 277
Rosing, K. 169 social learners 262
Rossi, Mario 399 social learning 260
Roundtable for Sustainable Palmoil (RSPO) 286 social networks 402, 403
446 Handbook on innovation and project management

Söderlund, J. 19, 36, 127–9, 158, 186, 211, 214 systems analysis (SA) 357–8
sodium-cooled fast reactors (SFRs) 131, 134, 135, Systems Analysis and Project Management
140 (Cleland) 364
soft value management 310–11 systems approaches 371n1
Sommer, A.F. 388 systems engineering (SE) 356, 359
Sommer, S.C. 21, 62, 128, 193, 194, 221 anti-aircraft guided missiles 359–60
The Soul of a New Machine (Kidder) 43 anti-aircraft gun directors 359
SpaceX factory 15 attempts to improve/reduce 367–8
sprint planning 381 ballistic missiles 360–62
sprint retrospective 382–3 computing and software SE 362–3
sprint reviews 381–2 defined as 357
Staber, U. 49 systems engineering and technical direction
stage-gate approach 7, 11, 388 (SETD) 360–62
Stage Gate™ models 105 systems engineering techniques 6
Stage-gate process 81, 312 systems management (SM) 356, 363–4
stakeholder change management 11 origins of 357–64
stakeholder orientation 225 project management 358–9
stakeholders 379 systems analysis 357–8
of decision space 320 systems engineering 359–63
of design space 316–17 Systems Modeling Language (SysML) 369
Stalker, G.M. 66, 68, 87, 116n8, 294 systems of systems projects 410
stand-alone innovation unit 241 major infrastructure 415–16
Starkey, K. 402 systems projects, housing 414–15
Stenberg, K. 341 systems thinking 294
Stingl, V. 108
Stock, G. 107 Takahashi, M. 108
strategic clarity 222–3 task accomplishment behaviours 248
strategic decision-making, tools for 311–15 Tatikonda, M. 111
strategic entrepreneurship journal 64 Taylor, Frederick W. 2
strategic frame factors, PPM 222, 225 “team scaffolds” 251
strategic implementation success 220 team structures, four-part classification of 14
strategic issues, corporate entrepreneurship technical (type 1) research 38–9
71–3 technological uncertainty 128
strategic project management 93 “technology brokering” 41
structural ambidexterity 126, 169, 181, 238 technology dimension 90, 91
structural measures 250, 254 Tell, F. 158, 211
structured innovation process 235 temporal ambidexterity 169
“subjective project management” 66 temporary organizations 333
subsidiaries Tesla 15
emergence of innovations in 156–7 Thames Tideway Tunnel 297, 303
interplay between projects, corporate “theory of change” 276
functions and 158–9 theory of contingency 80
roles of 153–5 Thiel, J. 404
sufficient equilibrium conditions, culture Thorpe, C. 196n7
evolution model 268–9 Tillement, S. 20, 191
super-high-tech 90, 91 time-based interdependencies 299
“sustaining technologies” 15 time-based strategy 92
swift trust 247 Tjosvold, D. 248
Sydney Opera House 144 top-down cultural dynamics 259
Sydow, J. 49, 248, 395, 404 top-down projects (PM) 71
system, defined as 357 total cost of ownership (TCO) 313
System Development Corporation (SDC) 363 Total Quality Management (TQM) 367, 368
system failure 370 total systems approach 360
system health management (SHM) 370 Toyota Hybrid Prius case 171–2
system innovation 87 traditional investment approaches 172
 Index 447

traditional operas 335 upstream and downstream factors, PPM 222–4

interpretations of 336, 338 upstream innovations 429–30
modern staging of 335–42, 348, 350 urban tunnelling programmes 301
non-modern staging of 346 US Army
traditional project planning process 379 ballistic missiles 360–62
traditional risk management 204 JPL missile 362
traditional success factors, PPM 222–3 Nike ground-launched anti-aircraft missile
traditional systems engineering (TSE) 364–5 359
benefits, problems and limitations 366–7 US Manhattan Project 358
Traditional Theatres (TTs) 339 US Navy
trial-and-error approach 221 aircraft training simulator and analysis tool
trial-and-error learning 171, 172, 204 for 362
“Triple A portfolio management” 173 Polaris submarine-launched ballistic missile
trust 253 programme 359
definitions of 245 WWII Mark-56 gun director project 359
emergence of 252 Utterback, J.M. 82, 83
facets of 245–7
formation, promoted in innovative projects Valentine, M.A. 251
250–53 “valley of death” 110
in innovative projects 248–50 value
between project partners 245 in decision space 320–24
types of 246 in design space 317–20
truth 39 systematic analysis exercise of management
Tuff, G. 220 literature 329n2
“Tunnel Energy Segments” project 300 Value Analysis Functional Approach 310
Turner, J.R. 88 value engineering 310
Turner, N. 169 value management (VM) 308, 309–10
Turner, R. 112 characterization of value space 324–7
Tushman, M.L. 15, 41, 169 contemporary approach of 315–27
engineering of hard and soft value
UK Atomic Energy Authority (UKAEA) 424, management 310–11
427–8, 430 in innovation projects 309
UK construction sector 413–14, 419 operational tools for business model
digitally enabled product platforms performance 316–20
competition 417–18 performance control 311–15
industry-level initiatives, relationships perspectives of innovation projects 327–9
between projects and firms 418 strategic tools for firm valuing 320–24
influence project set-up 417 value space 315
manage innovation at portfolio level 417 characterization of 324–7
product rather than project-based strategy data reduction in 325–6
416–17 engineering of 327
systems of systems projects (major van Abel, Bas 44
infrastructure) 415–16 Van den Ende, J. 21, 235
systems projects (housing) 414–15 Innovation Management 241n1
UK platform-based approach 413, 415, 417, 418, Van der Duin, P. 109
420n1 Van der Have, R.P. 276
UK product-based approach 416 Van de Ven, A. 375
uncertainty 110–12 vanguard exploratory projects 62, 188–9
uncertainty blindness 191 vanguard projects 130, 142, 394, 401, 403–4
understanding (type 2) research 39 Van Marrewijk, A. 47
unified project 90–92 Van Wijk, J. 285
unintended SIs 276 Varnes, C. 106
United States Air Force (USAF) 357–9 Vasconcelos Gomes, L.A. 191
ballistic missiles 360–62 Vavilov, S. 22
ICBM programmes 360 Vedel, J.B. 43–4, 224
448 Handbook on innovation and project management

Verdi, D. 399, 400 Whitley, R. 112

Verdi, Giuseppe Whyte, J. 23, 49, 296, 394, 403, 404, 410,
Aida 342 411
La Traviata 335, 336 wicked problems 24
Vernon, Raymond 151 Wideman, R.M. 212
Verspagen, B. 375 Wied, M. 193
voice behaviour 224 Williams, T. 102–3, 115
Volden, G. 114 Wilson, K. 155
von Braun, Wernher 358, 364 Winch, G. 108
Von Hagen, O. 281 Winter, S. 203
Voss, M. 224 Wolstenholme, Andrew 296–7, 303, 305n1
V-2 project 360 Woodridge, Dean 360
World Bank 5
Wachs, M. 110
Ward, S.C. 212 Youker, R. 111
waterfall project management 376
advantages of 378–9 Zhang, S. 411
elements of 378 Zhou, A. 415
limitations of 379 Zhou, S. 23
Westling, G. 143 Ziering, Amy 282
Wheelwright, S.C. 13, 14, 127, 220, 226 Zollo, M. 203
Whirlwind 362 Zuckerberg, Mark 63