January 10, 2020

When (not) to manage a project as an innovation project

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In order to answer this question, we would first need to define when an idea is innovative.

  • Is a small product update, like a new feature, already an innovation?
  • Is using a new technology under the hood of your service an innovation?
  • Is offering an existing product or service under a different business model an innovation?

Opinions will probably differ. I doubt this is the most important discussion to answer the question, though.

Start with why

If you want to do something innovative, let’s start with your goals. Why do you want to innovate?

  • Do you want to reach a new customer segment?
  • Do you want to stay ahead of your competition in order to keep your market share?
  • Do you want to improve delivery efficiency?
  • Do you want to be perceived as a company that is ahead of the curve and not a laggard?

By clearly specifying your innovation goal, you’ll be able to translate vague strategy (“be innovative!”) into concrete execution. It will help you define and focus your project scopes and investments.

It’s not black and white

This still leaves lots of grey between “innovative” and “business as usual”. How do you know whether or not to manage a project as an innovation project?

A more actionable criterion is the level of uncertainty involved in realising your new idea and achieving your goals. The higher the level of uncertainty, the shorter your validation feedback loop needs to be.

For example, if you are a retailer and already have 150 physical stores, setting up a new store in a new location is a project with few uncertainties. You know how to build the store, you know what it needs to look like and how it needs to be organised to be successful, you know the logistics, you know your customers, …

A very different story is setting up the first store of a new brand and a new store concept, with new products, an immersive shopping experience, strong online-offline integration, … This would be a project with much more uncertainties.

  • Are your customers who you think they are?
  • Is testing out products in store good enough, or will customers want to try things out at home as well?
  • What information will customers look up online, what offline in your store?
  • Are you sure you will be able to deliver the customer experience (logistics, technology, …)?

To make the second project a success and reach your initial goals, you’ll need to experiment and learn a lot to ensure you are creating the right shopping experience. You’ll need a much shorter learn-build-measure loop.

In summary, the level of uncertainty is an important driver for your project approach. Hence, assessing how (un)certain you are that you will actually achieve your goals with the scope you have in mind, is a key activity during any project initiation.

How (un)certain are you about your projects, and are you managing them accordingly?


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