Strategic project management for product innovation: Strategy development for projects

This research is about how Strategic Project Management (SPM) is applied to develop project strategies for incremental and radical Product Innovation Projects (PIPs), or in short PIPs. Product innovation is important to all manufacturing firms, and especially to manufacturing firms exposed to rapidly changing customer and technology trends, and operating in industries with considerable complexity and uncertainty. This is particularly true for large firms with more than 500 employees in fast-moving volume-manufacture industries, such as consumer-electronics, automobile, industrial and medical product industries. These types of firms have significant investments in both incremental and radical product innovation as they view their innovation capabilities as a core competence crucial to creating and sustaining long term competitive advantage. These innovation investments are reflected in their annual Research and Development (R&D) expenditures. According to the European Union, the 2,500 firms with the largest direct R&D investments in the world spent 696 Billion Euro on R&D in the year 2015 to 2016 alone and had net sales of 17,687 Billion Euro. Therefore, large firms such as these seek to excel at managing product innovation. Yet, research found that product innovation failure rates range from 35 percent for healthcare products to 49 percent for fast-moving consumer products. Research has also identified that sound project management of PIPs is important to product innovation success. Previous research on product innovation management and strategic management has primarily concentrated on broad firm-level aspects. However, most product innovation efforts are implicitly or explicitly organised as projects. The literature suggests that project managers are the new strategic leaders who take responsibility for product innovation and proposes that by applying strategic project management practices PIP managers can significantly increase the likelihood of product innovation success. Yet, the literature is virtually silent on the theory and practice of strategic project management for PIPs. Therefore, this research responds to the call for research on project strategy development by addressing the overarching research question: What are the roles of strategic project management in product innovation projects? This research takes a contemporary strategy-as-practice and project-as-practice approach and applies a case study methodology focused on PIPs within large innovative parent firms. Thus, product innovation projects are the unit-of-analysis from the view of PIP managers. This research explores how project strategies are developed using a questionnaire combined with in-depth follow-up interviews of thirty PIP managers. Denmark is the selected geographical area for this research as it is ranked high on several innovation indices. For example, Denmark is ranked sixth in the world with 3.1 percent of its Gross Domestic Product invested in R&D. It has high densities of large innovative firms and project managers involved in product innovation. Twenty of the 30 participating senior project managers and their PIPs are from 15 of the 2,500 largest firms with significant R&D investments in Denmark. A further 10 participating senior project managers and their PIPs are from large firms with more than 500 employees and significant R&D investments in Denmark, but outside the top 2,500 largest global R&D investors. A thorough literature review informs the development of an integrated ‘a priori’ SPM framework and an initial set of complementary SPM roles and practices for PIPs. The SPM framework integrates project, strategy, innovation and business concepts such as project methodologies, value proposition, business model, resource-based view, dynamic capability theory and contingency theory. It is created to frame research on SPM; to ensure that SPM has a solid theoretical foundation; and to assist future project managers in formulating successful project strategies for PIPs. The chosen research methodology enables the ‘a priori’ SPM framework and SPM roles to be compared and contrasted with PIP managers’ actual praxis using questionnaire descriptive statistics, interview thematic analysis and case study analysis. This research contributes to project and strategy; theory and practice in a business innovation context by researching how product innovation projects and their parent firms co-create strategies and capabilities to transcend the strategy-execution-gap. It documents that good project strategies achieve coherent alignment between ‘why’ a project is to be done, ‘what’ a project is to achieve and ‘how’ a project is done in collaboration with its stakeholders in the parent firm. It finds that project managers apply SPM to develop and continuously evolve their project strategies to achieve coherent alignment while navigating a changing project situation. The main research contributions are a verified ‘a posteriori’ SPM framework and ten ‘a posteriori’ SPM roles and practices. Additionally, this research develops a SPM learning cycle that integrates the ten SPM roles and practices and is a useful educational tool when introducing junior project managers to senior project managers’ reflective SPM practice. Other research contributions to project and strategy theory and practice include, but is not limited to, identification and verification of different project strategy styles, strategy-innovation-model categories and project-capabilities-model elements. Furthermore, this research synthesises the project complexity and contingency literature and develops a systematic foundation useful to profile PIPs in their parent firm and to inform project strategy development.