The Management of Innovation in Project Based Firms

Innovation is an important area of management theory, but there is a paucity of research on innovation in project based firms. Project based firms are simultaneously becoming a more vital and important organisational context, exemplifying many current managerial challenges. In this paper we research innovation in twenty project based firms. We identify three key areas of innovation from the theoretical literature and conduct empirical research, discovering (1) whether project based firms provide an organisational context supportive of innovation, (2) how project based firms address the question of innovation and slack resources, and finally (3) whether project based firms view innovation as universally desirable, or adopt a more cautious approach to developing and driving their innovation strategies. Our findings add to current theorising on innovation in organisations, expanding our knowledge of project based firms and innovation strategies

Developing a go-to-market strategy: art or craft

The importance of project-based firms is increasing, as they fulfill the growing demands for complex integrated systems and knowledge-intensive services. While project-based firms are generally strong in innovating their clients' systems and processes, they seem to be less successful in innovating their own products or services. The reasons behind this are the focus of this paper. The characteristics of project-based firms are investigated, how these affect management practices for innovation projects, and the influence of these practices on project performance. Using survey data of 203 Dutch firms in the construction, engineering, information technology, and related industries, differences in characteristics between project-based and nonproject-based firms are identified. Project-based firms are distinguished from nonproject-based firms on the basis of organizational configuration, the complexity of the operational process, and the project management capabilities of the firm. Project-based firms also differ with regard to their level of collaboration and their innovation strategy, but not in the level of autonomy. A comparison of 135 innovation projects in 96 of the firms shows that project-based firms do not manage their innovation projects different from other firms. However, the effects of specific management practices on project performance are different, particularly the effects of planning, multidisciplinary teams and heavyweight project leaders. Differences in firm characteristics provide an explanation for the findings. The implication for the innovation management literature is that “best” practices for innovation management are firm dependent

Towards a service-led relationship in project-based firms

Project-based firms increasingly apply practices that are in line with relationship marketing (RM), which is a shift from individuality to mutuality, and service-dominant logic (SDL), which is a shift from a focus on goods exchange to an emphasis on service exchange. These firms also adopt value co-creation processes, benefiting from both RM and SDL views. However, their overall transition towards RM, SDL and/or both is not clearly understood. Therefore, the research aim is to explain how and why project-based firms have moved away from transitional marketing. A retrospective action research between 2002 and 2009 provides process data on how a single main contractor adapted their marketing approach over five publicly funded projects within the oil, gas and petrochemical industries. The findings show that the uniqueness and dynamics of projects necessitate the adoption of both SDL and RM, a view that is entitled the service-led relationship here. This transition occurs through services expansion, multi-level distributed interactions and process-oriented performance management in projects. The firm enabled the transition through the evolution of both institutional mechanisms such as contracts and organizational structure, and people attributes such as capabilities and culture

Sources of Ideas for Innovation in Engineering Design

This paper explores the sources of ideas for innovation in engineering design. The paper shows that engineering designers involved in complex, non-routine design processes rely heavily on face-to-face conversations with other designers for solving problems and developing new innovative ideas. The research is based on a case study and survey of designers from Ove Arup & Partners, a leading international engineering consultancy. We examine the role of different mechanisms for learning about new designs, the motivations of designers, problem solving and limits to designers' ability to innovative. We explore how the project-based nature of the construction sector shapes the ways in which designers develop new ideas and solve problems. We suggest that among the population of designers in Arup, there are a number of different design strategies for innovating and that these can have important implications for how design is managed. We locate our approach in the research on innovation in project-based firms, outlining patterns of innovation in firms that survive on the basis of their success in winning and managing projects.engineering design, innovation, tacit knowledge, project-based firms

Narrative interactions: How project-based firms respond to Government narratives of innovation

The purpose of this article is to explore the ways project-based firms respond to Government narratives of innovation. We focus on the narratives of innovation articulated by Government as part of industrial policy and the responses thereto by senior managers in project-based firms. Our research setting is a major project-based sector: UK construction. 45 narrative interviews were conducted in addition to the content analysis of the Government reports on construction innovation. We find that project-based firms respond to the Government narrative for the need for innovation to improve performance by developing and enhancing their innovative capabilities and generating their own narratives of innovation. The model developed shows how narrative interaction between the Government and project-based firm levels impact on meaning-making of innovation by (re)articulating collective identities, and shaping innovation strategies

Risk Management for Enterprise Resource Planning System Implementations in Project-Based Firms

Enterprise Resource Planning (ERP) systems have been regarded as one of the most important information technology developments in the past decades. While ERP systems provide the potential to bring substantial benefits, their implementations are characterized with large capital outlay, long duration, and high risks of failure including implementation process failure and system usage failure. As a result, the adoption of ERP systems in project-based firms has been lagged behind lots of companies in many other industries. In order to ensure the success of ERP system implementations in project-based firms, sound risk management is the key. The overall objective of this research is to identify the risks in ERP system implementations within project-based firms and develop a new approach to analyze these risks and quantitatively assess their impacts on ERP system implementation failure. At first, the research describes ERP systems in conjunction with the nature and working practices of project-based firms and current status and issues related to ERP adoption in such firms, and thus analyzes the causes for their relatively low ERP adoption and states the research problems and objectives. Accordingly, a conceptual research framework is presented, and the procedures and research methods are outlined. Secondly, based on the risk factors regarding generic ERP projects in extant literature, the research comprehensively identifies the risk factors of ERP system implementation within project-based firms. These risk factors are classified into different categories, qualitatively described and analyzed, and used to establish a risk taxonomy. Thirdly, an approach is developed based on fault tree analysis to decompose ERP systems failure and assess the relationships between ERP component failures and system usage failure, both qualitatively and quantitatively. The principles and processes of this approach and related fault tree analysis methods and techniques are presented in the context of ERP projects. Fourthly, certain practical strategies are proposed to manage the risks of ERP system implementations. The proposed risk assessment approach and management strategies together with the comprehensive list of identified risk factors not only contribute to the body of knowledge of information system risk management, but also can be used as an effective tool by practitioners to actively analyze, assess, and manage the risks of ERP system implementations within project-based firms

Innovation Management in Project-Based Firms

Project-based firms have an organizational structure, capabilities and routines that clearly distinguish them from manufacturing firms. Some have claimed that these characteristics make project-based firms more innovative than, for instance, manufacturing firms, others argue the contrary. The central question in this research is to what extent the specific characteristics of project-based firms affect innovation management. We focused on new product or service development projects in project-based firms, and investigated the influence of firm characteristics on success factors for these projects. We performed an exploratory case study to generate hypotheses, and subsequently tested these hypotheses using a large scale comparative survey of project-based and non-project-based firms in the Dutch Information and Technology, Construction, Engineering and related industries. We find that development projects enable project-based firms to follow more innovative strategies. To execute these development projects successfully, they are to be managed differently than is currently described in the innovation management literature. Multidisciplinary teams and planning, for example, hamper development projects of project-based firms. It seems that in project-based firms the experts within one discipline, who work each at separate business projects, need to work together in development projects, since collaboration between disciplines abounds. On the contrary, in manufacturing firms, where specialization abounds, the experts of the various disciplines need to collaborate in multidisciplinary development teams. In project-based firms the project leader is subsequently needed to translate the specialized new services and products, and to ensure that these are implemented within projects executed to customer order. This is clearly a different task than for heavyweight project leaders in manufacturing firms, who have to ensure and enable communication and collaboration between the various disciplines. Furthermore, it seems that project-based firms should apply a more emergent style of project management on their development projects, as their capabilities in efficient project planning hamper the quality of the services and products that are developed

The productivity dilemma in project-based firms:why do organizations tie their own hands and what can managers do to untie them?

In repetitive operations the productivity dilemma has been widely studied, but there is a lack of research in non-repetitive operations, such as in project-based firms. This paper investigates why project-based firms foster or hinder project flexibility through an embedded multi-case study with six projects within a large German project-based firm. The results suggest that although such firms have projects as their key source of revenue, their focus lies in longevity and survival and this logic is, in some instances, at odds with the temporary nature of the project context

Technological Change and Innovation in Consumer Magazine Publishing: a UK-Based Study

This paper presents the results of research undertaken between 2002 and 2004 into the impact of technological change on the UK consumer magazine industry. The findings highlight patterns of innovation, both in the range of products (most notably monthly magazine titles) and the structure of organisations and work practices, which have tended to elude much of the contemporary debate within the “cultural industries” approach adopted in the media studies discipline. Instead, our analysis makes use of insights from the innovation literature to highlight the impact of technological discontinuities on the capabilities of both incumbent firms and new entrants. It also highlights the important and growing role that is being played in innovation-led industries through the adoption of organisational practices that find their origins in the traditions of project-based firms