Crossing the Valley of Death: Managing the When, What, and How of Innovative Development Projects

Abstract

The last few decades have seen a profound transformation of innovation project management within automobile firms. During the 1990s, the product development phase was revolutionized by the deployment of heavyweight project management, project portfolio processes, and platform strategies. The 2000s saw the forces of change move upstream in the innovation process, with the development of new methodologies intended to develop and orient creativity, as well as new upfront units acting as innovation labs. However, many upfront creative endeavors still encounter an innovation valley of death when they move into the rigid and risk-averse development phase. Thus, the frontier of innovative project organization seems to be the ongoing quest to reconcile the emergence of breakthrough innovations in the upfront phase with the more rationalized nature of development phases. Based on a case study of a disruptive low-cost car, this article analyzes how the product development phase can support innovative exploration to overcome the challenge of achieving a major cost breakthrough. We analyze the specific content of the project’s innovations ( fractal innovation) and the management practices and organizations used to implement them. We characterize how such innovative product development can contribute to a new economy of innovative effort within the global innovation funnel of the firm. We compare this global innovation process, where development projects play a major role as a locus for organizational learning, to the customary one in automotive firms, where learning happens essentially in front-end marketing and engineering departments.

How Did the Imperfection of an Innovation Project Come About? The Tension Between Legitimacy and Flexibility

“…Rather, they repeated and eventually enhanced their conventional project management practices. Those newer project management practices, such as the agile approach, which could be legitimate in innovation projects (Midler, 2019), were not legitimate in this project. This finding is in agreement with Lehtonen and Martinsuo (2008), who indicated that deeply embedded projects are more likely to ignore flexibility when adopting practices and procedures that are used in the parent organization, but inconsistent with Midler (2019), who found that innovative projects systematically question and transgress the best practices of head office departments.…”

“…Legitimacy and flexibility, viewed as a duality, could enable each other, like stability and change (Farjoun, 2010). Clark and Wheelwright (1992) and Midler (2019) found that firms that place high value on innovation adopt a heavyweight project management model to achieve the balance of legitimacy and flexibility, although they are in a highly institutionalized context. For example, organizations in the automotive industry, where radical innovation has become a key condition for competitiveness, put great commitment into innovation projects and embrace greater internal variation and openness, at the same time stabilizing their internal variation and institutionalizing their innovation.…”

From the wall of the industry to the soul of society: a review and multi-level analysis on projectification

“…Although at first related to new product development (NPD) processes (Midler, 2019a), it expanded to other organizational functions, leading to changes in hierarchy dynamics, task definitions, human resources management (Ingason et al, 2019) and work relationships (Arvidsson, 2009;Soderlund, 2006, 2010;Clegg and Burdon, 2021;Dollinger, 2020;Ekstedt, 2019;Nesheim, 2019;Prouska and Kapsali, 2021). It also created tensions due to the coexistence of both "permanent" and "temporary" organizational structures inside companies (Arvidsson, 2009;Ekstedt, 2019;Nesheim, 2019).…”

“…Projectification has been studied in varied contexts, such as entrepreneurship (Auschra et al, 2019;Li et al, 2020), public sector organizations (Godenhjelm et al, 2015), conservation of traditional rural biotopes (Cwikla and Jalocha, 2015;Raatikainen, 2018), health care (Glasdam et al, 2015;Marten and Sullivan, 2020;Penkler et al, 2020), pharmaceutical companies (Biedenbach, 2011), media broadcast (Clegg and Burdon, 2021) and in performing arts (Lindgren and Packendorff, 2007). From a geographic perspective, studies also examined the regional influences of projectification in European (Dornisch, 2002;Mukhtar-Landgren and Fred, 2019;Schoper et al, 2018) and in African countries (Bardosh, 2015;Marten and Sullivan, 2020) and as a crucial element to promote and coordinate collective innovation strategies in high-growth emerging countries (Clegg and Burdon, 2021;Midler, 2019a).…”

“…Projects can be seen as an engine of change and innovation, enabling a real product mindset and a customer-oriented perspective in the project team (Aubry and Lenfle, 2012;Cerne and Jansson, 2019;Nesheim, 2019). Therefore, innovation and entrepreneurship are closely linked to projects, as they are considered to have analogous characteristics and issues (Beaume et al, 2009;Lundin, 2016;Wilson et al, 2018;Auschra et al, 2019;Midler, 2019a;Li et al, 2020), such as strong and mature project management capability, empowerment of project functions and concerns with learning processeswhich are reported to be relevant for entrepreneurs and innovation processes, as well as for project management (Midler, 2019b).…”