3Management

Management is the art of getting three men to do three men’s work.

from: The William Feather Magazine on Scientific Management 1919

Scientifically, work is a fact. It belongs to the physical observations of energy, just as heat, light, chemical, or nuclear bonding. In particular, work is the mechanical form of energy and can be due to motion, elevation, tension, friction, rotation, momentum, pressure, and many others. As a matter of fact, it underlies the law of conservation and therefore represents some exclusivity as previously explained for factual truths.3 Hence, the work of three men will always stay the work of three men. In natural science this is called the First Law of Thermodynamics.

Yet, the effects of work may differ reasonably. Work may diffuse—literally meaning spread—into the other forms of energy, which are not intended. And work is dissipated—literally meaning spilled—into heat, which fundamentally can never be avoided and is therefore attributed with the own scientific term of “entropy”—literally meaning changeability. But since the property of changeability can only diminish, the negative value is in use.4 Hence, the effectiveness5 of work is always diminished by diffusion and its efficiency6 by dissipation. In natural science this is called the Second Law of Thermodynamics.

Since subjected to engineering intent and reason, the effects of energy underlie scientifically the law of entropy, as previously explained for the truth of reason. Thus, for a particular purpose of work, its effectiveness and efficiency have to be reasonably managed—literally meaning handled. The Ringelmann effect confirms that productive work equally diminishes when two or more individuals—literally meaning undividables—work on the same purpose [44]. So far it has not been settled whether this is rather due to diffusion, that is, a lack of coordination and of orientation, or rather due to dissipation, that is, a lack of cooperation and some inherent loafing. Anyhow, it is the productivity of work that needs to be reasonably handled or managed.

Although management executives do not personally execute the work, they are responsible for the reason of operation. And due to the epistemological aspects in science explained earlier, they are generally in charge of the logical justification of business, too. Thus, they casually consider themselves as the “men of action”, though this is the only role they do not face, in general. But meanwhile the word management does not stand for business handling alone, any more, but signifies also the caste of management executives.

At this point it shall be admitted that the inspiration for this book has been The Principles of Scientific Management by Taylor in 1911 [45]. This theory has become so influential that it is often referred just as Taylorism. It has helped to pacify the US job market and its emerging industries in a period of dramatic riots at the turn to the 20th century. And it is therefore considered an alternative draft to The Communist Manifesto by Marx concerning a socially acceptable way to lead the workforce in an equally successful and livable way. Consequently, it has been adopted by prominent manufacturers, such as Ford and Toyota, and thereby is also specified as Fordism and Toyotism, respectively. The concept of new duties for scientific management can still be traced in Lean Thinking as discerned by Womack and Jones in 1991 [46]. In order to exemplify this in the following, the scientific interpretation shall be retraced by branding Taylor’s four new duties in subsequent stages by the terms: skilled work, workforce, cooperation, and work division (see Figure 3.1).

In fact, skilled work is required at first, or, as Taylor put it: “They develop a science for each element of a man’s work.”7 Only professional skills with regard to work guarantee a management with a certain scientific standard. This duty led in Fordism of the 1920s to increased automation of the manufacturing processes, because just a process, which is specified in detail, is also ready for automated operation. Consequently, at Toyota’s from the 1950s, the manufacturing processes were further improved to a state of autonomation, where Jidoka is called an automatic stop at process failure—and Poka-Yoke is called an engineering procedure to make processes foolproof, that is, achievable in just one right way. Then, in Lean Management the meaning of these elements of man’s work has changed completely: The superior target of a lean enterprise is to produce value and accordingly the new duty of a lean enterprise is to Specify Value.

Transferring these considerations to the purpose of innovation management, the prominent duty would be a specification of its value, for example, by means of cost specification and by accounting as well as by the calculation of the net present value due to the investments required. Additionally, autonomous abortion scenarios should be elaborated and measurable criteria have to be established to stop and to exploit inadequate proceedings in the most profitable way. While the expected achievements of innovations can be somewhat dubious at the beginning, the related processes should be scientifically sound to a greater extend.

As a second new duty of Taylorism, a suitable workforce is required for skilled execution, or, as Taylor put it: “They scientifically select and train, teach, and develop the workmen.”8 Thereby it is obviously recognized that every realization of work needs— besides professional skills—a driving force, too. This duty was extended in Fordism to a general introduction of machines in order to relieve the human efforts, however, sometimes also to substitute even the jobs of workmen. Yet, this eventually enhanced the humanization of work, since nowadays workplaces are mainly designed ergonomically. Consequently, these enhancements led to some production leveling at Toyota’s, where Chaku-Chaku is called a process including several steps of machining at one work station—and Heijunka is called an engineering procedure to eliminate inconstancies in workflows, that is, a harmonization of the logistics. In Lean Management this is therefore newly interpreted as the duty to establish a Value Stream.

Transferring these considerations to innovation management, the new duties can be understood as a well-considered scheduling of intermediate achievements and the relation of different activities. Interruptions of the proceedings should be avoided by a timely adjustment of the different duties. And outsourcing of some duties should be envisaged if specific competences are required. In fact, the application of computer software and of electronic administration devices can be regarded as a modern form of outsourcing workforces and is commonly accepted to spur the managerial processes.

As the third duty of scientific management—after all this soulless automation and mechanization of work—even Taylorism accepts that a humane accommodation is required for success, or, as Taylor put it: “They heartily cooperate with the men.”9 In particular, the emotional statement “heartily” needs to be emphasized, here. In contrast to pure materialism, people are not just means of labor but are personalities with individual identities and basic human rights and self-determination. This duty was respected in Fordism by the implementation of a New Deal, conceding each employee a rather satisfying payment under the terms of that period. Thereby, even unskilled workers could afford the purchase of a car after reasonable efforts. This duty was adopted even by a US federal law to ensure minimum wages during the Great Depression of the 1930s. Consequently, workers at Toyota have become intensively involved by means of Management Planning, that is, a distribution of planned work by deliberate talk with all possible contributors. For example, this cooperation is enhanced by means of Andon boards, instructing all employees about the actual status of production, such as throughput, failures, accidents, and so forth. And Kanban is a scheduling indication to notify each employee about any item in the factory, although the employee may be in charge at remote places or at unusual times. The procedure of management planning is also referred as hoshin kanri involving all possible contributors in the executive decisions and making the mutual expectations transparent for everybody. In Lean Management, this management duty is branded as Flow with the imperative for everybody to bother about a smooth workflow, primarily and permanently.

With innovation management, it is equally imperative to share skills, competences, and information in a most reasonable way. Informal meetings as well as formal conferences are adequate for this purpose. A suitable documentation by informal recordings as well as formal reports will surely help. However, if the aspect of cordiality is neglected, then all these means will fail. The deal for collaboration should be fairly recompensed—or any cooperation becomes merely a nuisance –particularly, when the desired goal comprises ingenious achievements for innovations.

Last, but not least, in scientific management a work division between execution and management tasks is required, since they belong to different states of mind, that is, conservation of effect versus entropy of diffusion. To exemplify this humorously: A logger is seen occasionally by a passerby exerting enormous efforts to fell a tree with an axe, yet each stroke just yields a small dent. When the reflective passerby suggests sharpening the axe first for more effect, the answer is affirmative to that fact; but then, the logger revokes, because he has still the whole grove to fell that very day and no preparatory time to lose.

Therefore, work division seems indispensable, although in some contrast to cooperation, or, as Taylor put it: “They almost equal division of the work and the responsibility between the management and the workmen.”10 Here, the demand for equality is to be highlighted. While this splitting of work and of responsibility for work includes some alienation and perhaps even some incapacitation, it seems indispensable to manage the complexity of operations. And this interpersonal conflict has to be balanced by mutual respect and by balanced parity. However, this duty led in Fordism first to mere technical improvements, for example of the assembly line or a supply chain, which enhanced the productivity tremendously. Nowadays, modern manufacturing underlies a permanent improvement by means of reengineering. And this accounts mainly for the advancement of Kaizen aka Continuous Improvement Process CIP, where all workers are dispensed from time to time from their tasks and take, occasionally, the responsibility of improvement of their operating instructions. And Kaikaku refers to an engineering process that is labeled during the introduction of a new production technology, where all workers are consciously familiarized. Therefore, it is called “lean” in management, when all work, activities, processes, and related courses are a result of a significant demand, either to comply with the required target or to readjust the assigned targets. This is called the principle of Pull.

The ambiguity of innovations seems reason enough to work with appropriate respect and some modesty to one’s own capabilities as well as to the potentials of the other contributors involved. At times, it may be required to pursue the launch of an innovation without any scruples, yet, at other times it may be wise to pull the emergency brake and look out for alternatives in order to prevent the worst-case scenario. Therefore, it is necessary that someone takes responsibility, independently from the anxiety or expectations of the personal impacts. However, it is equally wise to let all coworkers participate in these proceedings.

Modern management has widely diffused the responsibility to a caste of managers and their particular duties. General Management consists of the management of these managers: for example, the management of cost, supply or financing to comply with the economical aspects; the management of communication, human resources or customer service to handle the social aspects; the management of knowledge, R&D or technology to cover the technical aspects; the management of time, scheduling or milestones to cover the dynamic aspects; the management of risks, conflicts or changes in respect to critical aspects; the management of maintenance, production or energy to procure the operative aspects; the management of product, branding or the portfolio in regard to strategic aspects; the management of the environment, the IT or the program to include boundary aspects, to just name a few.

Management duties have obviously become as numerous as previously the elements of work. In that way the equal division of work and of responsibility is somewhat fulfilled, even regarding the amount of the workforce required. Especially, the increasing demand for innovations seems to be a job motor for qualified jobs. A new proper job description for such managers has to be scientifically developed, according to the first duty of Taylorism.

At this point, it is imperative to stress that routines are not less worthy than projects. On the contrary, best practice studies indicate that enterprises should do about 80% of business routines and merely 20% of business projects to be successful. Routines procure a steady economic equilibrium and furnish the funding for project investments. Therefore, it is a bit perturbing if some recent business polls indicate that presently more than half of the business processes are carried out by projects. Since every project has a considerable chance to fail, this may have severe impacts on the cash flow. Hopefully, it just signifies some enthusiasm and satisfaction about the advantages of project management.

Another basic characteristic of a project is its uniqueness. For example, one may consider a personal project to learn a foreign language or to acquire similar skills such as swimming, biking, or driving—once learned, never forgotten, as the saying goes. The readiness of man to learn and understand spares the effort of repetitions when exploring a new business case. Similarly, just one graduation from school, high school, college or university is usually required, and therefore unique. And the opposite of a project is a repeated confirmation or a regular reestablishment of previous achievements, such as tax declarations, salary payments or maintenance services. Certainly, the introduction of a new machine or of a new accounting system for taxes or salary has to be projected, too. But afterwards one should expect some leveling and beneficial routines for the special efforts of this implementation. Again, the rule-of-thumb advice is to standardize about 80% of the processes in order to retain sufficient time off to care about the improvement of the standard achieved.

The next basic characteristic of an entrepreneurial project is its limitation. To comply with economical requirements each project case has a limited budget and—as time is money—also a limited duration. The investment plan for a new incorporation, a new product, or a novel production line, a new building, or even a new service offering like a restaurant or a consultancy –is always limited due to constraints in the available funding. If the funds are exhausted without any returns, the project has already failed. Thus, stable institutions tend to avoid projects, for instance public services, traditional clubs or even industrial “firms”—literally meaning firmly established corporations. Such institutions stand for sustained funding, for example, by taxes, fees, tolls, charges, or just by a stable market position. In particular, the problem with public projects is that often the authoritative remuneration by public funding is exploited to boost the budget permanently, since a government runs seldom out of money. Take, for example, military expenses, public airports, railways or other traffic projects like the Big Dig Boston, the Edinburgh Parliament, the Sydney Opera, the Gotthard Tunnel,12 or the Berlin Airport—just to name some examples of excessive spending.

Therefore, a last basic characteristic should be mandatory for projects, yet it is often neglected: autonomy. At least, an entrepreneurial project should be autonomously organized—where the word “organization” literally stands for being at the disposal of own means and resources. An autonomous management is basically provided by an own budget and usually an own staff of managers and of workers, as well. And this enables the development of an own concept, structure, planning, and controlling, in order to pursue their very own targets.

Especially, in cases where an innovation project depends on other business affairs, that is, other projects or routines, it is reasonably involved and affected by them. For instance, there may be conflicts about the urgency, when the demand is occasionally high and/ or the output accidentally low. Or, there may be conflicts about convenience, when the purpose of the project disagrees with the strategy of a running business model. Therefore, in order to avoid that projects are integrated in the regular shop-floor routines, they have to be reasonably autonomous and independent.

It has to be admitted that independence in general is either a relative or an illusive notion. For all things in the universe are connected somehow, as far as we know. Maybe there are things unknown, which are completely independent—and therefore they are unknown; at least, until we have connected them to our experience—but then they are no longer independent. Especially within the economical framework of an enterprise, projects always meet with some restraints from the overall business, for instance from the financial liquidity, from the strategy, or from the economic cycle. Thus the primordial duty of the project management is to achieve a certain degree of autonomy for the particular project case in connection with the other project cases and the business routines, such as sales, production, product development or administration.

This paradoxical situation becomes even more obvious when we consider that projects are by definition unique undertakings yet are created within the frame of a continuous undertaking, that is, an enterprise. Project investments are furnished by the balanced economy of a sponsor, and the members of the project team expect reliable payments as well as do their suppliers do. Thus, a project team works for a unique target within a framework of routines. And the project management consists basically of the paradoxical integration of unique projects by management routines. This is the fundamental characteristic of a project case.

As a consequence of this mandatory integration of a project case into the business routines, an overlapping of different managerial divisions of an enterprise can be observed. For instance, if there are divisions for sales, production, quality, product development, technology, and innovation in an enterprise, these divisions do not just manage these projects but have other autonomous projects of their own, which have to cover all these aspects themselves. For example, there may be projects about an increase in the sales as well as new sales as part of a development project; or there may be productivity projects as well as a reasonable striving for some project productivity; and quality may be enhanced by projects as well as one expects a quality of the projects; similarly, there are development projects as well as project developments, technology projects as well as a project technology required and innovation projects as well as project innovations.

Scientifically, the management of projects does not represent a fact but has to be taken as a convincing reasoning about an appropriate way to proceed. Surely, the results of projects may be factual, but the pursuit of these results can merely be reasonable, because they remain unaccomplished and fictional until a project case comes to its end. In scientific consequence, a project case cannot be factorized separately but diffuses with the other duties of an enterprise.

Although, the integration of projected and routine work is the basis for the expected economic growth, it is also a cause for the connection and an overlapping of management duties (see Figure 3.3). In science, this strange setting is called fractal or self-similar. And it will be, at a later stage, a challenge to set appropriate rules for such self-similar, fractal systems or cycles.

However, the advantage of such self-similar systems is the opportunity of aggregation. For example, the projects of an enterprise can be compiled in a portfolio, that is, usually a survey of all the projects in work. This portfolio can then be managed on a superior level, for example, to adjust each of them “top-down” or to merge all of them “bottom-up” for some strategic purposes.

Moreover, several projects of an enterprise can be bundled to form multiple projects, that is, usually a combination of projects with almost identical requirements, such as the implementation of new software at different divisions or enterprises. Although each division or enterprise may have its particular project requirements, it is basically wiser to use the experience of the specialists for the same software in different divisions.

And, for a further example, selected projects of an enterprise can be reasonably assorted as a program, that is, a collection of projects serving a particular purpose. Such programs are usually projects on a higher level or megaprojects, like the NASA Apollo program between 1960 and 1975 with an overall budget of about US$ 170 billion,13 or the US Nuclear Weapon program between 1940 and 1998 with a total budget of about US$ 5.5 trillion [47]. Obviously, such programs are extended in cost and time to such an extent that they do not appear as projects anymore but as continuous enterprises. Many people are normally surprised when finally all work activities of such a program came to an end.

Innovation projects are extraordinary because they comprise an outstanding risk of failure. As compared to other projects in the framework of usual business, the potential threats for innovations are unknown and thus accompanied by higher uncertainties. Something is new only when it contains unknown things. The more radical or disruptive an innovation is the higher are the entrepreneurial risks to be faced.

Nonverbal communication too can be considered an important tool to cultivate innovations.

In particular, for project communication some features have been cultivated to improve the process of conviction and of documentation. For instance, a frequent recording is advisable, for example, daily, weekly, or at least monthly, to bypass the unconscious process of oblivion. And a regular review is implemented, for example, monthly, quarterly, semiannually, or at least annually, to check deviations between the projected and the achieved progress. Further, a casual audit is helpful, for example, once or twice in a project, to reflect about the methods employed and about the auxiliary means for project management. And usually a comprehensive report is commissioned at the end of a project case, to collect and to discuss the events and the achievements. All these seem equally appropriate in the process of incubating an innovation culture.

But communication is not the only aspect that has to be cultivated for an innovation. Since management is always some sort of controlled activity, it is subjected to responsibility and leadership. In particular, the requirement to pursue a target under the restrictions of time and money makes it necessary to prepare decisions and to coordinate the respective activities.

The principal version of such management directives is called Management by Results and consists simply of a controlling activity, whether the tasks ordered are elaborated, evaluated, or accomplished. For instance, as rumor has it, Thomas Edison used to lock his project team in a laboratory as long as required, in order to produce the desired result—sometimes even for several days.

With increasing complexity of project cases, this proved to be inappropriate, and in the 1950s Drucker suggested a Management by Objectives, where all members of a project team are requested to state their proposals about their individual contributions to a given project case [50]. Although this directive requires more counseling and considerable negotiation, it has become the usual standard for project management directives nowadays. Apparently, it liberates more work, when people are respectfully integrated in a project case, than it requires work for that particular integration of mutual agreement.

A special enhancement here is the Management Planning, also known as hoshin kanri, already mentioned earlier as an achievement of Toyotism. By this directive the task to distribute the workload is delegated to the workers, and it requires a long process of interpersonal interrogations, convictions, discourses, and negotiations. Sometimes, teams are inept at such procedures due to a lack of team culture, and an additional team development process is needed to kick-start the process.

Furthermore, there may also be mixed proceedings, called Management by Exceptions or Management by Delegation. It simply indicates a splitting of the responsibilities and a partly delegation to the team, whereas the general directive stays with the management executives.

As for the impact of these management directives on innovation projects, all four aspects have their particular advantages and disadvantages. For instance, if the premise is clear, for example, known, simple, constant, and comprehensive, management by results will likely produce the desired outcomes unbeatably in a quick and cost-effective manner. However, if the premise is sketchy and unsteady, management by objectives will be a better choice and will bring in some flexibility. If the premise seems rather complex, management planning may be the best choice. And, if everything appears somewhat fuzzy, diffuse, and basically unknown, one should perhaps resort to management by exceptions and delegation. According to the classification of innovations as radical, incremental, or disruptive, a matching choice of management directives is recommended [51].

“Structure follows strategy” is a mnemonic summary of Chandler’s work about the evolution of the American industry [52]. It contains the argument that a given strategy manifests in some sort of a compulsory structure. And this coincidence of strategy and structure is recognizable as a certain industrial culture.

For example, a sociological leadership model is that of a hunting team, where all members are subjected to the strict orders of a chief, who qualifies as the most experienced or by his outstanding physical strength. As all prey animals have a particular capacity to escape or fight the human hunter, teamwork provides a higher chance to succeed. The structure of such a society is therefore a Line Organization, where each task is subdivided to smaller subtasks with a unique order of command.

For a project case, this subdivision is made in a so-called Work Breakdown Structure until a level of Work Packages is achieved. These work packages can be fulfilled independently according to an arbitrary list of activities. This structure brings clarity to the whole operational work. And it is suitable for management by results.

If the work packages are further attributed by their expected duration and relations to the other work packages, a Process Organization can be derived, too. Yet, it is rather advisable to improve the project schedule by a consulting with the workers responsible for the execution of the work package. By a suitable restructuring, the work can be completed in parallel shifts with minimum intersections or gaps. This ensures everyone’s participation and their involvement in learning their responsibilities. This structure is obviously somewhat coherent with management by objectives.

However, for projects with higher complexity, the sociological leadership model is that of a family team, where all members have various tasks within a household. A certain compassionate sympathy is expected in order to take personal responsibilities as well as to stand back in line, if necessary, for example, for daily tasks such as cooking, cleaning, child care and provision. The structure of such a society is a Matrix Organization, where each task has several impacts on some other tasks. A clear splitting of tasks and of work seems to be impossible, and all work has to orientate itself to the whole project and its actual state. Thus all activities have to cope with several requirements. In consequence, the work may become over-determined by a matrix structure, which may be the origin of permanent and time-consuming discussions. Occasionally, this may lead to a high stress levels with reduced output and subsequently to burnout syndromes. However, if the project case is rather complex, this may be essentially the best way to proceed. This structure corresponds to the directive of management planning.

The scheduling of the processes for such complex projects can be done through the Learning Organization, that is, a permanent interaction and joint exploration of the ways to proceed. Such an organization suspends all obligations for command under the actual needs to comply with. This is obviously only appropriate when the project case is diffuse, sketchy, unsteady, and fuzzy. And this structure seems to be related to some sort of management by exceptions and delegation. This case is quite often found, especially in innovation projects.

For the purpose of organizational learning, the four duties of Taylorism have been adopted and reassessed by Senge [53]. Again the aspects of skilled work, workforce, cooperation, and work division have been revised and described in a suitable way.14

Personal Mastery is circumscribed by skilled work within a project team, when tasks and duties are of higher complexity. Especially in innovation projects initially the exact nature of competences required for the work ahead is largely unsettled. It is though imperative that during the subsequent phases of the project all the skills needed are covered by the project team.

Fortunately, there is the human tendency to stretch their performance tremendously if the necessity arises. The Pygmalion Effect is named after a legendary king of Cyprus in Greek mythology, who is said to have sculpted a female statue of such beauty and perfection that he fell in unfathomable love with it, until his lovesickness was answered by the gods who conceded it life with the name of Galathea.

This evocation of a notion to life was adopted in 1966 by Rosenthal and Jacobson, when they published a study about education, where selected pupils increased their performances remarkably if just the teacher was told to expect this [54]. Notably, there was no information given to the respective pupils or to their classmates, and no other enhancing support was given—just the empowering assignment of the teacher was sufficient to produce the effect. Inversely, it is commonly known that a permanent assignment of defeat will generally result in receding performances by the victims, for example, by mobbing, bullying, or agitation. Therefore, it is highly recommended to trust in the particular capabilities of the team members to cope with the required tasks. Innovation projects, especially, depend on the effect of the required talents, skills, and competences.

Mental Models is circumscribed by the particular trait of the workforce in a learning organization to focus individual interests on the common project case. Innovation projects often produce novel requests without any preceding patterns. Consequently, there is no managerial experience available, neither about the tasks to be organized nor about how to execute them. Therefore, a collective model of mutual understanding is required to harmonize the particular functions in a given situation.

Again, it is the tendency of human beings to engage in and settle with collective challenges. Already Aristotle had discerned the human race as a Zoon Politikon, that is, a species of community. Nowadays, sociological studies suggest that the concept of an isolated individual is never appropriate. When subjected to isolation, people will experience substituting hallucinations, that is, a community is imagined and attributed to the available animals or even things, like “Wilson the Volleyball” in the film Cast Away.

On the other hand, a community can emerge victorious, which is quite often the subject of success stories in movies where hopeless teams succeed on the basis of a peculiar team spirit. Therefore, outstanding performances can be expected from a project team with a sustaining mental model. Especially innovation projects bear out the effect of mutual sympathies and of volunteered participations, which enable surprising novelties on occasion.

System Thinking circumscribes the management duty of hearty cooperation in learning organizations. It further demands recognition of the contributions of fellow members of a project team in order to coordinate and support their work in an appropriate way. This will go a long way to enhance the effectiveness as well as the efficiency in collaborative work without the supervision of the superior management. When each team member takes some responsibility for the interactions, the whole system can react flexibly to new challenges, defaults, or opportunities. As no one can expect an innovation project to succeed in the generally prescribed ways of an organization, this seems to be the most influential duty for all team members: to keep a lookout beyond one’s own nose, as the saying goes.

Once again, this particular feature of a human team is obtained more or less by the gratuity of nature. Although all members of a community may be quite different, distinct, and individual, a typical characteristic can usually be discerned for the whole. This particular characteristic can be discerned in a family or a tribe, as well as in a club, a city, or a nation. It is the basis of folk traditions as well as corporate identity of any enterprise. And although it cannot usually be attributed to a single member of a community, the team character remains almost the same even if a considerable amount of members leave and are replaced by others.

There are institutions that have persisted in this manner for decades or even centuries. On the contrary, drastic effects can also be expected if members are suspended from their peer group, for example, depression, physically illness, or even death may occur. Obviously, people hold an inborn desire to participate and to think within a group structure. Therefore, suitable structures and responsibilities will evolve almost without particular instructions. Innovation projects, especially, benefit from this effect to advance into unknown regions.

Finally, Shared Visions stands for the last management duty of ensuring an almost equal work division between execution and responsibility. This is a most challenging duty of combining the individual virtues of compatible team members.

The flexibility in leadership that is required to follow the aforementioned duties is problematic, especially within the framework of an innovation project, where nobody knows the right way to go or the correct measures to take. And usually everybody has a slightly different vision in mind because of the nature of communications as explained before. Thus, a common vision is the utmost prerequisite for an innovation project that will help in focusing different interpretations and particular expectations onto a shared point of view.

However, for this duty of Shared Visions no natural predisposition seems to be given for humans—and therefore a certain leadership culture is essential. Opinions may differ considerably from one person to another since everybody has an own experience and a related understanding. And even natural sciences dispose of measurable effects with no coherent logic, for example, the wave-particle dualism in physics or the concept of consciousness and unconsciousness in psychology. Facts and reason seem to be always somehow paradoxical—or fuzzy at the least—and therefore have to be cultivated by the management. On one hand, you can trust that there are always several ways to succeed at an innovation project case; on the other hand, you have to take into account that everybody has a different opinion and decide on how to proceed in the best way of the respective logic.

Therefore, visions have to be cultivated in a coherent way. Innovation projects, especially, are challenged by a progressive mechanism of disintegration. As stated before, the duty of integration is the one task of a project manager that cannot be delegated. And if an organization proves to be unable to learn any more, a new structure is mandatory (see Figure 3.5).

For instance, the project conception phase covers the underlying tasks of defining the project charter and the project stakeholders—as well as establishing the project aim and an associated project risk concept according to the potential threats.

The project charter itself can further be subdivided into detailed project work packages, which itemize the originating cause of the project case. And the charter has to specify the project requirements and the project features, which represent the initial ideas for execution of the principal and the agent, respectively. Finally, all the conceptual agreements from the beginning are stated and documented in a project brief.

In particular, the origin of an innovation project may be due to a novel idea, a prospective strategy, a new situation, or even just a follow-up of another project case. And the requirements of an innovation project may concern a certain business, a particular process, a specific division of the enterprise, a part of a superior program, a portfolio, or a megaproject. Then, the features of an innovation project may serve the technical, financial, sales, or organizational purposes—or even all of them together. Finally, the brief of an innovation project contains at least a catchy title with a short outline and the contact addresses as well as the revelation of special agreements. These particularities represent the usual possibilities to elaborate the charter of an innovation project.15

According to the conception of the project stakeholders, it not only comprises the manager and the team but has to include all the other people who have a stake in the project case, like the sponsors and perhaps a steering committee. In detail, all those stakeholders have their specific responsibilities: The team members account for the factual execution of work, the manager for reasonable directives, the sponsors for entrepreneurial coherence, and the steering committee members for counseling and for business support.

Then, the conception of project aims can be subdivided to a certain scope with corresponding deliverables according to specific success factors, which will be explained in detail in the next section of this book.

Project threats consider the probable risks with an anticipatory provision for project abortion, for critical processes, and for a corresponding management attention to the project quality.

When all these premises are duly elaborated, the preliminary task of project conception can be regarded as settled and the next step inside the innovation funnel can be taken. Although it seems to be a reasonably easy task to cast a concept, it is commonly agreed that most errors and mistakes are concealed in this phase. Regarding the conical form of the innovation funnel, this becomes somewhat comprehensible since the widest ignorance of facts is found at the very beginning.

The next phase of an innovation project is project organization, where the project has to be more concrete and recognizably attached to reality. Literally, an organ stands for a resource or any auxiliary mean to execute something, like a human organ to procure life functions or the organ as an instrument to produce music. Hence, the organization of a project case has to cover the provision of all the means for an appropriate execution of the project case.

Again, many subdivisions can be made, leading to numerous activities to achieve, like the organization of raw material or construction components and related tools, the financing, workforce and work stations, energy, and information supply, just to name the most important ones. Most of them have been already mentioned earlier when discussing the culture of projects and explaining the structure and the necessity of organizational learning during innovation projects. These tasks along the management line for innovation projects seem more structured and determined. Nevertheless, it is scientifically still a section on the arbitrary part of the line between reason and facts and therefore still attributed with considerable ambiguity. But the funnel has started then to narrow on the way and facts become manifestly organized.

When project planning starts, the cognitive division between reason and facts is overcome, eventually. The tasks that follow concern generally a strict calculation and a balancing of the premises.

For a start, the Milestone Planning contains a rough setting of sub-ordinate project targets, which have to be neatly scheduled to be SMART, which stands for the mnemonic acronym: Specific, Measurable, Achievable, Realistic, Timed. Hence, milestones can be considered as specified steps of a project case with measurable achievements within a realistic time duration. In particular, the opposing interests of the team and the management have to be combined in order to provide an undisturbed workflow and a regular interruption to check the advancements, respectively.

After that, a Work Breakdown Structure (WBS) can be elaborated, which contains all the tasks, the work packages, and the activities of the project case. As already explained for the project culture earlier, this allows to deduce a project scheduling, where the duration of and the relations between the different activities are set. And, if further organizational means are attributed to that calculation, a resource planning can be achieved by mere spreadsheet calculation.

Surprisingly, such a plan evaluation is often misprized, or, as the saying goes: Planning is invaluable, however, plans are worthless. Apparently, this proverb confuses cause and effect because the mistakes of a plan have their origin in its conception and subsequent organization; therefore seldom the spreadsheet evaluation errs. And you would otherwise not blame a right calculation when just the premises are wrong. The plan is only an outcome (which can be trusted) of the planning calculations, which has to be separated from the overall management tasks of a project. Thus, it delivers reliable factual information for a project and narrows the remaining ambiguities of an innovation funnel.

The last phase of project management consists of the project controlling in order to check and manage the factual achievements on display. This controlling concerns all means of conception, organization, and planning again and may thus require as much management as the project case itself. Therefore, the question is: Who controls the controlling?

To limit the controlling efforts in a reasonable way, a suitable confinement is advisable: Initially, a risk controlling of the concept is important in order to prohibit early mistakes. Then a cost controlling of the spent budget is required to enable timely readjustments. Later a controlling of the earned value serves to estimate the probable success. Finally a success controlling of the achievements focuses on the expected deliverables. In this way, controlling is not just a check of the situation but delivers factual information to help in the management of the project. This contributes to narrowing the innovation funnel to the expected results. As a consequence, a downright line of entelechy has been established (see Figure 3.7).

But, what if the controlling reveals an intolerable discrepancy between facts and conception, organization or planning? Fundamentally, management belongs to the business operations of routines, which can be understood as cycles. And if such a cycle reveals errors, it can be reset, restarted, and repeated all over again.

For example, if the planning has an error—which is seldom the case—you have to correct it. And if the organization contains inappropriate means—which is more frequent—you have to rearrange them. In most cases, however, some errors or mistakes are discovered at conception and the management settings have to be readjusted as a result. This is the crucial challenge for innovation projects.

As management is based on routines, the successive phases form a cycle. However, the work of a project case has to follow a directed line of progressive advancements. The advantage of management cycles is that one can board anywhere in the process. But the progressive work of a project requires some sort of inauguration or kick-off for getting started.

This appears easier than it really turns out to be, as it contains the inextricable antagonism of the hen and egg: You need a hen to hatch the egg that would in turn contain the hen needed to hatch an egg. Therefore, it is usually agreed to consider a pre-phase of invention—which will be discussed in the final chapter of this book—and start the project with that first milestone, that is, when an invention is provided.

The phases of project work can be roughly divided according to the sections of entelechy of the innovation funnel, as described earlier. The phases can be summarized as follows: A primary project exploration of reasonable thoughts is followed by a study recognizing the project feasibility. Project testing is the next step in gathering facts and reliable information. Finally, settling on facts, a project launch of a prototype or a demonstration takes place (see Figure 3.8).

In general, project phases are elaborated in combination with management and work activities. For example, the Stage Gate process by Cooper contains six successive gates numbered from zero to five [55]. By defining appropriate gates for the accomplished work and related stages for the required management activities a holistic approach is provided to master the complexity of innovation projects. Gate 0 concerns the discovery of an innovative idea and contains the management stage for inventive activities during a pre-phase of a project. Gate 1 deals with scoping and the stage of exploration of a project concept. Gate 2 seems partly related to the previous purpose, as it concerns the elaboration of a business case, but also contains a stage for project planning. Gate 3 is about development and therefore contains stages for organization and planning to achieve a status of feasibility. Gate 4 concerns testing and validation and contains stages of controlling factual information. And gate 5 has to do with the project launch and contains a stage of activities to prepare the marketing.

Similar settings of milestones or gates are known for product or process development or quality management. As milestone numbers usually increase according to progress, quality gates are numbered inversely, that is, from the expected result to the present state. For example, the quality gate (QG) z may correspond to the milestone (MS) 1—and the QG y to the MS 2, respectively. And it seems to be quite reasonable to take a look from both sides, prospective and retrospective, in order to make hidden constraints visible and manageable.

Other tools of product, process and quality management are equally convenient when they help to support an innovation project. Since they contain approved rules and standards for a methodical management of projects, they ensure certain reliability and success.

For example, the Deming- or Shewhart- Cycle PDCA in quality management stands for the mnemonic acronym Plan, Do, Check, Act. The relation of this cycle to project management by conception–organization–planning–controlling becomes obvious when you consider that cycles can be entered at any point and that heuristic approaches contain a suitable mixture of management and work, that is, plan-control management activities and do-act work activities, respectively. In innovation projects it seems therefore appropriate to plan novel ideas and recognitions and check information and facts while doing explorations and feasibility studies and acting by test and launch. Indeed, a suitable interpretation of the advice for quality management is quite helpful for innovation projects, too.

Another example is the DMAIC cycle of process management, standing for Define, Measure, Analyze, Improve, Control. Again a mixture of management routines and work executions can be discerned, that is, definition, analysis, and control, on one hand, and measurement and improvement, on the other. Additionally, this process management cycle has been modified, for example, to DMAEC—where improvement is replaced by engineering—or DMADV—where improvement and control are replaced by design and verification. Presumably, an innovation may be also successful if certain processing is respected, for example, definition of an invention, measurement of related effects for feasibility, analysis to obtain organizational means and planned structures, improvement, engineering or design for development and testing, and finally control or verification for the factual launch. This seems just as well a suitable way to achieve an innovation.

The general alignment of different management routines makes it somewhat appropriate to emphasize the special constraints of innovations. As products, processes and quality are management duties of the ordinary business, innovation is initially an extraordinary business. Invention ideas usually disturb the running processes thereby diminishing quality and sometimes disrupting the whole business model. Only the progressive advancements of the innovation funnel makes entrepreneurial interests manifest, by and by. It is therefore advisable to start innovation projects partly outside the usual framework of an enterprise.

The innovation target is mainly a special pricing or rating for uniqueness, as explained in the first chapter of this book. In contrast, ordinary projects may serve for a large variety of entrepreneurial interests, like quality assurance, product certification or process control. Admittedly, innovations may also refer to these duties. But as unknown features are always more difficult to handle, these aspects are postponed for a while or stay relatively crude.

As previously explained, an invention without diffusion is vain, because there is no economic remuneration and the achievements are not viable. And inversely, diffusion without invention is villainous, because it does not offer a factual novelty. Although the goal of an innovation is economic success by diffusion, the partial success of invention comes first.

For example, the steam engine was invented by Newcomen in 1712, but its larger application as a power machine was achieved by Watt in 1776. The motor carriage was invented by Benz in 1885, yet its larger application as an automobile was achieved by Peugeot in 1891—please note the obvious difference between the mounting of an engine on a carriage and the creation of a new appliance called “automobile”. Further, the modern calculation machine was invented by Zuse in 1937, but larger commercial application as an electronic computer was achieved at IBM in 1947. Further, the mobile phone was invented by Motorola in 1973, but its larger application was achieved in Japan and Scandinavia in 1980. Obviously, simultaneous achievement of invention and market diffusion is a particular challenge.

According to management science discussed earlier, invention can be understood as the effectiveness of an innovation. And the diffusion in the market is reasonably a matter of efficiency. Surely, one needs always some sort of effect prior to the achievement of efficiency.

For example, the introduction of hydrogen fuel cells has to face the dilemma that a diffusion of fuel cell cars requires a suitable network of hydrogen service stations, which are only economically reasonable, when a sufficient amount of fuel cell cars are running. So, it seems vain to invest in fuel cell cars when they cannot be fueled, or to decree a quota for hydrogen service stations without any appropriate cars to fuel. Please note that in the beginning of the automobile era benzene fuel was usually distributed by pharmacists until special fuel stations became economically reasonable. And inversely, although fuel cell engines were applied to motor cars by Mercedes in 1994, the world still awaits their commercial diffusion. The auxiliary implementation of fuel cells in a hybrid car is still estimated as some sort of bridging, which may be in vain and a loss if the complete transformation will be finally achieved.

In this way, innovation success shows some relation to legal positivism, because the result is a matter of fact, which occurs not until being caused by an offense. The inverse of this would be a villainous system of presumed anticipation and a prosecution without any legal cause. In a similar way, an innovation manager has the primordial duty to justify the balance of technical effects for sale, and to achieve an economic efficiency on the market. Market diffusion has to respect the effects of invention, as inventions have to prove their applicability. This interdependence is often underestimated by the management.

According to the Project Management Institute (PMI) the duty to integrate complementary tasks is the only one that cannot be delegated by the project manager. Or, to put it otherwise, a project manager can delegate all kind of duties in a project, like conception, organization, planning, and controlling, yet, when he or she delegates the integration of all these tasks within the framework of the project case, he or she will delegate his or her authority as well.

The triangular gateway for the epistemology of innovations has been already explained before. Hence, a combination of physical execution and psychical belief is justified by a “third world” of apperception, that is, the logical model of a business case.

For example, the success of the steam engine is not only an alignment with the effect by Newcomen 1712 and with the efficiency of Watt 1776 but also caused by the invention of contracting by Boulton 1778, that is, the introduction of a new business model for services: Machine work was not traded by the steam engine but merely through the power provided. Since machinists to operate an engine were not available at that time and this represented the highest risk of a related investment, the separation of engine and power was exactly the missing idea required to bridge this technology into a new era. Nowadays, we usually obtain power by means of an electrical network and mere plug-in adapters—without knowing which particular machine provides that power—and we do not need to buy a power engine for that.

In a similar way, the era of automobiles was established not only by the invention of the motor carriage by Benz in 1885 and the improved application of automobiles by Peugeot but similarly by the business idea to decrease costs by the introduction of mass production by Ford in 1908. And the business idea of modern personal computers (PC) comes from Hewlett-Packard in 1968—neither Zuse nor IBM expected a worldwide market beyond about five computers.

An innovation requires at least three ideas to succeed, namely, one for the technical execution, one for the market application and one for the business model. The imperative to consider and to work out all these three factors to succeed in an innovation can be exemplified by failed project cases. In many cases failures occur when just one factor is missing.

Certainly, a missing execution is the cause for some sort of fraudulent bankruptcy. For instance, the idea of concentrated solar power by mirrors sounds reasonable in application and seems to be justified by long-lasting equipment to produce electrical energy. However, in 2011 the German enterprise Solar Millennium went bankrupt with this business case, because deposits were apparently paid by new deposits without sufficient execution of installations. The losses added up to about € 200 million and the case is still at court.

In many similar cases, reasonable ideas and convincing business expectations often sell better than the physical product. Another example for this is the so-called dot.com bubble in 2003: At the turn of the millennium Internet commerce became a possibility and consequently many entrepreneurs established new business models with just an address in the World Wide Web, assigned by the Internet domain “.com”. The related shares were highly rated on the stock market. However, execution of the physical business could not be established quickly enough. The total losses just in Germany within the frame of the particular share index NEMAX in 2003 added up to some € 200 billion. Even if it is considered that some of the losses were due to an exaggeration of the stock market when the bubble burst, the dramatic effects of neglected execution for the success of innovations becomes evident.

An example of a failed application of an innovation project is called a White Elephant, that is, an expensive investment in execution with a justified business case, yet expectations for market applications prove to be unreasonable later. In 2002 the German enterprise CargoLifter realized the largest cantilever hangar of the world for an airship, built for the business purpose to transport loads up to 160 metric tons by air. However, it turned out that there were not enough applications available for the calculated costs. Today, the hangar is used as an amusement park, and about € 150 million of investments are lost forever.

Again, other examples can be presented where convincing business cases caused heavy investments in execution but failed in the market application. In 1999 the US Motorola Company realized its project Iridium by placing of 66 satellites into orbit to establish a business of worldwide commercial communication. However, the project failed as a balance between the communication costs and the customers’ appreciation could not be established. The total losses rose up to some US$ 5 billion.16

And finally, there are also examples for failed innovations by a missing business case, that is, in spite of accomplished execution and reasonable market expectation there are only expenses without any remuneration. A typical example is the realization of data compression by MP3 as projected and executed by the German Fraun-hofer Society for advancement of applied research. Although the respective inventors were adept at presenting and explaining the achievements and market opportunities to several prominent enterprises, nobody was able to discern a suitable business idea for the commercialization of its exclusivity. Thus, the benefits were realized without appropriate licensing costs by free-riding enterprises in the emerging markets of electronic entertainment. This appears to be a particular problem of inventions executed by public institutions.

Other examples of equally missed business opportunities are numerous: Rudolph Hell invented in 1956 the first practical telecopy or fax system, which was later commercialized by Xerox. Students of the RWTH Aachen University realized in 1976 the first prototype of a hybrid car, which was later commercialized by Toyota under the brand Prius. Andreas Pavel obtained in 1977 the first patent for a mobile music player, which was later commercialized by Sony under the brand Walkman. Apparently, commercialization and business ideas are sometimes as hard to get as the physical execution and reasonable applications.

The cause of such omissions is quite often a particular technical commitment or over-engineering. A project team of skilled engineers tends to postpone the market launch time and again because they are keen keep raising the bar of technical effectiveness. The delay appears justifiable given the reasonable intention to offer a more radical good. It is also true that sometimes an increased effectiveness goes along with a higher efficiency. And the related uniqueness promises an equally higher reward for that innovation. However, remuneration for the investments in the projected work and its management is slowed down, too. Hence, capital costs increase disproportionally and eventually the duration of exclusiveness diminishes as well. It is therefore generally advisable to increase efficiency only after a first success of the innovation effect is achieved.

In consequence, the predominant duty of any innovation manager is to watch out for a possible spin-off for an innovation project. It can be extremely profitable to launch a first version of an innovation with inferior efficiency at an early maturity for a suitable peer group. The return on investment and the gained experience can be applied to launch subsequently series of improvements with more efficiency. For electronic goods this procedure is actually practiced and accepted in general, notably by an extension number after the product name, like “2.1” marking the first improvement of the second version. Obviously, that sequencing of a product launch has become a familiar label for product development and the consumers. And the prospective upgrade of a contemporary version is already conceived when the actual version is being introduced.

The success factors for innovation management can be fundamentally tested with a method described already by Aristotle in four different causes: The material cause questions the qualification of the matter for success, the formal cause asks for the functional shape or structure of the application for success, the efficient cause investigates the beneficial relations of the business for success and the final cause controls all the risks and the chances of probable modalities for success. This seems a rather comprehensive checklist for the three epistemological factors plus the factor for final coincidences.

A more detailed method is furnished by the 12 related categories of Kant. As previously introduced, a project case can be initially examined due to its quality with the related categories of affirmation, negation or limitation. For instance, an innovation can be checked by the quality of details affirmed, excluded, and just proved to a limited extent. Then, a project case can be also examined by its quantity with the related categories of universality, particularity, and singularity. For instance, an innovation can be checked by its quantities of universal effect, particular specification or single occurrence. Further, a project case can be examined by its relations with the categories of generality, probability, and exclusiveness. For instance, an innovation can be checked by its relations of general importance, probable impacts, and exclusive connections. Finally, a project case can be even examined by its modalities with the categories of ambiguity, specification, and irrefutability. For instance, an innovation can be checked by its modalities of ambiguous results, specific achievements or irrefutable outcomes.

In this way, beneficial spin-offs from innovation projects can be regarded as some sort of voluntary coincidence. According to the explained mechanisms of epistemology, coincidence may occur and represent some sort of a hidden fourth gatekeeper of success. It can be that an innovation project succeeds or fails due to an occasional, unrecognized, and unintended compatibility by an unexpected influence.

For example, the modern traffic can be simply seen as a coincidence of the idea of sophisticated road construction and pavements by McAdam in 1815, the motor carriage by Benz in 1885 and the pneumatic tire by Michelin in 1889. It is often ignored or neglected that higher traffic loads, stresses and strains at elevated velocities bear out not on cars alone, but on the interdependent system of roads, tires, and automobiles, at least. And similarly, our modern telecommunication is a result of, in almost the same manner, a line network of telephones, a coverage by transmitting stations and a suitable terminal equipment and related communication devices. It appears somewhat strange that phone boxes have been formerly necessary just to make a call, or it may surprise us that there are still remote locations without a suitable connection to the cell phone network. The postmodern society has achieved a level of technical infrastructure that allows emerging new opportunities for innovations just by the effect of the existing technology.