Researchers’ tips: How to succeed with innovation in project-based companies

In businesses based on different projects with specific project managers and budgets, it is particularly difficult to drive innovation. So what are the keys to success?

– The construction industry is often told that it is conservative and closed to new ideas and products. But this is due to complex conditions rather than resistance to change, says Emil Ahlström, Uppsala University.

In his doctoral thesis, he studied how innovations are disseminated, implemented and used in project-based organizations – that is, businesses where most or all value is created in projects. Construction and transport companies, consultancies or computer game companies are examples of this type of organization.

– I have studied one of Sweden’s largest construction companies. There is a permanent core that procures and supports various construction projects. Everything else happens out in the projects, like a road construction in Tornedalen or a housing construction in Gothenburg.

Examples of innovations, within the company that Emil Ahlström has studied for several years, are an app that digitizes the measurement of transport, a drone technology for metrological work and a rotation program between consulting and construction companies to increase understanding between professional roles.

Different logics

The permanent organization in a project-driven business seeks long-term stability and development. Projects, on the other hand, are short-term focused on delivering results within budget and timeframe. As a result, projects rarely take risks.

– Individual project managers have the mandate to decide whether or not to use an innovation. Only those with obvious direct benefit to the individual project are used. Other more long-term innovations are ignored.

– Drone technology was quickly picked up by all construction projects because of its clear advantages, says Emil Ahlström.

Innovators operating at the frontier

In larger project-driven organizations, it is often a few individuals who are tasked with identifying and disseminating innovations in the company. To succeed, it is important to have a broad network of contacts within the organization, as well as a good understanding of the conditions and circumstances in which the projects work.

– Bringing innovation into the business requires a careful strategy and adaptation to the organization’s unique circumstances. Often the perceived resistance to innovation is due to the complexity of the organization, not because people want to be pushed around, says Emil Ahlström.

Contact emil.ahlstrom@angstrom.uu.se