Delirium in the gun shop: The nexus between innovation and productivity

For centuries battlefields have been strewn with the bloated bodies of armies that failed to innovate and, equally important, to gather good intelligence. Now, not far away, an Australian killing field looms.

According to an intelligence report to Industry and Innovation Minister Greg Combet, leaked to newspapers, it’s the field of jobs in our defence industry. Budget cuts are threatening the survival of defence contractors, many of who invested over the last three years on the basis of plans sketched in the Government’s 2009 defence white paper. We are looking at the collapse of 1,500 or more firms and the loss of thousands of highly skilled, hard to replace jobs over the next five years. What will it take to prevent this slow-motion massacre?

This news, another mine in the PM’s minefield, also buffeted our resident PMs (pragmatic optimist Potter and scholarly sceptic Megan) who arrived with the promised 10 points on project management.

Megan, polishing her glasses, soon sounded like an AK47 on full automatic. “We know that defence contracting involves highly specialist people, long lead times, infrequent projects and frequent delays. We know that government departments are the most capricious of all customers. Only delusional contractors would fail to understand the scale of the risks, and yet they go about their business with little attention to diversification and innovation. Then they cry foul, cry poor and beg for handouts. They think that technological innovation is the main game but it’s the most dangerous game without disciplined strategic innovation.”

As Megan paused to reload pragmatic Potter moved in. “It’s your delirious drivel that should be buried alive. Why dwell on possibly putrid futures when we can construct better ones?” He laid out the latest Ernst & Young Australian Productivity Pulse. According to the Productivity Pulse, we can boost our economy by over $40 billion a year with better teams, better aligning of skills and jobs, better delegation and better processes. Our defence contractors face bigger challenges but they have time to renovate, renew and rejuvenate. When the defence tender prosperity path goes into hibernation we can draw on our renowned Aussie ingenuity and go over, around or under. Companies can lift productivity a little without innovation; moreover they can boost it by as much as 15% with innovation. And critically important for the gun shops, once innovation takes hold it not only boosts productivity, it opens up new and better paths to market. 

Megan, reminded of her first-hand knowledge of Toyota, had to concede.

From its survey of around 2,500 Australian workers, E&Y found that industrial relations was a bit player in the theatre of productivity. What mattered was innovation. Twenty-three per cent of the workforce is employed by companies that enable them to be highly productive, whereas 31% are in places where productivity is patchy or low. The more productive workers see innovation as the strongest driver of productivity.

In contrast, over half of the workforce considered that their employers fail to focus on innovation, are unwilling to try new things and do not recognise and reward innovation. The deliriously desirable link between innovation and productivity is once again uncovered, along with the big opportunities for those prepared to shape leading companies. 

To my surprise Megan agreed to young Potter’s proposal that they go out and mine the universe for more hidden treasures to close the knowing-doing gap by replacing minefields with GoldMinds that can shape admirable industry achievements.

As promised in last week’s blog, “The new PM: Comedy, seduction and consequences” here are the project management tips from Potter and Megan…

• When employees or contractors have a PMI or similar project management qualification they will be competent at managing projects in stable environments. As environments become more turbulent deeper leadership qualities, including strategic and tactical agility, become critical to success.  
• The failure to constantly track stakeholder expectations is the main reason that almost 30% of projects aren’t completed (“closed out” in project speak) according to plan.
• Projects also fail because of poor planning and poor risk assessment during planning. Always scrutinise for risk before hitting the “go” button.
• If you aren’t doing so, follow a methodology. It’s a step towards error proofing. There are many methodologies, covering diverse functions (engineering, IT, product launches, etc) of varying scale and complexity.
• This project plan or project initiation document outline from the exceptionally good JISC covers most mid-sized and moderate to highly complex project. (JISC evolved from the UK Government IP project management support site for universities.)

– Project goals, objectives and critical success factors.

– Project scope.

– Risks and constraints affecting the project.

– Assumptions made about the project.

– Project organisation structure and roles and responsibilities.

– Project control mechanisms.

– The reporting framework.

– Stakeholders and their involvement.

– Project planning and a milestone project plan.

– Project budget.

See more here.

• All contracts/project plans need a clause covering variations ? when expectations change resource requirements change; and stakeholders have to agree on contributing or reducing resources.
• Aim to seduce (aka motivate) your team, client, subcontractors and bit players to embrace the project by coating the customer’s or the sponsor’s expectations in passionate language. For example note the relative impact of: “This project will deliver the most powerful aircraft ever built” and “This project is building an aircraft with x/KW of thrust”.
• Listen for the source of complaints, concerns and questions. Expectation is often first expressed as a complaint. Don’t dismiss complaints as inconvenient or an attack on your performance. Begin (but don’t necessarily finish) by viewing the complaint as a challenge to innovate, improve and bring about a more satisfactory outcome.
• Manage issues daily if not hourly.

• All stakeholders fear performance failure from time to time. These fears can show up as reluctance to contribute constructively when issues arise.To overcome the fears, make sure that stakeholders understand their respective role within the plan; probe for concerns, praise successes face-to-face and acknowledge completion of major tasks publicly.