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International Journal of Project Management 29 (2011) 396 407 www.elsevier.com/locate/ijproman

Systems thinking in innovation project management: A match that works


Maria Kapsali
Imperial College Business School, Innovation and Entrepreneurship Group, South Kensington, SW7 2AZ, London, UK Received 28 July 2010; received in revised form 5 January 2011; accepted 6 January 2011

Abstract This paper discusses why conventional project management practices lead to the failure of publicly funded innovation deployment projects, and investigates how the use of systems thinking in project management can help projects be more successful. Based on 12 case studies of two EU innovation policies, we provide evidence that by using systemic project management, which entails providing flexibility in planning, communicating and controlling activities, innovation projects are more successful. This research refutes previous theory that claims that we should formalize to manage complexity and uncertainty. The key finding is that systems thinking methods provide the flexibility to manage innovativeness, complexity and uncertainty in innovation projects more successfully. Suggestions for further research include suggestions of how to embed flexibility in project management methods using the constructs of equifinality and causal embeddedness. 2011 Elsevier Ltd. and IPMA. All rights reserved.
Keywords: Systems thinking; Innovation project management

1. Introduction: the need for systems thinking in project management This paper advocates the application of systems thinking in the management of innovation projects. The argument is that there is a lack of effective project management practice suitable for innovation projects and that systems thinking can be a suitable conceptual framework to provide constructs for the development of better theory and practice. The argument is developed thus. First, we discuss the application of conventional project management methodologies in publicly funded innovation deployment projects in this way. Deployment projects differ from NPD projects in terms of innovativeness, complexity and uncertainty because they are not developing a technology but they diffuse, customize, modify and market already mature technologies to users. These projects have lower levels of technological uncertainty and novelty, but higher levels of complexity because they deal with different types of users and markets. These facts influence the organization of project activities. Current theory claims that publicly funded innovation deployment projects need careful
Tel.: +44 020 75946491. E-mail addresses: kapsalis.maria@gmail.com, m.kapsali@imperial.ac.uk.

process control over activities, a formalized communication process and detailed planning. However the consistently high levels in failure of publicly funded innovation deployment projects make us question this argument. The questions remain: How can systems thinking be applied to projects in order to manage for innovativeness, complexity and uncertainty? Evidence from 12 case studies reveals that an overemphasis on operational control and the lack of flexibility to manage boundary relations and operational change are the critical factors for the successful project management of complexity and uncertainty. These are two important functions in systems thinking, which is a conceptual framework, providing constructs for the attributes and functions of systems. How can systems thinking help the practice of control and planning in projects? To apply systems thinking in project practice, this study suggests that further research into the constructs of equifinality and causal connectedness is needed to embed flexibility in project management. 2. Boundary and operational control practices of conventional project management Because of the lack of agreement in existing theories (Fitzerald, 1996) conventional project management theory and practice were

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created as a basis for facilitating project evaluation (Crawford and Pollack, 2004). These were founded on engineering/construction practitioner led models (Sderlund, 2004; Shenhar et al., 2002) which achieved a universal status through the monopolization of accreditation (Cicmil, 2006, 1997). However, there are two concerns with conventional project management as it stands now. Firstly, theory and practice treat the project as an island, with closed boundaries that relies upon prescribed formulae to manage boundary relations and change through formalized communications procedures (Engwall, 2003; Hodgson, 2000; Heeks and Mundy, 2001). The second issue is problematic change management, which is a consequence of tight operational control over scope creep (unauthorized activity changes). Two problems are caused by this emphasis on closed boundaries and operational control in innovation projects. The first problem relates to assumptions of rationality and linearity about control and boundaries, which create a paradox and an irony in project management theory and practice. The paradox is that projects, while being temporary organizations, serve long-term organizational goals (Turner and Keegan, 2001) and the irony is that project activities are being managed using planning tools which are applicable to more predictable operational activities (e.g. batch production) mimicking the way operations management exercises control on conventional production processes (Lamers, 2002; Turner, 2000). However, the fact that project processes are externally evaluated weakens internal operational control, makes the tensions within feedback loops through the project boundaries intense and in reality raises the need to balance actual performance with external expectations, thus increasing the need for operational flexibility (Mller and Turner, 2005; Lundin and Sderholm, 1995). Control through boundaries is designed around project tasks and action, while in permanent organizations control is linked to hierarchy and governance structures. Project boundaries are defined by tasks, while in permanent organizations boundaries are institutionally legitimized (Lundin and Steinthorsson, 2003). The uncertainty, complexity, and uniqueness of project activities make control more difficult and deviation from plans more probable, because plans are formulated for a set of contingencies that cannot be preconceived because they have no precedent (Sydow and Staber, 2002). The rationale behind conventional project planning assumes decomposition and predictability of activities, treating relational instability and operational change as aberrations (Sauer and Reich, 2007). This narrow emphasis is an obstacle to producing an explanatory and predictive framework for innovation projects (Mller, 2003) because theoretical prescriptions become irrelevant to practice due to the lack flexibility. When tasks are uncertain, change is unpredictable and creativity is required, managers need flexibility to deal with evolutionary, non-linear innovation processes (Smyth and Morris, 2007; Engwall, 2003; Koskela and Howell, 2002). The second problem is that the conventional approach cannot cater for the practice and theorizing of project innovativeness, because of its weakness to deal with different levels of uncertainty and complexity discussed above. Innovativeness refers to the level of novelty or originality by virtue of

introducing new ideas or innovations, originality depending on the ability to think and act independently in order to achieve innovativeness; innovativeness also refers to the tendency to adoptuse innovation and is also an (cap)ability to create something new or make renewals and changes through a process of idea generation (Salavou, 2004; Hilmi et al., 2010; Hult et al., 2004; Dormann and Lindgaard, 2004) which very much depends on interaction and communication. Novelty, originality and creativity can be viewed from many different angles, depending on the unit of analysis; either project, person or whole system. One can assess innovativeness by the levels and types of change the innovation brings when implemented (Gemnden et al., 2007). This stream of research can use measures like product and process technical uniqueness, change etc. Another way to assess innovativeness is the level of diffusion and adoption of the technology by the intended users (Mudd, 1990; Midgley and Dowling, 1978). This area of research has used the user(s) as a unit of analysis, assessing their adoption and psychological/cognitive patterns. A third stream of research focuses on the firm's external and/or internal process of innovation and a fourth stream focuses on the determinants of innovation and/or its impact on organizational performance (Salavou, 2004; Subramanian and Nilakanta, 1996). In the public sector, innovativeness refers to the adoption levels of innovation within macro-systems, and depends on factors such as the diffusion instruments designed within public policy programmes and the way policy communicates and incentivises markets and stakeholders (Stoneman and Diederen, 1994). Innovativeness, therefore, is a multicomplex and broad concept and there is substantial obscurity around its definition (Salavou, 2004; Midgley and Dowling, 1978) as it lies and intersects in the boundaries of all the innovation actors (policy academiaproducermarketuser) and innovation elements (technology, social institutions) and its definition springs out of their interaction and interpretation (Dormann and Lindgaard, 2004). It is this interaction across the boundaries that will determine the levels of innovativeness, by negotiating and coproducing ideas on the use of innovation, where boundary roles exert particular significance (Salomo et al., 2007). However, the question remains how much of this interaction can possibly be predetermined and planned, or its outcomes predicted. Innovativeness, with its embedded element of originality, brings with it unpredictability and self-emergence (Gemnden et al., 2005). This unpredictability is beneficial for creativity, but raises the need to compromise planning and controlling levels, as it is necessary for innovative projects to function under certain levels of autonomy (Gemnden et al., 2005). By the same token, lower levels of innovativeness increase the need for formalized communication, and higher levels of complexity in planning and tightening control. Therefore, the question about the amount of control and levels of formalization that should be exercised remains unanswered and prominent in public policy innovation deployment projects (Brown and Eisenhardt, 1997). When measuring innovativeness in public innovation deployment projects by using the model of Gemnden et al. (2007) (see also Table 1), we question what kind of approach these innovation projects might be better off with.

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Table 1 Measuring (in terms of highmediumlow) the innovativeness of publicly funded innovation deployment projects, based on the classification from Gemnden et al. (2005). Measures of innovativeness EARSS Description 1. Market dimension (a) Creates totally new customer benefit (b) Change in customer attitude and behaviour (c) Improvement of firm's market position (d) Extent of market uncertainty at the beginning (a) New technological principle (b) Quantum leap in performance (c) Squeeze out of existing technology (d) Extent of technological uncertainty at the beginning of the three stages (average) (e) Reorientation of corporate strategy (f) New organizational structure (g) New qualification of employees (h) Fundamental change in corporate processes (i) Few experience with new production processes (j) Major change of organizational culture (k) Intensive cooperation with external partners (l) New financial need for project (m) Major changes in value chain, stages eliminated (n) Creation of a new infrastructure (e.g., filling station for hydrogen) (o) Alterations in regulation required in order to implement innovation (p) Critical debate of innovation in society At a system level Medium N/A High Low N/A Yes high Low-customization N/A N/A N/A N/A N/A Low Yes Yes No Yes Yes high N/A eTEN Description At a user level Medium N/A Higher Low N/A Yes high Low-customization N/A N/A N/A N/A N/A N/A Yes Yes No Yes Yes high N/A

2. Technology dimension

3. Organizational dimension

4. Environmental dimension

Firstly, public policy projects are not embedded in specific organizations, do not serve firms' strategic goals directly, and their public project owners have a strict hierarchical-formalized relationship with project leadership. Secondly, the level of technological novelty is of lower importance. R&D and radical innovation projects have a higher level of innovativeness than deployment projects, while the latter do not develop a technology but diffuse, customize, modify and market already mature technologies. Lower levels of technological challenge decrease technological uncertainty. Even so, publicly funded innovation deployment projects exhibit very high levels of failure even when their technologies are well known, tried and tested on the market (Hovelja, 2009). Thirdly, public deployment projects are characterised by high levels of boundary complexity, because they tackle both public and private users and markets with diverse characteristics, drivers and barriers. Since the users are part of the modification/customization process, activities in deployment projects are constantly negotiated (Champy, 2003), relations become unstable, and this is why a significant degree of implementations ends unsuccessfully (Nicho, 2004). Therefore, these projects suffer from a higher relational instability and environmental dependency than projects which are contingent upon more stable forms of interfirm co-production and higher interdependence of tasks (Taylor et al., 2009; Taylor and Levitt, 2007). Finally, public deployment projects are usually run on diverse and poor public resource infrastructures, with significant constraints because of resource limitations, politicized relations, institutional rigidities and complex regulations. Therefore, with lower levels of technological uncertainty, higher levels of complexity in interaction and other boundary activities, and higher levels of relational instability, theory expects that publicly funded innovation deployment projects need more

control over processes, a more formalized communication process and more detailed planning than R&D projects. In addition, business and risk planning should play a more important role to reduce uncertainty and complexity (Salomo et al., 2007) and so should a clearly defined project protocol (McNally et al., 2010). However, the consistently high levels of failure of publicly funded innovation deployment projects suggest that the planning and control methods used are not really as effective tools are they are supposed to in order to deal with innovativeness, complexity and uncertainty. In the next section we will consider how systems thinking can contribute to planning and control for innovativeness, complexity and uncertainty. 3. How can systems thinking be applied to project management? What levels of control and formalization of communication and planning does a publicly funded deployment project need? There are no generic models to manage innovation projects differently according to their type (Shenhar and Dvir, 2007), and since we found no satisfactory answer thus far, we have to ask: how can systems thinking help define the levels of control and formalization in planning, communication and control in these projects? What levels of flexibility are useful? Much research into the organization of project management has separated strategy/decision-making from execution (Artto et al., 2004, 2008; Partington, 1996; Rodrigues, 1994). The split between decision-makers and project managers creates two different managerial systems; one formal, used to comply with external (usually contractual) specifications, and one informal based on the intuition of the project managers and the group dynamics within the projects (Jaafari, 2001). This two-tier system

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confuses the practices of operational control and boundary relating. Managers react to this situation by practicing systems thinking principles regarding control and change intuitively, as a derivation of their individual cognitive frameworks (Jaafari, 2001; Rodrigues, 1994). The practice of systems thinking then is already being implemented in reality, albeit sub-optimally as it is practiced in an amateur way through the limited experience and frameworks of reference of the managers (Jaafari, 2001; Rodrigues, 1994). For this reason we need to develop a methodology that explicitly conceptualizes this experience and frameworks, a methodology that will bridge strategy with project operations through proper boundary management and smart controls (Artto et al., 2008; Poli and Shenhar, 2003). It has been demonstrated in the field of systems thinking that different managerial methodologies are appropriate in different contexts and for reaching different ends. Systems thinking is the right conceptual framework to pursue this kind of contingent managerial design in both practice and theory, since through its synthetic, integrative thinking (Pourdehnad, 2007) we can gain understanding of individual and collective behaviour, human and technical alike, that cannot be obtained by analysis alone. The systems thinking framework accepts the social as equal to the technical, uncertainty and complexity as part of the management of the tasks, planning and control (Saad, et al., 2002). Systems thinking can complement conventional styles of research in projects in certain ways: first, it suggests different levels of analysis and synthesis for different problems from the activity to the supra-systemic (hierarchy). Second, systems thinking complements reductionism (the belief that everything can be reduced to individual parts), analysis (breaking down a system to its smallest components), cause and effect thinking (environment-free, linear without circular feedback loops, closed boundaries), and determinism (delusion of complete control) with complexity (a sub-system of a larger plan), synthesis (explaining the whole system in terms of the functions and the relations between parts), circular causal effects (explaining environmental influences, enactment and feedback-open boundaries) and indeterminism (emergence and probabilistic thinking) (Pourdehnad, 2007; Sderlund, 2004; Capra, 1996; Yeo, 1995). Third, systems thinking is a conceptual framework which can utilize different theories, tools and techniques to help construct holistic, contingent perspectives and practices (Joham et al., 2009; Pourdehnad, 2007). However, the part of systems thinking applied in conventional project management is the closed or hard systems approach, (Crawford and Pollack, 2004) that strongly tends towards process management (Phelan, 1999). Conventional project management is based on the closedhard approach and focuses on process standardization in terms of the Iron Triangle (cost, time and scope) metrics (Atkinson, 1999), essentially focusing on outputs in terms of process management and not outcomes like goal achievement. The purpose of a measurement system however should be to help the team cope with, rather than just to help top managers monitor the progress of, the processes. For that reason, ideally, it is the team that should play the lead role in designing the project measurement system, because the process they are responsible for is unique and so

should be the measures to track it (Atkinson, 1999). As opposed to this control-oriented rationale, the open (or soft) approach argues that the system needs to adjust to environmental complexity by differentiating and elaborating its structure and processes and thus by becoming internally complex. In the meanwhile, several new streams of research in project management look at simulation and have used alternative constructs of systems thinking than the hard and closed approaches, like holism and interdependence, and other streams have moved towards studies in sociology and engineering or applied mathematics (Crawford and Pollack, 2004). Contingency and crossfunctional studies try to explain changing projects but remained anecdotal, with scant empirical evidence based on survey data and perceptual measures (Partington, 1996). It is obvious that systems research in project management was confined by functionalism and now needs to use more holistic constructs that will not only focus on the creation and utilization of specific tools and techniques under specific situations, but radically change managerial methodology (Pollack, 2007). To illustrate the argument, we use the example of the application of simulation in project management. Simulation methodologies have systematically applied systems thinking constructs to projects. For example System Dynamics (SD) gives a holistic picture of the behaviour of a system over time and more specifically the system's underlying structure based on behavioural rules, providing a less ambiguous and more condensed frame of communication (Chapman, 1998). SD is an excellent tool for applying the systems thinking construct of holism, as in providing a whole picture of a specific system and most importantly on abstracting its main attributes to show the particular system's pattern of organized complexity. This means the nonrandom patterns under which the system adapts and self-organizes despite the randomness and serendipity which are inherent within all systems (Cabrera et al., 2008; Weaver, 1948). Therefore SD is a very effective tool for rationalizing complexity through formalizing these behavioural rules (Senge, 1990; Forrester, 1961). As such SD provides clarity and reveals what should be considered important in each project (Rodrigues and Bowers, 1996). However, the fact that SD is hanging between functionalism and interpretivism since it both builds an objective representation of reality and models people's subjective interpretations in group modelling sessions raises the debate as to whether SD should be considered as a hard or a soft systems model (Mingers and White, 2010) and if it actually can utilize the complexity of people's interpretations, since it is based on reducing and abstracting complexity (Jackson, 2003). Moreover, techniques for tracking and measuring change in mental models like simulation have not been well established yet (Vennix, 1999, 1996, 1990), and neither has a precise process of mapping knowledge (Richardson et al., 1989: 355). For example, SD does not depict operational detail, since it works on higher levels of abstraction and therefore does not track operational change. Unlike abstracting complexity, what is needed in project management research are mental models that are inclusive of the complexity of stakeholders' interpretations in order to explain the emergence of innovativeness through the boundaries, and ultimately understand how much flexibility we need in order to exercise control effectively and achieve project goals through exploiting operational change.

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Computational modelling of learning dynamics on the other hand can be inclusive of complexity and highlight emergent, self-organizing activities in complex organizational systems by emphasizing agents' learning and adaptation patterns. This type of modelling is a bottom-up description of agents and their patterns of connectivity, without identifying what patterns of behaviour might emerge in the larger system (Dooley, 2002). Simulation of learning dynamics has been conducted on individual learning and the impact on productivity within organizations (Lutz et al., 1994), collaborative learning processes in architecture, engineering and construction teams (Fruchter, 1999), knowledge generation (Soibelman and Kim, 2002), the dynamics of knowledge flows across organizations in construction networks (Ibrahim and Nissen, 2003), corporate memory design (Demian and Fruchter, 2006), interorganizational boundary spanning technological changes induced to a set of interorganizational change variables (Taylor and Levitt, 2007), and learning between task interdependent organizations in a project and learning dynamics in project networks (Taylor et al., 2009). Levitt's findings from this type of simulation have shown that relational instability slows learning and that task interdependence moderates the impact of increasing relational instability on network productivity rates. There are three important methodological issues with learning dynamics simulation models (Dooley and Corman, 2002). First, the simulation itself is based on some simplistic assumptions about human nature, since human interaction is not only about learning or connectedness, but rather a mixture of motives, incentives, politics, power and dependency, exchange and communication in addition to learning. Many processes related to innovativeness besides learning take place simultaneously while agents interact, such as negotiating, compromising and representing meaning and ideas, experiment and finally using simulation itself as a boundary object. Second, because of the restrictive assumptions about equilibrium, structure and independence in these simulations, emergence and self-organization are difficult to visualize, operationalize and measure, and therefore to statistically model. These types of systemic analytical formulation tools do not easily take into account uncertainty. Therefore, it is difficult to evaluate the impact of structural and behavioural changes, because emergent macro-patterns tend to invalidate the assumptions of most statistical methods. The third problem is the trade-off between parsimony and validity, which relies on the analyst's discretion, who usually tends to trade complexity for validity, and therefore not all complexity in stakeholder interaction is finally included and modelled. We therefore see a wide range of application of systems thinking constructs (like holism, adjustment and interdependence) through simulation however, there is no reference to the use of constructs corresponding to the management of innovativeness, complexity and uncertainty. The management of complexity and uncertainty should include the identification of flexibility and slack and the ways these could be embedded in planning, execution and evaluation, to allow for enough originality to increase innovativeness (Yeo and Qiu, 2003; Nohria and Gulati, 1996). This would be achieved by adopting an open systems approach in planning and control activities

using minimum critical specifications, which are more generic (and self-determined) metrics that focus more on outcomes and less on process outputs to encapsulate change. These outcome measures will ensure adjustment of plans during execution through the provision of flexibility, and with the use of smart controls. The conceptual framework of systems thinking includes generic constructs that are common to most systems paradigms, constructs such as equifinality and boundary management which include flexibility as a necessary property of managerial activities embedded in outcome measures. On the one hand, goals, plans and performance criteria may be prespecified at certain levels of detail, but they can also be modified, allowing for flexibility in managerial action to exploit many ways of achieving its goals (equifinality). Equifinality allows for alternative paths of action being available through flexibility in choice; effectively reaching the same goals through different waystrajectoriespaths because systems can achieve a final state independently of their initial conditions, by a high variety of different paths and through multiple structures even if contingencies are stable (Gresov and Drazin, 1997: 4034). The concept of equifinality presents a dilemma to traditional contingency theory research (Donaldson, 1995) which treated the concept as a null hypothesis to explain the absence of findings consistent with contingency theory. Ashmos and Huber (1987) argued that equifinality is one of the missed opportunities of Bertalanffy's (1975) General System Theory. Equifinality, as a property of both the system and managerial practice, is essential to manage effectively in non-linear unpredictable environments, and it needs to be build into project management methods. Equifinality is not a predictive construct but rather a contingency one being prepared for the most probable conditions through carefully using slack. Boundary management on the other hand involves managing relationships, inputs and outputs across system boundaries (Jackson, 1991) and balancing uncertainty with interdependencies (Amado and Ambrose, 2001). Boundary management would ideally be integrated within all project management tasks (defined here as plan, communication and control activities). The main characteristic of boundary management would be the constant mutual adaptation between plans and processes of different actors. In conventional project management, formalization of boundary processes is used mainly as a monitoring mechanism in order to control or avoid unauthorized change in project activities (scope creep) (Khan, 2005; Staber, 2004; Keil et al., 1998; DeWeaver and Gillespie, 1997). Systems thinking uses the construct of causal connectedness to examine boundary management, which is based on the idea that there can be no analysis of relations unless we assume that there might be causality within the interactions of actors thus causal connectedness. When projects relate to their environment, they are influenced by the way choice and dependency are embedded when project boundaries are drawn and by the way flexibility is build in the management of operational processes (equifinality). Such systems thinking constructs however have not been the focus of academic research although they are intuitively used in the practice of project management (Jaafari, 2001; Rodrigues, 1994). To see if systems thinking constructs would be useful to

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initiate academic research that is satisfactory in explaining the actual workings of innovation project management, we first need to see if and how these constructs are practiced and the effects of this practice on project performance. We intend to endeavour this through our case studies. 4. Research design: Comparative, multiple case studies This study is based on the examination of project management in 12 projects belonging in two publicly funded EU innovation deployment programmes. These programmes had similar goals (innovation deployment in healthcare infrastructures and markets), similar timeframes (FP5), and belonging to the same sector (healthcare), but which used different implementation-control instruments. Both programmes were chosen specifically because they were already finished by the time the study begun because the design of the study is retrospective (Cox and Hassard, 2007); that means it was our intent to examine projects that were already finished in order to get a completed picture of the patterns of managerial practice we were studying that had been consistently repeated under similar circumstances. This methodology is common in NPD research and here is used for innovation deployment projects as well. During the retrospective method managers and participants were asked to provide their interpretations and perceptions regarding the performance of the projects and the type of management of complexity, uncertainty (operational change), and boundary relations. The type of management was assessed based on the type of planning, communication and task coordination activities. Respondents made retrospective sense of the situations (Weick, 1995), interpreting events, attributing in terms of cause and effects of what they experienced and comparing with other experience (Cox and Hassard, 2007). The method is based on 12 multiple case studies which were cross-compared. Comparative case studies are suitable for exploratory research, when investigating causal mechanisms within complex circumstances where a phenomenon is dynamic, not yet settled and calls for an applied orientation directed at improving practice. In this study the cases are used to elicit understanding regarding project practices, thereby addressing the gap in the current theories regarding the effectiveness of current managerial methodologies in innovation projects (Eisenhardt and Graebher, 2007; Yin, 2003; Rowley, 2002; Perry, 1998; Beannick and Roche, 1997). In particular here, the method is employed to identify the constructs that can provide a theoretical shift leading to new empirical measurement activities in subsequent research (Meredith, 1998). The cases are categorized into two groups, each group implementing a specific EU innovation programme (EARSS and eTEN). The first group of the three EARSS case studies represented 12.5% of the total population of the projects at the time (3 of 24). The second group of nine eTEN projects represented a percentage of 29% of the total population in the eTEN eHealth programme (9 of total 26). The first group of cases was three national EARSS projects included into the EU policies on antimicrobial resistance, which supported the EARSS (European Antimicrobial Resistance Surveillance System) programme, which aimed at developing a pan-European electronic epidemiology surveillance network in

member states at user level (laboratories). The second group of cases included nine projects belonging into the EU eHealth policies coordinated the eTEN (electronic Trans European Networks) programme, which required projects to either validate a market or create a viable venture to deploy telemedicine technologies in healthcare markets and help users to adopt them. The projects in both programmes were ICT innovation deployment projects, that is they were required to diffuse, modify, customize and help the adoption of electronic networks using already developed (from previous R&D projects) mature technologies. Their goals were not to invent or develop new technologies, and therefore the levels of innovativeness required were moderate. These levels of innovativeness will be displayed in the analysis section where the projects are compared in Table 1. Although the goals of the programmes were similar, which counted for similar levels of innovativeness amongst the projects, the implementation instruments of the two programmes were diametrically different, which caused the difference in the type of project management. The eTEN projects were imposed with a bureaucratic type of control and evaluation process that focused on measuring the progress in the project processes; while the EARSS programme used control and evaluation through minimum critical specifications, which allowed for the practice of systemic project management.

4.1. Data collection and data sources The procedure undertaken, first, involved the collection of data from policy and project documentation, such as: official publications (legal documents etc), ex ante and ex post evaluation reports and official websites, which were used to provide us with a comprehensive understanding of the policy background in each case study. Second, we carried out 31 semi-structured interviews, 13 of which were with the EARSS project managers and laboratories heads for the first case study and the remaining 18 were with project managers and participants in the eTEN projects.

4.2. Analysis process To begin with, detailed descriptions of all the sub-cases were constructed by categorizing interviewee responses. The next stage involved looking for corroborating patterns by examining the causal patterns within each case, and then by comparing between cases (Patton, 1997). Subsequently, the categorized data was transferred to tables and matrices and through data reduction techniques inferred causality was elicited within the previously identified patterns. That is, the patterns for each case study were organized into chains of causality, or causal networks that provided a comprehensive picture of the causality in the systemic relations. In sum, the chosen comparative embedded multiple case study method is a robust treatment for providing suitable causal evidence, in this instance in relation to project management methodologies, that can subsequently be used to develop new testable theory (Miles and Huberman, 2002).

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5. Findings: Systems thinking suits innovation projects better 5.1. Comparing programme goals and implementation instruments 5.1.1. The eTEN programme One of the EU Information Society programme strands called eHealth included a series of programmes for a) the development, and b) for the marketization of healthcare innovation. The eTEN (electronic Trans European Networks) programme was a part of eHealth supporting collaborative consortiums that would develop and market healthcare technology. In order for these projects to initiate deployment, they had to identify or stimulate demand for eHealth and telemedicine technologies, either validate the market or create a venture to market the technologies to the users. The eTEN programme thus helped projects develop from a business case (a good service idea) to a business plan (to put the idea into practice). The eTEN did not fund scientific research and explicitly directed that only a minimum number of researchers and technical trials should be employed in the course of an eTEN project. The starting point was a clear business plan, and an accompanying investment plan. The monitoring procedure was based on PMBOK (Project Management Body of Knowledge) protocols (conventional project management), placing both participation rules upon consortiums and prespecified performance objectives (on time, cost, and quality) to evaluate the progress in project phases. Evaluation was focused upon the quality and the features of the product and the cost effectiveness of project processes. There were no supportive mechanisms for professional interaction, training, etc. The projects were run and evaluated on an individual basis. 5.1.2. The EARSS programme According to the Community Public Health Policy on Communicable diseases, participating in pan-European surveillance programmes, and especially in Antimicrobial Resistance (hereafter AR) network is mandatory for all member states. The case studies describes 3 national projects carried under the EU Antimicrobial Resistance programme during FP5 called EARSS (European Antimicrobial Resistance Surveillance System), which aimed to develop a pan-European electronic epidemiology surveillance network in member states' national public health systems. The deployment of the electronic network involved data transfer from microbiology laboratories to the EARSS Management Team (hereafter EARSS MT) at the EU central agency at RIVM (The Dutch National Institute for Public Health and the Environment) for analysis and interpretation via national EARSS centres. The implementation rationale of EARSS was first to work through existing national epidemiology networks, and second to be implemented with minimum intervention in the national surveillance infrastructures. Measurement of project performance focused on minimum critical specifications in terms of periodic data outputs and did not monitor the project process. The EARSS MT provided assistance and tools for the deployment of the

network at the operational level (like software, protocols for laboratory standardization, etc) but their use was voluntary. Therefore, the EARSS MT focused on supporting the project managers as change agents by providing them with support in terms of cross-national collaboration, interaction, technical assistance and education and most of all participation in the programme objectives. The project managers were bound only by a collaboration agreement. Thus, performance measurement evaluated outputs and did not exercise control over the managerial process. The EARSS pilot motivated several countries to establish or to update their national AR surveillance networks. Expansion of participation went from strength to strength in terms of both laboratory and country memberships. However, national EARSS networks suffered from low ICT deployment, of between 15% and 16% in the end of the pilot and remained stagnant thereafter. 5.2. Comparing project management in terms of planning, communicating and task control activities 5.2.1. The eTEN projects and their management and performance Despite the successful conclusion of the majority of eTEN projects in terms of time, cost and quality, only a fraction of them finished with a venture that marketed the electronic eHealth and telemedicine networks. The reasons for this was that most of the eTEN projects chose to just validate the existence of a market, validate the quality of the technology in delivering a service and submitting a business plan; however most opted out of establishing a venture that went on to become a business. Because the focus of the EU evaluation was on measuring project efficiency, this limited project management in the following ways. First, the project managers were required to manage in a conventional way, which did not allow them to experiment and invent their own way of creating boundary relations with the user-markets. Second, the project managers were obliged to use work breakdown packages which caused obstacles in forming a group identity, thereby being unable to control the tasks of the participants informally. Third, the monitoring procedures restricted the levels of flexibility that project managers could avail themselves so as to be able to deal effectively with contingencies and change. Consequently, eTEN project managers frequently practiced a form filling exercise that involved satisfying the planned performance specifications and anything that was considered to deviate from the plans was avoided or ignored. In other words as long as the performance objectives were being met, they considered that they were carrying out the tasks efficiently according to the requirements. In some cases the manager was marginalized by their own team and in two projects they were specifically selected with the remit of handling administration tasks and not to interfere with the running of the work packages. The above had several consequences for group dynamics. For instance, because the planning method was based on work breakdown structures, participants worked independent of each other's input, and, as a result, they formed distinct and isolated teams. Related to this, the participation rules, although in theory aimed at supporting collaborative project networks, in practice

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hindering the creation of optimum combinations of consortia, resulting in the formation of research islands. Moreover, in many cases project goal shifting emerged because participants chose to team up with a greater number of researchers than that prescribed by the programme rules, leading to technological validation and trials becoming of greater importance than deployment. Therefore, project performance deployment failed because the managers were unable to manage change. In sum, the eTEN project management did not adjust their activities to the needs of local markets and this lack of flexibility in managerial activities resulted in weak leadership, intra-group miscommunication and task coordination problems. Moreover, given managers focused on fulfilling the rules, they were unable to devote sufficient time to boundary management issues, in particular working with the market at the user level. Therefore, in terms of innovativeness the needs of the user-markets were not thoroughly included and the management was not sufficiently free to manage complexity and uncertainty effectively. 5.2.2. The EARSS project management and performance In the contractual agreements between EARSS and national project managers, the latter had to fulfil minimum critical specifications (e.g. 25% coverage of total laboratory population, 4 aggregate network data reports a year, etc). Project time and cost were constraining factors, but they were not the criteria used to evaluate and monitor the project. Each project manager worked within the limitations of their national epidemiology reporting systems, adopting boundary and operational activities according to the way they worked with the laboratories. For instance, although in EARSS A there was more focus on boundary activities to encourage maximum use of the software in the laboratories, to overcome the fact that the laboratory managers did not have enough resources, and the national AR centre was not supported with resources either. By contrast, EARSS C participants were given training to facilitate deployment by the project manager and were reinforced by the national politics with enough resources, so a mixture of formal and informal boundary management developed. Because of lack resources for laboratory training and boundary activities, and because there was large variation in laboratory protocols, EARSS B managers were not enthusiastic about the EU software and standardization protocols and instead decided to develop their own methods, leaving laboratories free to follow their own as well. In all cases, and despite or even because of the lack of strict operational criteria, all the projects achieved the minimum critical specifications. The managers exhibited initiative, tailored their management actions according to their markets, and, therefore, achieved a certain level of creativity by inventing their own selling method, customizing the technology according to their markets' needs, timeframe and budgets, and using the outcome metrics as targets rather than measures. This required extensive boundary management activities, which managers had to negotiate constantly. The complexity and variation of data collection methods from microbiology laboratories presented the biggest obstacle, while poorly developed and resourced electronic networks within the laboratories was an additional national issue. The skill of the project managers in controlling methodology and the

provision of training (which was optional) helped overcome part of these obstacles. To manage complexity, the leaders had to make conscious choices between elements of the network taking priority. In particular, they had to make compromises in relation to the level of network participation, the quality of data reported, the reliability of reports and the deployment of software-protocols. In this regard, the project managers had to take care not to be over obtrusive when recruiting to the laboratories, for they could easily reduce the number of willing participants. There were also other considerations, including laboratories that were pushed into taking on extra activities, who might report low quality data (which they sometimes did). Given the different levels of complexity and uncertainty in the networks, different approaches to management were observed. Ongoing compromises were made by the project managers because of the inherent complexity and uncertainty stemming from the users (which prohibited the use of detail and prespecified planning, since managerial activities were too diverse to be precisely predicted). While some formalized activities, like training and conferences, took place, most boundary management activities were informal. Despite variable infrastructures, the EARSS network expanded enough to produce workable aggregate surveillance results from 1998 to the present day, and this can be attributed to the flexibility of project managers to handle change and boundary relations.

6. Comparing findings In this section we will compare the management practices between the EARSS and the eTEN projects. First, regarding the programme characteristics described in Section 5.1, the goals of the programmes were similar: they targeted user markets and initiated collaborative projects to push the deployment of mature network technologies to users. Their implementation instruments however were different: the EARSS programme used a more collaborative approach to programme management, using minimum critical specifications to measure outcomes while the eTEN programme used the conventional approach of process measurement. As a result, the project managers had a different approach to their methods the eTEN managers used conventional management methods while EARSS varied in their approaches contingently. Both public programmes funded deployment projects; these projects had to modify and not develop innovation, which theoretically reduced the need to manage for higher levels of technological innovativeness (Table 1). As discussed in Section 2, public innovation deployment projects have highly complex and unstable boundary relations. Based on these arguments, with lower levels of technological uncertainty, higher levels of complexity in boundary activities and higher levels of relational instability, theory expects that publicly funded innovation deployment projects need careful process control over the activities, a formalized communication process, a clearly defined project protocol and detailed business and risk planning (McNally et al., 2010; Salomo et al., 2007).

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Section 5.2 provided a description of the management and performance of the projects. Starting with the performance of the project depicted in Table 2, we see that the EARSS outperformed the eTENs in the sense that exceptionally few eTENs actually exploited a real market or managed to commercialise, while a fraction of them created a deployment venture, whereas the EARSS projects achieved sufficient levels of deployment, fulfilling their goals. Most of the project managers and practitioners attributed their management performance to handling change as reported in Table 2. The eTEN projects had a perfectly acceptable management process and passed the evaluations, but could not control contingencies. Because of the emphasis on conventional project management methods, project management was limited in three ways. First, the project managers were asked to manage conventionally (bound by participation rules and process criteria), and they were inhibited from managing the boundaries contingent with all stakeholders (including sponsors, partners and users). The lack of flexibility led to weak leadership in communication and coordination. In addition to this lack of effective boundary management, the project managers could not control the complexity of deployment at the user level, due to the lack of flexibility to deviate from plans. The management structure in the eTEN projects did not allow the project managers flexibility to adjust to local contexts. Second, because of this, project managers did not have the authority to form a group identity and control project activities. Eventually, intra-group problems occurred due to the diversity of objectives within the team,

leading to ceremonial deployment. Third, systematic monitoring did not allow project managers the flexibility to manage contingencies and change in project activities. Then, project managers resorted to stage management which seemed to be a frequent phenomenon in the eTENs. Change was considered a deviation from the plans; it was avoided or ignored, as long as the performance objectives were met. In the EARSS projects, the project managers conducted extensive boundary management to handle the volatility of user behaviour and retain their commitment. Planning was flexible, there was a reliance on boundary management of different forms to suit the users and there was a lot of support in terms of boundary interaction and professional collaboration at the programme level, as well as provision of technical alternatives to provide some freedom for operational flexibility in adopting technology. Flexibility therefore helped with planning and controlling project activities, while boundary management developed the connections necessary to handle complexity in the user level and uncertainty in user adoption. Eventually, the EARSS project managers used an open-systems approach mutually adjusting plans and activities within and between the projects' and other systems' needs. The project management of the eTENs was strictly conventional and could not focus on managing all the boundaries. In EARSS, project managers had flexibility to manage; in eTENs it was considered unnecessary. The findings are compared in Table 3 and indicate the differences between the two types of project managing. An open-systems approach inspired by systems thinking seems to increase effectiveness in an innovation project since it provides

Table 2 Data comparing the effectiveness of the projects and correlating to their management of change (from empirical research). The first three are the EARSS projects, marked in gray, which show that the levels of their deployment were good after adopting flexible ways of dealing with change.
Projects Outcome Is it still Was it deployed operational 1 2 3 Yes mostly Yes low Yes but very low No No No No No No No Yes Yes partially Yes Yes Yes Plans are emergent specific for the situation backed by policy Plans are emergent but more formal and externally defined by national policy Incremental development no major contingencies Trivial-technical 3 month extension for deliverables Nature of changes in the plans and activities Dealing with change Adapting seeking assistance from other professionals personal informal communication with policy and lab Cost and diversity of professional practise both formal and informal communication with policy and labs Cost, diversity of professional practise and diverse strategic plans not frequent boundary management with laboratories or policy Not utilizing change Bad management (that led to problems with task and technical completion) as in lack of contingency planning and effective change management Communication procedures with the sponsor not flexible enough need to improvise but distance between teams inhibits it

4 5 6 7 8 9 10 11 12

No No No No No No No No No

Bad planning of WP and loss of technical objective 6 month extension for the technical component did not work

Flexibility to explore different ways to achieve the outcome A lot of delays friction with administration in hospital Plan generally successful minor changes Market changes did not allow full deployment but product is commercially released

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Table 3 The comparison of project management methodologies used in the projects (based on empirical evidence). The EARSS projects are marked in gray to correspond to Table 2.

Project manager tasks

EARSS (3 case studies) Open systems systems thinking

eTEN (9 case studies) Conventional Prespecified plans The project manager satisfies contract requirements/ compromises tasks to fit WBS plans project managers have limited negotiation power with both EU and consortium partners change aversion Infocracy (standardized communication procedures) Focus on external communication limited communication with other projects diverse partner objectives distance between participants/dictated by contract and participation rules. Other project interfaces (e.g. users) are marginalized Tight task control process oriented The project managers did not have the leverage to control the project teams fulfil the contract diverse partner objectives inhibit task control

Planning

Plan as they go The project manager gives reports with aggregated data, not management reportsmanagement plans are flexible there are certain focal goals and then there is flexibility to decide on the course of action Boundary management Main project manager task in all projects both formal and informal The project manager communicates through the boundaries with the (national and EU) government, to network with colleagues and to promote the network to labs (3 main interfaces)

Communication

Task control and coordination

Flexible task control output oriented Low at operational level because the project managers did not have the leverage to enforce standardization of data management on laboratories or control over resourcing

the project manager with the flexibility to handle operational change and boundary management activities, and thus achieving project goals. 7. Conclusions Conventional theories of innovation project management prescribe that projects with lower levels of technological uncertainty, modest levels of innovativeness, higher levels of complexity and higher levels of relational instability, need to be managed with careful process control, a formalized communication process, and detailed planning. The consistently high levels of failure of publicly funded innovation deployment projects however, leave us to question these kinds of planning and control methods. This study therefore advocated that public innovation deployment projects fail precisely because of conventional management practices. Evidence from 12 case studies refuted the previous arguments and showed that conventional project management methods, such as detailed planning, formalized communication and tight controls, do not help deployment projects perform well, because they stifle innovativeness and communication through the boundaries, and restrict managerial action to handle contingencies and change. The same evidence showed that flexibility should be embedded in operational control and boundary management activities that help projects adjust to the demands of their environment and to resource limitations. In conclusion, systems thinking can contribute to the planning and controlling for innovativeness, complexity and uncertainty by embedding flexibility in managerial activities. Systems thinking constructs should correspond to operational flexibility and boundary management (such as causal embeddedness and equifinality) that have to be embedded into conventional project management methods.

7.1. Implications for theory and future research Two conclusions are drawn from the evidence. The first is that in circumstances where the outcomes of project activities are less predictable (uncertainty), and where these activities involve many stakeholders and boundaries (communicationcomplexity), empirical evidence shows that operational flexibility (equifinality) and boundary management (causal embeddedness) become very significant to successful practice, more significant than formalization and control mechanisms. The second conclusion is that the emphasis on monitoring instruments on outputs (efficiency in process performance measurements like the Iron Triangle cost, time and scope) and not outcomes (effectiveness, achievement of goals) leads to low and ceremonial performance in innovation projects. These arguments however, should not be perceived as a rejection of process control mechanisms or conventional project management methods. In fact the paper questions only the emphasis on process measures and other conventional project management methods and proposes that these should be improved by embedding systemic constructs (equifinality and causal connectedness). The subjects in the projects expressed exactly that: not the absence of rigorous control but the complementarity of control with instruments that will provide more flexibility, is required in modern innovation project management. Theories from other project fields like construction and IT have recognised these and have initiated their own efforts to discover ways to make their projects more flexible. Why doesn't this happen in the management of innovation projects? Efforts for exploring more flexible ways of managing innovation projects are marginal and are not widely reported or supported for experimentation and discussion. It is evident, therefore, that a balance should be struck between process output and performance outcome measures in management philosophies. It would help if further research was

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conducted into different types of projects to see different variations of the applications of systems thinking constructs. Further research is also needed to identify the applicability and suitability of different systemic constructs in various innovation environments. Therefore, this study targets a weakness in conventional project management methodologies, which are designed to make the processes of a project predictable enough to be managed, but are unable to encapsulate ways to manage the evolutionary nature of processes in innovation projects (Shenhar and Dvir, 2007; Cicmil, 2006; Sderlund, 2004). The findings of our study refute the argument that publicly funded innovation deployment projects need only careful process control over activities, a formalized communication process, a clearly defined project protocol and detailed business and risk planning (McNally et al., 2010; Salomo et al., 2007). We make a distinct contribution to innovation project management Davis, 2007; Shenhar et al., 2002) by providing a clear indication of which areas of project management should use specific systems thinking constructs, which will lead to more successful practice.

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