Drivers of Innovation in Megaprojects: the Role of Complexity
Nominated for The Neil Mansfield Award
Chantal Cantarelli, Sheffield University Management School
This paper investigates how innovation takes place in megaprojects and influences project performance. Furthermore, we examine the role of complexity as a driver of innovation.
Background and purpose
Innovation is widely regarded as being critical for organisations’ competitive advantage (Dodgson et al., 2008), however, in megaprojects innovations have not been widely adopted. Some of the inherent features of megaprojects impede their ability to be innovative, including project size, risks and uncertainties (Van Marrewijk et al., 2008). However, at the same time the sheer complexity of megaprojects sometimes provides opportunities for innovation, indeed project complexity turns out to be one of the main reasons for innovations in megaprojects (Ozorhon and Oral, 2017).
So far, the literature on innovation in megaprojects has mainly focused on managing risk and uncertainty, learning from other practices, or the impact on institutional structures (Davies et al, 2014). There is a lack of literature about how innovation comes about. Moreover, few studies have investigated the impact of innovation on the overall project performance (Bosch-Rekveldt et al., 2011; Davies et al., 2009; Lessard et al., 2014).
The purpose of this paper is two-fold: investigate how innovation takes place in megaprojects and influences project performance and examine the role of complexity as a driver of innovation.
The objectives are achieved through a systematic literature review combined with case study analysis. The systematic literature review aims to reveal different types of innovation and the factors that facilitate these innovations. In the case study analyses we will analyse these different innovation aspects for two megaprojects. Furthermore, we analyse how innovation in megaprojects is the result of project complexity and how innovations influenced the overall performance. The case study approach is based on documentation research and governmental reports.
The systematic literature review revealed five main aspects of innovation in megaprojects, i.e. technological, governance and organisational types of innovation, as well as the innovation process and capabilities.
We examined the relation between these five innovation aspects and different complexity dimensions (Chapman, 2016) for two high-speed railway megaprojects, TGV Méditerranée (TGV Med) and HSL-South. The TGV Med mainly features governance and organisational innovations (e.g. on-site project manager) whereas the HSL-South features mainly technological (construction method) and governance innovations (contracting). In both cases delivery and context complexity played a predominant role in driving these innovations. The cases show that a specific complexity dimension can act as a driver for different types of innovations. In addition, interdependencies between complexities as well as between innovation types were revealed. Decisions on the adoption of innovations should not only consider the level and diversity of the project complexity but also assess the innovation capabilities, whether they are adequate or can be acquired. We showed that in addition to planned innovations, megaprojects are adaptive to innovation initiatives as a response to the challenges encountered during the project life cycle. The impact of the innovations on the project performance of the cases studies was negative in the sense that they resulted in cost increases and schedule delays. However, they also contributed to conflict resolution and improved decision-making of future megaprojects.
This paper shows that megaprojects have the capability to innovate with various levels of complexity. For innovations to be more widely adopted in megaprojects, decisions may need to go beyond efficiency considerations and take a more strategic performance perspective.
Association for European Transport