A MODEL TO ASSESS THE IMPACT OF INNOVATION ACTIVITY …

A MODEL TO ASSESS THE IMPACT OF INNOVATION ACTIVITY ON PROJECT PERFORMANCE IN CONSULTING ENGINEERING FIRMS

Daniyal Mian Master of Engineering Management & BSc Electrical

Engineering (with Hons)

Principal Supervisor Professor Stephen Kajewski Head of School, Civil Engineering and Built Environment (CEBE) School,

QUT Associate Supervisor Dr Vaughan Coffey Lecturer, Civil Engineering and Built Environment (CEBE) School, QUT

Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy

Civil Engineering & Built Environment School Science & Engineering Faculty, Queensland University of Technology

2015

Keywords

Keywords: innovation, project performance, knowledge-based firm, measures consulting engineering firms, innovation activities, impact, Global Financial Crisis (GFC), Delphi study.

A model to assess the impact of innovation activity on project performance in consulting engineering firms

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Abstract

Innovation in most knowledge-based firms, especially in consulting engineering firms, is used on an adhoc basis by senior managers to leverage competitive edge without understanding the concept and how it is applied to organisations.

Although the body of literature on innovation is extensive, to gain a greater understanding of it in the service sector, more empirical research needs to be undertaken (Oke, 2002). In spite of the availability of 25 years of innovation literature, the service sector, especially consulting engineering firms, have received minimal attention from academics or practitioners. Hayes (2005) also points out that there is a lack of holistic studies on innovation and creativity in the consulting engineering context. Hayes attributes this to engineers being too focussed on design detail and being dull and unimaginative. This has also been identified by a number of researchers in the past. It is also important to mention the research from projectbased firms in this context. Keegan and Turner (2002) note that there is scarcity of innovation in project-based firms. They have pointed out the reluctance of managers to develop innovations within business projects. A holistic consideration of innovation and associated activities are still very new to consulting engineering firms, where human resources (full time and part time employees) are of utmost importance as they represent knowledge. These firms use knowledge to gain a competitive edge. Furthermore, most of the researchers (Fagerberg, 2008; Chow, 2007; Davila et al 2006) have concentrated on organisation performance whereas projects are microcosms of an organisation and in most cases seen as contributing significantly to an organisation's performance. The main focus of this research is the interrelationship between innovation activities and project performance. Consult Australia (2014) identifies some of the impacts of the current market downturn which in turn emphasises the need for consulting firms to invest in innovation. In response to the above needs, the aim of this research is to develop a model that uses a structured and systematic approach to assess the impact of innovation activity on project performance for consulting engineering firms.

ii A model to assess the impact of innovation activity on project performance in consulting engineering firms

A comprehensive literature review is carried out beginning with Schumpeter's work on innovation and entrepreneurship and concludes with a review of innovative ideas developed from the current body of literature. Innovation activities that impact project successes were identified from the literature review. It was established that innovation activity is a function of a number of themes each of which in turn comprises a number of sub-activities or independent variables. Project success factors were also identified from the literature. It was identified that project success is a function of subjective and objective measures. This review assisted in exploring, establishing an understanding and answering a number of research questions. The review guided by the questions became the basis of establishing the proposition. A conceptual model interlinking the above variables was developed and mainly based on the rationale provided by the literature review. However, in order to make the model represent the reality it was further augmented by feedback from industry experts directly or indirectly associated with consulting engineering firms. A Delphi study was undertaken to validate the model. The study comprised of three rounds and helped test the proposition. It was established that Innovation activity in consulting engineering firms is a function of R&D activities, staff related activities, communication activities on projects, introducing innovative systems, and client related activities. Each of these are in turn are spilt into sub ? activities. It was also shown that these activities have a direct positive impact on project performance. The relative impact was based on the rankings of the prioritised model. A final feedback and workshop was held with the experts to present and discuss the results from the previous Delphi iterations. There was no additional information or contrary opinion forthcoming from this feedback session and the findings from the Delphi process were confirmed.

This research will benefit both industry and academia. The final prioritised decision making innovation model can be used by consulting engineering firms to make an informed decision in investing in appropriate innovation activities that positively impact project performance. This will help in using an informed approach towards investing rather than a `hit-and-miss' trialling. The application of innovation to consulting engineering is still under researched. The intellectual property produced by this research will also help in it being used as lessons learnt by other researchers to expand the subject matter to other domains. It can be used to inform future

A model to assess the impact of innovation activity on project performance in consulting engineering firms iii

research and academic learning and teaching programs. This research will also be an important benchmark extended to Queensland Government departments to inform some of their policy, procurement and delivery models where the focus on prioritisation in innovation is growing.

Statement of Original Authorship

The work contained in this thesis has not been previously submitted to meet requirements for an award at this or any other higher education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made.

Signature:

QUT Verified Signature

Date:

October 2015

iv A model to assess the impact of innovation activity on project performance in consulting engineering firms

Acknowledgements

A special thank you to my supervisors Stephen Kajewski and Vaughan Coffey for their constant encouragement, mentorship and giving me the final push to complete this long and hard journey. Their feedback has been important in improving the quality of this thesis.

Also, another special thank you to my wife Laila, son Abdullah and daughter Zarmina. They supported me throughout and gave me the motivation to keep going. Without their support, I would not have been able to complete the thesis.

Finally, I will also like to dedicate this study to my father (late) and mother who have worked hard to raise and educate me which helped me to prosper well in my life. My father would have been proud to see me complete this thesis.

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Table of Contents

KEYWORDS ............................................................................................................................. I

ABSTRACT .............................................................................................................................. II

STATEMENT OF ORIGINAL AUTHORSHIP .........................................................................IV

ACKNOWLEDGEMENTS ........................................................................................................V

TABLE OF CONTENTS..........................................................................................................VI

TABLE OF FIGURES............................................................................................................VIII

LIST OF TABLES ...................................................................................................................IX

CHAPTER 1:

INTRODUCTION ............................................................................. 1

1.1

Research Aims and Objectives3

1.2

Significance of This Research 4

1.3

Research Problem 6

1.4

Relationship to Other Projects 9

1.5

Research Approach 9

1.6

Limitations 10

CHAPTER 2:

LITERATURE REVIEW ................................................................ 12

2.1

Innovation - A Changing Debate and Changing Solutions

12

2.2

Innovation in Knowledge-based & Consulting Engineering Firms

15

2.3

Innovation Activities 30

2.4

Performance Measures

39

2.4.1 Subjective Measures 45

2.4.2 Objective Measures

45

2.5

Rational for Developing a Model

45

2.6

Development of A Conceptual Model 53

CHAPTER 3:

RESEARCH METHODOLOGY .................................................... 59

3.1

Mixed Methods

59

3.2

Brief Review of Methodologies 60

3.2.1 3.2.2 3.2.3

Surveys 60 Grounded Theory (GT) 61 Delphi Study 62

3.3

Research Plan

66

3.3.1 Literature Review-Developing the research model 67 3.3.2 Validation of the Model using a Delphi process 67 3.3.3 Check the Robustness of the Results 68 3.3.4 Conclusions/Recommendations for Further Research 68

3.4

Comparisons of Strengths and Weaknesses of Delphi 69

3.5

Why Use Delphi for this Study?

73

3.6

Administer the Delphi Process 78

CHAPTER 4:

VALIDATION OF THE MODEL .................................................... 80

4.1

Stage 1- Questionnaire Design81

4.1.1 Pilot Study to Develop Questionnaires 81

vi A model to assess the impact of innovation activity on project performance in consulting engineering firms

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