Abstract. In certain products, such as aircraft or ships, innovation is not always easily recognizable. Major developments in components and systems can be overshadowed by the total product. Innovation is spread over many different items and timescales. The article describes an approach where innovatory activity in shipbuilding is planned and carried out by those involved in design production in several departments, rather than confined to a separate R&D department. The aims, organization, and procedures are described, including the process of project evaluation. The article concludes with a review of project success rate, and draws conclusions particularly about the key roles of marketing and individual performance.