Overview
A company must excel in two seemingly parallel ways to become a leader in global markets with innovative product differentiations. First, the company should constantly build and refresh its market segments with innovative and differentiated products, so that it grows with the critical capabilities needed to stay ahead. Second, they should proceed systematically in planning and implementing business projects, integrating the internal and external factors to work together in an ever-changing competitive environment. Most companies have recognized that cross-functional process of implementing business projects builds functional excellence. This chapter addresses the factors of internal and external environment that drive the project implementation process in different business situations. In continuation to the discussion on project environmental factors, this chapter also discusses project matrix and project lifecycle. Innovative business projects are the juncture where functional groups work together within the organization’s integrated abilities. Resource planning, financial evaluations, and managerial training to carry on the projects, which strengthen the project relationship among functions, have been discussed in this chapter.
Project Administration
Innovation business projects are largely influenced by the project environment built over various internal and external factors, and project life-cycle. The internal environment of an innovation project is architected by the organizational culture, resources, and risk management abilities, while the external environment is governed by market and collaborative moves on managing innovative projects. Innovation-led business projects can operate successfully, when project teams stay streamlined with the organizational culture and are empowered for decision making, exercising autonomy for project operations. Such supremacy to the innovation project teams would help them resolve many problems during the project management process. Commitment of employees and members of the project team is very closely allied with empowerment. The organizational culture generally resists any changes in the project goals, tasks, and techniques designed to accelerate the project implementation process, if thrusted on the project team either abruptly or in a transparent transitional manner. The innovative projects are largely implemented in a controlled environment and are sensitive to the internal environment of the organization. The project teams develop confrontation if the top-down decision flow dominates the project task management environment by stipulating the messages like “carry on your task, the way we tell you.” Under such circumstances, members of the project teams feel little commitment, express change proneness, and feel less empowered in the organization (Argyris 1998).
Project management administration, techniques, team attributes, and organizational culture play key roles in building the project environment in a company. The project environment requisites in a company are often complex in reference to product development, making efficient use of resources, and stimulating cross-functional tasks and communication. The significance of innovative business projects today is not only limited to manufacturing firms, but has also made a significant dent in judiciary by way of digitization of proceedings, enterprise resource planning, health care sector companies, and local governments as an indispensable part of their operations. Such widespread acceptance of innovation in manufacturing and services industries has led to various challenges in managing innovation projects. However, such manifold growth of innovation project is not out of bounds of failures and outright disasters. Among various factors that contribute toward the failure of an innovation project include ignoring its environment, working in an unacceptable organizational culture, pushing a new technology to market immaturely, developing high expectations on the performance of team members, considering low priority on the project’s fallback options, and fixing loose accountability of project managers. The project environment demands to stay abreast with the project management performance management techniques by conducting feasibility studies, developing macro perspective of team management, and building strong leadership with strategic orientation and goal-oriented project planning (Pinto and Kharbanda 1996).
Internal and External Fit
As the market competition is growing continuously in the global marketplace, innovation has become a survival instinct for companies, and they tend to invest perennially on the innovation and new product development projects to maintain competitive differentiation. In this process of innovation initiatives, the organizations often undergo many changes in workplace environment, cross-cultural conflicts, and decision-making issues due to the formation of new project teams and working with collaborative ventures. Hence, it is difficult for most companies to maintain the internal fit of innovation project teams with the organization, and they often suffer from conflicts in task management in reference to taking decision, monitoring the performance, and balancing the time and cost performance during the project. The internal environment of the project encompasses the following factors:
Team culture
Working relationships
Open communications
An environment of trust
Willingness to take risks
Recognition of efforts and achievements
Managing innovation projects is a not just driven through the power of leaders, but it needs a homogeneous team to carry out multilevel tasks. The project leaders should follow good recruitment practices for inducting members of the project teams, set achievable expectations, constantly monitor performance feedback, manage conflict, and determine critical success factors for building an efficient innovation project team. While companies recognize the critical value of a team to work on innovation projects, the importance of cultivating a cooperative mindset should be considered as a prime attribute to inculcate into the project teams (Gratton 2007). The working relationship at various hierarchical levels in the organization beyond the teams should be healthy to manage with bottom-up approach that allows listening, analyzing, and acting on the voices of the team members. Top-down decision approach for the working relationship is also considered to be fine, provided the innovation project teams are not clutched with bureaucratic administration. In developing a seemly project environment, flexibility in working relationships needs to be considered. Project teams often function in a matrix format, staffed by members taken from diverse functional teams in order to achieve the project goal. When the project manager exercises a high degree of authority, the team is known as a strong matrix, whereas the team is identified as a weak matrix when functional managers have stronger authority over the project leader. Some companies also believe in constituting the functional teams that are less autocratic. The attributes of functional and autonomous teams in managing innovative business projects are exhibited in Table 4.1.
A company periodically needs to evaluate its organizational environment, regardless of the competitive landscape of the company in the industry. Even if the external environment is not changing in ways that demand a response, companies need to maintain the internal environment that probably encourages the employees to work on innovation projects. The human dynamics within an organization are constantly shifting. The most growing challenge in an organization is managing change for assuring the internal fit. Over time, informal networks within the teams mirror the formal structure, which triggers the advantages of restructuring human resources to start a bottom-up democratic environment to carry out the innovation projects, making the organization more creative. Such internal fit in an organization collectively stifle innovation and adaptability processes and prepare the employees for the change management for designing, developing, and implementing the innovative business projects without personal or organizational conflicts (Vermeulen, Puranam, and Gulati 2010). The internal fit in an organization can be achieved by adhering to the following requirements:
Conveying clear goals and objectives to the employees
Transparency in the management process
Flow of communication within the organization with disruption in contents
Clear accountability of employees and project team
Systematic monitoring and evaluation
Follow a single reporting channel for measuring performance than allowing multiple authorities to supervise the performance of an employee
Following the core of ethics within the organizational policy
Allowing interpersonal communication with in the organization
Honoring the voice of employees on innovation, management, and operational processes
Embedding team culture and cooperation in managing tasks than creating the competitive environment by setting targets against the peers
Maintaining integrity and confidentiality of matters within employees to protect the competitiveness of the organization
Develop cooperation and trust in the organizational culture
Table 4.1 Attributes of functional and autonomous teams
Functional teams |
Autonomous teams |
|
|
There are four factors that make higher impact on the employee of an organization, including intangible job context, employee development and skill utilization, remuneration packages and workplace, culture and rewards (Qu, Ryan, and Chu 2001). Work ethics play a major role in developing organizational learning and integrating the learning process with work culture to strategically fit into the organizational design and structure. Although improved compliance procedures can help limit this risk, successful efforts must extend beyond compliance to build a culture of organizational integrity. Recent changes in regulatory requirements in financial institutions and more guidelines on monitoring and performance evaluation demand an integrated approach to cultural awareness through the four organizational practices of controls, clearly defined principles and purpose, core values, and ethics. Inevitably, the most difficult of these is building a culture of high ethical standards that are reflected in day-to-day practice (Kayes, Stirling, and Nielsen 2007).
Organizational learning is a continuous process, and it involves employees at all levels of management in sharing knowledge and innovative insights, which supports the business growth of the firm. The learning process is generally embedded in the organizational culture that drives employees to invest resources in creative thinking. The organizational culture comprising the task, thrust, time, target, and territory of work stimulates the learning process. Alike diffusing knowledge with the employees, often organizations learn innovative ideas by committing trials and errors within the organization. Another behavioral dimension that appears to be critical in determining the employer and employee relationship is the opportunity of unlearning knowledge and skills of the employees. Often firms succeed in convincing highly talented candidates to accept lower positions, assuring that they will be promoted to the position that has a close match with their qualification and experience, but employees under such situations succumb to frustration as they do not find an appropriate platform to share their knowledge and implement skills.
Driving forced internal fit in an organization through managerial control would lead employees of the firm to develop resistance and defeat the objective of the firm to commonly acquire contemporary skills, design thinking, and develop innovative strategies. It may be appropriate for the emerging firms to consider a review of integrated learning designs for improving the unit effectiveness. Learning environment in an enterprise is largely governed by the organizational culture, which is affected directly and indirectly by the employee relationship and their behavioral performance (Rajagopal and Rajagopal 2008). The level of diffusion of knowledge in the organization largely depends on the learning design comprising individual, peer, and subject-oriented or interdisciplinary patterns. Learning and application of knowledge in an organization is often motivated by reward systems orchestrated to generate the desired synergy in reference to its contents and use value. In a global marketplace, which is perpetually changing, the learning organizations must support the idea that diffusion and adaptation of innovative ideas, managerial know-how, and business strategy are continuous processes. However, a number of traditional organizations tend to discourage such knowledge process by limiting the financial and human resources. Thus, emerging enterprises should rethink on choosing the most appropriate learning design for the organization in reference to managing information acquisition and diffusion processes, and break the conventional knowledge barriers in organizational learning. There are various knowledge-based perspectives that affect the internal fit of the employees in a company toward innovations and diffusion, discussed as follows:
Inadequate information on innovation, research and development, and design
Lack of qualified personnel within the enterprise or in the labor market
Lack of information on technology and markets
Deficiencies in the availability of external services
Difficulty in finding co-operation partners for innovative products, process development, and strategic business alliances
Organizational rigidities within the enterprise like attitude of personnel or managers toward change and managerial structure of enterprise
Inability to devote staff to innovation activity due to production requirements
A major setback in achieving the internal fit in a company is the cry over random budgetary allocation for the projects and tasks that demoralize the employee expectations with the high-value projects involving time-bound innovation and commercialization. When teams head up a big innovation project, they need to uphold the motivation of their team members and avoid either squandering or limiting the use of available capital. It is important to create and manage the innovative project complying to the mission and implement a truly energizing work environment that establishes a right internal fit for the teams to work. The only way to get the best internal fit for innovation project teams is acceptable work environment, admissible autonomy, availability of resources, output-oriented monitoring, fair evaluation, great design, and innovative features that match with the business goals of the company to achieve the desired performance. Hence, rolling back to the first step to get the best internal fit, it is necessary to assemble the right team, and then staying involved, responding to hard questions about organizational culture and workplace environment. Innovation-led organizations should articulate a vision for future work space and drive the search for ways to realize this vision matches the new innovative business projects with the market behavior (Thurm 2005).
Knowledge management involves many procedures and techniques used to get the most from an organization’s explicit and tacit know-how. Sharing knowledge without personal bias among peers or employees within the organization is the most important critical success factor of all knowledge management strategies. Effective knowledge sharing practices allow individuals to reuse and regenerate knowledge at the individual and organizational level (Chaudhry 2005). However, most enterprises observe individual and organizational barriers in knowledge sharing that include internal resistance, trust, motivation, and inadequate awareness. Learning organizations require a change in focus from a technology-driven approach to a people-driven approach to improve knowledge management. With the evolution of technology, the paradigm of knowledge management is shifting from a conventional approach to an analytical approach as a conversational medium by combining formal and informal knowledge within a social context (Hong, Suh, and Koo 2011).
To be a leader in global innovation, a company must excel in two seemingly contradictory ways. Firstly, it must constantly build and refresh its individual areas of expertise from the point of commercialization of innovation, so that it attains the critical capabilities needed to stay ahead, and secondly, it must be a perfect internal fit within various disciplines and project teams to work together to meet the required output for a competitive marketplace. Most companies have reorganized themselves by cross-functional processes, have already discovered the ways who integrate various disciplines and still maintain the core functional excellence. However, innovative projects often reach the critical juncture where functional groups have to make compromise with the organization’s integrative abilities that affect the quality of output and commercialization process to build the brands of new innovative products in the market. The internal fit in an innovation organization is used as a tool for strengthening the relationship among functions and develop expertise in the specific field to build the market leadership and gain competitiveness in the marketplace (Leonard-Barton et al. 1994).
External Fit
Forward linkages to innovative business projects comprising technology alliances, supply chain, marketing, branding, services management, and customer relations that are managed by the entities outside the principal organization constitute the external fit. Outsourcing of task to be supplemented for carrying out the tasks in an innovation project has emerged as most cost-effective and functionally efficient trend among the companies today. The relationship with outsourced agencies and alliances with other companies appear to be the major challenges for the innovation companies. The start-up enterprises (SUEs) are largely involved in sprouting new ideas and bringing out the prototypes with testing in the niche markets, attracting sponsors for global commercialization. Hence, most large companies operating in the regional or global markets tend to outsource the innovation and new product development process to the SUEs. For instance, VanceInfo and Microsoft had been engaged in a long-term client or vendor relationship since 1997, and the project had been the result of this long-term partnership arrangement. The project was deemed quite successful and innovative as it provided an opportunity to determine how collaborative innovation could work between two remote and culturally different supply chain partners (Abbott, Zheng, and Du 2013).
Innovation and enterprise integration are two compelling sources of growth in a dynamic competitive marketplace. The ability to coordinate across organizational boundaries largely appears as a critical factor in determining the speed and lifecycle of a market-driven innovation. Innovations need to be integrated into the larger operations of the corporation at sufficient level of scale to show a prolific impact on business and sustainability in the marketplace. Many large businesses spend resources on innovations, but fail to capitalize on them. However, some organizations use innovations to optimize local operations than integrating them to create consumer value and corporate image. Large organizations spread the innovation tasks among two groups comprising innovation facilities group (IFG) and an innovation assimilation group. The IFG members provide organizational support on the techniques to carry out innovations and applications for the new technology. Firms also engage the IFG to explore new developments in the marketplace on the concept, prototypes, or breakthrough of the innovation and impart expert services for in-house initiatives to nurture the innovation within the organization. The innovation assimilation group acts as policy support unit to drive innovation to market. The members of this team provide resources to launch innovation, and integrate operations into the business model of the firm. Firms need the aforementioned support teams to diffuse innovation and make it more (Cash, Earl, and Morison 2008).
Companies outsourcing the innovation process need to develop a conducive work environment by synchronizing the external fit with the outsources organizations like SUEs through the following steps:
Defining mutually fit objectives
Collaborating in management of resources and inputs required for the innovation projects
Co-creating innovation infrastructure
Revising the backward linkages and developing internal fit within the organization to coordinate with the outsourced enterprises
Executing innovation process in a task-by-task manner with the outsourced enterprise
Monitoring progress categorically
Monitoring, evaluation, and administering checks and balances on innovation project
Developing a business plan and working with the market players supporting the commercialization of innovation
Launching the innovated product, offering customer services, and delivering value to stakeholders.
Firms must ensure that all innovations should encompass attributes of four As comprising awareness, acceptability, availability, and affordability to diffuse innovation in the overall market. The attributes of internal and external fit within and outside organization for planning and implementation of innovation projects is exhibited in Figure 4.1.
The ease of internal and external fitness for carrying out innovation projects largely depends on the organizational design and decision systems such as vertical (top-down) or horizontal (team or bottom-up), as illustrated in the Figure 4.1. The information and business analytics helps companies to make appropriate decisions toward achieving internal and external fit required for not only managing the innovation projects efficiently, but also to plan commercialization of new products by developing forward linkages with the suppliers, retailers, service providers, and customer relations management. Companies managing innovations as a continuous process to establish competitiveness and brand loyalty of new products should develop strategic vision also to counter the risk and uncertainties in the product development as well as in the commercialization processes. Unforeseen uncertainty and chaos in the innovation companies are common, and companies need to strike a balance between planning and continuous learning. Companies must learn to ascertain what kind of uncertainty is likely to dominate a project by following the most suitable mix of project tools and techniques to work with the innovation projects (de Meyer, Loch, and Pich 2002). The factors influencing the external fit of a company include the following attributes:
Market demand
Capabilities and competencies of innovation sponsors
Technological advancement
Government norms and standard
Political, economic, social, technological, and legal factors
Understanding consumers and consumerism
Figure 4.1 Analyzing organizational environment for managing external and internal fit
The innovation assimilation group should help in developing the task-map for the innovation team and integrate the process map by identifying the goal from the perspectives of consumers. By mapping out every step of the innovation task, companies can effectively manage the innovation process (Bettencourt and Ulwick 2008). A firm that simultaneously engages a high degree of both innovation quality and operational efficiency gains higher competitive advantage in the market in reference to the prescribed and perceived quality on the innovation. Few firms are able to balance innovation quality and operational efficiency. Such management skills are referred as ambidextrous strategy, which differentiates firms and their products from the competing products and help them enjoy temporary monopoly in the market (Sarkees and Hulland 2008).
Unless an enterprise generates information on business environment and diffuses it efficiently throughout its organizational network among the employees and members of the innovation team, it could well play with market uncertainties and secure the market for the near future. Many companies rely on an information technology and knowledge management infrastructure with the social system in which people operate the sociocommercial ecology of innovative products of a company. Socio-commercial ecology drives people’s expectations, defines consumption approaches, guides perceptions on innovations, demand pricing and promotion strategies from the company, identifies the right consumer segments that will fit in the commercialization of innovations, and determines consumer interactions on the new innovative products through various networks. Through effective management of knowledge, Nucor developed and constantly upgraded its main strategic and proprietary competencies: plant construction and start-up know-how, manufacturing process expertise, and the ability to adopt breakthrough technologies earlier than competitors. Nucor’s sociocommercial ecology also allowed, among other things, excellence in the tasks associated with sharing and mobilizing knowledge by identifying opportunities to share knowledge, building effective and efficient transmission channels, and convincing individuals to accept and use the innovation and change-driven products (Gupta and Govindarajan 2000).
Transfer of Innovation and Technology
Most innovative products that are launched in the market soon attract competition and face the challenge of substitution, while some products compete with low-end and disruptive technology products. In both situations, innovative products struggle for their existence in the market and attempt to fit into the consumer perceptions positively. Yet most organizations naturally resist change and pull out from investing in brand building and communication to support the survival of innovative products. Most resourceful companies hold change to innovate and succeed by meticulously distinguishing between their core and context activities and integrating the right innovation model to their business strategy.
Transforming markets for adapting product and services innovations is a big challenge for most companies engaged in doing business in consumer products. Innovative products need to be transformed to the perceived suitability of consumers for optimal use by way of total customization. Most innovative products have the limitation for 360° transformations due to the standardized functionality and built-in structural restrictions. Driving change in the marketplace demand and consumer behavior has traditionally come through top-down initiatives such as corporate endorsements toward manufacturing design, quality, technology, and innovation for new products experts and developing marketing best practices to inculcate perceived changes in consumer behavior. Critical innovations in consumer products like light emitting diode (LED) screens and lighting devices transformed consumer behavior and market demand to get more value at less price. Transforming buying behavior for such innovations is relatively easy than educating consumers toward the use of innovation in educational products and services. But within every organization, there are a few product innovations that encounter unique marketing problems that seem impossible to solve. Although these change-agent products in a company roll out in the market with effective communication tools to drive awareness, attractiveness, trial, availability, and repeat buying stimulus, they often fail to gain consumer confidence in usability and so fail to generate the desired response in the market. Companies can develop innovation launch and transformation to consumer need strategies considering the following attributes:
Co-create community orientation and engage the process of self-appraisal of innovative products and services in terms of competitive benefits and value for money
Reframe innovation through facts and prepare for innovation transformation according to the customer needs and market demand
Entail marketing of innovative products in the existing channel network and allow direct marketing to create customer value
Make innovation safe to learn among consumers and market players by creating an environment that builds constructive opinions
Grow communication grapevine through the digital networks and physical community infrastructure on the innovations and competitive advantages
Make the innovations as problem solver and drive it in the market as a key to the community satisfaction
Leverage social evidences for the innovation considering its applications to the larger community-led consumer awareness like ecofriendly detergents that minimize cesspool and soil pollution
Build immunity to innovations in the market against disruptions and misevaluations that could build low trust and commitment among the consumers and market players
Companies should ensure that throughout following the aforementioned steps, they must adopt a facilitator’s role without overpowering the consumers or raising conflicts with the competitors. Such corporate attitude may cause damage to the brand image of the company. The customer-centric innovation transformation methodology can help solve even the most extreme dilemmas on innovation acceptability in the market and its socialization for sustained growth (Pascale and Sternin 2005). Companies that organize their innovation transformation efforts in systematic, well-managed ways are those whose efforts will be rewarded in terms of high rate of acceptance among consumers, distribution harmony, and retailing diligence. The systematic model of innovation management of companies should link to strategy, problem solving, and cultural change, and tailored to the needs consumers.
Cultivating continual innovation and creating new business models have become essential success parameters for any business. Vertical and horizontal integrations are imperative to the success of a corporation, resulting in models that provide tremendous business opportunities. This approach also brings great execution challenges. In addition to creating innovation through internal research and development, two significant areas where enterprises constantly strive to create innovative capabilities are mergers and acquisitions and partner strategies. Innovation and new business models can be successfully enabled through connecting specific products and solutions. A robust network foundation is essential for building higher level infrastructure services. This foundation includes intelligent network capabilities at the different network locations, including branch offices and campuses, external connectivity, and home and partner environments. A converged network infrastructure can result in major savings when collaboration and video are enabled along with the right productivity solutions, for instance, through the use of unified communications and collaboration technologies, immersive video, and video phones. A key technical requirement to scale business models is faster service provisioning. Through the use of a private cloud and intelligent automation solutions, corporations can reduce the time taken to provision a new service. Embracing virtual desktop technologies can also result in considerable advantages.
Innovation is broadly considered as an intellectual accomplishment at the grassroots of humanity, but commercializing it is a business skill compounded with capabilities, competencies, and resources of the organizations. Thus, most business innovations are either developed by entrepreneurs or small and medium enterprises, but they lead to mergers or acquisition with a larger business organization to gain enough resources to grow in the marketplace. Most of the innovations driving potential businesses are acquired by the large companies and carried forward to develop commercially and position them sustainably in the marketplace. For example, in small information technology companies, young software developers have worked on developing the interactive shopper software to support the consumers on selecting clothing and dresses that are suitable to their appearance and taste online. This software was later made available for personal computers, local area networks, Android phones, and many more devices. The virtual dressing room can be installed in any place that has electricity and broadband Internet access, and the developers hope to eventually see the unit installed in areas like train stations and airport terminals. The technology, called tryvertising, is already popular in Japan, where some of the early trials have taken place. The system works by using a Kinect sensor along with a 60-inch LCD display and an iPad. It is able to respond instantly to the user’s movements as they try on the clothing, and the developers claim that the system can even provide a virtual experience of the clothing’s texture. Once an item has been selected, the shopper can use a printed QR code to access the item at the online store and complete the purchase. Mergers and acquisitions for product and service innovations require a combination of solutions that work to seamlessly integrate the marketing-mix, and this process also brings challenges related to varied information and technology-related market environments. Most companies struggle with the process of integrating the physical and intellectual capital of a new acquisition into the parent environment.
Innovations of some small companies that emerge in a niche are able to radically change their entrenched ways of serving the large markets and claim leading transformation in the market. Even less common are companies that are able to anticipate a new set of requirements and mobilize the internal and external resources necessary to meet the innovation transformation process. Few companies make the transformation from their market-oriented business innovation model to a customer-centric innovation management model, which delivers the innovation to the consumers in a sustainable way with high level of satisfaction. Innovation transformation typically begins at the niche market, searching a way forward to create a new consumer segment to sustain by developing a temporary monopoly situation. This seeks the following clarifications for companies to manage the transformation of innovation of products and services from premium consumer segment to mass segment and finally down to the bottom of the pyramid:
Is differentiating innovations by the consumer or market segment a prolific strategy?
Do companies really need to develop differentiated marketing strategy to transform innovations and galvanize change?
How could it be possible for the companies to adopt new ways of managing transformed innovation in view of the preferences of consumers under market pressure?
Most companies develop new dynamic capabilities deliberately to manage the innovation transformation and market management process. Companies that transform the innovations to the consumer preferences gain fundamental advantages over the competitors toward building marketing alliances of branding and distribution, creating experiential marketing challenging in business against conventionally operating competitors, and nurturing strategic changes in consumer behavior (Johnson, Yip, and Hensmans 2012).
Project Matrix
The innovation projects have to be monitored and evaluated, implemented based on various cross-sectional factors that directly or indirectly affect the project performance. These factors are largely common for innovation projects, but may vary for specific projects under external business environment factors. A project management model integrates the project matrix, which shows the cause and effect and the inter-relationship among the key operational factors affecting the outcome of innovation projects. The project matrix should be constructed as a visual map of the task, time, cost, and outcome expectations during the phases of the innovation project. The project matrix is an integrating tool that provides a single design for organizing the goals, developing related tasks, and reviewing the diverse aspects of the innovation project:
The work breakdown explaining the small tasks groups spread over the divided timeframe of the project for easy stage (phase)-gate (review) process,
Preparing the documents of deliverables in reference to documents, drawings, listings, and so on
The task management in reference to cost-time-risk triadic critical variables in an innovation project
Developing the project charter by delineating the accountability of people to tasks, goals, objectives, deliverables, and the quantity and types of skills required to complete the project
The project’s engineering standards, design, and operational modalities and project methodology
The project matrix can be designed through the various project supporting software including Microsoft Project to delineate the effective coordination among people associated with innovation projects, managing the operations, reducing the complexity during the innovation process, and producing high-quality results. A sample of multiple-task matrix for innovation projects is illustrated in Table 4.2.
Companies engaged in managing innovation projects may structure the project matrix in reference to the basic project indicators during the initiation phase and later expand it with the advanced project management elements. The matrix should begin with project prologue, which should specify the mission, goals, and objectives of the project, and various functional elements like time, cost, resources, market demand, and business environment supporting the innovation-led products or services, as exhibited in Table 4.2. The project matrix helps the managers and project teams to determine the project requirement and work on designing in considering the vital indicators as discussed earlier. The business plan for an innovation project outcome should be evaluated in the project matrix in reference to CTR (cost, time, and risk) factors and its marketability. The project team should prepare the matrix by mentioning specific goals of the project and develop documents for the project, considering the monitoring CTR subsystem. Accordingly, the information should be collected and placed in the corresponding columns and rows of the matrix to serve as a guiding tool throughout the project duration. The project matrix and project subsystems are clearly defined into the sets of deliverables through various phases in the projects and are attended methodically to complete the task. The project manager should develop the matrix, which lays out the tasks in terms of the phase-wise outputs. Upon evaluation of the output in each phase, the project staff is required to produce intermediate deliverables for internal review or for external delivery to the client on demand. The project planning matrix (PPM) shows both the logical structure of the project that links between the inputs or activities and the objectives to be achieved under predetermined assumptions and the attributes that are critical to quality. The PPM is useful in the project planning process by advising the planner to constantly check whether the project design is plausible and consistent, and facilitating the communication among all members of the teams on the why’s and the how’s of the project, allowing project monitoring based on common understanding (Gottfredson and Aspinall 2005). The matrix structure of the project management has several benefits in delivering the quality output in reference to the following attributes:
Accountability
In a matrix organization, it is important to delineate the project management responsibilities and the functional management responsibilities.
Power equilibrium
When implementing a matrix organizational structure, the operating guidelines should be established to assure proper balance of power between project managers and functional managers.
Size of the teams
Project teams should be kept as small as possible throughout the project.
The innovation projects generally do not fail working on an innovation project through a well-set matrix base, but management needs to ensure implementing each scheduled task successfully. In managing an innovation project, strategy, structure, processes, rewards, and people all need to be aligned in a successful matrix implementation. There are many challenges in developing a right project matrix and implementing it within the project environment where accountability of project team members should be defined in reference to the following attributes:
Rationale—Project managers need to assure that the team members understand the context of all elements of the matrix and develop their attitude and behavior toward working with the project and preparing the right deliverables.
Cooperation—The project matrix is intended to improve cooperation among the cross-functional teams in managing the tasks, without encouraging bureaucracy, leading to slower decisions by involving too many.
Control—It is recommended to have autonomy among teams and control standards for checks and balances on managing tasks. Centralization of controls can make the matrix slow and expensive that may lead to cost and time overrun. The project managers should build trust in distributed and diverse teams and to empower people to work with their tasks.
Table 4.2 Multitask matrix for innovation projects
Mission goals objectives |
Human resources |
Capital cost interest and profit |
Time-phasing and extensions |
Technology-feasibility viability |
Marketing sales demand risk |
Market information and business analytics |
Next-generation innovation and growth |
|
Project prologue |
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Project requirements |
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Project design |
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External specifications |
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Project outcome |
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Prototype testing |
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Business plan and commercialization |
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Monitoring and evaluation |
The project matrix not only has a significant impact within the technical domain, but it also serves as a guiding tool for the sponsors and project administrators outside the project domain. The two project matrix can have many variables in rows and columns in odd or even format depending on the nature of the innovation project. The effect and value of the rows and columns address the robust weight and measure of the variables associated with the respective tasks to be performed across the predetermined stages of management of innovation projects. This is a divide and conquer approach, and the benefit is a reduction of complexity in the given CTR framework. The goal is to define a set of columns to place the factors of governing systems like human resources, CTR, deliverables, marketing, and so on, that are relatively dependent of one another. The tasks can, thus, be conducted in continuum, and a project model can be set up with specific criteria of success. In this process, it is suggested to develop a pilot model for testing and then build a detailed deliverables-based project model. Matrix and hybrid structures in project management are being opted by most organizations that intend to engage in bringing innovations to the market continuously. The major attributes of the matrix and hybrid product structure include:
Multiple projects are in progress at any given time
Projects vary in size and complexity
Hybrid structure—a mix of both the functional and autonomous project organizational structures
Provides for effective utilization of company resources
Employee assignments—full project time
Career development and growth
Have a dual reporting relationship with a (temporary) project manager and a (permanent) functional manager
Project manager is the intermediary between the company and the stakeholders
Checks and balances and fast response upon problem identification
The hybrid structure of project management is a combination of both models of functional and autonomous project management teams. Such blended constitution of project teams would allow the companies to host multiple innovation projects of varying size and complexity with long-term engagement of employees. The hybrid project teams would be able to make optimum use of organizational resources—both human and capital resources—and maintain required checks and balances during the project execution process. However, the hybrid project teams will work with dual reporting system with the leader of the functional unit as well as the project leader.
Administrative complexities play a significant role in explaining new technology drive. Process simplification, zero defect products, cost and profit, and overall governance of new products development have many odds to be either eliminated or managed within the organizational system. Most managers exert in never having considered setting up business, thinking about the odds and complexities or think about them during the process and give up the innovation process. Such behavior is also significantly affected by the perception of administrative complexity (van Stel and Stunnenberg 2006). Firms that are engaged in rapid development of new products find the gap between diffusion and adoption. It is expensive for companies to manage the overpiled inventory of obsolete products unless they can be improved and reverted to the active demand. Expensive downtime for production-line changeovers, and merchandise languishing on retailers’ shelves or in their showrooms also cause serious concerns to the firms engaged in developing new products. For service companies, though, complexity is much harder to spot and root out, largely due to the ease with which new products can be created and marketed (Gottfredson and Schwedel 2008).
Large organizations are complex by nature and face new business challenges, such as globalization, innovative technologies, and regulations over the period. Market uncertainties and competitive threats add layer upon layer of complexity to corporate structure and management. Technology marketing is complex, and most firms get trapped into the complexity grid; however, some get over the problems as they develop sustainability against uncertainties and work through the new challenges. The innovation marketing grid has several factors that pose conflicts and challenges to the innovation project management companies during different levels of the process. The complexity grid comprises 12 commonly observed points of conflicts, with independent effects of each point as well as their combined effect in a matrix form. The conflict points in the grid include ideation, resources management, process management, capabilities and competencies, technology marketing, growth and next-generation innovation and technology issues, involvement, organizational policies, operational efficiency, competitive decision, business environment, and organizational culture, all of which nurture the innovation and technology development projects in the firm. In the complexity grid ideation process and the extent of involvement of employees, consumers, and market players stage cognitive and organizational conflicts and challenges, while management of resources and organizational policies raise various challenging issues during different phases of innovation and technology development. Similarly, the process and operational efficiency commonly drive various issues of concern in reference to capabilities and competencies, and work culture of the organization. Firms face many conflicts during the innovation process on marketing of the technology-led products and the existing business environment. Moving the innovation and technology to next generation is also not an easy step-up as firms often get snared in the unwise competitive decisions in an effort to push the innovation and technology-led products in the marketplace (Rajagopal 2014).
Large firms have been the driving force behind the market economies in the developed countries. Traditional theories suggest that new products that are not consistent with the existing demand retard economic growth, whereas classical theories suggest that serving products to the existing market demand is safer than creating demand in the market to position the products. However, the global competition and changing consumer behavior on experimenting new products have raised new theoretical concepts on the relationship of launching new products with the market demand. Large firms are engaged in continuously developing new products and could benefit, in contrast to small firms, from economies of scale and scope. Many economists believed that larger firms would lead to more economic growth and that the share of small firms eventually would disappear or reduce to only a small fraction. Globalization has induced extensive cross-culture working ambience and driven most firms to multidimensional manufacturing and marketing operations to sustain in the competition marketplace. Hence, most firms have become increasingly complex and ungovernable, causing decline in performance, unclear accountability, and opaque decision process that raise questions on the sustainability of the firm. To avoid frustration and inefficiency, executives need to systematically address the causes of complexity using a simplicity-minded strategy in their companies by streamlining the structure, pruning nonresponding products before introducing new products to create space, building disciplined processes, and improving managerial behavior (Ashkenas 2007).
Project Lifecycle
Project lifecycle is different from the normal lifecycle of products or services as the project team faces various challenges during the process of taking the project through the stages of its lifecycle from initiation to the last stage of closing the project with profitability, market share, and consumer loyalty. Most projects encounter the market risk and uncertainty at the stage of near completion of the project, and if the project team is unable to fix these issues, it plunges in failure, creates enormous sunk cost, and thrusts on the project team to terminate it with several prejudice in an unhealthy manner. The stages of project lifecycle and their attributes are exhibited in Figure 4.2.
The classical project lifecycle has four standard stages beginning from initiation, moving to planning, then toward implementation, and finally closing, as illustrated in Figure 4.2. Project managers face conflicts of ideation, team building, resources mapping, and exploring potential for commercialization in the “initiation” stage. They appear to be lower in intensity than the “implementation” stage of the project lifecycle. At this stage, project teams undergo the major challenge of preparing work breakdown structure, making budgetary allocations, and developing contingency plan. In the “implementation” stage of innovation project, the outcomes are ready to commercialize. During the implementation stage, the major challenges with the project teams commonly emerge toward managing market mismatch with the project outcome, reducing cost and time overrun, and reorienting the innovative product to consumer preferences. The last stage of project lifecycle is closing the project with projected profitability and market share. If the project outcome is successful, companies generally start a new project of the next-generation innovation and set the new lifecycle. Contrary to this, as the project outcomes are rejected in their commercialization endeavor, they turn to fail and cause large volume of sunk cost. However, these stages are being altered time and again in the contemporary times by the market interventions and exhibit attributes other than the stages of classical project lifecycle (Westland 2006). The SUEs gather information, do crowdsourcing, develop concept, workout prototype, and test the market in the sage of “initiation” and later sell the innovation prototype and process to the large companies that intend to take up the project to the rest of the three stages.
Figure 4.2 Stages, attributes, and challenges in project lifecycle
For example, Sasken, a communication software company based in India, which provides research and development support to leading wireless device vendors from its offshore workstations in India, is engaged in continuous innovation and project development projects. Over the years, working with various innovation projects, the company has come across a number of challenges in developing an advanced multimedia player for high-end mobile handsets for the Japanese market. The project teams faced varied challenges in managing the innovation projects for different geo-demographic and market environment. The Japanese market is one of the most advanced in the mobile services it offers, and is well-ahead of the rest of the world in terms of handset functions and features. Project teams often face difficulties in managing deliverables to the clients and provide services from remote innovation centers. The Sasken project team faced a number of challenges in building a technology-intensive product according to its client’s specific requirements from its offshore workstation to meet the client expectations and norms in reference to quality, completeness of the product, and timeliness of delivery. The project team also had to cope with unavailability of tools and platforms, with communication and co-ordination challenges, and with cultural differences that were typical of offshore product development (Sridhar and Vadivelu 2011).
The project manager and project team move with one shared goal in managing the project. Commonly, the projects have a linear path consisting of a beginning, a middle period during which activities move the project toward completion, and an ending with either successful or unsuccessful outcome. The project lifecycle refers to a series of activities, which are necessary to fulfill project goals or objectives. Projects vary in size and complexity, but no matter how large or small, all projects can be mapped to the following lifecycle structure:
Starting the project
Organizing and preparing
Carrying out project work
Closing the project
In the planning phase, the project is developed with comprehensive action points and maps in reference to meet the project’s objective. The phases in the project planning process and their attributes are as listed as follows:
In first phase, the team identifies task and time matrix to carry out the planned tasks. The project’s tasks and resource requirements are identified in this stage of project planning by suggesting the right approaches to administer the tasks scheduled in the work breakdown structure. This phase is also referred to as “scope management.”
In the second phase, a project plan is created outlining the activities, tasks, dependencies, and timeframes. The project manager coordinates the preparation of a project budget by providing cost estimates for the labor, equipment, and materials costs. The budget is used to monitor and control cost expenditures during project implementation.
During the third phase, the project plan is put into motion and the work of the project is performed. This phase is known as implementation phase of the project. In this phase, progress is continuously monitored and appropriate adjustments are made and recorded as variances from the original plan. In any project, a project manager spends most of the time in this step. During project implementation, people are carrying out the tasks, and progress information is being reported through regular team meetings. The project manager uses this information to maintain control over the direction of the project by comparing the progress reports with the project plan to measure the performance of the project activities and take corrective action as needed.
During the last phase, which is called as “closing of project,” the emphasis is on releasing the final deliverables to the customer, handing over project documentation to the business, terminating supplier contracts, releasing project resources, and communicating the closure of the project to all stakeholders. Upon successful completion of the project, companies also tend to conduct “lessons-learned” studies to examine the do’s and don’ts for the new projects.
Managing Competitiveness in the Innovation Projects
The market drivers of product differentiation and new products development comprise the needs of common customers, global customers, global channels, and transferable marketing. The customers’ needs become a compelling factor for the multinational companies when customers of the different countries have the same needs in a product category. The free trade and unrestricted travel has created homogenous groups of customers across the countries in reference to the specific industries. However, some markets that typically deal with the culture-bound behavior and resistance of consumers toward adoption of differentiated products seek companies to offer customized products to consumers within niche. The global channels and distribution and logistics companies offer seamless transport, storage, and delivery services. Companies can expand internationally provided the channel infrastructure is met with the distribution needs of the company. Hence, their integrated networks thrive to bring new products and technologies close to the global distributors and retail stores like super markets and departmental stores in order to generate systems effect. Transferability in technology marketing is applied in congruence with the marketing ideas on brand names, packaging, advertising, and other components of marketing-mix in different countries. Nike’s campaign anchoring the basketball champion Michael Jordan pulled up the brand associated with technology-led new products in many countries. This is how the good ideas of multinationals get the new technology and innovative products leveraged in the global markets (Rajagopal 2015).
The competitive drivers of product differentiation support the companies for matching their technology development and marketing strategies in accordance with the consumer preferences. The existence of global competitors indicates whether a new technology or product is ready for international business operations. Firms need to develop market infrastructure for the new technologies and products to be able to explore the scope of expansion. The competitive efforts put pressure on companies to globalize their marketing activities and derive optimum performance of the new products by interpreting appropriately the competitor signals. The cost drivers of technology and new products are largely based on the scale of economies that involve the cost of production functions in the large and complex industries, cost of outsourcing, diffusion and adaptation of technology, tariffs and taxes, and costs associated with the basic and advanced marketing functions. The macroeconomic factors of the neighboring countries also govern the cost drivers. When a new automobile plant is set up, it aims at designing, manufacturing or assembling, and delivering a particular model by penetrating into the neighboring markets to gain the advantages of economies of scale. The high market share multidomestic companies derive gains from spreading their production activities across multiple product lines or diversified business lines to achieve advantage through the scope of economies. Developing new technologies, products, manufacturing and marketing activities of Proctor and Gamble, Unilever, and Colgate-Palmolive may illustrate this global attribute that is explained by the cost drivers. Other cost drivers include global sourcing advantages, low global communications, and automation processes. The location of strategic resources to the production plants, cost differences across the countries, and transport costs are also some important considerations of the cost drivers.
The lowering of trade barriers made globalization of markets and production a theoretical possibility, and technological change has made it a tangible reality. The technology drivers play a significant role in global business. Global expansion of the multinational companies has been highly stimulated by the technological advancements in the designing, manufacturing, and marketing of consumer and industrial products. The services were also improved by many technological breakthroughs. The Internet revolution has triggered the e-commerce as open access channel that acts as a strong driving force for global business in the consumer and industry segments. Improved transport and communication now make it possible to be in continuous contact with producers anywhere in the world. This makes it easier for companies to split production of a single good over any distance. Storage and preservation techniques have revolutionized the food industry, for example, so that the idea of seasonal vegetables is no longer relevant today as anything can be exported all the year round from anywhere. Technological upgrading, in the form of introduction of new machinery and improvement of technological capabilities, provides a firm with the means to be successful in competition. In the process of introducing better technologies, new lower-cost methods become available that allow the firm to increase labor productivity, that is, the efficiency with which it converts resources into value. Firms adopt these newer methods of production if they are more profitable than the older ones. The ability of a firm to take advantage of technical progress is also enhanced if the firm improves its entrepreneurial and technological capabilities through two competitive strategies, namely learning and adaptation strategy and innovation strategy. The latter is a process of searching for, finding, developing, imitating, adapting, and adopting new products, new processes, and new organizational arrangements. Because rivals do not stand still, the firm’s capacity to develop these capabilities, as well as its ability to compete depends on the firm’s maintaining a steady pace of innovation (Asian Development Bank 2003). Containerization has revolutionized the transportation business, significantly lowering the costs of shipping goods over long distances. Before the advent of containerization, moving goods from one mode of transport to another was very labor-intensive, lengthy, and costly. It could take days to unload a ship and reload goods onto trucks and trains. The efficiency gains associated with containerization and transportation costs have fallen, making it much more economical to ship goods around the world to drive the globalization. The government drivers for the globalization include diplomatic trade relations, custom unions, or common markets.
Communication is another important driver of innovation and differentiation. Mass media channels are the most rapid and efficient means of communicating to a large number of potential adopters, but interpersonal communication is more effective in persuading potential adopters to accept a new idea. Direct communication among users of the same socioeconomic segment and educational level increases the potential of acceptance even more. Although scholarly writings and curriculum resources provide an abundance of information about the effectiveness and benefits of media literacy training, a majority of potential adopters will be more influenced by conversations with their peers.
The most evident reason to drive the companies go global is the market potential in the developing countries that act as major players in the world market. Companies such as Nintendo, Disney, and the Japanese motorcycle industries have been greatly benefited from exploiting the markets of the developing countries and reassuring their growth in the world market to harness the promising market potential. The emerging scope of spatial diversification has also been one of the drivers for enhancement of the global business, utilizing the additional production capacity at the economies of scale and low-cost outsourcing. The saturation of demand for the products and services of a company in the domestic market may also be an effective driver to globalization, wherein the company looks for building value for its brand across the boundaries. A product that is near the end of its lifecycle in the domestic market begins to generate growth abroad. Sometimes, the cross-cultural attributes of overseas markets become the source of new product ideation. Such backward sourcing of technology insights may also be considered as one of the potential drivers for globalization of business and exploring the strategic alliances with prominent regional or multinational brands thereof.
Successful consumer-led products in the competitive marketplace always try to gain a distinct place among competing firms and focus on acquiring new customers and retaining the existing ones. Repeat buying behavior of customers is largely determined by the values acquired on the product. The attributes, awareness, trial, availability, and repeat factors influence the customers toward making rebuying decisions in reference to the marketing strategies of the firm. The perception on repeat buying is affected by the level of satisfaction derived from the buying experience of customers (Rajagopal and Rajagopal 2008). Among growing competition in retailing consumer products, innovative point of sales promotions offered by super markets are aimed at boosting sales and augmenting the store brand value. Purchase acceleration and product trial are found to be the two most influential variables of retail point of sales promotions. Analysis of five essential qualities of customer value judgment in terms of interest, subjectivity, exclusivity, thoughtfulness, and internality, need to be carried out in order to make the firm customer-centric and its strategies touching bottom of the pyramid (Dobson 2007). Dynamic complexity in a business may arise in oligopolistic market systems with high risk in investment, brand development, and generative customer loyalty. It may be observed that the switching behavior of consumers occur when the distribution of a company is weak in the market. In many cases, companies are not able to carry out controlled experiments on implementing business strategies due to cost-related and ethical reasons. Hence, dynamic complexity not only slows the learning loop, but also reduces the learning gained on each cycle. Developing right business strategies in a right market situation is a growing challenge among the systems thinkers and business strategists. Delays in developing appropriate strategy create instability in market dynamic systems and adds negative feedback loops in the market, which reduces the sustainability of the company in the competitive marketplace.
The firm’s decision to add a product to the line is influenced by its compatibility with reference to marketing, finances, and environment. Marketing competitiveness involves the match between the new addition and the current and potential marketing compatibilities of the parent company and its foreign subsidiary in matters such as product, price, promotion, and distribution. The firm needs to analyze the risks pertaining to financial operations and opportunities related to the addition of a new product line, which the firm is looking for. The common criteria in determining the financial compatibility of the proposed addition may be the profitability and cash flow implications. Besides, to ensure that the newly added product line would not encounter any legal and political problems, it is required for the firm to analyze the factors of environmental compatibility, which includes concern for the customer, competitive action, and legal or political problems. The inclusion of a product in the line should not pose any problem for either the existing or potential customers (Rajagopal 2014).
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