Administering Business Projects
Overview
Administering innovative business projects is often a complex problem. Hence, there is growing demand for new approaches among companies to support the performance of business projects and organizational structure. The project administration practices have spawned innovative processes from both manufacturers and project designers. Consequently, a multitude of new concepts and processes in administering innovative business projects have emerged in the 21st century. New products, technologies, and concepts are frequently implemented in the business projects with high-level organizational support. This chapter discusses the right perspectives of setting scope of the project and developing work breakdown structure (WBS) to manage cost and time resources. This chapter would benefit managers in making spatial and temporal adjustments in the business projects and carrying out network analysis. The approaches for managing the business projects through the stage-gate process, and effective monitoring and evaluation to protect the business projects from falling into the black holes have been discussed comprehensively in this chapter.
Administering innovative business projects are complex and sensitive to the cost, time, and quality risks of deliverables. The most crucial tasks in project administration include developing a project charter, project scope and scope creep, managing cost and time using critical path method (CPM), deliverables, and commercialization of the project outcome. Often innovative business projects are terminated prematurely as the project deliverables do not match the current market demand. Consumer preferences and requirements of the sponsors often change during midproject, causing delay or termination of the projects. However, risk management can only manage known risks, but uncertainties in project operations might cause damage to the projects in terms of cost, time, and deliverables. Every project has some known or unknown risks or both. The techniques of conventional risk management apply only to the known risks. Large, complex projects are difficult to administer due to scope creep, technology shifts, instability in the project teams, and change of leadership. Thus, project administration becomes difficult, and the increase in encountering risks, becomes more likely. The projects turn cumbersome when there are additional tasks in the project to be performed within the budgetary constraints. The more complicated a project seems to the project manager and other participants, the greater the likelihood that something important will be missed, thus increasing the likelihood of redoing tasks in the project by borrowing more time and delaying the completion of the project (Browning and Ramasesh 2015).
Project Scope
Managing innovation projects and achieving commercial success is often not a guaranteed mission. The innovation projects appear to be fragile as they have to pass through risk, and uncertainties concerning human and capital resources, and market behavior. The innovation projects can be successful, provided the companies should establish the projects with sound mission and scope frameworks. Developing an effective project scope is a process, which helps to decide whether or not to proceed with the project. An incomplete emphasis of the project scope often throws inordinate difficulties in the early stages of a project’s lifecycle, as such situation in the project affects the execution of tasks. Meanwhile, the project team can map the tasks and outcomes by stages of the projects and fix accountabilities among the members of the teams understanding variabilities of interests. Innovation projects, in specific, bring different degrees of changes on the surrounding environment and people involved in the project. Therefore, leaders of innovation projects should redefine the project scope and boundaries subjected to changing outcomes, market demand, and expectation of different stakeholders (Fageha and Aibinu 2013). Project scope is defined as the process of the work to be performed in order to deliver a product, service, or result with the specified features and functions. The project scope is dependent on the project outcome as product or service, which defines its features and functions. Thus, project scope management ensures that both the outcome of the project and the project scope are periodically monitored and properly maintained. It is important to establish the project objectives, which include a new product, creating a new service within the organization to frame the project scope in a right way. There are a number of objectives that could be central to a project that might influence laying out the project scope. However, it is critical for the project manager to ensure that the team delivers the project results within the project scope.
The scope of a project is the clear path of the work required to successfully complete or deliver a project. The project manager should ensure that only the required work that delineates the scope is performed to complete the project within time and budget limits by providing all deliverables to the stakeholders. The documentation of the scope of the project explains the limits of the project, fixes accountability of each member of the team, and clearly lays the procedures for performing tasks that are approved by the project leader and disseminated down to the team members working on the project. The standard project methodology suggests that the project scope should be defined before rolling out the task to be performed by the teams. Collaboration among the project owner including the start-up enterprises (SUEs), regional firms, or large companies, sponsor, and stakeholders not only guides the project toward delivering outcomes, but also helps in developing the right scope of the project. The scope must make clear to all involved in the project exactly what product or service needs to be delivered upon completion of the project. A good project continues to accomplish its goals with the established and approved project scope. Making changes in the scope during the midproject is called as scope creep. Finally, the project manager defines project scope by identifying what initiated the request for a desired project outcome in terms of either an innovative product or service, or both.
The scope of the project should be developed before developing the WBS to avoid any abrupt changes in the task, time, cost, and accountability criteria in the middle of the project. Any changes in the project tasks would shift all financial and operational parameters of the project and such changes are referred as “scope creep.” As the scope changes affect the project, project managers often try to redefine the critical path to reach the project goal by skipping or combining a few tasks that might cause cost and time overrun and divert the project from the predetermined path. Some of the costs of scope creep may derive the following outcomes:
Deferred benefits
Lowered return on investment
Increased maintenance costs
Overallocated staff
New risks
The project creep becomes necessary in the project due to market uncertainties and the changes in the availability of project resources or the corporate policies toward the innovation projects. The project managers can accordingly consider the project scope creep over the original project plan. It is not unusual to anticipate changes in the original project plan as the project work advances, which forces project managers to redefine the project scope. However, implementation of change management tools within the organization discourages the managers to make changes in the project scope. An effective change management team would be able to control both internally generated and customer-driven changes in the scope of projects and reduce the scope creep impact. In order to incorporate customer-driven changes and modify the project scope strategy, the customer often participates as a member of the project team to guide the required change. The role of customers in managing the project scope creep addresses how the change will affect the project budget as well as assignment of cost-task-risk, and staff allocations. Some tools and techniques useful in capturing the project scope are discussed as follows:
Define the project need
Identify key stakeholders
Identify project drivers
Develop operational concepts
Identify external interfaces
The project scope should be developed in a way that it is compatible to the project charter and the WBS. The general practice of project management suggests that developing the project scoping and its process is all about developing an initial WBS, which is a result-oriented family tree of the project cost, tasks, and time allocations, risk factors, and anticipated outcomes at each stage of the project. The project scope in convergence with the WBS exhibits all the potential work to be done in the project in an organized way. It is often portrayed graphically as a hierarchical tree with a list of element categories and tasks. The WBS makes large complex innovation projects more systematic to work by progressively smaller work packages that may include a number of tasks. Upon drawing proper application of the project scope management, it helps effectively in managing the critical factors of project management such as cost, time, risk, quality, and outcomes. Besides the critical project factors, the scope management also provides support in managing the following external dimensions:
Helps in management of projects belonging to public (government) and private organizations
Helps in prioritizing and reducing the temporary work requests, which can save time and cost
Allows project teams to conduct cost-benefit analysis to validate the need for any deviations in the project path in reference to WBS and scope creep in the middle of the innovation projects
Facilitates productive communications with stakeholders and among the team
Serves as a tool to manage client expectations, work load balancing, and team morale
Project scope verification is interwoven with project planning phases and process stage-gates. It provides an opportunity for the client to review the performance after some of the initial work has been done, and verify that the work is of acceptable quality and further tasks can be carried out as per the project plan. The scope verification is needed in an innovation project to determine whether to stay with the predetermined task in the project plan and to avoid any overlap or deviation of the tasks. Thus, the project scope verification is a random process to be carried out many times during the project process. The scope creep in an innovation project is commonly considered after acquiring the review of customers on the product concept or prototype for making desired modification in the end product before commercialization. If the end users prefer to suggest modifications to be done in the end product, the proposed changes should be evaluated in reference to technological feasibility and economic viability, prior to making changes in the project scope. The purpose of reviewing the project scope creep is to keep the goals of end users and the company as close to the cost-time-risk (CTR) plans as possible, and enhancing the market potential for the final deliverables. This phase of the project scope is designed to strengthen and reinforce the initial scope definition through feedback. However, scope changes in innovation projects are common and often inevitable, as market players involved with the project often reset their business goals. At this point, the concept of scope creep is introduced in a project, subject to approval of the project leader and to restrict any unauthorized changes. If the project team does not control the scope creep in the project, the potential consequences of scope change may result into premature termination of the project, market failure, and heavy sunk cost, leading to irrecoverable loss to the company. A change control should be managed by the project team through formal documentation that provides statements about any changes in project scope to guide the process as smoothly as possible. A scope change control should be put in place in the project path as early as possible to synchronize with the existing tasks to be performed and classify the types of changes suggested by the market players. Changes in scope can have a great effect on every element considering the minimum variations in the CTR factors by defining the changes in an orderly fashion to keep the end users and market players involved in the project activities. However, accommodating new requests becomes more expensive due to changes in the cost and risk parameters in the market. The successful projects manage the creep from the beginning, considering the potential returns on investment and market value. One of the most damaging aspects of scope creep is the increasing project cost, as it not only drains the project budget by adding new tasks and work packages, but also adds time to tasks that pushes back completion dates, causing a loss in the potential profits that would have been realized with an on time completion of the project. Scope creep can also create a larger and more complex end result that costs more to maintain upon commercializing the outcome of the project. Figure 5.1 exhibits the internal and external situations that make the project team implement project scope creep.
The scope creep in a project is driven by the changing demand of consumers and market players including sponsors, distributors, and retailers, as illustrated in Figure 5.1. The project team evaluates the requirements to accommodate the change by creating additional tasks (T6A, T7A ) in the WBS in order to improve the shareholder value. The project scope creep throws several effects on the innovation project, which include cost and time exigencies, cost of team training to manage additional tasks, and the risk of quality of project deliverables. The project might also suffer from the risk of cost and time overrun, and quality of deliverable in implementing the additional tasks created and making them compatible with the project goals and outcomes. The scope creep in a project might cause changes in the attributes deliverables, uncertainty in performing the additional tasks, cost escalation, and time prolongation (DUCT). Thus, the project team should carefully evaluate the need for scope creep before introducing the additional tasks in addition to the mainstream project scope.
In order to manage the scope creep in a project, it is necessary to have streamlined communication among the project teams internally, and with the stakeholders externally to smoothen the deviations of tasks emerging due to the scope creep. The changes adding features and functionality to the scope of the project without communicating through the proper channels and getting the proper authorizations could not be implemented. Regularly communicating the progress of the project to team members and stakeholders will not only help the project team manage the tasks efficiently, but will also prevent scope creep. Also, communicating the status of open issues will also keep scope creep in check, as the team members and stakeholders are aware of the roles and responsibilities in addressing these issues. The communication with the project can be managed through the networks consisting a set of core team members who bring noncore contributors within the communication gamut and share knowledge, information, and feedback regarding the team’s task. A project network can be helpful when the project scope is beyond control, the sphere of influence of the core team is not uniform, the task is complex, and it is unclear to reach an optimal solution. Managers can use a project’s kick-off meeting to set norms and project scope to reach the desired expectation on the project and as an option to look outside the team for possible solutions to complex problems (Cummings and Peltcher 2011).
Figure 5.1 Scope creep in innovation projects: attributes and effects
Project Charter
In project management, a project charter is a complete document that presents the objectives, scope, task schedule, team and stakeholders, risk management, deliverables, and approvals. It provides a preliminary delineation of roles and responsibilities, outlines the project objectives, identifies the main stakeholders, and defines the authority of the project manager. The terms of reference are usually part of the project charter. The project charter formally and holistically describes the project, authorizes a project or a specific project phase, and it is used as tool for kickoff by the project sponsor. It is a very powerful document as it assures the proper visibility of the project by defining the roles and responsibilities within the project and aligns the project to the strategic goals and objectives of the organization. A good project charter should include the following attributes:
Executive summary
Project justification
Project purpose
Project scope—description of tasks that are included and excluded in the project
Project deliverables, outcome, and completion goals
Critical success factors, team constitution, and stakeholder summary
Co-creation, stakeholder involvement, attributes of sponsor, and market behavior
Major milestones in the project
Risk, contingencies, and situational management
Purpose of the project
Role of project charter for the project leader and team members
Corporate objectives and goals
Compatibility of project deliverables with corporate goals
Enhancing corporate identity, brand image, and customer value
Project justification
Uniqueness
Compatibility with the market needs
Business case
Project scope
Scope definition, project boundaries, and roles of team members and project leader
Project constraints
Critical success factors
Project schedule
Project process, completion, and task distribution
WBS, and work packages
CTR-deliverables matrix
Cost and time overrun estimates, and contingency plans
Team and stakeholders
Project team and leadership profiles
Project sponsor profiles
Goals, accountability, and task administration
Specifically, a project charter provides the project manager the power to bring the project team together to accomplish the task of completing the project successfully. Project managers still face many resource challenges, depending on the structure of the project. However, a properly developed project charter that is communicated to the project sponsor and stakeholders enables the project manager to organize the team work to match with the expectations and responsibilities of the sponsors and stakeholders. The project cannot be is technically authorized until the project charter is completed and authorized. The project charter should provide information on the following points:
Project identification including the title of the project and brief description of the project along with the particulars of the project team.
Project objectives in reference to predetermined project benefits to the organization, ways of aligning project with the strategic priorities of the organization, expected outcome, deliverables, and benefits to be realized.
Assumptions made in the decision to charter this project. All assumptions must be validated to ensure that the project stays on schedule and within the budgetary provisions.
Project scope to establish the boundaries of the project in order to identify the limits of the project and define the deliverables. Any requirements that are specifically excluded from the project scope should also be listed.
Major milestones and deliverables of the project according to the schedule of date.
List of the potential impacts the project may have on existing systems or units.
Project resources comprising initial funding, personnel, and other resources committed to this project by the project sponsor.
High-level project risks and the strategies to mitigate them.
Metrics to project success and describe that the project team is trying to achieve as a project outcome.
Roles and responsibilities of project team members followed by the names and contact information for those filling the roles in tabular form. Modifies, overwritten, and other examples must be added to accurately describe the roles and responsibilities of the team members. The roles and responsibilities of the stakeholders (consumers) and, subject experts if any, working with the project must be described.
The role and responsibility of the sponsor include to approve the project charter and plan, secure resources for the project, confirm the project’s goals and objectives, keep abreast of major project activities, make decisions on escalated issues, and assist in the resolution of roadblocks.
A project manager leads in the planning and development of the project and manages the project to scope. His role and responsibilities include developing the project plan, identifying project deliverables, risks, and developing a risk management plan. A project manager is also responsible for directing the project team, developing the project scope, administer process control and change management, ensure quality assurance during the project process, and maintain all documentation including the project plan. The project manager also needs to report and forecast project status to the project sponsor, resolve conflicts within the project or between cross-functional teams, and make sure that the project outcomes would meet the business objectives. A project leader also communicates periodically the project status to stakeholders.
The team members work toward the deliverables of the project. The members of the project team conduct initial research on the project backward and forward linkages, and collect and analyze the data as outlined in the project plan. The project team also liaisons with the project manager about the scope of the project, risk and quality concerns, and proactively involve in managing project outcomes and expectations.
A project charter should contain the essence of the project, provide a shared understanding of the project, and act as a contract between the project sponsor, key stakeholders, and the project team. The project charter is usually a short document that refers to more detailed documents, such as a new offering request or a request for proposal.
In innovative projects management, companies develop Initiative for Policy Dialogue (IPD) by documenting all the necessary attributes to carry out the project with initial observation and discussion with the project teams. This document serves as a project charter. The innovation project management leaders will also develop customer preference and value (CPV) matrix and construct the critical definitions in the project accordingly. Both IPD and CPV serve as the integral part of the project management process. The project charter establishes the authority assigned to the project manager, especially in a matrix management environment, which includes decision grid among various project subleaders like engineering, manufacturing, testing, marketing, finance, administration, and research and development. Such matrix project system explained in the project charter is considered as the best practice within the industry. The principal uses of the project charter include:
Provide a comparable format for ranking the projects
Draw cost-benefit analysis and authorize the time, tasks, and deliverables in reference to the value approximation of the returns on investment
Serve as the primary document for the project for commercialization of innovation in reference to the stakeholder value
Serve as a guiding tool throughout the project and determine the baselines that can be used in team management, monitoring and control, and managing the project scope
For a large multiphased and multi-layered innovation project, the charter can be created for each individual phase or layer. The project layer is considered as scaling-up the performance of tasks in reference to technology upgrades and business analytics. Such layered project consumes more time in performing each task, as the project team needs to trained for each task or phase of the project. In a multilayered project, the project team can develop an initial charter during the scope phase of a project, followed by a planning charter, and an execution charter during at the operational phase of the project. Developing the charter and identifying the stakeholders are the two major concerns in managing an innovation project. The project charter can be documented by using the following resources:
Project “Statement of Work”
Business case
Work agreements and operations alliances with external agencies
Enterprise standards, industry standards, regulations, and norms
Organizational process, assets, and templates
Typically, the project manager takes lead in developing the charter in association with the area-specific team members. The project manager works with the key stakeholders, that is, customers and business sponsors, subject-matter experts inside and outside the organization, intra-organization departments, various business groups within the industry, and professional bodies like Project Management Institute to develop the project charter. The project manager employs facilitation techniques such as brainstorming, problem solving, conflict resolution, meetings, expectations management, and so on, to develop the charter. The charter once signed provides authority to the project manager to officially execute the project and employ organizational funds and resources to make the project successful.
Innovation Lifecycle
Innovation lifecycle moves through common lifecycle comprising introduction, growth, maturity, and decline in the context of market behavior. However, the attributes of innovation cycle in different stages vary from the product or organization lifecycles to some extent. Innovation cycle cannot be determined in general as it differs for the types of innovation and its growth in the market conditions. The innovation drivers in reference to its backward and forward linkages, unique proposition, innovation value, and high investment to carry out product innovation occur during the introduction stage of the innovation lifecycle. Firms foster the strategies of 4As to strengthen the product awareness, acceptance, availability, and affordability in order to reduce the market risk and gain competitive advantage of the new product in the marketplace. As the innovative products move to the growth stage, firms put more impetus on sales by refining the marketing-mix strategies in reference to the following elements consisting of 11 Ps (Rajagopal 2012):
Product (uniqueness and associated attributes that distinguish the product from the existing products in a given marketplace)
Price (low-end or premium market pricing)
Place (developing strategies on distribution management and routes to market in reference to make the product available at the convenience of consumers)
Promotion (developing promotion packages, advertisement and communication strategies, and building product opinions among consumers and market players)
Packaging
Pace (time)
People (front-line employees of an organization engaged in selling the product)
Performance (product performance and consumer experience)
Psychodynamics (consumers engaged in social media to share their experience on the innovative product)
Posture (corporate image)
Proliferation (expansion into manufacturing and launching complimentary products to augment the use value of the innovation)
At the growth stage of innovation, the threats of value disruption due to negative word-of-mouth and competitive tactics in the market against the product are often observed by the firms that increase the risk of substitution and consumer defection. Innovation-led products are also susceptible to imitations by infringement of intellectual property rights and disruptive technologies with the increase of market competition against the innovative product. Most firms invest in building product brands at this stage and enhance services support to inculcate confidence among the consumers and augment their loyalty toward the product and company.
Innovation-led products turn sustainable in the maturity stage as they gain the desired market share and position them strategically with longterm goals in the market competition. In this stage, both the consumer value and brand equity for the innovation-led products and services increase. However, as the technology grows and consumer preferences for the products change over time, the products turn obsolete in the decline stage, depleting their market share and increasing the substitution risk. Firms, thus, should be engaged in continuous improvement or innovation process to develop next-generation products at the edge of the mature stage and avoid falling in to the decline stage. Products, which fall into the decline stage, are difficult to revive as the dynamic market forces weaken the product significance and turn them idle in the marketplace. Often investing on the products trapped in the decline stage does not yield expected returns and turns into sunk cost that cannot be recovered.
Product innovation and marketing cycle are also affected by the innovation diffusion cycle spread across the same stages as of product innovation cycle. In the introduction stage, often the diffusion of information is low, as firms do not employ adequate resources in generating awareness on the innovation. Firms invite lead users in this stage to test the innovated product and influence early adopters on the usage of product. Lead users form a small group, but act as powerful referral and brand carriers. Firms spend adequate resources in the growth stage to diffuse product innovation attributes through direct communication on one-on-one basis to drive intensive effect on the innovation-led products among early adopters. Consumers in this group are strong followers of lead users and stand as effective opinion leaders for influencing the early majority of consumers. Most companies deploy enormous resources in advertising, communication, and social media involvement during the late growth and maturity stages to drive customers who are less affluent and less educated, but ready to experiment with the innovative products. The early majority consumer segment constitutes relatively larger than the previous consumer segments but is confined to niche. The following is late majority segment, which is a very large segment and often represents about half of the total number of consumers in a given market area. This consumer segment exhibits high adaptability with the innovative products and derives satisfactory value for money that makes the late majority consumers frequent buyers. Consumers in this segment are price-sensitive and pose the threat of defection when more attractive substitute products penetrate into the market. However, a small number of (about 20 percent) of consumers in each market segment are hard to drive for buying any innovative product as they are indecisive and difficult to convince. Such segment of consumers is found in all stages of growth of innovative products, but is apparently huge in the decline stage of the product lifecycle.
An individual’s choice of innovative organic products can be linked clearly to ethical stances, but ethical choices can also vary from individual to individual, from industry to industry, and among countries. Consumer purchasing motivations are revealed in a study as being self-interest-centered rather than altruistic. Hence, to enhance the scope of organic products marketing in future, the firms must aim to modify perceptions and attitudes of larger consumer segments by implementing educational marketing campaigns that reinforce the ethical, environmental, and societal benefits of organic production. The key challenge for organic products marketers is to strengthen individuals’ perception of the individual benefits by adding more and stronger emotional values to green brands. Future green marketing research should extend its analysis to the emotional motivations and benefits associated with environmentally responsible consumption behavior (Hartmann and Apaolaza 2006). The green intentions of organic products significantly influence ethnocentrism, environmental concern, involvement, and attitudes. However, risk aversion has been found as the major emerging variable, while involvement and environmental concern are significant in determining the consumer behavior toward organic products (Paladino 2005). Concerns related to the environment are evident in the increasingly ecologically conscious marketplace. It has been observed in one of the research studies that females, married and with at least one child living at home, are the consumers who are willing to pay more for environmentally friendly products. They place a high importance on security and warm relationships with others, and they often consider ecological issues when making a purchase (Laroche, Bergeron, and Barbaro-Forleo 2001).
Among information technology (IT) companies, Google stands out as an enterprise designed with the explicit goal of succeeding at rapid, profuse innovation. Much of what the company does is rooted in its legendary IT infrastructure, but technology and strategy at Google are inseparable and mutually permeable, making it hard to say whether technology is the DNA of its strategy or the other way around. Google has spent billions of dollars in creating its Internet-based operating platform and developing proprietary technology that allows the company to rapidly develop and roll out new services of its own or of a business partner. As owner and operator of its innovation “ecosystem,” Google can control the platform’s evolution and claim a disproportionate percentage of the value created within it. Because every transaction is performed through the platform, the company has perfect, continuous awareness of, and access to the by-product information and is the hub of all germinal revenue streams. In addition to the technology explicitly designed and built for innovation, Google has a well-considered organizational and cultural strategy that helps the company attract the most talented people in the world and keep them working hard. For instance, Google budgets innovation into job descriptions and eliminates friction from development processes, and tries to learn from failures and chaos. However, some elements of Google’s success as an innovator are very hard and expensive (Iyer and Davenport 2008).
It is also possible for a firm to penetrate into the market faster and outperform the close competing products that exist, if the ex-factory market dynamics is comparatively faster. We may define such dynamics as escape velocity for the new products, which manifests in increasing the customer value, market coverage, just-in-time supply management, and augmenting product performance through in-store and point-of-sales demonstrations. It is observed that the faster the market penetration of new products, the higher the opportunity of market coverage over the competing product in a given time and territory. The new product attractiveness may comprise the product features, including improved attributes, use of advance technology, innovativeness, extended product applications, brand augmentation, perceived use value, competitive advantages, corporate image, product advertisements, sales and services policies associated therewith, which contribute in building sustainable customer values toward making buying decisions on the new products. The introduction of new technological products makes it important for marketers to understand how innovators or first adopters respond to persuasion cues. It has been observed in a study that the innovativeness and perceived product newness, which are one of the constituents of new product attractiveness, are independent constructs that had independent effects on customer’s attitude toward the brand and purchase intent for the new product. The attractiveness of new products is one of the key factors affecting the decision making of customers, and is turn related to market growth and sales. The higher the positive reactions of the customers toward the new products in view of their attractiveness, the higher the growth in sales and so in market (Lafferty and Goldsmith 2004).
Customer involvement in developing new products has been widely used in American and Japanese manufacturing firms. Quality Function Deployment (QFD) is uses as the most popular tool for bringing the voice of the customer into the product development process from conceptual design through manufacturing. The process of QFD begins with a matrix that links customer-desired product engineering requirements, along with competitive benchmarking information, and further matrices can be used to ultimately link this to design of the manufacturing system. Unlike other methods originally developed in the United States and transferred to Japan, the QFD methodology was born out of Total Quality Control (TQC) activities in Japan during the 1960s and has been transferred to companies in the United States. It has been observed that the companies in the United States showed a higher degree of usage, management support, cross-functional involvement, use of QFD-driven data sources, and perceived benefits from using QFD. These companies are more suitable to use newly collected customer data sources, such as focus groups and methods, for analyzing customer requirements. Japanese companies have been found using the existing product services data like implications of guarantee, warranty, and a broader set of matrixes. The use of analytical techniques in conjunction with QFD including simulation, design of experiments, regression, mathematical target setting, and analytic hierarchy process are also considered as supporting tools for analyzing customer data (Cristiano, Liker, and White 2000). Similarly, recent studies have described how “lean” Japanese car assemblers assigned the design and development of whole modules to a group of first-tier suppliers, who in turn utilized a team of second-tier suppliers for the detailed development and engineering. Customer-involved product development strategies were also found to be common with the firms in different industries, including Apple, Benetton, Corning, McDonald’s, Nike, Nintendo, Sun, and Toyota. The customer firm, often a large original equipment manufacturer, perceives that its power may be cascaded throughout its supply base. At the basic level, cascading is a way for a customer to delegate responsibility to its suppliers. In practice, it has been contended that cascading more often takes the form of a more imposing style of leadership (Lamming et al. 2000). Along with the factors of QFD, companies should also develop the product innovation charter, considering the following critical variables in new product development process:
Core competencies
Quality, function, delivery, infrastructure—4As (attributes, awareness, availability, and affordability) and 11 Ps (including product, price, place, promotion, packaging, pace, people, performance, psychodynamics, posture, and proliferation)
Technology, product experience, customer franchise, end user experience
Technology derives
Technological strengths, global competition, nonlaboratory technology, small-order-handling technology
Market drivers
Dual-drive strategy, co-producer (customer—focus), mass customization, distributors
Technical driver together with a market driver
Technology of microfilming and the market activity of education
Global satellite technology and golf course superintendents
Goals and objectives
Profit, growth, market status
In the Internet age, firms are recognizing the power of the Internet as a platform for co-creating value with customers. Internet has impacted the process of collaborative innovation as a key process in value co-creation. Distinctive capabilities of the Internet as a platform for customer engagement, including interactivity, enhanced reach, persistence, speed, and flexibility, suggest that firms can use these capabilities to engage customers in collaborative product innovation through a variety of Internet-based mechanisms. The network mechanisms can facilitate collaborative innovation at different stages of the new product development process (backend versus frontend stages) and for different levels of customer involvement (high reach versus high richness). Ducati, a manufacturer of motorbikes, and Eli Lilly, a multinational pharmaceutical company, are found to be actively engaged in encouraging customer involvement in developing new products (Sawhney 2005). In pursuing growth through product innovation, companies should look at their customers as partners in creating and building value. Consumers today have near-instant access to all the information they need on virtually any product. Moreover, they use this information to influence product development as individuals, and more importantly, through user communities and review groups (Johnson 2006). Most companies ask their customers about their needs. Customers offer solutions in the form of products or services. Companies then deliver these tangibles, and customers may change their preference as the product or service is made available in the market.
Consumer perceptions play a key role in the lifecycle of a brand. The role varies according to the stage in the lifecycle, market situation, and competitive scenario. A company to invest on appealing communication strategies for creating awareness may need to influence the decision of consumers toward buying the brands they have not tested before. Systematically explored concepts in the field of customer value and market-driven approach toward new products would be beneficial for a company to derive long-term profit optimization strategy over the period. On a tactical level, managers need to consider the optimum spread of customers on a matrix of product attractiveness and market coverage. This needs careful attention and application of managerial judgment and experience to measure the customer value-driven performance of the retail stores, considering the innovative sales approaches for organic products, store layouts, product displays supported with comprehensive point-of-sales information, brand information, and other loyalty parameters of the consumers.
Critical Path Analysis
CPM is one of the frequently used techniques in project planning in optimizing the task-time convergence. A typical project has many tasks involving different people, which often makes a project manager keep track of things. It is far too easy for certain activities to fall behind and get lost in the sea of endless jobs. CPM helps managers to determine the time span in completing the project and performing critical tasks manage the project budget and time schedules. The Program Evaluation and Review Technique (PERT) and CPM techniques are used in scheduling of activities that construct a project and to determine the earliest or latest start and finish schedules for each activity. These techniques would also help the project team in determining the entire project completion time and the slack time for each activity. Though PERT and CPM are similar in their basic approach, they do differ in the way activity times are estimated. Each activity monitored under PERT is classified as optimistic, or pessimistic, which is most likely to determine the expected activities to be carried out in the project determining the completion time and its variance. Thus, PERT is considered to be a probabilistic technique, which allows the project team to find the probability of the entire project being completed by any given date, and follow a deterministic approach by using two-time estimate, the normal time, and the crash time, for each activity during the project. The application of CPM is explained in Figure 5.2 in reference to an example of the project on innovative combustion control devise for automobiles.
The example of combustion control devise for automobiles for products like “start-stop” devise of Bosch GmbH, Germany, illustrated in Figure 5.2, shows the tasks T1 to T15 distributed in project in order of operational sequence that have many subtasks indicated with the arrows corresponding to the tasks. It is important for the project managers to review the tasks and subtasks in the project and apply CPM to eliminate the low-priority and repetitive tasks to reduce the time required for project completion as well as lower the real cost against those estimated. In the preceding illustration, the subtasks like T1A, T1B, T1C need to be prioritized and decided about which tasks to be performed to move to the task and subtasks 2A and 2B and subsequently to T3A. The CPM analysis suggests which subtasks to skip and which ones to “bridge” like T3A to T5A and T10A to T14A. The “bridges,” if approved, would allow the project team to skip T4, T4A, T11, T12, and T13, including their subtasks and reach the completion of the project ahead of 26 weeks and could reduce the corresponding costs in managing those tasks. It is important to note that at the beginning of the project, the time taken for each task is the estimated time. During the project, the estimated time might vary based on different factors. In such cases, it is important to revisit the CPM diagram and again do a critical path analysis. Experienced developers are usually accurate with their estimations, so time over-run is not something that will happen frequently. It is essential to estimate the time needed for each subtask when planning any project to calculate. This helps to establish the start date of any activity, which cannot start until the preceding activity has been completed. The calculations also determine the latest date for completion of an activity, so that the next activity can begin. Benefits of using a PERT chart or the CPM include:
Improving planning and scheduling of activities
Managing project cost and deliverables
Simplifying the planning process by identification of repetitive planning patterns
Managing expected project completion time, probability of completion before a specified date
Figure 5.2 Application of critical path method
CPM is a powerful but basically a simple technique for analyzing, planning, and scheduling large, complex projects. This tool provides a means of determining which jobs or activities in a project are critical in their effect on total project time, and guides to schedule all jobs in the project in the best possible order to complete it on schedule and within the minimum cost. The innovation projects should be analyzed through CPM, explaining the description of the task, date of completion, and periodical schedule of progress reporting. The tasks may also be started and stopped independent of each other, and must be performed in the order of priority for completion of the project successfully. The concept of CPM is quite simple and may be best illustrated in terms of a project graph, which is valuable in depicting visually and clearly the complex tasks in a project and their interrelations with the other tasks. In order to carry out CPM analysis, each task necessary for the completion of a project should be listed with unique identification using alphanumeric codes, with specific time requirement to complete the task, and its immediate prerequisites. For convenience in graphing, and as a check on certain kinds of data errors, the tasks may be arranged in the order of priority in reference to the technological requirements. There would be an error in technological ordering if a cycle error exists in the tasks data (like task a precedes b, b precedes c, and c precedes a). Further, each task is drawn on the graph as a circle, with its identifying symbol and time appearing within the circle. Sequence relationships are indicated by arrows connecting task with its immediate successors, with the arrows pointing to the latter. The critical path can be best understood as the bottleneck route to complete the project in lesser time and cost against that has been projected. Only by finding ways to shorten the time to perform tasks through the critical path, the overall project time can be reduced in innovation projects. CPM helps project managers eliminate the non-critical jobs to perform that are irrelevant from the viewpoint of total project time, cost, quality, and deliverables (Levy, Thompson, and Wiest 1963). Using CPM, project managers can avoid poor planning of projects by visualizing the important tasks of a project depicted in the CPM chart. The main aim is to produce a visual of the entire project broken down into smaller activities, which are vital to the completion of the entire project. The benefits of applying CPM to each set of the tasks include:
Predicting the time each activity will take and offering a timescale to the client
Seeing how each section is important to the drive the progress of the project
Assigning the right team to carry out the tasks and the concerned department to monitor the critical and corresponding tasks
All innovation projects should identify the specific tasks and mile-stones. Milestones are the events that mark the beginning and the end of one or more tasks. The network diagram (CPM chart) contains the sequence of the successive and parallel activities. In the diagram, arrowed lines represent the activities and circles or “bubbles” represent milestones. Weeks are a commonly used unit of time for activity completion, but any consistent unit of time can be used. For each task, the CPM model usually includes three time estimates:
Optimistic time—the shortest time in which the activity can be completed
Most likely time—the completion time having the highest probability
Pessimistic time—the longest time that an activity may take
Accordingly, the expected time for each task can be calculated using the following weighted average equation:
In the preceding equation Et denotes the expected time, Ot and Mlt indicate optimistic and most likely time, respectively, and Pt is expressed for pessimistic time. The statistical weight for each time variable is used from 1 to 4, and some of the weights serve as the denominator in the preceding equation. Analyzing the expected time helps to bias time estimates away from the unrealistically short timescales normally assumed. The critical path is determined by adding the times for the activities in each sequence and determining the longest path in the project. The critical path determines the total calendar time required for the project. The amount of time that a noncritical path activity can be delayed without delaying the project is referred to as slack time. In the CPM, projects managers should determine the following four times for each task:
ES—earliest start time
EF—earliest finish time
LS—latest start time
LF—fastest finish time
These time units are calculated using the expected time for the relevant activities. The earliest start and finish times of each activity are determined by working forward through the network and determining the earliest time at which an activity can start and finish, considering its predecessor activities. The latest start and finish times are the latest times that an activity can start and finish, without delaying the project. LS and LF are found by working backward through the network. The difference in the latest and earliest finish of each activity is that activity’s slack. The critical path then is the path through the network in which none of the activities have slack.
CPM is considered as one of the major quantitative tools for business decision making. It is a simple technique for analyzing, planning, and development of complex products and for completing them at minimum cost (Jassawalla and Sahsittal 2000). Analysis by CPM may be applied to new product development or product innovation projects that have three common characteristics essential for CPM analysis—the product development information consists of some well-defined process determinants; the process may be started or stopped independently of each other, within a given sequence; and the product development process must be performed in technological sequence. A step-by-step analysis might demonstrate critical path scheduling and the process of constructing a graph. CPM is a schedule network analysis technique. CPM was developed by the DuPont Corporation in 1957. Critical path determines the shortest time to complete the project, and it is the longest duration path through a network of tasks. It may be viewed from the preceding figure that CPM is based on the creation of a sequence of dependent tasks (i.e., tasks that can only be performed after earlier tasks are complete). Performing critical path analysis on this sequence allows managers to work out possible parallel sequences (i.e., tasks that can be performed simultaneously). The critical path is the longest chain of dependent tasks required for product development. The benefits of CPM in product development process include:
Production planning and control
Time-cost trade-offs
Cost-benefit analysis
Contingency planning
Reducing risk
It is important to analyze the feedback in each stage in the process of product development. The power of analytics in decision making is well-recognized in the process monitoring and evaluation stages, but few companies have what it takes to successfully implement a complex analytics program. Most firms will get greater value from learning through feedback in various stages of the product development process. Managers need to become adept at routinely using techniques employed by scientists and medical researchers. Specifically, they need to embrace the “test and learn” approach by way of taking one action with one group of customers, a different action (or no action at all) with a control group of customers, and then compare the results. The feedback from even a handful of experiments can yield immediate and dramatic improvements (Anderson and Simester 2011).
Companies must identify core competencies, which provide potential access to a wide variety of markets, make a contribution to the customer benefits of the product, and are difficult for competitors to imitate. In a later stage, firms must reorganize to learn from alliances and focus on internal development (Prahalad and Hamel 1990). Determining the set of competencies required by different positions is a monumental task, and it requires input from all levels of an organization. Managers need to look into the legitimate control of the costs, improve the operational dynamics, and quality of product. It has been argued that new frontier in value creation is emerging with fresh opportunities in a competitive marketplace. In this new frontier, the role of the consumer has changed from isolated to connected, from unaware to informed, from passive to active. As a result, companies can no longer act autonomously, designing products, developing production processes, crafting marketing messages, and controlling sales channels with little or no interference from consumers. Armed with new tools and dissatisfied with available choices, consumers want to interact with firms and thereby co-create value. The use of interaction as a basis for co-creation is at the crux of emerging reality. The co-creation experience of the consumer becomes the very basis of value through a DART model for managing co-creation of value processes. The DART model has four constituents—dialog, access, risk assessment, and transparency. Combining the building blocks of transparency, risk assessment, access, and dialog enables companies to better engage customers as collaborators. Transparency facilitates collaborative dialog with consumers (Prahalad and Ramasway 2004).
Stage-Gate Process
In formulating project decision strategies, it is necessary to involve all role players, such as project team, sponsors, deliverables, quality and packaging managers, distributors, logistics and inventory managers, retailers, franchisees, and so on, and fully acquaint with the marketplace environment. The low involvement project team leads to poor project decisions and implementation; however, intensive feedback and business analysis on innovation projects are helpful in shaping project deliverables. Project strategists tend to use powerful drivers while referring to implementation efforts. Project managers should know that the implementation of project policy is a critical ally in building a capable organization, and use of the appropriate drivers of implementation of the innovative business projects is the pivotal hinge in the growth of business of a firm.
Innovation projects can benefit from opening up the customer-centric pricing development process to reap long-run advantage in the marketplace. They can co-create consumer-oriented pricing by integrating the consumer value with the stage-gate process. This decision process in project management explores opportunities for employing both inbound and outbound review of the expected project deliverables in reference to upstream and downstream markets. The stage-gate decision model can exploit the advantages of openness, economic rationale, and sustainable effect of decisions for achieving the project goals. This model would allow explicit consideration of managerial know-how and technology through gate evaluations and also enable the project team to continuously assess their core capabilities in working through this decision model. The stagegate process in determining project decision from the initiation stage to the stage of completion is exhibited in Figure 5.3.
A stage-gate model is a conceptual and operational roadmap for developing an effective pricing strategy. This model divides the effort into distinct stages separated by management decision gates. Cross-functional teams must successfully complete a prescribed set of related cross-functional tasks in each stage, prior to obtaining management approval to proceed to the next stage of product development. The stagegate processes have a great deal of appeal to price management, because, basically, they restrict investment in the next stage until management is comfortable with the outcome of the current stage. The gate can be effective in controlling product quality and development expense. Stages and gates in the project decisions are sequential phases and may run into some overlapping activities, especially when they cross the decision points. The stage-gate process leads toward completing tasks sequentially step by step. A newer alternative to the stage-gate process is CPM, which is essentially a management by exceptions technique, in which certain critical parameters of the project, such as cost, time, risk, product performance level, and deliverables are managed by reducing the cost, shortening the time, and delivering quality outputs. Firms need to conduct regular checks so that the project teams remain within bounds. The criteria used in the gate review involve aspects such as:
Figure 5.3 Stage-gate model for decision making
Strategic decision fit in the project environment
Project attractiveness in reference to cost, time, deliverables, risk, and profit
Competitive advantage
Anticipated response level of project team
The stage-gate process begins with understanding the market demand, consumer needs, and project resources for developing an appropriate project decision strategy. Tasks associated with the development of a good project task and time line are then divided into a sequence of logical steps called stages, each of which is preceded by a gate where the attractiveness of the project is assessed. During each stage, a cross-functional project team carries out tasks that result in the completion of defined deliverables including those related to technical (manufacturing, R&D, quality, regulatory) and business (sales, marketing, business development) functions. The advantages of using the stage-gate process are as follows:
Improved project performance
Shorter project time
Quality project deliverables
Earlier detection of conflicts during review in gates
Less recycling and rework
Innovative business projects combined with strategic business initiatives involve significant market and customer attraction. Some innovation-led projects fail because the existing project management methods are unable to forecast their commercial success accurately. Firms managing innovation projects also need to develop systems thinking in managing projects and apply the stage-gate process method to capitalize on the “power of wisdom of project” by allowing the project teams define the business-linked project rules. Such project management practices motivate project teams, sponsors, and project owners (organizations) to enhance boundary of project deliverables, commercialization, and customer value.
Cognitive Factors in Entrepreneurial Performance
Effective management of a firm typically requires both planning and control, establishing performance measuring and rewarding systems to reinforce specific goals of the organization, and developing mindsets of project managers by creating a sense of shared responsibility in performing tasks. Although companies invest considerable time and money to administer polices through project managers, it is necessary to focus on the management strategies on how the structure of the sales force needs to be closely associated with the performance indicators of a firm’s business. Firms must consider the relationship between the differing roles of project managers in reference to intrinsic and extrinsic tasks, degree of specialization, and how to develop a corporate image. These factors are critical in measuring the efficacy of management because they determine how quickly a firm can respond to market opportunities, competitive goals, and reflect on revenues, costs, and profitability of the firm (Tsai, MacMillan, and Low 1991).
The task of a project manager changes over the course of the strategy administration process. Different abilities are required at each stage of management, including analysis of strengths, weaknesses, opportunities, and threats, creating solutions, and taking the lead. Success of the project managers depends on the knowledge, attitude, and practice that they need to have the SMART tag comprising qualities of being strategic, measurable, aggressive, responsive, and time-driven (Rajagopal and Rajagopal 2008). Project managers often view their tasks as a set of stereotypical activities, but in practice, it is a diligent task that involves a variety of conflicts and high risk. Hence, the performance of project managers is demonstrated by effective administrative skills not only in developing new ambiance to carry tasks effectively, but also to resolve conflicts and ambiguities during the task-handling process and dynamics. Result-oriented performance and control are positively related attributes of project managers that lead to the success of the organization (Hultink and Atuahene-Gima 2000).
The project managers’ goals arise out of necessities rather than desires; they excel at defusing conflicts between individuals or departments, placating all sides while ensuring that an organization’s day-to-day business gets done. Project managers should also possess the traits of a good leader to drive enthusiasm among employees of the organization and drive them in competitive dynamics. Leaders, on the other hand, adopt personal, active attitudes toward goals. They look for the opportunities and rewards that are available around, inspiring subordinates and firing up the creative process with their own energy. Their relationships with employees and coworkers are intense, and their working environment is often chaotic (Abraham 2004).
Personality Traits
Businesses organizations need both project managers and leaders to survive and succeed in the global competition. Project managers routinely overvalue certain skills and traits when it’s time to hire, promote, or administratively support an employee. However, some organizations have the right behavioral perspectives in place to portray complete and accurate pictures of coherence and competence in a cross-cultural workplace. The seasoned and senior project managers reveal their competence by using a mysterious blend of psychological abilities known as emotional intelligence. Such managers are self-aware and empathetic.
Encouragement
A good project manager gives credit when it is due to his fellow workers and does not hog the credit. This trait of a good manager is sustaining over many years. It is essential for a project manager to understand the strategic insights or accomplishments made in the context of organizational growth and its goodness of fit in leveraging performance. In this way, project managers should exhibit the qualities also of a good learner in an organization. Direct learning derives from the manager’s own experience and vicariously from the experience of others. In this learning process, a project manager discovers how to benefit from the suggested practice by fellow workers or his team members to prevent problems, create improvement opportunities, and rethink the way it does business (Cook and Brown 1999). Project managers also learn indirectly through the insights of fellow workers and functionaries of supporting organizations such as suppliers, customers, consultants, and competitors to understand and draw useful inferences about a practice. In either way of learning, a good manager always tends to acknowledge his team members for their contributions to organizational growth.
It is observed that most project managers in private firms have high trust in employees. While project managers in collective enterprises develop the lowest trust in employees, the managerial values of power, distance, and collectivism also affect the trust and work culture in business organizations (Wang 2002). Project managers should nurture the organizational values in a triadic portrait of 3A factors that include the personality traits of appreciation, acknowledging, and alluring. Learning to adapt to the advice of co-workers is the way of doing things, which actually helps project managers in maintaining control of the process of carrying tasks. Once project managers have that skill, they need never feel apprehensive about working with or for anyone (Simpson 2002).
Supervision and Functional Efficiency
Project managers represent a large chunk and increasing percentage of the employees of multinational companies. In various industrial segments like financial services, health care, high-technology products manufacturers, pharmaceuticals, and media and entertainment, managers constitute 25 percent or more of the workforce engaged in general-line activities. As most organizations are vertically oriented, the retrofitted organizational structure prompts managers to achieve objectives by pressure tactics on employees, which makes the workplace ambiance more complex. Thus, during the supervisory operations project managers tend to intervene in the task-handling process of peers and outsourced workers, which often lead to inefficient outcome performance. Project managers often choose to work with ad hoc and matrix overlays formed between the vertical structures that affect the functional efficiency in carrying tasks in an organization as well as hamper the organizational work culture (Bryan and Joyce 2005). Project managers in vertical organizations run into interference and attempt to solve problems at the higher level.
Time Management
One of the typical work cultures that Japanese have may be described as 3T power-grid, which comprises a synergy of task (commitment), thrust (driving force), and time (punctuality). Task, thrust, and time relationship is an important strategic triad to be understood by project managers. The theories of time management have progressed beyond these ideas, as the global competition among firms has grown over time. The goal of time management is to allow coworkers and team members to spend most of their time on work that is truly important, but relatively nonurgent. Work and leisure should both be governed by this same philosophy, by balancing excellence in work with excellence in relaxation (Billington 1997). Project managers should strategically manage time, providing staff with greater control over their professional time. The time structure plays a key role in building a performance-driven organization. Due to failures in complying with task schedules, growth opportunities are sometimes not fully realized. Spin-out time management is a process by which multiple tasks are distributed within a given time frame and monitored independently that enhances the individual’s innovative capabilities in carrying out the task. Such time management practice is commonly followed by project managers in many multinational companies (Pieter and van Gorp 2003).
Responsiveness
Project managerial responsiveness is inculcated through effective listening to coworkers and subordinates, understanding the problem, and developing action-oriented thinking in an organization. Listening begins at home, which implies that good managers pay due attention to the ideas of their employees. Employees give lots of verbal and nonverbal messages about whether their concerns have been heard, and project managers need to respect their feelings. Generally speaking, the more important a communication is, the more important is the originator of the communication and that determines when a project manager listens to his or her employee. An attentive listener develops trust among employees and such confidence builds strength. In an organization where managers are good listeners, the employees share the tasks and achievements. Common understanding may be used as a filter to analyze solutions to problems emerging in the team. The information flow should be streamlined for drawing suitable interpretations, inferences, and implications. However, managerial culture is an omnipresent evolution of organizational behaviors that continually helps in building trust among different subgroups of employees in an organization (Rajagopal 2006).
Judicious
Rapidly changing work culture and complexities of organizational problems demand a quick and judicious managerial decision to drive toward a win-win situation. Fast-cycle decision making is not just about making decisions more quickly. It is a rethinking of the decision-making model, where managerial intuition is combined with employees performing brainstorming discussions, carrying out task simulations, and sharing information among the peers. Experiences of project managers drawn from several companies and leading management studies suggest that the managers’ ability to act quickly and wisely depends on his or her personality traits, problem-solving abilities, and managerial relations with the employees (Prewitt 1998). The tolerance limit for any ambiguity and uncertainty in the team work may be very narrow for a project manager while working in a team. This attitude of project managers also reflects their consciousness to the time frame associated with the task of the team. It is required to fix the criteria for the team members to work in the team on the assigned tasks, set a judgmental framework, and detect fallacies (van Woerkom and van Engen 2009). It is may also be necessary to produce a new combination of roles, considering originality or creativity to protect individualism and reduce any assertiveness among the coworkers and staff members.
The value of managerial judgment is an analytical tool that provides a useful way of focusing on creative accomplishments in an organization, rather than their rational limitations because of manager-staff relations or organizational policies. In doing so, project managers should reassert the value of the word “policy” in an organization in reference to its connotations of instrumentality, functionality, and linear rationality (Brownlie 1998). Unsuccessful decisions that were mismatched to the decision task can be explored by project managers to uncover what went wrong and discover ways to improve the chance of success (Nutt 2002).
Proactive and Helpful
The human-value system is a synergy of societal values, family values, and individual values generated through the influence of culture. The personality traits of project managers are largely evolved through family and societal values that govern the family-value paradigm. As regards taking interest in the achievement of each member as well as of the group, the project managers should exhibit a positive attitude to motivate the staff (Cumming 1980). In a work environment, it would be challenging for a project manager to understand and adapt to individual behavior of different cultural groups and use a yardstick to soften the communication gap. Japanese believe in implicit communication with the rule-of-thumb that implied is better than spoken and that employees should appreciate interdependence to work in an organization effectively (Haru 1997).
Resource Management
In practice, project managers need to predict how alternative and relatively complex strategies or administrative processes affect dynamic results, and their likely impacts on employee morale and organizational growth. This is why managers typically obtain key employees’ prior reactions to any new decision, policy or operational approach, and pretest the new idea on a limited scale. These procedures, however, may not provide accurate long-run predictions, and they can be applied to only one or two ideas at a time (Darmon 1997). The decision of project managers based on collective resources determines the task distribution and rewarding dimensions within a predetermined control process. Such strategies operate independently from managers’ monitoring, directing, and evaluating activities, and needs to be assessed separately in the practice of management (Lawler 1990). Project managers should be resourceful in increasing the knowledge of their staff by arranging training in relevant areas directed to boost their capabilities and skills. Project managers need to focus on removing implied status barriers between sales and customer value—a strategic direction to help salespeople to build stronger values to overcome cultural diversities and optimize results. It is also important for the managers to train salespeople toward managing customer emotions, collective competence, and ethical complexities (Martin and Bush 2003).
Creativity
Principles of the relational-cultural theory indicate that the role of relational competency is important in fostering the growth of employees and organization. One of the principal goals is to identify and define specific relational competencies that support creative, innovative, inclusive, and relational practice (Duffey, Haberstroh, and Trepal 2009). One of the attributes of a good manager is to be creative in managing tasks and employee relationships. Managerial creativity aggregates the roles of the cognitive, motivational, and social processes of managing an organization to instill innovation among the coworkers and teams (Paulus and Dzindolet 2008). These attributes of mangers distinguish them from most of the existing work cultures across the countries in the world. This has reflected into the material culture (technology and economy) of Japan toward continues improvement (Kaizen). In fact, Kaizen is a form of creativity embedded in social culture, which has been adapted by Japanese organizations. Japan is a more centralized society that lays emphasis on Darwinian philosophy of evolution—survival of the fittest, which sets more rigid standards of work culture leading to Kaizen (Haru 1997). A good project manager should be able to create an aura among employees to express creative thinking. Aura is defined as a cover that is related to the feeling—experiences of beauty, exclusiveness, uniqueness, and authenticity that an idea, thought process, or imagination creates in an organization. Creativity is an intangible asset for a project manager and a guiding tool for an organization (Björkman 2002). Managing creativity has two serious challenges that managers face in increasing the creativity of their organizations. The objective of managing creativity is to cultivate a creative approach and curiosity in life and work, challenge and test our current mental models, and engage in active experimentation with new mindsets and approaches.
Project managers of emerging companies may have a long-standing and pertinent question of how to map the cognitive variables of employees and develop a coherent work culture. This issue is very pertinent to the organizations that have cross-cultural workplace environment. Behavioral skills and administrative competencies of a project manager are strongly associated with the performance and organizational growth. Higher dependency on the superiors in making decisions on administrative matters lowers the cognitive inertia of project managers in a growing firm and affects the internal fit of working environment in an organization. Hence, the project managers may be delegated higher autonomy in phased manner during the growth stage of the firm. However, effective implementation of autonomy requires a clear view of the objectives, dedication toward understanding cognitive dimensions of employees, and developing discipline at work. A successful project manager should lean toward conducting behavioral analysis of employees, acquire skills in managing manpower, develop commitment, and build network within workplace in reference to task, time, thrust, and target (Rajagopal, Banks, and Rajagopal 2011).
References
Abraham, Z. 2004. “Managers and Leaders: Are they Different.” Harvard Business Review 82, no. 1, pp. 74–81.
Anderson, E.T., and D. Simester. 2011. “A Step-by-Step Guide to Smart Business Experiments.” Harvard Business Review 89, no. 3, pp. 124–32.
Billington, J. 1997. “Fairly Timeless Insights on How to Manage Your Time.” Harvard Business Publishing Newsletter, February, 1–2.
Björkman, I. 2002. “Aura: Aesthetic Business Creativity.” Consumption Markets & Culture 5, no. 1, pp. 69–78.
Bryan, L.L., and C. Joyce. 2005. “21st Century Organizations.” McKinsey Quarterly Online August.
Brownlie, D. 1998. “High Minds and Low Deeds: On Being Blind to Creativity in Strategic Marketing.” Journal of Strategic Marketing 6, no. 2, pp. 117–30.
Browning, T., and R.V. Ramasesh. 2015. “Reducing Unwelcome Surprises in Project Management.” MIT Sloan Management Review 56, no. 3, pp. 53–62. Cook, S.D.N., and J.S.
Brown. 1999. “Bridging Epistemologies: The Generative Dance Between Organizational Knowledge and Organizational Knowing.” Organization Science 10, no. 4, pp. 381–400.
Cristiano, J.J., J.K. Liker, and C.C. White III. 2000. “Customer-Driven Product Development Through Quality Function Deployment in the U.S. and Japan.” Journal of Product Innovation Management 17, no. 4, pp. 286–308.
Cummings, T. 1980. Systems Theory for Organizational Development, 19–25. Chi Chester, UK: Wiley.
Cummings, J., and C. Pletcher. 2011. “Why Project Networks Beat Project Teams?” MIT Sloan Management Review 52, no. 3, pp. 75–80.
Darmon, R.Y. 1997. “Predicting the Long-Run Profit Impact of a Contemplated Sales Force Compensation Plan.” Journal of the Operational Research Society 48, no. 1, pp. 1215–25.
Duffey, T., S. Haberstroh, and H. Trepal. 2009. “A Grounded Theory of Relational Competencies and Creativity in Counseling: Beginning the Dialogue.” Journal of Creativity in Mental Health 4, no. 2, pp. 89–112.
Hartmann, P., and V.I. Apaolaza. 2006. “Green Value Added.” Marketing Intelligence & Planning 24, no. 7, pp. 673–80.
Haru, Y. 1997. Different Games Different Rules, 54–55. New York: Oxford University Press.
Hultink, E.J., and K. Atuahene-Gima. 2000. “The Effect of Sales Team Adoption on New Product Selling Performance.” Journal of Product Innovation Management 17, no. 6, pp. 435–50.
Iyer, B., and T.H. Davenport. 2008. “Reverse Engineering Google’s Innovation Machine.” Harvard Business Review 86, no. 4, pp. 59–68.
Jassawalla, A.R., and C.H. Sashittal. 2000. “Strategy of Effective New Product Team Leaders.” California Management Review 42, no. 2, pp. 34–41.
Johnson, L.K. November 2006. Harnessing the Power of the Customer, 1–2. Cambridge, MA: Harvard Business Publishing Newsletter, Harvard Business School Publishing.
Lafferty, B.A., and R.E. Goldsmith. 2004. “How Influential are Corporate Credibility and Endorser Attractiveness When Innovators React to Advertisement for a New High Technology Product?” Corporate Reputation Review 7, no. 1, pp. 24–26.
Lamming, R.C., T.E. Johnsen, C.M. Harland, and J. Zheng. May 2000. “Managing in Supply Networks: Cascade and Intervention.” 9th International Annual IPSERA Conference Proceedings. University of Western Ontario, Canada, 24–27.
Laroche, M., J. Bergeron, and G. Barbaro-Forleo. 2001. “Targeting Consumers Who are Willing to Pay More for Environmentally Friendly Products.” Journal of Consumer Marketing 18, no. 6, pp. 503–20.
Lawler, E.E. 1990. Strategic Pay: Aligning Organizational Strategies and Pay Systems. San Francisco, CA: Jossey-Bass.
Levy, F.K., G.L. Thompson, and J.D. Wiest. 1963. “ABCs of the Critical Path Method.” Harvard Business Review 41, no. 5, pp. 98–108.
Martin, C.A., and A.J. Bush. 2003. “The Potential Influence of Organizational and Personal Variables on Customer-Oriented Selling.” Journal of Business and Industrial Marketing 18, no. 2, pp. 114–32.
Mohammed, K.F., and A.A. Aibinu. March 29, 2013. “Managing Project Scope Definition to Improve Stakeholders’ Participation and Enhance Project Outcome.” Procedia—Social and Behavioral Sciences 74, pp. 154–64.
Nutt, P.C. 2002. “Making Strategic Choices.” Journal of Management Studies 3, no. 1, pp. 67–96.
Paladino, A. 2005. “Understanding the Green Consumerism: An Empirical Analysis.” Journal of Customer Behaviour 4, no. 1, pp. 69–102.
Paulus, P.B., and M. Dzindolet. 2008. “Social Influence, Creativity and Innovation.” Social Influence 3, no. 4, pp. 228–47.
Pieter, K.J., and D.M. van Gorp. 2003. “Spin-Out Management: Theory and Practice.” Business Horizons 46, no. 2, pp. 15–24.
Prahalad, C.K., and G. Hamel. 1990. “Core Competence of the Corporation.” Harvard Business Review 90, no. 3, pp. 79–91.
Prahalad, C.K., and V. Ramasway. 2004. The Future of Competition: Co-Creating Unique Value with Customers. Boston, MA: Harvard Business School Press.
Prewitt, E. August 1998. Fast Cycle Decision Making 1–2. Cambridge, MA: Harvard Business Publishing Newsletter.
Rajagopal. 2006. “Innovation and Business Growth through Corporate Venturing in Latin America: Analysis of Strategic Fit.” Management Decision 44, no. 5, pp. 703–18.
Rajagopal. 2012. Systems Thinking and Process Dynamics for Marketing Systems: Technologies and Applications for Decision Management. Hershey, PA: IGI Global.
Rajagopal, and A. Rajagopal. 2008. “Team Performance and Control Process in Sales Organizations.” Team Performance Management 14, no. 1, pp. 70–85.
Rajagopal, J. Banks, and A. Rajagopal. 2011. “Analyzing Cognitive Determinants in Managerial Decision Making.” International Journal of Business Excellence 4, no. 1, pp. 44–60.
Sawhney, M., R.C. Wolcott, and I. Arroniz. 2006. “Different Ways for Companies to Innovate.” Sloan Management Review 47, no. 3, pp. 74–81.
Simpson, L. August 2002. Why Managing Up Matters. Cambridge, MA: Harvard Management Update Newsletter.
Tsai, W.M., I.C. MacMillan, and M.B. Low. 1991. “Effects of Strategy and Environment on Corporate Venture Success in Industrial Markets.” Journal of Business Venturing 6, no. 1, pp. 9–28.
van Woerkom, M., and M.L. van Engen. 2009. “Learning from Conflicts? The Relations Between Task and Relationship Conflicts, Team Learning and Team Performance.” European Journal of Work and Organizational Psychology 18, no. 4, pp. 381–404.
Wang, Y. 2002. “Which Managers Trust Employees? Ownership Variation in China’s Transitional Economy.” Asia Pacific Business Review 9, no. 2, pp. 138–57.