Make In India: Innovative Project Management for Indian Companies

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1 Make In India: Innovative Project Management for Indian Companies Author: Prashanth Thimmavajjala, Mindtree Ltd Abstract: The Make in India initiative started by the Government of India is aimed at attracting MNCs to setup their manufacturing base in India. In order to ensure ease of business, the government is making some changes to key policies. This is likely to have the same impact on Indian companies as that of the liberalization policies of 1992 with increased competition from MNCs. The current scenario in India is also seeing a boom in the number of startups in various niche segments. The only way for Indian SMEs to compete with the MNCs will be through innovation. This paper tries to explore the possibilities of Indian SMEs exploiting the booming startup ecosystem to foster innovation and gain significant competitive advantage over the MNCs. Collaboration of multiple firms leads to a web of multiple projects at various levels which becomes difficult to manage. Each of these projects will be involving innovation and projects involving innovation are different from traditional projects as there are a lot of uncertainties. This paper tries to explore a few techniques that can be used to effectively manage the complex web of projects and for managing projects involving innovation. Keywords: Make in India, Collaboration, Innovation, Judo Strategy Introduction The Make in India initiative launched recently by the Government of India is a very powerful one and is for seen to be having a big impact on the state of the Indian economy. With this initiative, the government is encouraging multi-national companies to set up their manufacturing base in India and have India as one of their key strategic locations. The government has taken several steps in policy making in order to ensure ease of business to multinationals. The initiative will foster tremendous growth in various sectors like Manufacturing, Defence, Aerospace etc. The policy changes brought about for the Make in India initiative will also encourage Indian companies to increase their operations in India. It will also encourage a lot of start-ups to take up niche segments within the various sectors covered under this initiative and come up with innovative products and solutions. For the Indian companies, the Make in India initiative means increased competition from large multi-national companies as they setup their bases in India. These large companies with deep pockets can make heavy investments in manufacturing facilities and research to be able to come up with cheaper and better products than Indian companies. With no cost arbitrage advantage, the Indian companies will be suddenly facing these giant firms with competing products in the same market segments. Indian companies will have to become more innovative and creative with their products to take on the big firms and stay ahead in home markets. If multi-nationals have to make in India, Indian companies need to Invent in India. This paper tries to explore how Indian companies can use innovative project management techniques to foster innovation and give tough competition to the multi-national firms and remain relevant in the market.

2 Innovate through Collaboration Several start-ups are bound to originate due to the ease of business due to policy changes and also due to the sectors that are niche. These start-ups might have really breakthrough ideas either in nascent or advanced stage but might need more resources and investment to make it into a viable product. This handicap makes them stay small against the large MNCs. Indian companies especially the SMEs have reasonable amount of resources and investing capacity and will need to actively keep looking out for ideas to stay relevant in the market and compete with the MNCs. In order to succeed in the market, both SMEs and Startups can look at collaboration with other firms. Four combinations of collaboration are possible (Fig 1) Fig 1: Types of possible collaborations SMEs collaborating with other SMEs might result in higher resources in a combined form but might lack the dose of fresh ideas needed for innovation. Startups collaborating with other startups might come up with a lot of brilliant ideas but might lack the necessary resources and funding. SMEs collaborating with Startups has great potential as the idea generation competency of the startups with the resource and investing capacity of the SMEs will offer breakthrough ideas. Startups and SMEs can collaborate together to identify ideas, fund them and develop them into end products. The collaboration can involve multiple SMEs and multiple startups to come up with ideas that are highly valuable to the target markets. This will need a lot of collaborative projects to be taken up where multiple firms might be involved. These projects will need to be innovation driven and will require collaborative R&D of all participating firms. Being R&D projects these will require different approach to project management. Project management comes into play at two levels: one at the individual R&D project level and the other at the higher level of network of projects across network of firms. Managing Network of Firms Firms that are planning to collaborate need to find the right partners based on the portfolio fit between the companies. Partner firms should be such that they either have similar portfolio goals or have portfolio gaps that can be filled by the partnership. It should be ascertained if the collaboration will result in an effective combination of ideas to have a breakthrough product. As part of the collaboration, ground rules on idea ownership, share of funding, share of projects and areas of ownership need to be clearly laid out.

3 Once the collaboration is finalized, project management committee and change control board needs to be created with members from all participating firms. These two groups shall help as follows: 1) Work division, resource allocation and monitoring: A large R&D initiative can be divided into multiple smaller R&D projects that can be assigned to each of the participating firms based on their core competencies. The work division is done by the project management committee. Once the work is assigned to individual firms, resource allocation is done at firm level, the committee will have to monitor the progress of the individual projects and also assess how it is impacting the overall progress of the high-level project (Ref 3) (Fig 2) Figure 2: Work division for R&D initiatives 2) Idea Pruning: Since each of the participating firms have their own portfolio of projects and ideas, the project management committee needs to create a network portfolio which comprises of all the projects of all the partners and prune them to identify ideas that can be developed in a collaborative manner to achieve significant competitive advantage to all the participant firms in terms of value for the business (Ref 3) (Figure 3)

4 Figure 3: Idea pruning in collaborations 3) Change Management: The projects to be taken up as part of the collaboration are research oriented. Such projects undergo frequent changes in terms of approach, technology, strategy etc. The change control board will be effective in identifying and approving changes by analyzing if the change is required to meet the strategic objective of the collaboration (Ref 3) (Figure 4) Figure 4: Change management in collaboration projects

5 4) Risk Management: The projects being research oriented have a lot of unknowns which are risks at a high level. The risks can be at the individual parts of the overall project at each firm level or at the overall initiative level. The project management committee will identify the risks, keep track of them and take corrective actions when necessary. The committee might have a stage-gate approach so that the overall project progresses only when some of the risks are no longer present (Ref 3) (Figure 5) Figure 5: Risk management in collaboration projects Managing Individual projects Each firm within the collaboration will be working on one or more parts of the overall R&D initiative and each of these will be managed as an individual project. However, with all these projects, the fundamental concern is about the uncertainty. There is a lot of uncertainty on the details of the solution that the project is supposed to deliver and there is not enough information on the approach that needs to be taken. This leads to confrontation with the traditional project management practices where the end product is clearly defined and the steps required to achieve this are also clearly known. In traditional projects, the deliverable can be broken down to work packages and an appropriate work breakdown structure (WBS) can be designed for managing such projects. However for projects that are driven on innovation, the whole concept of WBS falls flat and cannot be directly adopted. In order to overcome this problem, approaches like Creativity Breakdown Structure (CBS) and Design Breakdown Structure (DBS) are suggested. The Creativity Breakdown Structure (CBS) involves in graphically breaking down each problem that the project is trying to resolve through R&D into multiple fundamental problem areas such as timing, cost, equipment, material, components etc. so that the properties required in the potential solution can be easily identified and be worked upon. When each of the identified problem areas are addressed through innovation, it will be resulting in the potential solution for the high-level problem for which the R&D project was taken up (Ref 1, 2) (Figure 6)

6 Figure 6: Sample example of Creativity Breakdown Structure The Design Breakdown Structure (DBS) develops as an extension of the creativity breakdown structure (CBS) by breaking down the areas and components into fundamental problem areas that needs to be resolved to achieve the goals set out by the component. The DBS shows all the problems and potential solutions to all the problems graphically. The DBS acts as a well-structured road map for the entire project and helps in clear communication between the project teams. The DBS is also helpful in easily isolating the constraints on resolving each of the problem areas so that corrective action can be taken for alternatives to be pursued (Ref 2) (Figure 7)

7 Figure 7: Design Breakdown Structure (Source: Breaking Down Innovation: New Tools for Project Managing Innovative Projects- Dr Olaf Diegel) After multiple levels within the DBS, few of the tasks become more clear and can be easily removed out of the DBS and provided a schedule and resource allocation. This process is repeated till all the problem areas have clearly defined tasks with a defined schedule and resource allocation. Once there are clearly defined tasks, clear stage-gates need to be introduced in the schedule to avoid losing time on activities that do not result in the envisioned result. This will help in abandoning ideas or activities that are not worthwhile and focusing the time and resources on activities that contribute to the envisioned result. Once the projects have reached a level of sufficient clarity in terms of outcome and tasks needed to achieve the desired outcome, then the projects can be managed by traditional project management practices. The change management and risk management will continue to be key due to the uncertainty surrounding such projects. The processes to be followed for these will be as per the traditional practices of project management. Managing Competition Indian SMEs and Startups are much smaller in size as compared to the large MNCs against which they will need to compete. Indian companies will need to adopt Judo Strategy (Ref 4) to compete effectively against the MNCs. The implications of the Judo principles on project management are as below: 1) Move rapidly to uncontested ground to avoid head-to-head conflicts: Choose collaborative projects that are great ideas to reach to markets and segments which are not targets of the MNCs. MNCs generally tend to focus on large markets with large margins. Indian companies can build innovative products to reach smaller and niche market segments within India.

8 To be able to compete and move rapidly to new markets, the products and solutions needs to be developed in a faster manner with lower time-to-market. Project management for such projects should use agile project management methodologies so that the ideas can be developed in an iterative manner towards the final product. Obeya based techniques for project management can also be used to ensure shorter Plan-Do-Check- Act (PDCA) cycle and also to foster faster decision making and communication within individual projects in each of the participating firms and also at the higher level of network of all the firms involved in the collaboration.(ref 5) 2) Be flexible and give way when attacked directly by a superior force: Project selection in collaborations should be such that projects and ideas can be progressively developed based on competitive response of the MNCs to such breakthrough projects at each stage of the project. Alternative projects to be pursued should also be identified if the current projects are likely to face strong competitive retaliation by the MNCs 3) Exploit leverage that uses the weight and strategy of opponents against them: The size and complexity of MNCs becomes their handicap in a few situations. Indian collaborations should choose projects that can use the handicap to their advantage. Projects and ideas that are not likely to be pursued or confronted by MNCs due to their handicap are ideal candidates to be exploited by Indian collaborations. Conclusion Innovation will be a key driver for success for Indian companies in the Indian markets once MNCs start their operations in India following the Make in India initiative. Indian SMEs and startups will have to gear up for the challenge by inventing in India through collaboration. Innovative project management techniques along with traditional project management techniques will ensure success of projects that are undertaken under collaborations and help in building sustainable competitive advantage to all the participating Indian firms. References [1] Birute Mikulskiene: Research and Development Project Management Study Book, 201 [2] Diegel, Olaf : Breaking Down Innovation: New Tools for Project Managing Innovative Projects, The Innovation Journal: The Public Sector Innovation Journal, Volume 10(3), 2005, article 8 [3] Global Dynamics of Innovation and Project Management, PMI, October Solutions/~/media/PDF/Business-Solutions/Global_innovations.ashx [4] Yoffie, B David and Cusumano, Michael. A.: Judo Strategy: The Competitive Dynamics of Internet Time, Harvard Business Review, January-February 1999 Issue [5]