Teams Must Embrace the Learning Curve When Organizations Launch Projects in New Sectors
A self-driving taxi, developed by Volvo in partnership with Uber
BY KATE ROCKWOOD
Size and agility don't always go hand in hand, but it's precisely the combination that large organizations need to become disrupters in today's fast-changing business environment. That's why some of the business world's most recognizable names are embracing a startup mindset as they expand their traditional portfolios and launch projects in new sectors.
For example, household appliance innovator Dyson in September announced a £2 billion project investment to develop an electric car by 2020. In November, Volvo said it would expand a partnership with Uber to develop self-driving taxis. Watchmaker Shinola had no reservations about launching a project to build a boutique hotel, scheduled to open later this year in Detroit, Michigan, USA. And furniture manufacturer Ikea last year veered into the techrealm, developing software for a series of connected lighting products and launching a new augmented reality-shopping app.
Although massive firms have the deep pockets to take their time and ambitiously experiment, they understand navigating new terrain can be a bumpy road. Project teams launching initiatives in new industries must overcome sizable challenges.
For starters, they must determine how to expand their ranks quickly and recruit new kinds of expertise. They must build knowledge so they're better suited to calculate contingency budgets and risk registers in new territories. All of these help build strategic competencies to help organizations accelerate the transition to a new sector.
“In a familiar sector, the project manager could complete the project on time, on budget and in scope and move on to the next. But with new sectors, project managers must understand what makes the business successful—not only the project,” says Tarun Rout, PMP, project manager, Volvo, Bengaluru, India.
When organizations dip their toes into new sectors, they have to fill the talent gap and prepare for a learning curve. After food packaging giant Tetra Pak decided in 2016 to create a consultancy division, customers were already clamoring to hire the service. But staffing the new division was a sticking point. “The question we debated was: Do we develop a training program for the people we have today, or do we take our data set and employ people who are already consultants on how to use the service to deliver projects?” says Paul Grainger, technical key account director, Tetra Pak, Denton, Texas, USA.
“With new sectors, project managers must understand what makes the business successful—not only the project.”
—Tarun Rout, PMP, Volvo, Bengaluru, India
While Tetra Pak ultimately chose to bring in talent, French automaker Groupe PSA took a slightly different approach when its luxury DS division launched a project to integrate bPay chips into the key fobs of its DS3 automobiles. The project, which was completed in September, allows car owners to swipe their key fobs to pay for everything from gasoline to groceries—and pushes the connected car boundaries beyond the auto environment.
Rather than go it alone, Groupe PSA collaborated with a new crop of tech partners to ensure it could get to market faster. The company had a history of leveraging outside specialists to develop new technologies for its vehicles, so it already knew about the keys to collaboration, says Mehdi Sarsar, senior IT project manager, connected vehicle services, S'team Management, a consultant for Groupe PSA, Poissy, France. Explicit discussions around communication expectations—and plenty of documentation—helped those relationships work smoothly from the start.
“We had to ask: How will we workshop the requirements with the partners? What's the sequence of communication, and how will we structure and handle that? It all needs to be documented and very clear so those questions don't hold up the project team,” he says.
READY TO REBOOT
Diving into a new sector means starting from scratch in almost every way—sometimes even project management. Whether it's pivoting to agile delivery approaches while trying to capitalize on the latest tech trend or simply re-evaluating how the company's existing processes need to be tweaked for new sectors, teams must anticipate new wrinkles—and adapt.
“We had to ask: How will we workshop the requirements with the partners?”
—Mehdi Sarsar, S'team Management, Poissy, France
Eveready Industries India, a battery manufacturer for more than 75 years, set its sights on the US$150 billion global appliances market to pursue greater top-line growth, says Amitabh Dikhshit, head of appliances, Eveready, Kolkata, India. So two years ago, the company launched a product-development program to roll out branded appliances.
While the project team was diligent about maintaining rigorous project management standards throughout the process, it still encountered surprises because of its nascent appliance market knowledge. For example, finding and coordinating experts among the plastics, electronics, steel and molded products industries took longer than expected—and threw a wrench into the development schedules for the company's initial products. “Eighty-five percent of the products were on time and 15 percent delayed,” Mr. Dikhshit says. “If I did an analysis on why projects were delayed, I'd say we were juggling too many projects at once.”
To get a better handle on its appliance portfolio, Mr. Dikhshit says the organization has placed a greater emphasis on documenting lessons learned and gathering feedback—information that will help steer future product development. For instance, feedback from customers has already helped to determine which particular appliances should be eliminated from the appliance brand. Items such as cooktops will stick around, while air purifiers likely will be eliminated.
“We've concluded that we want to focus more on growing the brand with established appliances that customers already have a strong need for,” he says.
PHOTO BY SUDIP ROY
“If I did an analysis on why projects were delayed, I'd say we were juggling too many projects at once.”
—Amitabh Dikhshit, Eveready, Kolkata, India
Getting strong and targeted feedback from customers and users helps project teams focus on business goals—and improve outcomes on risky pursuits, Mr. Rout says.
Volvo and Uber are on schedule to develop and manufacture up to 24,000 self-driving taxis by 2021. The company also announced a separate initiative to develop its own fully autonomous vehicle by 2021. Across the portfolio, Volvo project teams put an emphasis on the end user, or riders, to fine-tune technical requirements and enhance design plans.
“In the end, the customer is the one who decides whether the product is going to be successful or a failure, so the project manager's responsibility is to bring the customer's voice into the project charter,” he says.
Volvo project teams used to mail out customer surveys, but the response rate was painfully low. So now teams rely on customer clinics. “We call the customers and give them some kind of virtual demo of what we're going to deliver,” Mr. Rout says. “Their input becomes the requirements for the project—so when we deliver, the customer is ready to buy.”
That external stakeholder engagement also can be valuable for smoothing conflicts with the project sponsor, Mr. Rout says. In a new sector, it can be all too easy for executives to make impulsive, uninformed demands. So having detailed data on customer expectations makes it easier to keep the end user's perspective front and center when trying to show project sponsors what will deliver the most value.
“By bringing the customer's voice to the conversation, you'll make a product that's more in-demand. So when the project is done, the sponsor makes continuous money,” he says. PM
“By bringing the customer's voice to the conversation, you'll make a product that's more in-demand.”
—Tarun Rout, PMP
Vacuum cleaner maker Dyson is working on an electric vehicle.
Watchmaker Shinola launched a hotel project in Detroit, Michigan, USA.
Volvo and Uber are on schedule to develop and manufacture up to 24,000 self-driving taxis by 2021.
Eveready Industries India, a battery manufacturer for more than 75 years, set its sights on the US$150 billion global appliances market to pursue greater top-line growth.
New Adventures Companies around the world are going in new directions to expand their portfolios beyond the sector for which they are known.
West Elm: New Reservations
Furniture retailer West Elm this year will complete boutique hotel projects in Detroit, Michigan, USA and Savannah, Georgia, USA. These two hotels, the organization's first, are part of a larger hospitality program. Project scope includes designing, furnishing and marketing the new hotel, before handing over the facility to hospitality management firm DDK for operations.
Ikea: No Assembly Required
Global home furnishing chain Ikea is taking its pilot program for furniture-assembly services in a new direction. By acquiring chore outsourcer TaskRabbit in September, Ikea can build a full-fledged assembly service without having to start from scratch or invest heavily in new talent.
Ford: Switching Gears
For more than a century, Ford has been fixated on cars. But in mid-2017, the U.S. automaker broadened its mobility play and rolled out a bike-sharing program called Ford GoBike. By the end of this year, the project team plans to have 7,000 bicycles available, spread across 546 stations in various cities in California, USA.