Gunjan Bagla – Amritt Inc. PDMA – So Cal Meeting: Tuesday, May 15, 2012
“Developing a Global Practice for Innovation that Includes Internal and External Centers of Expertise”
Gunjan shared how a US based company (Clorox) met its need to innovate and meet the needs found in emerging marked nations such as India.
Clorox was looking to add capacity to attack problems and issues with products, these projects that were not at the top of their priority list yet had to be addressed.
It’s not about shipping jobs overseas it is about adding SKUs – New Products. Their CIO = Chief Innovation Officer needed to grow head count and $ spent on innovation. With emerging country markets showing a consistent 8% plus growth, every year vs. the developed country markets with growth in the single digits. They turned to the Indian market as a source of manpower to help drive their new product development initiatives.
The challenge Clorox faced is that it is a big fish in a midsized pond with first or second place in its key markets. Developing a successful new product in a highly competitive saturated market is not easy; they needed local input to make the jump from the US market to the Indian Market. Indian consumers have different tastes. Even after spending large sums of money for extensive upfront research, they have found that to be successful new products must be preferred by 60% plus of the blind test participants. Clorox will not do private label, and no low products. They pay their suppliers a premium.
India has strong Intellectual Property Laws except for Music and Software. When working with Indian partners it is important to understand and uncover the hidden concerns and assumptions on both sides upfront. The western approach is contract based, where the Asian approach is that the contract is only the starting point in the negotiation. A typical Asian contract might be a few pages long; it is but an outline of the agreement. Trust and relationships play a big part in what happens next. Success is defined by the ability to deal with ambiguity. One needs face time to build trust in a personal relationship.
- Indians like to talk about politics and religion as a matter of course, these are often taboo topics in western business speak.
- Yes = I have heard what you said and understand it, Not that I agree with you or what you said.
- Indian communication is subtle and the true meaning is in the subtext what is not said. Indirect communication is considered sophisticated. Where in the west communication is more straight forward and direct. The westerner needs to read between the lines when negotiating with Asians.
- Eastern and Western concepts of time differ greatly. In the east, time is more malleable and deadlines are flexible and open.
- The three key characteristics of westerners who are successful doing business in Asia are: Persistence, Flexibility, and Optimism.
Gujan’s presentation was a big help in helping me understand how Clorox was successful developing new products in both the Indian Market and the US Market. He helped me understand how to work with an Indian counterpart. Thanks for a great presentation Gunjan!
About Gujan Bagla:
Gunjan Bagla works with the global R&D advisory service at Amritt, Inc. His company has helped Clorox, Covidien, Gojo, Kraft Foods, Roche, Woodward Industries, Johnson & Johnson, Vivendi Universal Games, Ubisoft, and other firms with their product development initiatives in emerging countries. The author of Doing Business in 21st Century India, Gunjan was the only southern Californian to be part of President Obama’s executive mission to India in 2010. A mechanical engineering graduate of the Indian Institute of Technology, Kanpur, he holds an MBA with honors from Southern Illinois University and taught an executive workshop on India at Caltech. He is a member of PDMA and past speaker at the Southern California chapter and PDMA’s 2011 Global Innovation Management Conference.