HOW TO ACCELERATE INNOVATION IN NEW GREEN BUSINESS BUILDING

Companies that want to scale quickly must cultivate deep market knowledge and a culture that embraces learning through failure.

India-based industrial biotechnology company Praj Industries has spent decades making innovation and growth fundamental to its business while also being mindful of how its actions affect the planet, people, and local communities. Consequently, the organization has been able to scale up in numerous locations worldwide. In an interview with McKinsey’s Pablo Hernandez, Praj Industries founder and executive chairman Dr. Pramod Chaudhari discusses what he’s learned along the way, how to build custom solutions, and how the next generation of start-ups can approach sustainability.

Key insight #1: Maintain a balanced view of people, profit, and the planet. Emphasis on one area should not come at the expense of another.

Pablo Hernandez: Sustainable growth is clearly a priority for you at Praj Industries. How do you balance that vision while also trying to run a profitable business?

Dr. Pramod Chaudhari: Entrepreneurs can adopt green practices in their business to help create new opportunities. For example, if they come from a manufacturing background, they could build models that show how green manufacturing approaches, such as using renewable power, can minimize their carbon footprint. By embedding these ideas in the company from the beginning, entrepreneurs can strike a good balance among people, planet, and profit. Unfortunately, right now the people element is suffering across many companies, especially as digital technology evolves. Automation, for instance, is having a big impact on employment as its use increases. At the same time, technology is also responsible for a lot of new professions and businesses emerging worldwide. The question is, how can we get people interested in learning how to embrace these new opportunities and strike the right balance?

Key insight #2: Make passion, purpose, and innovation through failure foundational to your business.

Pablo Hernandez: What are your most significant insights from running such a large company? Is there anything you would recommend to other start-up leaders?

Dr. Pramod Chaudhari: You must base your business on purpose and passion, and we can all learn how to do this better. After that, finding the right people and motivating them to get on board is important. When you have the right mix of passion and purpose and the right people, you can get them to do extraordinary things because they will work hard. Of course, leaders must also empower their teams and give them freedom to explore lots of opportunities for innovation—this is often forgotten. Praj Industries is no longer a small garage company, but we make sure that we have a strong R&D focus, which helps us discover, introduce, and commercialize new technologies. By finding the right mix of innovation, people, purpose, and passion, we can grow even faster than normal businesses. Ultimately, innovation should minimize cost, create easier access to customer intelligence, and deliver best-in-class technology.

Pablo Hernandez: In many of your writings, you emphasize the relevance of finding the right people. What characteristics do you look for in the people you work with? What attributes do you value most?

Dr. Pramod Chaudhari: Conventional attributes such as being hardworking and sincere and having dignity are the most important, especially for people who want to build a career in our organization. They must also not be afraid to fail. Failures are encouraged, as long as we learn from them, because if people can explore more ideas and approaches, then we can innovate quickly. We also value people with intrapreneurship qualities who have the mindset of an entrepreneur, meaning they embrace risk and are results-oriented and cost-conscious. A person with unique viewpoints and imagination can also help us find solutions that are effective and efficient. But it’s affordability and innovation that play important roles in accelerating the commercialization of technology.

Key insight #3: Develop a deep understanding of local environments, talent, and culture so you can build custom solutions.

Pablo Hernandez: Your company has a footprint in more than 100 countries across five continents. How did you manage this? How would you advise other entrepreneurs who want to scale their businesses?

Dr. Pramod Chaudhari: In our business, biotechnology is influenced by the local environmental conditions. We come from a tropical climate, and that’s the setting in which we gained experience, built on it, and found success. It wasn’t until later that it became important to offer bespoke solutions. Finding custom solutions requires developing an understanding of the subject and the physical area in which you’re working. When our intrapreneurs go outside India, they look for local knowledge. They need to know about the available logistics, the culture, and the economy of an area so they can adapt to those conditions. Therefore, we created a process to understand the local economy and costs of materials to adapt our products accordingly. We need to know how much this would cost in Africa, in India, in Southeast Asia. Taking the time to do this work shows customers that we are flexible, and it helps us arrive at a solution that is more suitable to a specific location.

Pablo Hernandez: Finding the right people to fuel growth in certain markets is challenging. What is your approach?

Dr. Pramod Chaudhari: You cannot do everything centrally. You need to have the right blend of decentralization and centralization, which is why we sometimes rely on the skills of people in certain markets to help develop our products. For example, in Brazil, the locals’ expertise in manufacturing fabricators was similar to or better than what we could offer in India. Our business approach has always been to think “glocal”—that is, think global and act local.