chaturvedi innovation

8/6/2019 Chaturvedi Innovation

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Siddharth Chaturvedi

Section BLT-2


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INNOVATION: DRIVING ECNOMIES AND CHANGE 2

Innovation has been the buzzword for more than a decade in all

spheres of life; business, social, political, sports and all you can

name. This submission attempts to take a closer look at what

exactly do we mean when we say innovation. Is it something like

quality in the way Robert M. Prisig presented it in the Zen and the

art of Motorcycle maintenance or is it something far more articulate

and tangible.

Various frameworks are depicted that attempt to institutionalize

innovation. Examples in innovation are cited not only in technology

but other areas as well, to show the paradigm shift happening in the

businesses and the national policies as well.

Towards the end, there is an attempt to measure innovation and the

resistances offered to innovation. Hence, exploring the reasons why

it is not blossoming in every corner of the globe.

Various models of innovation will be presented which, like most

management practices will like to put in place a theory to generalize

or systematize processes that could replicate acts of human

excellence.


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Innovation Defined

As per Merriam-Webster, innovation is

Function: noun

1 : the introduction of something new

2 : a new idea, method or device.

The National Innovation Council (India) defines Innovation as:

Innovation involves thinking differently and creatively to create

solutions that have an impact in terms of social and economic value.

Innovation can also enable solutions to problems that are not being

met in the conventional way of doing things. Innovation should also

go beyond formal R&D parameters to mean new things: process

innovation, organizational innovation or new applications of old

knowledge. 1

Prof Anil Gupta from Indian Institute of Management says that

Innovation is about disturbing the status quo mindset of the society.

Not surprisingly, it is absolutely in line with Schumpeter who

propagated the theory of creative destruction as a means of

innovation and progress.

Shekhar Kapur, a renowned film director, says innovation will

prosper when there is an allowance of failure.

1http://www.innovationcouncil.gov.in/#
http://www.innovationcouncil.gov.in/#http://www.innovationcouncil.gov.in/#


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Kiran Karnik, former chief of NASSCOM says, innovation takes what

is there and comes up with new processes and business models.

That innovation is a means to an end and not end in itself.

A.G. Lafley, Chairman and CEO, Procter & Gamble says, We define

it in terms in which consumers view and experience it. For us

innovation is the brand in addition to the product, its the design of

the shopping and the usage experience in addition to the functional

and usage benefits, it is the business model, it is the way we go to

market, the supply chain, it is the way we create the cost

structure1

Mindlab puts it more simplistically,

An idea which when implemented adds value. Clearly, they talk

about the value chain.

Invention and Innovation:

1http://www.youtube.com/watch?v=xvIUSxXrffc&feature=fvst


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There are various differences pointed out by authors; William

Buxton has this to say:

Innovation is far more about prospecting, mining, refining and

adding value than it is about pure invention. Here is the business

lesson: innovation is far more about prospecting, mining, refining

and adding value to gold than it is about alchemy. Rather than

focusing on the invention of the brand new, one might better strive

for creative insights on how to combine, develop and leverage what

is already out there, but hidden, or not understood.1

The first confusion to dismiss is the difference between invention

and innovation. The former refers to new concepts or products that

derive from individuals ideas or from scientific research. The latter,

on the other hand, represents the commercialization of the

invention itself. It is important to have this difference clearly

outlined because an invention may have little economic value, if at

all. In order to monetize an invention it is necessary to transform it

into innovation, and such transformation is possible once we find a

target customer, application or market. 2

While invention is a totally new product with no precedent, an

innovation is an improvement on an existing product. For example,

the light bulb was an invention by T.A. Edison, but the table lamp

was an innovation. The bulb was there, the table was there, metal

1

Point of View: William Buxton Innovation vs. Invention2www.innovationzen.com


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was easily available. The first table lamp producer saw an

opportunity that arose by an interaction of these inputs in a

different way. This led to an innovative product.

Xerox was the inventor of the PC but could not profit from its

inventions that eventually companies like IBM did.

It very clearly illustrates that innovation is not a stand-alone

function like an invention. Xerox could not benefit from its invention,

because it could bring the product to the market in an efficient

manner. This clearly understates that innovation encompasses an

interaction of various variables, both market and non-market.

Innovation capacity is to be built up by the firm or a nation and

there are various aspects to building this capacity. The first thing

that comes to our mind when we talk of innovation is, Apple.

Apple in turn is basically a company that makes products based on

technology. That means, in essence we are talking about innovation

in technology. As the various definitions above tell us, innovation is

much more broad and is practiced in varied sectors like agriculture,

education and public delivery systems to name a few.

Innovation has been the buzzword in the business circles for quite

some time now, but only few have been able to institutionalize it


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and come up with a series of innovations. This brings us to the

question of the pre-requisites for innovation to happen.

Whether firms can build up an innovative capacity using these key

drivers in the right mix.

What drives Innovation?

Innovation = f(creativity)

Creativity is both genetic and can be nurtured. As we keep

enquiring, eventually it is the intangible and the non-quantifiable

variables that become the key drivers of innovation.

Innovation has nothing to do with how many R&D dollars you have...

It's not about money. It's about the people you have, how you're

led, and how much you get it.

-Steve Jobs

It is hard to institutionalize innovation. The problem is innovation

does not follow a linear model of input and output. As said earlier, it

requires a healthy interaction of various variables.

Innovation will always come from individuals, so the focus of a

business and nation alike has to be on the development of society

as a whole. What a business can do is to bring down the barriers to

innovation and expect its employees to be innovative.


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How can a person/society be innovative?

The answer to this question is fundamental to all human existence.

Freedom. A person comes up with ideas only when there is an

ecosystem that would nurture such ideas.

Freedom has many facets.

Social freedom: Peer pressure as we know is a primary driver

towards an individuals behavior; it could be buying habits or social

etiquettes. A person needs to be secure about his public image and

the acceptance of the ideas by the peers. Any conservative society

will always be far less innovative than a progressive society, where

any new idea is welcome whether it is taken up or not.

Financial Freedom: everyone has a debt to pay. But if the debt

is too large, the day-to-day activities and paying off the debt is what

will have the majority of share of a persons mind.

For example, young and fresh MBAs usually have a loan to pay

back. Their primary motive is to find a job that will pay them the

highest but are ready to compromise on their level of interest. Some

students having more financial freedom would chose a profile that

interests them more, in turn giving them a breeding ground for their

creativity to come to the fore. These will be the people who would

not be insecure in terms of taking a financial risk.

Need: For market leaders, innovation is a need to maintain their


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position and for a follower, innovation is essential for them to just

stay in the business. With environment becoming a big concern

with both nations and society as such, businesses need to find

innovative ways of cutting down on their carbon footprint.

It is clear, if a firm or a nation provides the right mix of various

components, it can harness innovation on a regular basis.

Innovation Frameworks:

Traditionally much emphasis was laid on innovation being a result of

R&D in technology. This was referred to as the linear model.

All too often, the right kinds of actors are absent, or they do not

interact in ways that support the innovation process. The innovation

systems concept helps to reveal why these interactions might not

be present and what might be done to remedy this problem.1

1Enhancing Agricultural Innovation: How to Go Beyond the Strengthening of Research Systems


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INNOVATION: DRIVING ECNOMIES AND CHANGE10

The scope of innovation includes not only technology and production but

organizations (in the sense of attitudes, practices, and new ways of working),

management, and marketing changes, therefore requiring new types of knowledge not

usually associated with agricultural research and new ways of using this knowledge.

Ways of producing and using knowledge must also adapt and change. The innovation

systems concept emphasizes adaptive tendencies as a central element of innovation

capacity.


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Mind lab again puts forth a simple design of innovation, with people

and culture forming the base of all innovation. These lay the

foundation to innovations that are then articulated into technology

and organizational structure. This structure forms the ground on

which the company decides its innovation strategy. It is of critical

importance here that leadership has to actively involve in devising

innovation strategies, and as A.G. Lafley, Chairman and CEO,

Procter & Gamble says, there is a company strategy and there is

innovation strategy, which are different. This strategy is set in the

context of market environment, companys mission/vision and other

non-market forces.


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Product Innovations

Gradually the knowledge intensity of production has extended beyond the high-tech

sectors to reshape a broad spectrum of traditional industriesshrimp and salmon

fisheries in the Philippines, furniture, textile, and garment production in Indonesia,

Italy, and Taiwan. Firms compete less on the basis of price and more on the basis of

their ability to design novel products or improve the quality management of their

production. Firms that anticipate or quickly adapt to changing consumer demand or

changing production conditions are better placed to navigate between increasingly

dynamic markets for consumer goods on the one hand and rapidly changing markets

for raw materials and business-to-business services on the other. 1

At the same time, innovations have to be price competitive. A product available at a

very high price premium will not be able generate critical mass and will eventually

face a fall out. Secondly, the innovation needs to be sustainable and the customer

should have a trust that there will be more innovations to follow on the same product.

Tata Nano

Tata to win over a large part of the price sensitive motor bike and motor scooter

drivers, who so far could not afford a car, for the Peoples Car. With its four wheels

and the protecting body, this disruptive innovation opened up a totally new world of

safety and comfort for the Indians that have driven motorbikes and scooters so far.

1Enhancing Agricultural Innovation: How to Go Beyond the Strengthening of Research Systems


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This is how Tatas CEO Ratan Tata explains his innovation strategy.

In the first five years Tata Motors plans to sell 2 million, Peoples Cars. Apart from

selling the car in India, an export of this innovation to emerging countries such as

Thailand and Bangladesh is envisioned. 1

The innovation is clearly driven by a latent need of the market. The innovation of the

Tata-Nano is primarily at achieving a blend of safety and comfort at a very

competitive price.

National policy: Innovation as an ecosystem

All Asian nations have come to realize that there has to be a

conscious effort to foster innovation in their country. The reasons

are obvious; fast growing Asian market, competing industries within

Asia and slowly the traditional comparative advantage has little or

no meaning.

Singapore

Singapore never had the advantage of natural resources or human

capital so they created their own advantages. They created a world-

class port that helped them become a trade hub. Their financial

innovation saw the Singapore dollar being rather stable and was

affected less by the volatile exchange rates. They have not yet

disclosed exactly what mix of various foreign currencies they keep

in order to have a rather stable Singapore dollar. What this has done

is created an environment of low risk for businesses to flourish in1http://www.the-innovation-machine.com/?p=76


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the island country.

What we see here is the factor of needthat drove innovation in a

country. This in turn has created a society that has the most

competitive and hence the most innovative environments in the

world.

India

There is a huge disparity of wealth, a great diversity in geography

and culture in India. This has given rise to multiple needs. With

scarce resources and rising needs, Indians have been credited with

innovations across the spectrum. These innovations are called

Jugaad. It is applicable in all spheres ranging from technology, to

process streamlining to getting a way around the system.

As there is still a lot of underused Human capital and natural

resources, India has recently set up the National Innovation Council,

chaired by Sam Pitroda. Even the council recognizes Jugaadas an

innovation that needs to be scaled up.

That brings us to the Innovation strategy used by the council:


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This is the basic model of Innovation framework that the council will

be using to further its cause. As we see, it is again an interaction of

various variables that will help create an innovation strategy for the

nation.

Bhutan

The King of Bhutan introduced the concept of Gross National

Happiness (GNH), in an attempt to define an indicator that

measures quality of life or social progress in more holistic and

psychological terms than gross domestic product (GDP).

This is an innovation in the indicators of prosperity of the nation.

Economic policies of countries around the world tend to focus on

measures of sustaining or increasing the GDP. Once, such an
http://en.wikipedia.org/wiki/Quality_of_lifehttp://en.wikipedia.org/wiki/Holistichttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Quality_of_lifehttp://en.wikipedia.org/wiki/Holistichttp://en.wikipedia.org/wiki/Gross_domestic_product


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indicator comes into the fray, the national policies will also focus on

developing the GNH.

Social Innovations for Inclusive Growth

Grameen Bank

Developed by Professor Mohammad Yunus, Grameen Bank came

into existence because he believed that charity was not the answer

to the woes of poverty. The driver here was empowering the society

through financial freedom.

This financial freedom is brought about by an agent, called the

grameen bank, a micro-credit agency. It created access to credit on

reasonable terms such as the group lending system and weekly-

installment payment with reasonably long term of loans, enabling

the poor to build on their existing skill to earn a better income in

each cycle of loans.

This innovation in turn looked at the society innovating for itself,

creating jobs and opportunities for the impoverished.

Innovation in education

The pushcart revolution

Efren Peaflorida, started a "pushcart classroom" in the Philippines


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to bring education to poor children as an alternative to gang

membership. His efforts were recognized as he was named the CNN

Hero of the Year 2009.1

In the "pushcart classroom", pushcarts were stocked with school

materials such as books, pens, tables, and chairs, and then used on

Saturdays to recreate school settings in unconventional locations

such as the cemetery or trash dump.

This is innovation arising out of a need for education for the children

of the nation.

Mid day meal scheme

The Mid-day Meal Scheme is the popular name for school meal

programme in India, which started in the 1960s.It, involves provision

of lunch free of cost to school children on all working days.

The problem of poverty in India is such that parents preferred their

kids to go to work with them than go to school. Then there was also

a problem of children dropping out of school due to lack of interest.

There was no instant gratification provided by education.

This is where the policy came in to provide both the parents and

children a fair incentive to come to school.

1

http://edition.cnn.com/2009/LIVING/11/16/cnnheroes.tribute.show/index.html
http://en.wikipedia.org/wiki/Indiahttp://edition.cnn.com/2009/LIVING/11/16/cnnheroes.tribute.show/index.htmlhttp://edition.cnn.com/2009/LIVING/11/16/cnnheroes.tribute.show/index.htmlhttp://en.wikipedia.org/wiki/India


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Good ideas. Can they be measured?

There are always attempts to quantify the impact of ideas. While all

of the impact cannot be quantified there are a few parameters that

attempt to do so.

Innovation is measured in terms of the outputs it creates.

It also depends on why innovation is being fostered in a company. It

is good to have an innovative atmosphere in the company where

employees are encouraged to experiment. Now, the objective could

be to have a more satisfied employee staff or it could be to affect

the bottom line. In both cases, the innovation efforts are measured

accordingly.

A products sales figures, the number of children attending school,

the financial statements of the bank and number of people served

are direct measures of the innovation and its impact.

In more formal terms of measurement, the number of patents a

company owns vis--vis the amount of investment made to come up

with these patents. As the following chart shows, the value

innovation creates is different under various considerations of

productivity, service experience amongst others.


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Resistance to innovation

The company culture and leadership are two prominent barriers to

innovation.

The organization may be structured so that the development of an

innovation is more challenging than at another business. This

confining structure can be physical or, alternatively, systemic in

terms of the company's culture.

Similarly, for a nation, the regulatory systems offer the main

resistance to innovation. Anything out of the ordinary might be

subject to a lot of red tape and bureaucratic scrutiny. Hence, a

government employee would rather not innovate which would

generally lead to a negative externality for him.

This is not innovation


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