from jugaad to systematic innovation

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monday, october 21, 2013

Innovation for Emerging Markets: Insights

from Renaults Duster and Gillettes GuardIn earlier posts and articles, I have written about the challenges faced by

MNCs in innovating for emerging markets. This week, I focus on two

recent success stories to see whether they offer new insights.

The two cases are Renaults successful SUV, the Duster, and Gillettes

razor system, Guard. Duster has enabled Renault to find a sweet spot in

the increasingly crowded Indian automotive market and achieve a

significant volume of 60,000 to date. Guard has enabled Gillette to target

the huge market of male shavers who use conventional double edge

blades instead of more modern cartridge type shaving systems.

Immersion in Customers Lives: Key to Success

The first thing that strikes one on reading these two cases is how they

depended on straightforward but in-depth consumer research. In both

cases, teams from the companies immersed themselves in the lives of

users to understand their needs.

In the case of the Duster, this revealed that customers were looking for

a vehicle with the looks of an SUV, but a driving experience more akin to

that of a car. This process also helped identify a vacant price band in

which the product could be offered. Specific customer requirements like

better rear air-conditioning and more comfortable rear seats also

emerged from this exercise. [As an aside though, I should mention thatmost foreign car makers have known for several years that cars sold in

India need to offer a much better rear seat experience than that offered

in developed markets so I am surprised that this was a big revelation.]

thinkers50 india award

I received the Thinkers50 IndiaInnovation Award on August 30,2013

thinkers50 india featured on cnbc

tv18

CNBC TV18's Young Turks Progcovered Thinkers50 India

thinkers50 india listing

from jugaad to systematic

innovation
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For the Guard, customer immersion alerted Gillette to the fact that many

Indians shave without running water, and they also dont shave every

day, hence the blade system needs to be easy to clean, and also able to

deal with longer and tougher hair.

Interestingly, neither of these products required Steve Jobs like skills of

understanding needs that users had not expressed. Instead, all that was

required was in-depth understanding of existing user needs. This only

confirms what I have suspected for a long time at the current stage of

evolution of most Indian product markets, there are enough

opportunities to be had simply by identifying user needs that have not

been addressed by existing products and solutions. No sixth sense is

required!

Clean sheet or De-featuring?

While the Duster was developed by starting with an existing Renault

vehicle and adapting it to local needs, the Gillette Guard appears to have

started with a clean sheet. Readers of my previous post might recall that

I wondered when it would be appropriate to start with a clean sheet, and

when to de-feature or modify an existing product. The Duster and the

Guard offer a possible answer to this question: when you need to make

a really revolutionary change in cost structure to address an almost

unthinkable price point (as in the case of the Guard), clean sheet is the

only way. The Guard razor retails for Rs. 19 and the cartridge for Rs. 7 neither of these price points would have been even remotely reachable

starting with a product like Gillettes Fusion or Mach 3 razors.

ToI Bangalore August 31, 2013

interview with ping media

I gave an interview on the sidelinesof the Nasscom Engineering Summitat Pune on October 8, 2013

interview with channel world

magazine

I spoke about innovation in aninterview with C hannelworldmagazine

tedx nitk surathkal october 2011

I was one of the speakers...

at cii hr summit
http://4.bp.blogspot.com/-H-3OLHSO8vA/UmU9Dv2ogcI/AAAAAAAABE0/G9nyS-yXkv4/s1600/Gillette+product+range.jpghttp://www.youtube.com/watch?v=ow7rPSqhELYhttp://www.youtube.com/watch?v=WrcI450HAZYhttp://www.youtube.com/watch?v=JrBTPmJo6U0&list=PL--dQYlnxP1hrAicLQNpbXpU6k-F6SYvEhttp://4.bp.blogspot.com/-H-3OLHSO8vA/UmU9Dv2ogcI/AAAAAAAABE0/G9nyS-yXkv4/s1600/Gillette+product+range.jpghttp://3.bp.blogspot.com/-RX0tQXt1Ix4/UmU97vQZ_vI/AAAAAAAABFE/tCjPuYXdwv8/s1600/Gillette_Guard.JPG


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The Guard is certainly the more enterprising product of the two. It has

only a single blade (unlike Gillettes array of high end multi-blade

products). It uses drastically fewer components than a typical Gillette

razor, uses much less material and has a very simple structure. All of

these contribute to its low cost. Yet, all reports suggest that it gives a

good, safe (cut-free) shave for customers shaving in conditions of poor

light and no running water.

But Questions Remain

Margins & Profitability

Yet, the Guard raises several questions. Firstly, there is no way that a

product like this would yield anywhere near the 35% EBIDTA margins

that P&G (Gillettes corporate parent) is used to from shaving products.

This is corroborated by the financial performance of Gillette India over

the last few years. By a quirk of fate, Gillettes India operations are not

yet fully integrated with that of P&G because Gillette in India is a

publicly-listed company with an Indian partner (the Poddar group).

Hence, we have access to the financials of Gillette India. These show that

while their top line has been growing by about 15% every year, the

bottom line has been declining in most of the past few years. Though this

decline cant be attributed to Guard alone, the fact remains that this is

clearly a low margin product and its likely that its increasing volumes

are adding to the top line but not helping the bottom line. While Gillette

might nurture the dream of upgrading its Guard customers to higher

margin shaving products, thats unlikely to happen in any foreseeable

future. (Instead some reports indicate growing interest in the Guard in

developed markets!).

Imitation & Appropriation of Value

The second issue is barriers to imitation, and concerns related to

appropriating value from a new product like the Guard. Historically, As a

company. Gillette has depended on R&D to come up with improved

shaving processes, and comprehensive intellectual property protection to

ensure that the value of its proprietary technology is not appropriated by

others. For the Sensor, Gillette built a wall of 22 patents; for the Mach 3

razor, a much bigger wall of 57 patents. But, its not clear to me how

Gillette will prevent imitation of the Guard. A quick internet search does

reveal some design patents covering the design of the Guard, but there

doesnt appear to be as impregnable a patent fortress as in the case of

the Sensor or the Mach 3. Instead, Gillette seems to be relying on thesuperiority of its design, the choice of materials and the complexity of

manufacturing as barriers to imitation.

I participated in a panel at the CII

HR Summit, Mumbai, October 1,2013

at wipro km confluence

Talk on September 5, 2013

at imtma annual meeting

Talk on September 6, 2013

launch of 8 steps to innovation

Ravi Venkatesan, LR Natarajan andKumar Sachidanandam graced thelaunch event

our new book releasing march

2013
http://1.bp.blogspot.com/-gGbEFjJyuiU/UmU9O33OwMI/AAAAAAAABE8/UQT2FR-ZObQ/s1600/Gillette+patent+wall.jpghttp://8stepstoinnovation.com/http://www.catalign.com/data/8%20steps%20to%20innovation%20introduction.pdfhttp://1.bp.blogspot.com/-gGbEFjJyuiU/UmU9O33OwMI/AAAAAAAABE8/UQT2FR-ZObQ/s1600/Gillette+patent+wall.jpghttp://4.bp.blogspot.com/-H-3OLHSO8vA/UmU9Dv2ogcI/AAAAAAAABE0/G9nyS-yXkv4/s1600/Gillette+product+range.jpg


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Though the Duster has been successful in the market, its success has

already been threatened by the launch by competitors of new products

like the Ford Ecosport. Renault can take credit for identifying a market

gap and addressing it, but the company seems to have no easy means

of preventing others from coming up with competitive offerings to

address the same market.

But the Biggest Threat maybe to Indian Companies

The fact that MNCs are coming to grips with understanding Indian user

needs and can then use their technological strengths to address these

needs constitutes a significant threat to Indian companies. As MNCs get

their emerging market innovation act together, Indian companies failure

to embrace systematic methods of innovation is going to place them at a

significant disadvantage.

posted by rishikesha krishnan at 7:45 am1 comment:

saturday, october 12, 2013

Focus on Cost Innovation as it is Socially-

embedded: Dr. V. Sumantran

An important highlight of the recent Nasscom Engineering Summit at

Pune was a talk by Dr V Sumantran, head of the automotive business at

the Hinduja group, and formerly head of the car business at Tata Motors.

Dr Sumantran is an auto industry veteran with a long innings at GM in

the US and Europe before he re-located to India about a decade ago.

workshop on crea tivity &

innovation

I co-directed a faculty workshop withSrikant Datar of HBS

at india nonfiction festival

In conversation with Indrajit Gupta

iacc event march 1, 2013

I moderated a panel on "LocalInnovation: Key to Globalization"

expert talk at quest
http://1.bp.blogspot.com/-syKu-nDdPQ8/UlnucOjxeQI/AAAAAAAABDI/dX_3tBYOdNE/s1600/Sumantran.jpghttp://8stepstoinnovation.com/http://1.bp.blogspot.com/-syKu-nDdPQ8/UlnucOjxeQI/AAAAAAAABDI/dX_3tBYOdNE/s1600/Sumantran.jpghttp://jugaadtoinnovation.blogspot.in/2013/10/focus-on-cost-innovation-as-it-is.htmlhttp://jugaadtoinnovation.blogspot.in/2013/10/innovation-for-emerging-markets.html#comment-formhttp://jugaadtoinnovation.blogspot.in/2013/10/innovation-for-emerging-markets.htmlhttp://www.blogger.com/profile/07450841047810068098http://1.bp.blogspot.com/-gGbEFjJyuiU/UmU9O33OwMI/AAAAAAAABE8/UQT2FR-ZObQ/s1600/Gillette+patent+wall.jpg


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The overall theme of the summit was how the Engineering Services

industry in India needs to move from cost arbitrage (which has eroded

substantially over time) to innovation. As the keynote speaker, Dr

Sumantran did a masterly job of making the case for how India needs to

innovate.

Dr Sumantran started by setting the context. He explained how India is

slowly developing into a major auto hub. He gave one interesting statistic

to underline this phenomenon today Chennai produces more cars than

Detroit! However, Indias labour cost advantages are eroding fast, and

India does not rank high on manufacturing competitiveness surveys.

There is therefore an urgent need to find sources of competitive

advantage that transcend labour cost arbitrage.

Source of Competitiveness needs to be Socially Embedded

Dr Sumantran made a powerful case for the importance of our

competitiveness being embedded in our social context. He explained how

Japans embrace of a quality culture did not happen by chance but had a

sociological and geographical basis. As a country with a limited land

mass, Japan has an inherent focus on space efficiency. This gets

translated into an emphasis on compactness (remember the Walkman

came from Japan, as does the concept of a sleeping hotel see the

picture below). A Japanese automobile plant typically occupies one-third

the space of an Indian automotive plant. Japanese practices came from

the need to conserve space e.g. Just-in-time is very useful when youhave limited physical space to store inventory. And, lean on space

meant lean on working capital.

I gave a talk at Quest GlobalEngineering on January 25, 2013

keynote at ittiam technical

festival

In December 2012, I gave thekeynote address at the technicalfestival of Ittiam

3rd ck prahalad memorial lecture

On November 8, I delivered the 3rdCK Prahalad Memorial Lecture at ITMGwalior

my talk at its ghaziabad

On October 20, I gave a talk onInnovation and the Future of theIndian IT Industry

my talk at nstd forum, indonesia
http://1.bp.blogspot.com/-NeSfL5o55pM/UlnulwFaaNI/AAAAAAAABDQ/OojNr2pIAdc/s1600/shared+auto.jpghttp://1.bp.blogspot.com/-NeSfL5o55pM/UlnulwFaaNI/AAAAAAAABDQ/OojNr2pIAdc/s1600/shared+auto.jpghttp://1.bp.blogspot.com/-syKu-nDdPQ8/UlnucOjxeQI/AAAAAAAABDI/dX_3tBYOdNE/s1600/Sumantran.jpg


6/25



Translating this into the Indian context, Dr Sumantran argued that India

is constrained by affordability. (Examples: Shared auto, shampoo

sachet, etc.). Given this reality, he asked: Can India make cost

innovation a strategic platform? There are a number of India-like

markets across the world where this approach would yield dividends, and

this could work in developed countries hit by recession as well. The world

is changing and an interest in lower cost solutions is emerging even in

the most unlikely places e.g. the best selling motorcycle in the US is a

Honda 250 cc bike, not the powerful gas guzzlers of the past. Even

recreational bikes are getting focused on fuel efficiency!

But, Dr Sumantran was quick to emphasise that cost innovation is not

jugaad or quick fix solutions. Rather it is based on good engineering with

a cost-oriented mindset. He quoted Ingvar Kamprad, founder of Ikea:

The challenge is not in building a desk that costs a $1,000 but in

designing one that is functional and elegant for $50.

Principles of Cost Innovation

Dr Sumantran went on to describe the core principles of cost innovation:

Cost innovation needs discipline and following rules. It is usually not

achieved by adding complexity. He described how a Swedish engineer at

SAAB came up with a simple and elegant solution to the problem of neck

injuries caused by car impact from the back.

I gave an invited talk on FrugalInnovation: The Indian Experience atthe National Science & TechnologyDevelopment Forum, Jakarta,Indonesia on October 10, 2012

my talk at bimtech

On September 27, I addressed the

faculty of BIMTECH, Greater NOIDA,on the Challenges in ManagementEducation in India

iimb wins ncpedp award for

universal design

I received the award from MinisterMukul Wasnik on behalf of IIMB on14th August 2012

Felicitations from FL Smidth, aleading engineering consultancycompany for my work on innovation

can migration be stopped?
http://4.bp.blogspot.com/-50QNuHhc9cA/Ulnu1ccXKqI/AAAAAAAABDg/pB8WBsqSLrg/s1600/saab_seat.jpghttp://www.hybiz.tv/Rishikesha-T-Krishnan-/166665https://swamanthan.wordpress.com/2012/10/02/building-an-institution-b-schools-to-search-within-a-session-with-prof-rishikesha-t-krishnan/http://4.bp.blogspot.com/-50QNuHhc9cA/Ulnu1ccXKqI/AAAAAAAABDg/pB8WBsqSLrg/s1600/saab_seat.jpghttp://2.bp.blogspot.com/-PU8HYpchy9w/UlnutIxV-cI/AAAAAAAABDY/37FGg3SO4Nk/s1600/Honda+250cc+bike.jpghttp://1.bp.blogspot.com/-NeSfL5o55pM/UlnulwFaaNI/AAAAAAAABDQ/OojNr2pIAdc/s1600/shared+auto.jpg


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Cost innovation needs courage to move away from established solutions.

Dr Sumantran gave the example ofCessna C itation Mustang which at

$2.5m is one-third the price of the private jets sold earlier. The Mustang

was a clean sheet design involving new concepts like a glass cockpit.

Cost innovation is aided by minimalism. European car makers like Opel,

Audi and Volkswagen have a ll recently unveiled urban commuter cars

with very different concepts that promise to change the auto industry in

fundamental ways. Even F1 car designers like Gordon Murray have taken

on the challenge of designing low-cost cars Murray echoes Kamprad in

saying that he finds this even more challenging than shaving off 100 gms

in weight from a Formula 1 racing car. (Murray has designed a new

carbon fibre based Europe city car, the T.25, that has received rave

reviews).

My interview on Hybiz TV

interview in businessline

tedx talks - mine & others


innovation

powered by


innovation

The book was released in February2010

here are some comments:
http://www.indiaplaza.in/From-Jugaad-to-Systematic-Innovation-The-Challenge-for-India-Rishikesha-T-Krishnan/books/FRMJAGSYSINOV.htmhttp://www.youtube.com/http://www.thehindubusinessline.com/industry-and-economy/info-tech/article2943106.ecehttp://1.bp.blogspot.com/-M_FbODJl9zQ/UlnvD2mJswI/AAAAAAAABDw/OY8KR4vUIok/s1600/T.25.jpghttp://en.wikipedia.org/wiki/T.25http://4.bp.blogspot.com/-vVAbk7br6M0/Ulnu9UWBRgI/AAAAAAAABDo/VBDr3eOe6Jk/s1600/Cessna_Citation_Mustang_N416CM.jpghttp://en.wikipedia.org/wiki/Cessna_Citation_Mustanghttp://4.bp.blogspot.com/-50QNuHhc9cA/Ulnu1ccXKqI/AAAAAAAABDg/pB8WBsqSLrg/s1600/saab_seat.jpg


8/25



Dr Sumantran emphasized that cost gets defined by the requirements,

and hence it is important to define (and re-define) requirements

carefully. He gave the example of the Indian low-cost CRDI systems that

are specified quite differently from their more expensive European

counterparts.

Another important principle of cost innovation is intelligent re-use. He

gave the example of the Boeing 737 Max, a competitive product from the

Boeing stable, that is desendant from the very successful Boeing 737-

200. Since the production of the B737 Max does not involve major newtooling and fixtures, costs remain under control. The Logan, Renaults

most profitable car today, was designed out of throwaway bits from

different Renault models. The first model of the Honda City launched in

Asian markets was a derivative of an earlier Honda Civic.

In summary, Dr Sumantran mentioned that new rules, new thinking, re-

use, minimizing complexity, challenging goals, downsizing and setting the

right requirements are the key principles of cost innovation that India

needs to practise in order to achieve cost innovation. He concluded by

quoting Kettering, the legendary leader of General Motors R&D and

engineering: Engineering is a combination of brains and materials. The

more the brains, the less the materials.

Questions / Implications

Dr Sumantrans talk had one core message innovation in India has to

be focused on affordability but needs to be driven by good engineering.

But the question that kept buzzing in my mind after hearing him was: We

may have the affordability mindset, but do we have the engineering

places where you can buy the

book

Flipkart

Indiaplaza

followers
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9/25



competence required to make cost innovation work? Affordability may be

socially embedded, but is high quality engineering?

All indications are in the negative. For the last two decades, engineering

education in India has been driven by quantity and not quality.

Engineering education served as the feeder to a fast growing software

industry that hired people for their ability to write computer programs,

and not their ability to practice engineering.

As a veteran engineering educator, Professor K Chandrasekaranrecently wrote to me, As a teacher of mechanical engineering,

especially engineering design, for over 4 decades, I am appalled at the

way the most important component of engineering education, viz.,

students' projects ( a curricular requirement), has not been capitalized

on. With no serious attention to this, we are not only denying India of

creative designers, but also generating millions of engineering graduates

without fundamental design knowledge and problem solving ability. This

doesnt bode well for building innovation skills based on engineering

competence.

Dr Sumantrans talk raised another question in my mind: When should

one do clean sheet design, and when should one re-use? He gave

examples of successes from both approaches, but it isnt clear to me

how one predicts which one will work in what context. In the automotive

industry itself, we have contrasting experiences: Fords first product

introduction in India, the Ford Escort, failed; but Ashok Leylands Dost

which uses ideas from older Nissan trucks seems to be doing okay.

Maybe one simple principle is to avoid re-use in external appearance as

far as possible, but to enhance re-use in whatever is not visible to the

customer as long as it does not impact performance in an adverse

manner.

posted by rishikesha krishnan at 6:02 pmno comments:

saturday, october 5, 2013

Guest Post: Chirantan Chatterjee on "Where

will the next big idea come from?"

[Professor Chirantan Chatterjee (IIT Roorkee/IIMC/CMU) is our

colleague in the Strategy area at I IM Bangalore and focuses his research

on the Economics of Innovation.]

I recently finished an executive class teaching principles of valuation and

corporate entrepreneurship to employees from a large multinational

company. Participants in the class had aspirations to go entrepreneurial

with their business ideas and it was curious to gauge their reactions in

the presence of the sponsor of the program, their employer. These are

the quips I over-heard in coffee and lunch time conversations.

Innovation Evangelist

Stable leadership inspires

innovation

2 weeks ago

Insights of a Catalyst in

Alignment & Innovation

Practicality of Gandhis vision of

education through the hands

today

2 weeks ago

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10/25



The government is wasting money on entrepreneurship competitions

around the country.

Has there been any metric designed to measure their performance?

The focus should be on breeding Corporate Intrapreneurs.

This is where the resources and most hungry souls with ideas are.

Where will Indias Next Big Idea come from?

That experience got me thinking on where will Indias next big idea come

from. Will it come from its entrepreneurs or its intrapreneurs? But before

we get there, lets take a quick detour on corporate intrapreneurship (or

one can also term entrepreneurship, for convenience lets condense it as

CI/E) as it has evolved over the last 4 decades. The essential model for

this phenomenon can be captured as shown in this figure:

This framework comes from a 2009 book by Kellogg School academics

Robert Wolcott and Michael Lippitz titled Grow from Within: Mastering

Corporate Entrepreneurship and Innovation. The authors point out that

firms decide on ideas generated by employees, and take stock of the

amount of Resource Authority to be allocated (from ad-hoc to

dedicated) and also on the quantum of Organizational Ownership to be

assigned (from diffused to focused ownership). They further argue that

the models of CI/E could either be that ofThe Opportunist, The Enabler,

The Producer or The Advocate. The authors point out thereafter how

Zimmer is an example of The Opportunist model, Googles Product

Council is an example of The Enabler model, Du Ponts Market-Driven

Initiative is a case of The Advocate Approach while Cargills Emerging

Business Acceleratoris an example ofThe Producerapproach.
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The intriguing point to note was, when goaded, my class, a pool of

technology professionals from Indias software industry, slowly started

thinking about what might be the relevant models in the organizations

that they have worked for in the past. Thus, students conjectured on

bucketing how an Infosys, Wipro, Cognizant, TCS, Reliance Group or

even an I2 Technologies could come under these four buckets. For the

more discerning reader, I will leave it as an exercise to mull more on

how these models could be retrofitted into your experience of corporate

intrapreneurship at your respective organization.

The Challenges of Corporate Entrepreneurship

But moving on, the bigger question lies somewhere else. Basically, is

corporate entrepreneurship easy? Not really. Ideas and ideators comewith their own discoveries, and information asymmetries about its value,

could result in the firm-level sponsor disagreeing about the potential for

the idea with the intrapreneurs, the inevitable consequence of which

could be spin-off formation. CMU professor Steven Klepper who recently

passed away, documented in a series of work ranging across various

sectors how disagreements are a key source of spin-off formation, and

how spin-off formation could explain the growth of technology clusters

like the Silicon Valley.

Thus sustaining CI/E is not an easy task, since it always keeps open the

possibility of new firm formation. After all reduction in transaction and

coordination costs are a key explanation indeed for why firms exist, as

Nobel Laureate economist Ronald Coase argued in his seminal work on

the The Nature of the Firm.
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What should the Government do?

But is it a more difficult a task than sustaining external

entrepreneurship? What could governments do to create a market for

corporate intrapreneurs for example in lieu of external entrepreneurs?

Especially in resource constrained settings like that in India, where a

rupee spent here might mean a rupee lost from being spent somewhere

else? This is largely an open question worth pondering about with careful

measurement providing better evidence. Outcomes from such anexercise could actually be used to get a hang of this question, especially

by tracking performance of a rupee spent on external entrepreneurship

and equivalently on corporate intrapreneurship, controlling for all else

that could confound causal understanding of the question at hand.

Perhaps this is something worthy of a doctoral dissertation work in

managerial economics and decision sciences. Irrespective, the need to

evaluate this is now more than ever before, especially in a world under

recessionary pressure contemplating ways to jumpstart its flagging

economies, especially the emerging ones.

Talking about external entrepreneurship, over the last decade in India,

across engineering and management colleges of the country, including in

the IIMs and the IITs as much in other institutions, entrepreneurship has

been experimented with as the latest fashionable professional choice.

Spurred on by sponsorship from key governmental institutions like the

Department of Science of Technology, Entrepreneurship

Competitions/Contests are now dime a dozen and one wonders how

much these have enhanced the welfare of society with all the money

being spent. Are there metrics to measure the performance of these

entrepreneurship competitions? How many of the oceans of ideas

prospected have really taken off in the last decade? How many have

generated useful employment? Have some of these ideas really

disrupted competitive dynamics of certain markets, bringing down prices

of products and/or offered better choices to consumers? Like many other

issues right now in the country, the answers to these questions remain

unknown.

But with the National Association of Software & Services Companies

along with Confederation of Indian Industries betting on the 10000 Start-

Ups Program one hopes this will promote more useful resource and

thought-leadership allocation on this issue. Perhaps one can also

conjecture that the raison d'tre of the 10000 Start-Ups Program is in

itself the fact that corporate India (domestic or multinationals) are not

doing enough to spur the creative juices of its employees. Till then, one

can only be optimistic.

As my spirited students in the class debated, the answer to the starting

question of this article might not be an either/or issue, potentially the

panacea lies in stimulating both, entrepreneurs and intrapreneurs.

And maybe there in will lie the source of Indias next big ideas?


sunday, september 29, 2013

How can a CEO support innovation in thecompany?

What role does the CEO play in building a strong innovation capability?

What CEO behaviours will support a systematic and structured innovation

process rather than an ad hoc one or jugaad?
http://jugaadtoinnovation.blogspot.in/2013/09/how-can-ceo-support-innovation-in.htmlhttp://jugaadtoinnovation.blogspot.in/2013/10/guest-post-chirantan-chatterjee-on.html#comment-formhttp://jugaadtoinnovation.blogspot.in/2013/10/guest-post-chirantan-chatterjee-on.htmlhttp://www.blogger.com/profile/07450841047810068098


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Lessons from Ratan Tata

Lets start with an example. By the end of his tenure as C hairman of the

Tata Group, Ratan Tata emerged as a strong supporter of innovation.

What did he do well, and where could he perhaps have done differently,

or better?

Mr. Tata worked hard at building creative confidence in the teams he

worked with. Whether it was his support for the Indica in the late 1990s

or his frequent weekend visits with the Nano team in Pune, he

continuously demonstrated confidence in the ability of his young

engineering teams to find creative solutions to the different problems

encountered along the way. He did not lose faith after the rash of post-

launch quality complaints that clouded the launch of the Indica, or the

safety-related incidents and market setbacks after the launch of the

Nano. Mr. Tata demonstrated consistent support for projects that the

group had decided to back. (For more evidence of this, see the account

of Tatas development of the supercomputer in Harish Bhats TataLog).

Mr. Tatas demonstrated interest in innovation, particularly the time he

spent on the Nano, had an interesting ripple effect. Other Tata group

companies figured that innovation was a good way to attract the

attention of the Chairman, and started ambitious projects of their own.

Under Mr. Tatas watch, the group also put in place some group-wide

structures to support innovation. Prominent among these was the Tata

Group Innovation Forum that assembled leading evangelists of

innovation in the group under a common umbrella. This Forum helped

promote collaboration between group companies, identify fresh methods

for the management of innovation, and share best practices. The power

of this collaborative approach was demonstrated best by the Tata Swachwater filter that used the combined expertise of Tata C onsultancy

Services, Tata Chemicals and Titan.

The second important group-level initiative was Innovista, the group-

level innovation contest. This created a new competitive forum for group

companies from all over the world to showcase their innovative efforts,

and be evaluated through a rigorous methodology. A distinctive feature

of Innovista is the Dare to Try award given to teams that took on

challenging innovation projects yet failed in spite of their best efforts.

On the flip side, Mr. Tatas intense involvement in, and support for, the

Nano may have prevented him and his team from taking some

dispassionate decisions that could have made a big difference to the

fortunes of the product. As I have written elsewhere, unlike in the case

of the Ace (Tata Motors very successful sub-1 tonne commercial

vehicle), available evidence suggests that the Nano development and

launch process was divorced from the market. Instead, many key
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decisions involving critical specifications and performance of the vehicle

were taken by Mr. Tata himself. Given that Mr. Tata (though a car

enthusiast) was far removed from the target market of the Nano, this

may have accentuated many of the problems the Nano has faced in the

market.

My takeaways from Mr. Tatas tenure are that the Chairman /

CEO can play an important role in building and sustaining

creative confidence. A continuing and demonstrated interest in

innovation can act as a spur to innovation. Setting up relevantstructures that support innovation is another critical role.

But the Chairman/CEO should not get so closely involved in

specific innovation projects that he begins to second-guess the

market. Instead, he should support the use of appropriate

processes and approaches that prevent the company from

making costly mistakes. To build a process-oriented approach to

innovation, TVS Motor CEO Venu Srinivasan reportedly refuses to take a

decision on any innovation project unless it is backed up by the data and

analysis required by the companys innovation process.

Other Roles of the CEO

In 8 Steps to Innovation, we identified some specific roles that CEOs can

play in making innovation a more systematic and structured activity.

Laying the Foundation

The CEO can play an important role in identifying the companys

innovation priorities at a given point in time, and ensuring that the

companys resources are directed towards addressing those priorities.When Jeff Immelt became CEO of GE a dozen years ago, he realized

that his company had been very successful under his predecessor Jack

Welch in squeezing out waste and inefficiency from the company under

programmes like Six Sigma. Instead, Immelt identified his priority as re-

igniting GEs DNA as an innovative company. He therefore challenged his

business heads to identify imagination breakthroughs big ticket $1B+

ideas that could provide new revenue streams for the company.
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When HCL Technologies CEO Vineet Nayar took charge of the company,

he found that HCLs image in the marketplace did not match what he

believed was the quality and scope of work being done inside the

company. He therefore challenged HCLs employees to find new ways of

communicating the value being created in HCL to analysts and other

stakeholders in the investment community.

Understanding the Market

As managers go up the hierarchy, their day-to-day activities tend to get

far removed from the marketplace. Yet, they have to take big ticket

investment decisions on new innovations. Its therefore essential that

they find distinct and concrete ways of keeping in touch with the market.

The UK retailer Tesco advocates the CEO (and other CXOs) spending at

least a few days each year in a customer-facing role.

Professor Huggy Rao of Stanford recommends each CXO having at his

fingertips the top three delighters and top three disgusters of every

important customer segment in the company. This again helps them take

the right decisions when it comes to innovation projects and

programmes.

Create time, space and infrastructure for innovation

Employees need time and space to come up with new ideas as well as to

translate them into prototypes and demos. The C EO needs to therefore

make sure that this time and space is provided. The right place to start

this is with his direct reports.

A related requirement is the infrastructure and training for innovation-

infrastructure includes equipment for experimentation/ prototyping. The

CEO also needs to ensure that there is support for learning and

development initiatives that can spur and support innovation. Onecompany where we have seen sustained support for innovation-related

training is Titan Industries. When I coordinated a management

development programme on innovation for Titans managers two years

ago, not only did Titan CEO Bhaskar Bhat attend many of the sessions,

he attended the reviews of all the innovation projects and also hosted a
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dinner for the participants.

Make sure that honest failures are not penalized

Experimentation is an integral part of innovation, and many experiments

simply wont work. In fact, if all the innovations in your company work as

planned, your innovations are far too conservative. But, why would

anyone work on these really challenging and risky innovations if they will

be penalized for failure? One of the key innovation-related tasks of the

CEO is therefore to see that honest failure is not penalized. We saw

how the Tata group under the chairmanship of Ratan Tata introduced the

Dare to Try award. In other companies ranging from 3M to GE to IBM,

legends about innovators whose projects failed but were appreciated by

the CEO give a clear message that its safe to fail in pursuit of a good

cause.

posted by rishikesha krishnan at 7:03 pm4 comments:


How to be a successful innovator within a

company

We wrote 8 Steps toInnovation to help organizations build a capability for

systematic innovation. But, how do our insights from the 8 Stepsframework translate into action points for the individual who has the

desire to be an innovator? [Here, my focus is on the innovator who is

working in a company or other organization.]

Be curious

All of us are creative. But its not creativity but curiosity that is the

trigger for innovation. A few days ago, some students from NIT

Surathkal came to meet me. They are keen to get involved in innovation

and entrepreneurship, but they dont know where to start. I suggested

that they look around for problems to solve. India has no shortage of

problems that could provide the starting point for creative problem

solving.
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How do you find these problems? Whether you are working in an

organization, or are a student, immerse yourself in the life of people,

thats the best way to find these problems. Pain, wave (current trends),

and waste (wherever resources are not being put to good use) are good

sources of problems that you can include in your challenge book.

A strong desire to do things better faster, at a lower cost or with

better features or performance - helps drive the curiosity for innovation.

One successful innovator whose co-creation we use every day is Art Fry

(picture below). He is well known for the Post-it note see how his

curiosity led him to a very successful innovation.

Learn and practice techniques to release your creativity

While all of us have some innate creativity, we may express it in

different ways some of us in the kitchen, some of us through music,

others on the sports field. How do we direct our creativity to problem

solving in the business context?

Fortunately for us, there are a number of methods and techniques that

can help us release our creativity. These include TRIZ, design thinking,

Six Thinking Hats, and brainstorming. The internet has plenty of

resources covering these techniques, and there are many organizations

offering courses as well. But, remember that all these are aids to
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innovation, and need to be applied and practiced in the context of the

problem you have chosen.

Focus your creativity on relevant problems

For innovators within organizations, I hope you dont mind a piece of

advice: its usually much more helpful (and less stressful!) to focus your

problem solving skills on problems that are relevant to your

organization.

During my visits to companies, I often hear complaints from employees

such as: I came up with an app to help farmers get market prices easily

on their mobile phone, but no one is interested in what I have created.

But is this a surprise if the person complaining works for a company in

the automotive industry?

All companies work within some scope of business that they have

chosen. They target their (limited) resources to succeed within this

domain. They are unlikely to support ideas that fall far outside this

scope. The best way to avoid frustration is to work on ideas within the

scope of the company or in nearby adjacencies. Otherwise, you will have

a really tough (if not impossible) time convincing someone within the

company to support your ideas. As you might have read, even

companies like Google (which was famous for allowing employees to

work on projects of their own choice for 20% of their time) have in

recent months narrowed the scope of their attention to some well-

defined domains and projects.

Participation in organizational innovation initiatives/contests can be a

good way of ensuring that you are working on problems that are

relevant to the company (provided, of course, that your company has

given some careful though to the themes of the contest!).

Continuously experiment, try to validate your ideas at low cost

While most of us love brainstorming and coming up with new ideas,

ideation is only one part of the innovation process. Ideas gain value

when they can be demonstrated to work. Many ideas may in fact fail,

and may need to be refined and improved upon before they solve a

particular problem. So, a critical skill for innovators is the ability to

design simple experiments that can help them see whether their ideas

work. The ability to persevere with an idea is the hallmark of a

successful innovator. Remember Edisons comment about innovation

being 1% inspiration and 99% perspiration!

Be open to ideas from others, build on your own

It is rare that a single idea solves a complex problem. Ideas become

stronger when they are mixed, matched and refined by other ideas.

Being open to other peoples ideas helps your own become stronger and

better. Of course, while doing this, its only fair to acknowledge the

contributions of others.

Very few ideas are fundamentally new. Often borrowing ideas from other

fields and adapting them is a powerful way of solving problems.

Remember that the design of complex financial products became much

easier because people from Physics and Maths brought their skills and

ideas to the financial services industry.

Make your idea sticky

I often find innovators in organizations frustrated by what they see as a

lack of interest in their ideas. While one way to overcome this challenge

is to work on organizationally-relevant problems, thats usually not


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enough.

Many successful organizational innovators get traction because they

manage to find a champion, a senior organizational member who acts as

their ambassador and promotes their idea. To get such support, its

essential to make your ideas sticky you need to build a good story

around your idea and find ways to creatively communicate it to others.

The slide below gives some of the ways in which you can make your idea

sticky.

Communicating your ideas well benefits from practice. So, as in the case

of enhancing your creativity, work on this skill.

Contemporary management emphasizes the importance of networking.

Try to build a strong network with others in the organization. Once you

have built credibility and trust with influential members of the

organization, it will be easier for you to get acceptance of your ideas.


saturday, september 14, 2013

Why we won't have a Steve Jobs from India

Two copies of Walter Isaacsons biography of Steve Jobs have been on

my bookshelf for close to two years now, but the size of the book

deterred me from starting to read it. I didnt think I was ready to read

570 pages about the enfant terrible, particularly after I heard that the

book had several instances of his petulant and downright bad behavior.

So, I must thank my colleague and friend Sourav Mukherji for giving methe impetus to start reading it. And, I was not disappointed. In fact, I

spent two whole days immersed in the book, literally gobbling every

word in print (yes, I still read books the old-fashioned way!).

As I was reading, one question kept popping up in my mind could we

have a Steve Jobs from India? The immediate trigger came from a

recent interview in Mintwith legendary tech investor, Vinod Khosla, in

which he said that the environment for entrepreneurship in India is

improving, and we could see a Facebook or Google in the years ahead. I

have asked similar questions earlier, most prominently in one of my

columns in Outlook Business.

What made Steve Jobs Steve Jobs?

I guess I dont need to list Steve Jobs accomplishments here (Isaacson

lists eleven instances where Steves products transformed industries!

see below).
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So, lets jump forward and take a look at the man himself.

Steve had some distinctive characteristics: A keen sense of aesthetics;

an eye for detail; an intuitive understanding of what makes for an

outstanding user exper ience; a belief in simplicity and minimalism; an

obsession with getting things right, even if that took more time and

considerably more resources; a very strong and highly polarized opinion

about anything coupled with the ability to change his opinion if

convinced; strong self-belief; showmanship; ability to communicate and

connect with an audience; the ability to distort reality, to make people

think they could do impossible things in crazily ambitious timeframes;

the perspective to combine art and technology to create well designed,

high technology products for (a relatively affluent?) mass market.

Where did these attributes and skills come from? Was Jobs simply born

with them, or did he develop these along the way? And, what external

influences played a role in this process?

The Source of Steve Jobs Genius

Isaacsons book offers some clues:

Steve Jobs (adopted) father Paul Jobs re-conditioned old cars and then

sold them. He had a workshop at home where he spent hours in various

mechanical activities. Paul also built anything needed for their home,

from cupboards to a fence, himself. Steve learnt the importance of

craftsmanship and focusing on the details from Paul. Steves obsession
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that whatever is invisible to the customer should be as perfectly

designed and executed as what is visible had its origins in Paul Jobs

attitude towards his own work.

Steves practical bent was helped by his early exposure to Heathkits

(do-it-yourself kits for electronic products and amateur radios),

membership of the HP Explorers Club, and an electronics class at school

where students were encouraged to tinker around with a variety of

electronics components. An area in which Steve exercised his ingenuity

was in playing pranks on fellow students and teachers, leading to severalpunishments by his school. Jobs first business came from trying to

fool the telephone system into making long-distance calls for free by

simulating the tones that routed signals on the phone network, and then

selling the box that allowed him to do this. (The box itself was designed

by Steves friend and Apple co-founder, Stephen Wozniak, as were many

other gadgets including the Apple II computer).

Steve had a spiritual side to him from an early age. This appears to have

been partly driven by his endeavor to come to terms with his biological

parents giving him up for adoption, and partly was a function of the

times - Steve was a teenager in the late 1960s, a time of great political

and social ferment in the US. This was the time of the anti-Vietnam

protests, an interest in Indian spirituality and culture. This is when Ravi

Shankar became famous, and the Beatles embraced Mahesh Yogi!.

Steve spent several months in India connecting with different spiritual

leaders, and this was the start of a lifetime interest in Zen Buddhism. His

belief in simplicity and minimalism, and his ability to maintain a laser-like

focus on a few priorities had strong links to this interest.

Isaacson quotes Jobs as saying, I began to realize that an intuitive

understanding and consciousness was more significant than abstract

thinking and intellectual logical analysis (p. 35).

Steve dropped out of college after a year because he didnt like the

regular routine and the mix of subjects he had to study. But the college

allowed him to continue to attend courses of his interest for some time.

It was during his stay at Reed C ollege that he developed his lifelong

interest in calligraphy (which played a big role in the graphics capabilities

of the Macintosh), and took basic courses in design.

Why India wont have a Steve Jobs

Very few of us in India do things with our hands. Brahminical India

consistently ranks the brain and intellect over the hands and creative

skills. So much so that even people from traditional craft backgrounds

want to flee to white collar vocations. How many of us grow up with a

workshop in our homes? No Paul Jobs-like inspiration is likely in our

immediate environs

Most Indian families would shudder at the kind of unstructured

experiences that a young Steve Jobs had. Hanging around in another

country for months in the quest of a spiritual experience? I cant imagine

anyone I know allowing their children to do that. And this is not a

financial issue. So many of my friends and acquaintances are spending

upwards of $200,000 educating their children in the US or UK. But they

would go apoplectic if their children were to take a break year, let

alone get an unstructured experience of the Steve Jobs type.

I was recently chatting with the fellows at Ashoka Universitys Young

India Fellowship (YIF) Programme, an exciting postgraduate, liberal arts

/ critical thinking-or iented education initiative created by my good friend

Pramath Raj Sinha. I was surprised to learn from many of them that

they had a tough job convincing their parents that YIF was a worthwhile

investment of their time! Recently, one of my acquaintances, a senior


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manager in a leading multinational decided to cycle from Bangalore to

Hubli by his own account, his mother and brother made a considerable

effort to dissuade him from doing any such thing. I am sure everyone

has heard similar stories or faced related experiences

Our whole system pushes people towards conformism. A good friend, HR

head of a leading multinational, proudly told me over dinner recently that

HR is good at getting people in line. And snuffing out enterprise in the

process?

Are things changing? I was enthused to read about Akhil Mohan, a young

student, who has become a passionate advocate of conservation after an

interactive trip with the Bishnoi tribe in Rajasthan. But, how many of our

young students get exposed to such experiences?

Conclusion

Of course, Steve Jobs success was not due to his individual genius

alone. He grew up in the right place at the right time Silicon Valley in

the late 1970s was the centre of the personal computer revolution. As

Amar Bhide pointed out so eloquently in The Venturesome Economy,

customers in the US have shown a proclivity to try out products from

unknown entrepreneurs that is perhaps unmatched elsewhere. The US is

certainly a more conducive place to do business than India in

Isaacsons book, you wont come across a single one of the typical

constraints that a company in India faces. Steves colleagues and

employees at Apple, Next and Pixar seem to have put up with a lot of his

bad behavior, and I am amazed that in a country as litigious as the US,

he got away with all this without a significant lawsuit against him

.

But it seems clear to me that as long as we cloister and

mollycoddle our youngsters, and prevent them from having a

wider range of influences and experiences, our chances of ever

producing a Steve Jobs from India are very dim indeed.

posted by rishikesha krishnan at 1:08 am4 comments:


Need to Scale? Subroto Bagchi's "The

Elephant Catchers" will almost get you

there

I have a lways been amazed by Subroto Bagchi's ability to combine

writing and active public engagements with a successful corporate

career. More importantly, he is a good writer, and his books (The High

Performance Entrepreneur; Go Kiss the World) have inspired thousands

of young Indians to take wings and pursue their dreams.
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But, from my perspective , his most important book is The Professional.

The rapid growth of the Indian economy has meant that lakhs of young

Indians have entered the workforce in the last two decades. But neither

the Indian education system nor the Indian social system prepares our

young people for organizational life. Subroto's book fills this gap with the

most practical set of inputs that I have seen. Institutions of higher

learning in India couldnt do better than conduct workshops around thecore principles that Subroto proposes in his book.

Now, The Elephant Catchers

Subroto's latest book returns to his earlier theme of entrepreneurship

but with a twist - this time his focus is on scaling-up and growth. What

does it take to make a company scalable? How do your people

requirements change? What about organizational values? And external

branding?
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There are aspects of the book that I really liked. I found Subrotos

candor about the Kyocera fiasco which led to a huge write-off and,

ultimately, the departure of Mindtree founder and Chairman Ashok Soota

refreshing in an era where the truth is often obscured by corporate spin.

Mindtree acquired the whole team developing a new mobile handset from

Kyocera on the premise that the new handset was going to be path-

breaking and this would give Mindtree a leg up in the R&D and product

engineering space (one of the areas where Mindtree has tried to

differentiate itself as a company). However, Subroto describes how they

made a major error of judgement, perhaps carried away by the excitingprospects of a step jump in that business. Readers who are familiar with

our 8 Steps framework would readily see Mindtrees failure to do any low

cost experiments to test the key hypotheses or assumptions related to

this new product, as well as the absence of a robust de-risking process

as significant gaps in Mindtrees process.

Another section that I found very useful is on building a sales engine.

The best salesmen rarely make the best heads of sales, the skill sets

and personalities required for the jobs are very different. When you hire

an experienced sales head from another company, s/he will not be used

to working alone and will require other people, data and support to be

successful, so the total cost to the company is much higher than the

compensation paid to the head of sales. And, most importantly, the

individual who has been a sales head in another company may not be

the best person to create and build a new sales organization. While the

challenges in building a sales organization are well known, Subroto does

an excellent job of illustrating these challenges based on Mindtrees

experience. This would be invaluable to any small company that aspires

to grow beyond the efforts of the founders to build a sustainable sales

pipeline.

Strategy, JVs, M&As, and other insights

Subroto makes several other important points in this book. The first is

about strategy. In Subrotos view, you dont need a strategy unless

you are seeking a significantly higher growth rate than the industry.

While I agree with him that strategy is all about performing much better

than the average performer, I would hesitate to connect strategy to

growth alone. In my classes, I emphasize that the objective of strategy

is achieving sustained, above average returns that exceed the cost of

capital. While growth is one part of this, you need a strategy even if you

want to achieve distinctive performance on other dimensions such as

margins or return on investment.

Subroto emphasizes the important of the emotional connect of strategy.

I couldnt agree with him more - if you want people to get excited about

the strategy they need to relate to it emotionally. Thats why a catchy

story that communicates the strategy well is much more useful than

aggressive numerical targets.

Subroto has interesting views on joint ventures. He is generally not in

favour of them. I find it interesting that few Indian business leaders are

very gung-ho about alliances. Does this come from a strong need for

control? Or, an inherent distrust of others? Or, because Indian

companies often lack a distinctive advantage that they can bring to the

table? I haven seen any good research on this.

Subroto is skeptical about M&As as well. Of course, we know the global

stats on the success of M&As are not good, and Mindtrees experience

seems to have been consistent with these! But, I wish he had also

referred to research shows that the ability to do acquisitions successfully

is a capability that has to be learnt, and that there are companies like GE

and Cisco globally, and our own Bharat Forge and the Tata group that

have over time developed the capability to do acquisitions successfully.
http://www.8stepstoinnovation.com/


25/25


Older Posts

The chapters on how to deal with the media, use consultants and make

corporate social responsibility (CSR) a core part of the companys

strategy dont cover much new ground but are eminently practical and

would be useful to the entrepreneur trying to scale up his enterprise.

Two Weaknesses

While the book is eminently readable and has a tone that is Subroto's

very own, I found his coverage of two issues unconvincing, or at leastlacking in details. In a way the two are related. If you read Subroto's

earlier book, The High Performance Entrepreneur, you would recall how

Mindtree decided on its core values through a consultative process with

its stakeholders. Mindtree was conceived as a warm and caring

company; its logo was designed by youngsters from the spastic school.

In The Elephant Catchers, Subroto describes how expertise, being

businesslike and adding value became critical attributes as Mindtree tried

to scale. This led to a re-definition of Mindtrees core values as well as a

change in the external branding and positioning. But the book doesn't tell

you how these changes were effected in the heart and soul of the

company. If merely re-stating values changed organizations, change

would be child's play. Similarly, for a brand to be successful, it has to be

much more than external communication customers have to

experience the brand for themselves in every interaction with the

company. But the book doesnt complete the picture on these points.

From discussions with him, I know that Subroto has very sophisticated

ideas on organizational change. He even played the curiously named role

of Gardener for a few years in which his focus was on building the next

generation of leadership at Mindtree. In The Elephant Catchers, he

describes how individuals need to scale along with the company, and if

they fail to do so they may not be a part of the longterm plans of the

company. But, somehow, he hasnt tied these different threads together,

and hence the reader doesnt get a holistic picture of the change

process.

But, I would still recommend this book for its useful insights and

triggers for fresh thinking, and above all for an opportunity to

hear first-hand from one of the best business storytellers of our

time.

posted by rishikesha krishnan at 12:11 amno comments:

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