INNOVATION CULTURE:

Myths, Realities, Ideas

CAAYE Young Entrepreneur Summit
R. Gopalakrishnan
Mumbai 14th December 2012
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Click to edit Master subtitle style

SOME MYTHS SOME REALITIES SOME IDEAS

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Myths about innovation

1. 2. 3. 4. 5.

It is essential to be FiM R&D is the measure of Innovation Innovation is more difficult in services than in products Innovation is about big bets Process matters more than culture

Myth 1: It is essential to be FiM

Common tendency to rush to market because: (i) First mover has a true opportunity to gain time Andrew Grove, Intel (ii) FiM allows patenting (iii) It is better to be first than better Al Ries and Jack Trout In reality, the FiMs who failed are forgotten

Example 1: Personal Computer FiM

Example 2: Copiers FiM

Example 3: Disposable Diapers FiM

Other Examples of FiM Netscape versus Microsoft Det versus Surf Bonus versus Rin Tata versus Marico Browsers NSD Powders NSD Bars CNO

Myth 2: R&D is the measure of innovation

(i) (ii)

(iii)

Traditionally, pharma companies spend a lot No statistical relationship between financial results and R&D dollars Booz & Co. Annual Study Companies (like Apple) underspend their peers in R&D, but exceed peers performance

Myth 3: Innovation is more difficult in services than in products

All innovations aim to be magnetic Magnetic = functionality x emotion Products depend more on functionality Services depend more on emotion Emotion = customer experience x employee engagement

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The Starbucks experience: Turning ordinary into extraordinary

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Taj General Manager remembers 26/11

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Myth 4: Innovation is about big bets

n n n

If you employ a genius, you may take a big bet A big bet is a mixture of serendipity, genius, luck and how history is written Real life is a lot more about small bets

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What little bets are

Experiment

Iterate

Play

Reorient

Immers e Define
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Myth 5: Process matters more than culture

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Cultural alignment to business strategy Left brain and reductionist versus right brain and holistic

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A practical view of innovation culture

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SOME MYTHS SOME REALITIES SOME IDEAS

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Reality (1): Lessons I have learnt

Innovate Holistically: Product/Service as well as Business model and Social application Focus on Difficult to replicate rather than as first in the world. Develop and Rely on Culture/Environment rather than on processes. Drive a Long term agenda for innovation. Think biology, not only physics

1.

2.

3.

4.

5.

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Reality (2): Innovation must happen spontaneously There is power in natural innovation as compared to programmed innovation

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Reality (3): Living Systems inspire ways to Innovate

Permeable Boundaries Minimum Critical Rules Aligned Aspirations Flexible Architecture

Source - Organizing on the edge: meeting the demand for innovation and efficiency, Arun Maira and Robert Thomas, PRISM 3rd Quarter 1998) 20

Reality (4): All innovations solve some problem, somewhere, for someone
Innovation is the successful development and execution of value-led solutions to fulfill deeply felt needs

Deeply Felt Need Explicit / Expressed Implicit / Not expressed

I n n o v a t i o n

Effective Solution Affordable / Value-led Difficult to replicate New /Innovative

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Reality (5): Invisible innovations benefit the have-nots who outnumber the haves
Type of Innovation
Technology led Productbased First in the world Eg: Pod, IPod

Level of Visibility

Societal Impact

A B C

High

The Haves

Value-led Business Model based Difficult to replicate Eg: Arvind Eye Care

Low

The Have-nots

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Water borne disease - a global concern especially in emerging markets

The water and sanitation crisis claims more lives through disease than any war claims through guns Half of the worlds hospital beds are occupied by patients suffering from a waterrelated disease Every 15 seconds, a child dies from a water-related disease Water borne diseases cause 1.4 Mn children's deaths every year Nearly one billion people about one in eight lack access to clean water. More than twice that many, 2.5 billion people, dont have access to a toilet Water Borne Diseases cause more than 1.5 times the deaths caused by AIDS in India . and DOUBLE the deaths caused by road accidents An estimated 5,00,000 children in India under five years of age die each year due to diarrhoea 75% of the rural population in India does not have access to safe drinking water In India , 80% of diseases and 33% of deaths are caused by unsafe drinking water

WHO, UN report on developing nations sanitation and health 2006-07

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Tata Swach: Tata Swach: Nanotech Water Purifier

S

No Boiling

18 liters capacity Easy assembly Patented TSRFTM Technology

No Electricity
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No Running Water No Harmful Chemicals

(chlorine, bromine, iodine)

Removes harmful Bacteria and Virus

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How does Swach Work?

Swach video-clip Swach video-clip

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SOME MYTHS SOME REALITIES SOME IDEAS

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Idea (1): Jugaad is acceptable, and is neither a fashion statement nor derogatory

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Idea (2): Mindset determines attitude to innovation

Fixed mind-set people: my abilities are fixed and I must repeatedly prove/use those abilities Growth mind-set people: my abilities will improve only if I learn from mistakes/failures If infrastructure is well-developed, they tend towards R&D If under-developed, they tend to do quick-fixes Quick-fixes and R&D are part of the same journey of satisfying curiosity and solving problems
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Idea (2): continued

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Idea (3): Innovation can be product-led or business-model led

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TATA SALT

Birth and Adolescence Current Strategy

Adulthood and Maturity Renewal

Indias No. 1 Food Brand

1983 TATA Salt Launched Pioneered cause of Iodization in Master subtitle style India through Vacuum Evaporated Salt

PreClick to edit 1983: Non iodized, nonrefined Crystal Salt

Today: Iodized Refined Free-flowing salt, V E Salt 5.2 Ml Tons Iodized

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Birth and Adolescence

Adulthood and Maturity Renewal

Case Study: TATA Salt (2)

Current Strategy

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Birth and Adolescence

Adulthood and Maturity Renewal

Case Study: TATA Salt (3)

Current Strategy

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First to introduce iodized salt in the country

(Much before the ban on non-iodized salt in 1997)

2.

First to brand salt and promote the nutritional benefits of iodized salt. First to develop an outsourced distribution model (at a time when other Salt producers were still in
wholesale mode)

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Idea (4): It takes time to know whether innovation is continuous or disruptive

Disrupter Disruptee Digital Camera Photographic film camera Velvet ShampooBulk Shampoo

Disruptive Innovation Rebel technology, perceived initially as unsuitable Unclear potential until incumbent disrupted

Measure of Performance

Cell phone

Fixed line

Time lag

Continuous Innovation Gradual improvement / focus on efficiency Great long term potential until disrupted

Tim e
Source: Clayton Christensen, The Innovator's Dilemma

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Idea (5): The confluence of 5Cs triggers innovation

1. 2.

3. 4.

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Chaos Challenge Creativity Communicat ion Canalization

Entrepreneurship and Innovation are two sides of the same coin Entrepreneurship and Innovation have the same ingredients

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TATA Structure The physics view

TITAN

Voltas

Tata AutoCo mp TRENT

Tata Technol ogies Tata SKY DTH

Communica tions

Tata

Tata Teleserv ices Tata Elxsi

Rallis

Infiniti Retail (CROM A)

Tata AIG Insuran ce

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TATA Structure The botany view

CROMA Tata AIG

Tata Technologies

TRENT Tata Elxsi

VOLTAS Tata Tele services

Tata Sky

TITAN

Tata AutoComp Rallis

Tata Communications

Tata Consultancy

Tata Steel

Tata Motors

Taj

Tata Power

Tata Tata Chemicals Sons

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