The Hindu Business Line : Focus on innovation, Stanford don's advice to Indian firms

Innovation holds the key for a company's survival and growth in the fiercely competitive market today and, though it is a truism, there is nothing wrong in harping on it, said Prof Hayagreeva Rao, Atholl McBean Professor of organisational behaviour and human resources at Stanford University.

In an interview, Prof Hayagreeva Rao, on a visit to his native State, said that companies anywhere in the world should focus on innovation.

"It becomes possible only when an organisational culture is developed to encourage new ideas at all levels. To state the obvious, the CEO need not necessarily be the most brilliant, or most original, mind in a company. He, or she, has to welcome suggestions from employees at all levels." Citing the example of Google, he said that the company could make waves as it branched out in a new direction.

"Indian companies too have to learn the trick if they have to compete in the global market, especially in the IT sector. It is not enough if our companies do it cheaply. They should do it better. They should do it differently."

On the growth of the IT sector in recent times in India, he said that it was quite remarkable but there was also the worrying fact of digital divide.

"There is no digital equality. Huge masses of people in the country have no access to a computer in this electronic age."

To a question on the entry of retail giants such as Wal-Mart into the Indian market, Prof Rao said: "Wal-Mart's performance in some of the other Asian countries has not been so encouraging, but we have to wait and watch."

On whether foreign companies would be well advised to acquire local retail chains, he said that mere acquisition would not do the trick. "Each market is different. They should understand the market."

Prof Rao, who left the country in the early 80s to take up the posting at Stanford University, said he was at home in the US, adding that he did not attach much importance to the issue of dual citizenship.

Exuding optimism on the growth of the Indian economy, he said that the rate of eight per cent, or more, could be sustained.

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