The Hindu Business Line : The innovation imperative

Many leaders make the mistake of treating innovation as a vehicle to fulfill the needs of the strategy. In such a case, ideas which could create disruption to open up absolutely new areas get dropped or diluted.

Muhammad Yunus’ (in pic) Grameen Bank sprung from a personal understanding of people and poverty.

Bhupendra Sharma

One key manifestation of a buoyant economic environment is the tendencies in companies to do the ‘desirables’.

Amongst the many ‘nice to do’ things, many organisations have started talking about innovation in the same light.

The idea of innovation being the plank on which India’s growth story would be crafted is exciting. It’s much like what ‘quality’ did for Japan in the 1960s and ’70s in helping change the nation’s image from a ‘cheap and substandard me-too’ tag to world-class in quality and finish. Indian business entities have an opportunity to grow their business by deploying innovation seriously. Needless to say, the basic ingredients to make innovation happen are already present – the highest number of entrepreneurs and amazing social/ linguistic diversity unmatched in the world. The key challenge at the leadership levels is to appreciate innovation as a holistic phenomenon necessary for growth and not as a mythically understood phenomena focused on products/processes /R & D alone. In fact, larger gains can accrue to companies through business model innovations. Therefore, it would be important to understand a few key myths surrounding innovation.

It’s not about a process

It is unfortunate that as management of organisations was ‘Taylorised’, innovation also got the same treatment. The widely known ‘stage-gate’ process got deployed to leverage innovation in organisations.

One has not heard of any big breakthroughs happening through that process unless it may have been accidental.

Making breakthroughs happen is a human endeavour, the least understood, by companies wanting to innovate and necessarily a process game. Many companies which have deployed the ‘stage-gate’ process struggle to keep it going and ultimately end up justifying any output from it as ‘innovation’.

As a result, we have lots of ‘new improved’ versions of innovation being pushed into the market. Hindustan Unilever Ltd, amongst many companies, has bulky innovation process documents. Yet, it’s been 30 years after Fair & Lovely but nothing else has emerged as a big story.

It’s about ideation

There has been emphasis on people’s capacity to think of and create ideas which are ‘breakthrough-sounding’. I have heard many managers walk out of brainstorming sessions with ‘Kuch mazaa nahi aaya’ looks. Lots of effort goes into training people in ideation methods with the hope that they would generate breakthroughs. Even if they did is this enough to create the next big story?

As mentioned earlier, innovation being a human endeavour calls for personal insights into the core challenge which needs a breakthrough. Very often, companies outsource the gathering of insights and often to the same agencies. It is surprising how Pepsi and Coke could come out with the same idea of the Rs. 5 offer at the same time and both claiming that to be a result of an insights exercise.

Companies attempting to innovate through the ideas route have a poor, almost dismal, success rate and that is the point of worry. Globally, the success rate through the ideas route is about 7 – 8 per cent whereas our work demonstrates a success rate above 50 per cent and that is unthinkable to many pundits of innovation. The key challenge is about personal insights which cannot be outsourced. Muhammad Yunus’ Grameen Bank idea was born out of personal discoveries about people below the poverty line.

Innovation is subservient to strategy

Strategy seems to be elitism of thought. Many leaders make the mistake of treating innovation as a vehicle to fulfill the needs of the strategy. In such a case, ideas / opportunities which could create disruption to open up absolutely new and virgin areas get dropped or diluted.

For innovation to deliver a higher success rate and truly be called innovative, it would need to be a pre-strategy exercise that the leadership needs to undertake. After all, what is great strategy if not laced with innovation principles? This would lead to, by design, a higher success of breakthroughs.

As the world struggles to understand how to make breakthrough innovation happen, by design, and not treat it as a ‘Eureka’ phenomenon, Indian leaders have the chance to take a bold step by initiating the innovation agenda now or miss their chance in creating globally recognised value. To be able to do that, they would need to break the old pattern of learning about tools and methodologies which are adopted by Indian companies at least 10-15 years after they have been adopted globally.

There are a few examples of companies under new and convincing leadership which have undertaken the innovation agenda holistically and seriously. Wipro, Tata Chemicals, Mahindra Auto and Marico are some of them. In the coming year, we would need leaders / companies in thousands to sign up on the innovation agenda.

(The writer is Director, Erehwon Innovation Consulting.)

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