The Hindu Business Line : `Innovation, key to survival and success'

Guest speaker Mr Mukesh Ambani, Chairman of Reliance Industries Ltd, at a programme jointly organised by Stanford Graduate School of Business and Stanford Engineering in Mumbai.

Innovation. This was the theme of the speech that Mr N.R. Narayana Murthy, Chairman and Chief Mentor of Infosys, delivered at the two-day programme of the Stanford University in Mumbai, last Monday. "Innovation is not the same as invention," he began. "Invention is the generation of new ideas, methods or products, by extending the leading edge of frontiers of research. Innovation is the application of these inventions in new combinations," explained Mr Murthy. And he went on to dwell on different sub-themes of innovation.

Why innovate?

For the survival and success of corporations, societies and universities. Innovation is required in every interface with the stakeholders, to make a difference and distinguish your organisation from the rest. Innovation is all the more required in India because of the huge gap between the haves and the have-nots, and doubts about corporate leadership, MNCs and globalisation.

How to distinguish yourself?

Stakeholders have to realise better value when dealing with you. And you can do one or more of these: reducing cost, improving cycle time, quality, transparency, comfort level, goodwill, freeing the customers' time, increasing customer base, and so on.

Should innovation be done by the chosen few?

Innovation has to be pervasive. Everybody should have an opportunity and incentive to innovate. In every function, be it finance, software, quality, HR, or investment, people should constantly look for innovation. Innovation has to become part of our DNA and strategy. Valuable ideas come from every level in the organisation.

Where to innovate?

Innovation only in technology is not enough. You need that more in management practices, where the RoI is greater.

How to bring about innovation?

Ask every employee, "How can you become more valuable to stakeholders." Bring the customer into the mindset. Foster imagination, on how to reap better value for money, whether by increasing the speed of doing or reducing customer costs. And there should be excellence in execution. You can begin with internal pilot projects, to remove the wrinkles in your ideas.

When do innovations fail?

Innovations fail when they are brought about to boost one's success or ego. Instead, be open to criticism. Innovation needs you to be daring, optimistic, and joyful. What is required is to be intellectually energetic, and curious. Promote meritocracy. Once your people see job as an entitlement, innovation is finished! Also, innovation fails when you are not in touch with the customer. A major bottleneck to innovation is not mind, which is the inference engine that thinks, but mindset, which is the whole set of beliefs and scepticism about our ability.

On ideation.

It can be an exercise that runs from 8 to 12 hours, in which the only people who can lecture or argue are those less than 30 years of age. Thus, you can celebrate the power of youth, even as the seniors listen to the ideas. It has to be a hierarchy of ideas, not of positions or age.

But you must document the ideas, implement them and show progress. Offer incentives for innovation, in the form of money, recognition or free time, while providing also a safety net for failure. Keep the innovative spirit alive and roaring in the organisation.

On world-class organisation.

It competes with itself. It obsoletes its own innovation proactively, after reaping the benefits.

And it disseminates the innovation across industry.

We need to leapfrog in value chain

Trends that drive world prosperity

At the end of the programme, jointly organised by Stanford Graduate School of Business and Stanford Engineering, an elite gathering in the Ballroom of the Taj Mahal Hotel and Towers in Mumbai, had Mr Mukesh Ambani, Chairman of Reliance Industries Ltd as a guest speaker. "There is no cap on academic FDI," he began on cheery note, before narrating the tale of India's metamorphosis. Here are a few snippets from his lecture on January 16.

There are four trends that drive world prosperity, in all of which India is way ahead.

The first is globalisation. The world is a village and India has adjusted faster than other countries, in the markets, be they of labour or stock. We are just at the beginning of a trickle-down. The second trend is of growth in world output. From about $30 trillion, it will double to $60 trillion in ten years. And India is to get a disproportionate share of the incremental output, because this generation of India has adapted to technology. The third is demographics. We are a young country, with the power of youth. China can become old before it becomes rich, while in India it will be the opposite. And the fourth trend is democracy. There was scepticism in 1947, whether we would succeed. But we proved them wrong. We have strengthened our institutions. We change governments without bloodshed. Stability is our asset. We may be slow but we'll sustain.

Mock

The world mocked at our attitude earlier. Now we can turn it around as an acronym thus: M for market; O for outsourcing, the first stop in the development of trust; C for capital, and India is now a provider of capital; and K for knowledge, with innovation as a partner.

Game plan

The game plan for progress has five prongs, viz. GDP, exports, technology, stock market, and strengthening the rupee. When our GDP grows to $7.5 trillion by 2025, from less than $1 trillion now, we would be in the top three economies. By then, our exports have to go up, from $160 billion to $2.5 trillion, constituting about a tenth of global trade and a third of the country's GDP. Technology has to contribute about 30 per cent of GDP. Measuring wealth in terms of market cap, we can aim at $8 trillion, with a strong stock market. And the rupee has to be among the top five referred currencies, signifying our fiscal leadership.

Three pathways

First, economic value leadership. This means that we need to leapfrog in value chain, with world-class products. For example, we export iron ore that fetches $4 per ton and import steel at $700 a ton; we get $3 per pair of shoes, which in turn are sold at $50 outside; and we charge $5 per hour for services that are billed at $60 per hour in the developed world. Things need to change. The second pathway is innovation. We have to get out of the screwdriver mindset, and invest more in institutions of higher learning. And the third pathway is wealth creation. From the old slogan of garibi hatao, we should move to amiri badao. Wealth is a mindset issue. Though we have the highest proportion of arable land, it is wasted in low yield. While Israel reaps $5.8 million per square kilometre of arable land, it is only $88,000 here. Time that we think of doubling the income of farmers every 2-3 years. We can make the current century the India century, by scaling economic heights and raising the quality of living.

Reliance factors

One: Sticking to the first principles, with a clear business model, rather than being governed by the flavour of the day or the market.

Two: Winning hearts and minds of people, who are loyal to the cause, not the individual.

Three: Absolute diligence and focus, and never giving up.

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