From Jugaad to systematic innovation: A book launch experience at IIM Bangalore

“India has extraordinarily skilled technical talent but fails to create innovative products on a sustained basis” – With this paradox begins the book “From jugaad to systematic innovation” written by my friend Prof. Rishikesha Krishnan, a Professor of Corporate Strategy & Policy, and Jamuna Raghavan Chair Professor of Entrepreneurship at IIMB. I got an opportunity to attend the book launch last Friday at IIM Bangalore. The hall was packed and some people were standing. They had come to see the bridegroom (Rishi) and also to hear the bridegroom’s uncle, Subroto Bagchi (This is Subroto’s metaphor). This is a summary of what Rishi and Subroto said.

Rishi:

Why did I write this book? One, to promote an informed discussion on the paradox mentioned above. Second, to present a systemic view on why India is performing poorly on innovation when benchmarked globally. This is in spite of the fact that we are out of license raj for more than 20 years. Central theme of the book is in Chapter 4 which explores “barriers to innovation” from various dimensions such as social, cultural, managerial, political and economic.

The idea of this book traces its origin to a conference Rishi attended in 2002 on innovation systems. There he came across a book by Richard Nelson titled “National Innovation Systems” which presented innovation systems in various countries. The book didn’t have a chapter on India. That’s when Rishi thought, “Perhaps I should write the missing chapter”. He began the work in 2004. (Incidentally, National Innovation Systems is the first book I have come across at Amazon.com with an average review rating of 1 out of 5. The average is formed from a total of 1 review comment and the comment reads - They took my money but I never got the book.)

Subroto:

Why are Indians not so innovative? A sardar in Ludhiana can produce a copycat marker pen efficiently. However, he will not ask, “Who is it being made for? Is it for a kid or Antarctica expedition team members?” The requirements may differ substantially. Innovation may begin at any of the three layers – engineering (bottom-most layer), experiential and existential. Indians are comfortable working at the engineering layers. When Nissan wants to introduce a car in Europe, it sends a team to experience “What it takes to be a motorist in Europe” And the team will experience driving in French Alps as well as on Auto Bann. To operate from the existential layer one needs to creep into the mind of the customer and then work backwards from the feeling. In order to creep into the customer’s mind, we need to learn to dialogue (as against debate or discussion).

A salmon travels thousands of miles to hatch eggs. Out of the 2500 eggs that are laid only 2 will survive and grow up to hatch eggs. Similarly, there is a mortality rate built into the innovation process. Indian society is only beginning to understand and appreciate this.

The book launch was a wonderful experience. I am hoping it was a trailer of the experience the book will create. Let's wish the book a review rating far better than Nelson's. You can purchase the book online here.

Mahatma Gandhi and the heart and the soul of systematic innovation

People admire Mahatma Gandhi for various reasons – leadership, philosophy, as a freedom fighter, as a social reformer etc. But for me, Gandhiji was systematic innovator par excellence. In fact, his approach to innovation embodies what I consider to be the heart and the soul of systematic innovation. What is the heart of systematic innovation? And what is the soul? Let’s explore these two questions with Gandhiji as the hero.

Many people believe that creativity is at the heart of innovation. In fact, I have met people for whom creativity and innovation are synonymous. I have a different view. I believe that systematic experimentation is at the heart of innovation process. And Mahatma Gandhi was a master experimenter. He was a social engineer. It is no surprise that the title to his autobiography is – the story of my experiments with truth. He writes in the introduction, “I simply want to tell the story of my numerous experiments with truth, and as my life consists of nothing but those experiments” and later adds “I claim for them [experiments] nothing more than does a scientist who, though he conducts his experiments with the utmost accuracy, forethought and minuteness, never claims any finality about his conclusions, but keeps an open mind regarding them”.

There are two things common among great experimenters: (1) They will start with small, low cost experiments (sometimes called prototypes) and (2) they have a great respect for failures and constantly learn from them. Gandhiji was no exception. In fact, he has dedicated two chapters in his autobiography to articulate his early experiment of his innovation platform – satyagraha. Chapter 29 (part 4) is titled Domestic Satyagraha and chapter 40 titled Miniature Satyagraha. Chapter 33 (part 5) titled Himalayan miscalculation narrates the failure of satyagraha execution and how he realized what all he needs to ensure to execute a civil disobedience movement successfully. He would find this learning useful a decade later during his best product launch – the salt march.

If experimentation is the heart of systematic innovation then what is the soul? To understand the answer, we need to understand, “How did Gandhiji think of salt for his march?” This peculiar choice confused the British and the Indian leaders alike. When Gandhiji made an official announcement of his salt march plan at Sabarmati Ashram, there were all kinds of reactions. The Statesman, British owned newspaper made fun of him; even Motilal Nehru wired a question, “What will lifting a pinch of salt do?” Gandhiji wired him back, “Please lift and see!” Salt march indeed turned out to be a key milestone in the freedom movement and Gandhiji was conscious enough to publicize it far and wide through New York Times as the march was going on.

Question is, “What made Gandhi see the power of salt that others like Motilal Nehru couldn’t?” The answer is “Immersion”. Gandhiji, after returning from Africa, immersed himself in the real India and because of that he was able to connect with the problems of the ordinary man. Many others remained urban gurus. Thus, I believe that, immersion – understanding the anxieties and aspirations of your customers / potential customers – is the soul of systematic innovation. And Mahatma Gandhi epitomized it.

Many times we hear the question, "Will Gandhi's techniques work today?" For a systematic innovator, this question is absurd. It is like asking in 2030, "Will iPod work?"

Related articles:

Immersive research: P&G’s approach of getting deep customer insights

Discipline of full body immersion: lessons from Ganesha and Bill Gates

Rigor and rhythm of innovation review: a P&G example

How do you check the pulse of your innovation process? Well, I like what GE’s Jeff Immelt says in Game-changer: You known innovation is taking root when there’s rhythm to the review of projects and rigor in the milestones they must meet. If I were to probe only one thing in an organization’s innovation process, I would sit through or perhaps walk-through its innovation review. Everything from who are the reviewers, what is being presented, the nature of the questions, perceived seriousness of implications – all these would send vital signals. Let’s look at how P&G conducts its innovation review as described in Game-changer by A G Lafley.

· Homework before the review: AG points out an important pre-requisite before beginning any innovation review – the business team must have already completed the hard thinking in two areas: clearly defined business growth goals for a minimum of 3 to 5 years out; and clearly defined “where to play” choices or business strategies.

· Who attends: All critical leaders - CEO, Head of business, Head R&D, Head of design, Head of consumer understanding.

· What questions are addressed: AG talks about 3 primary questions:

1. How robust is my portfolio to deliver my goals? Judgments need to be made if there is a right balance of risk in the portfolio. This can be assessed by understanding if you have a big idea. Analyze the data showing how customers (the boss) respond to the idea. Is the proof data-rich or based on people’s opinions and experiences? Does the team know how to make the product? Do we have the right kind of patents? How well does the plan leverage core strengths? What types of help might be needed from outside the business unit?

2. How strong is my innovation plan compared to key competitors? This question requires benchmarking, forcing teams to look externally at what’s happening in the marketplace. It helps assess key competitors’ strategies. Understand in which area they are filing patents that may impact the team’s freedom to innovate.

3. How attractive is my innovation program from financial and return standpoint? Can the innovation be commercialized with a cost structure that enables the right balance between margin enhancement while also providing the customer a good value? Does the innovation portfolio as a whole provide a good return on investment?

· Methodology: The review happens through poster presentations similar to grade-school science fair. Why posters? Because these reviews are full of scientists, and the posters force the scientists to speak in terms that the senior management can understand. They also drive focus and simplicity. Often, the discussion also involves show-and-tell – where people get to touch and use a product or key technology element. Over a period of a few hours, the group can go through a dozen or so innovation projects.

Architect of Quality: The autobiography of Dr. Joseph Juran

I have a deep-rooted fascination for legendary practitioners who preach what they practice and vice versa. For me to find such a person, 4 things should happen: (1) This person should have been a hard-core practitioner contributing significantly to the practice (2) He should have written about the principles, methods and tools that he practices (3) He walks the talk; and (4) I come across, comprehend and appreciate his message. While there may be many who qualify criteria (1) and (2), criteria (3) is very demanding and (4) needs a lot of luck and carries the gravity of my biases. So far I have come across following legendary practitioners: Ramana Maharshi, Warren Buffett, Mahatma Gandhi, Thomas Edison and A G Lafley. This week I discovered another in this category: Dr. Joseph Juran, the architect of quality through his autobiography.

What did I find so fascinating about this book? Let me articulate three things.

· Brutal honesty of narration: When you are a legend, it is easy to write with a tone, “What did I do right to become great?” However, it is much more difficult to look at the movie of your life dispassionately and avoid the blame-game. For example, Juran narrates a story when his career seemed to have hit a plateau at Western Electric (an AT&T company). This was the first time in his career that a vacant slot above him gets filled by someone other than Juran and it shattered his belief that promotion is an entitlement. It made Juran to go into a “revenge” mode for some time. Looking back after 60 years, Juran tries to answer: “Where did the revenge emotion come from? What did I not understand at that time?” In this process, he uses data he gathered from his bosses and subordinates much later on the perceptions people carried about him (tactless & arrogant). I found this approach of writing impressive.

· Evolution of “process capability” as an idea: One of the core contributions of Juran is the concept of “process capability”. It was a radical innovation that demonstrated that you can improve productivity systematically without adding any machinery, workers or material. It made a huge impact in Japanese industry in 50s and 60s, for American industry in 70s and 80s and to the rest of the world later. Juran traces beautifully the conception of this idea, difficulties faced in getting it adopted in his own organization, role of professional societies like Society of Advancement of Management (SAM), American Management Association (AMA), Japanese Union of Scientists and Engineers (JUSE) etc. in spreading the idea and the role of consulting projects and books Juran wrote in establishing the idea.

· A powerful lens to look at last century: Juran came from a Jewish immigrant family and lived for 104 years (1904-2008). His first ten years were spent in poverty and he lived in Minneapolis’s red-light area for 4 years with his dad after his mother’s death. His first car was Ford Model-A (bought in 1929), his company’s strength came down from 40,000 to 7,000 during Great Depression (he survived the lay-offs), he was engulfed by fears of anti-Semitism during world war-II, he decided to become a freelance consultant when it wasn’t an established practice (1945), in 2001 Juran celebrated 75^th wedding anniversary with his wife Sadie. Juran wrote the last chapter of this book in 2003. This vast canvas makes the book an amazing lens to look at the last century.

I recommend this book to anyone interested in any of Business history, Quality, Management, Innovation and Consulting. In India it costs just Rs.359. In all likelihood, I will re-visit this book for years to come.

8 characteristics of an effective idea mananagent system

If “40 years, 20 million ideas” is an in-depth narration of how one of the best idea systems in the world (Toyota) evolved over close to half a century, then “Ideas are free” by Alan Robinson and Dean Schroeder is an in-breadth study of over 150 idea systems across 13 sectors in 17 countries. What do Alan and Dean believe to be the characteristics of a good idea management system? Let’s see it with an example articulated in the book, that of Boardroom, Inc.

Boardroom, Inc is a Connecticut publisher and it averaged 104 ideas per employee in 2002. Its sales per employee were seven times greater than the average publisher. Idea management process as Boardroom works as follows:

Each week every employee is expected to come up with two ideas – no matter how small – and bring them to the department meeting. During the meeting, everyone (including the manager) presents his or her ideas in turn. After each one is explained, the group discusses it and, if possible, improves on it. If members of the group decide that the idea can be used, they decide who will be responsible for implementation (usually the person who came up with it). If the proposal needs further consideration or review at the higher level, someone will be assigned to follow through. The average meeting involves 8 to 10 people, lasts 45 minutes and in addition to taking care of normal departmental business, processes some 20 ideas. Quarterly bonus, which may be on average several thousand dollars based on corporate performance, is given to only those employees who have offered at least 26 ideas in that quarter.

According to Alan and Dean, this simple process has most of the characteristics of an effective idea system. Let’s summarize them below:

1. Ideas are part of everyone’s normal work
2. It is easy to submit ideas
3. Ideas are reviewed and discussed by people who have direct knowledge of the situation at hand and who can build on or help modify it so that it will work better
4. Decision making is rapid, effective and efficient
5. Feedback to the suggestor is quick and complete
6. Whenever possible, ideas are implemented almost immediately, often before higher-level managers even become aware of them
7. People are recognized and success is celebrated
8. The system is actively managed and constantly improved.

Alan & Dean identify three core metrics to track how the system is working and where it can be improved further.

• Quantity of ideas: measured typically in ideas per person per year (sometimes, per week, month, quarter etc)

• Source of ideas: participation rate is one metric which tells how many employees across different functions – production, sales, customer support are giving ideas. Source may involve external parties like customers or partners.

• Velocity of ideas: This metric tracks company’s responsiveness to ideas. It tells us about questions like: How long does it take to make decisions about them? How fast are people getting feedback about their suggestions? How quickly are ideas implemented?

INSSAN Convention: sources & types of innovations and a good practice

I wrote about the INSSAN Convention I attended last week where shop-floor innovators were the heroes. What were the sources and types of these innovations? What kind of analysis was involved in coming up with solutions considering? What kind of cost was involved? And finally, what did I not see in the convention? Let me articulate what I observed.

Sources of innovations: Most innovations involved observing a problem area or an improvement opportunity in the plant set-up. These included high frequency of wear-and-tear or failure of critical components (e.g. bearing), oil or gas leakage, inability to manage sudden surge in demand (e.g. sudden demand for 20-pack cigarettes in Godfrey-Philips), human fatigue in certain process steps (e.g. actuator mounting at a BHEL plant), hazard exposure, delay and/or high cost in distribution channel (e.g. forex cost for transfer from oil refinery to retail outlets of BPCL), saving of carbon emission, sourcing new machines locally instead of importing the expensive ones (e.g. at Godfrey-Philips the design change involved 195 spares and sourcing it locally and assembling together). If we look at “Pain-wave-waste” as three main sources of innovation, then these innovations were related primarily to “waste”, some to “pain of employees” and a few to a wave especially “Go green”. I didn’t see any innovations which were linked to consumer research data or consumer complaints (customer pain). Similarly, I didn’t see any “competitor analysis” (why don’t we do this?) or “macro-trend analysis” (social, technology, regulatory waves/trends).

Analysis techniques: The most common analysis technique used by the innovators was “why-why” analysis. It is a technique where you start with a problem and repeated ask “why?” until a root-cause is discovered. I feel it is a simple and yet very powerful technique. Note that many of the innovators were not graduates and some presented their innovations in Hindi. However, their slides were far better than what I have seen in high profile conferences. Second most popular technique was “Pareto analysis” (80-20 rule) to figure out which 20% things are responsible for 80% of the problems. I didn’t see much collaboration outside the department (let alone the organization) in coming up with a solution. That is far cry from companies like P&G (For example, see here the players that collaborate in P&G’s idea funnel).

Types of innovations: If we use the BusinessWeek classification of 4-types of innovations, then most of the innovations were of type “process improvement” (no surprise here). Some of the process improvement resulted in improving product quality (“product axis”) and occasionally improved the customer experience. Only once I saw the innovation involved optimizing the delivery channel.

My favorite practice: I found Mahindra & Mahindra’s process different and interesting. For example, Mr. Desai from press-shop said that he is part of Everest team which met 12 times a year, came up with 1265 ideas out of which 1020 ideas were implemented. This meant a run-rate of 11 ideas per person per year. The team would identify a challenge such as “reducing input material cost” and work as a cross-functional team to address the challenge. The team demonstrated that input material cost can be reduced significantly by re-using scrap material.

INSSAN 20th Annual Convention: where shop-floor innovators are the heroes

There are many forums where “man on the top” is celebrated. But not many where “man on the spot” – innovators at the shop floor carrying designations like technician, utilities operator, maintenance operator are celebrated. Indian National Suggestion Schemes’ Association’s (INSSAN) 20^th Annual Convention held in Mumbai last week was one such forum. Personally it was a humbling experience for me.

In the picture is Mr. Srinivasan, a sr. assistant from Hosur plant of TVS Motors, shown presenting his idea. Srinivasan became curious when he observed that the piston pin in StarR motorcycle model costs Rs. 15.08 while it costs only Rs.13.87 for VictorGLX model. After doing a “why-why” analysis he found out that the cost was different due to the logistics overhead – pin for Star coming all the way from Andhra Pradesh (500km) while the pin from Victor coming from a nearby place (8km). After laboratory analysis he found out that the material properties of the two pins are the same. When Srinivasan was satisfied with his testing, he suggested that the piston pin coming from nearby vendor be used for StarR and it has already been implemented saving TVS

Guess how many ideas Srinivasan has suggested that have been implemented? A whopping 5792 ideas over the last 6 years saving TVS Rs. 4.86 Crores! He has won best suggestor award 6 times at TVS and also has traveled twice abroad to attend international conferences. Srinivasan was one among 60 to present his idea in the INSSAN’s Convention. The innovators had come from all corners of India like Jamshedpur, Trichy, Vizag, Belgaum, Hosur, Bhilai, Gaziabad, Delhi, Ankaleshwar, Silvassa, Thal, Khopoli, Kandivli, Pune etc. Participating organizations included PSUs like BEL, BHEL, BPCL, RCF, SAIL and private companies like Coromandel, Hero Honda, IPCA Labs, Mahindra & Mahindra, Sterlite Industries, Tata Power, Tata Motors. The only high-tech company represented was Bharat Electronics. Following sectors were missing: Retail, Hospitality, Healthcare, IT, Education, Telecom.

TVS also happens to be leader in India when it comes to idea per person per year metric. In 2009, on an average every TVS employee suggested 44 ideas as compared to an average of 5 ideas per year over 28 companies that participated in the survey. That is close to 10 times the average! You ask the TVS folks and they say, “We are very serious about this process and every quarter review our progress. Last year, every employee carried a goal of 36 ideas for the year”.

Suggestion schemes in India are over half a century old, perhaps tracing their origin at Tata Steel, Jamshedpur. Unfortunately, we don’t have any literature which tells us why some suggestion schemes in India have survived and thriving while others have died or undergone multiple birth-death cycles.

Kudos to INSSAN organizers for creating a platform where we celebrate “men on the spot” and appreciate their ideas!

Related article: Idea management systems in India: Benchmark data from INSSAN