What innovation programs can learn from Quality Circle (QC) activity

I got an opportunity to attend 24^th CII QC Circle Convention involving finalists from 4 states in South India (Tamilnadu, Kerala, Karnataka and Andhra) held in Le Meridien on Dec 20, 2011. Each of the 15 participating teams had already excelled in the statewide competition. They were representing companies like Amar Raja, Ashok Layland, BEL, Kancor, Kochi Refinery, Lucas TVS, Rane Madras, Toyota-Kirloskar etc. My objective for attending this event was to understand (a) How does QC activity happen in manufacturing industry in India? (b) What can innovation programs learn from it? Here is my take:

A Quality circle is a volunteer group, a team of four to seven workers with the possible inclusion of their supervisor that understood the methodology of identifying and solving problems. For example, one of the teams named “Gold Star” had five members aged between 23 and 55 years. Two of them were 10^th standard, two had PUC and one had Diploma in Mechanical Engineering. Four of them were machine operators and one of them was a Quality auditor. The team had a patron who was a manager.

From their presentations, following things struck me as worthy of emulating by innovation programs in other sectors.

1. Team activity with gamification: QC circle is a team activity. Contrast this with the suggestion schemes where individuals are the heroes. Each team identified problems, set goals and systematically went about solving them. Weekly/fortnightly one hour was reserved for this activity (e.g. every other Wed 3-4pm). A typical project lasted 2 to 5 months. Each team had created an identity – some called themselves Kadamba warriers, some were Red Chillies, others were New Millennium etc. Each team competed against others within the company to do better at innovating within their environment. In at least some of the participating companies it was a decade long initiative with 100% participation as shown by the picture below.

2. Problem selection criteria: Selecting which problem to solve is given a lot of importance in QC activity. All the teams presented the list of problems they identified first – about 50 to 70. A commonly used technique for selecting the problem was called SQPC analysis. It meant to rate each problem on 4 dimensions – Safety, Quality, Productivity and Cost. In some cases these parameters were crisply defined. For example, safety – zero accidents, quality - < 2 defects per vehicle, production – MTBF > 3 hrs by Mar ’12, cost – 5% saving in allocated budget. See the picture. Depending upon the scope of innovation, this criterion may vary. However, it makes sense to identify some criteria in selecting problems to solve.

3. Genchi Genbutsu: This is a Japanese phrase meaning “go and see for yourself”, which is a central pillar of the Toyota Way. Genchi genbutsu is sometimes referred to as “get your boots on”, which has a similar cadence and meaning. Toyota-Kirloskar team presented how they did brainstorming at workplace to identify and solve the problem better (see the picture). This is similar to immersive research of P&G.

My learning: I derived following learnings for the innovation programs: (1) They can introduce innovation as a team sport - it just makes it more fun. These teams could be Communities of practitioners (like Java / SAP developers) or theme based teams (e.g. sustainability). The teams could compete based on a simple scoring mechanism (no of ideas submitted, no of prototypes demonstrated, no of ideas implemented, business impact etc). (2) Organizations can help innovators in developing a challenge-book. Similarly, organizations can define strategic priorities for selecting problems where it is willing to make non-trivial investment. These could be specific technology areas, customer segments or consumer/social/regulatory trends (3) Organizations can make “immersive research” an important aspect of problem understanding and solving. For example, Intuit’s “follow-me-home” or P&G’s “Living it, working it” programs do this.

Note: Thanks to Prof. Rishikesha Krishnan for the suggestion to make the learning explicit.

Dr. Gururaj Desh Deshpande’s insights on entrepreneurship and innovation

I got an opportunity to listen to Dr. Gururaj Desh Deshpande on “Can Social innovations and Technology innovations leverage off one another?” at the IIT Alumni Club Bangalore event held at Bangalore International Centre, Domlur, last morning. It was a fantastic talk. Here are a few of the insights Desh mentioned in his talk and during Q&A:

· Concurrent innovation: In a place like MIT where Desh is a Board member, there is no dearth of technology innovations. However, for the researcher or the faculty member working on the innovation, the primary interest could be elegance and publishability – criteria that matter for tenure and impressing peer group. The challenge is to create an atmosphere where innovations get connected with relevance to create an impact. This is what Desh calls concurrent innovation where innovators get connected to the real world up front as opposed to much later in the life cycle. Over the last 10 years MIT has funded 80 projects and a third of them have generated $100 M or more.

· The sandbox for social innovations: In social sector, the equation (innovation + relevance = impact) needs to be turned around. The real challenge is in understanding the problem. Then you bring in the ideas to solve the problem. We need to create an environment where this happens systematically. 6 years ago Deshpande Foundation created a sandbox in Hubli to do that. What is this sandbox? It encompasses 5 districts: Belgaum, Dharwad, Gadag, Haveri, and Uttar Kannada, and is home to about 10 million people. Ideas / interventions that need to be proven get experimented within this sandbox first and successful ones get scaled. Help is provided in the form of access to advisory network, teaching, additional resources from corporate / NGOs and of course, grants. Akshayapatra (mid-day meals), Karadi Path (learning through Karadi Tales), Agasthya Foundation (sparking creativity in rural India), Sikshana Foundation (improves quality of teaching in Govt schools) are some of the organizations that were incubated in the Hubli sandbox.

· Sustainability of social ventures: In many social ventures, the beneficiary does not have buying power (e.g. mid-day meal in state schools). Hence, there is a donor. Every time the donor wants to add value to the organization, he projects his risk tolerance on the project. Unfortunately, from his standard of living, he finds everything risky. Very quickly the product does not cater to the requirements. The idea is to take the performing assets, scale them and make them sustainable. i.e. find those interventions that are already working and scale them.

There are three ways a social venture becomes sustainable: (1) By becoming part of free market economy (2) By becoming part of Govt & (3) By supported through broad based charity as opposed to funded by a few rich people. Sometimes it is a combination of the three. For example, Akshaypatra combines (2) and (3).

· Role of value system in innovation: Entrepreneurship or innovation is just a tool. It allows you to do something faster and better. It quite doesn’t say whether it is for the good of the world or for the bad of the world. So you need a value system on top of it. That is a bigger issue we need to resolve. World economy is based on consumption. In the 70s there used to be a debate between capitalism and socialism. About 10 years ago, it looked like capitalism all the way. But now we are beginning to see cracks within capitalism. Consumption based economy means everybody has to consume more and more and more which will just rip apart this whole world. There will be nothing left. So the bigger challenge is to re-think on what winning means. Does winning include sustainability, goodness? Etc. In some area where we see this happening. For example, in energy, 10 years ago it was all about producing more energy. Now, people are realizing that the low-hanging fruits in energy are efficiency and savings and you could save up to 40-50%. Now there are 50 startups in Boston area and another 50 in Silicon Valley who are trying to figure out how they can get access to the low-hanging fruit – efficiency. People are building huge database of every building and then you do audit on a building and show what you can do to achieve how much saving.

· Role of technology in education: Majority of school going kids in India still don’t have access to computers and Internet. In fact, a lot of little things like eraser, pencil, 5-10 pieces of paper, old newspaper (acts as a reading material) have much bigger impact than the computers (For example, see “spot prizes” intervention of Sikshana Foundation – it is the oldest and most popular activity). This is not to say computers are not useful. It is just that getting tablets to villages and putting them to use is a little unrealistic at this point. That doesn’t mean we shouldn’t continue to experiment on these things. One of the best experiments Desh has seen being carried out in a few California schools is as follows: Suppose you want to teach Pythagoras theorem, then the students will be asked see Khan Academy video in the evening at home and come and do the homework in the school the next day. It is changing the whole paradigm. You need a lot of interaction / debate / discussion during the homework. There are going to be a lot of innovative ways of educating each other. In Desh’s opinion, the biggest problem in education is always inspiring kids to want to learn. So any intervention that inspires kids to want to learn is going to create significant value. Technology has been trying to intervene in education for a long time. But it hasn’t. Next 10 years are going to be exciting. MIT just announced a new initiative – MITx - which will offer certification through free online courseware.

Sources:

Photo from thehindu.com

The marvels and the flaws of expert intuition: story of Ramanujan’s first letter to Hardy

Malcolm Gladwell’s “Blink” presents the marvels of expert intuition and Nassim Taleb’s “The Black Swan” highlights the flaws of expert intuition. Well, Srinivas Ramanujan’s first letter to Hardy exemplifies both – the marvels and the flaws of expert intuition. Let’s see how.

Genius or fraud? “I beg to introduce myself to you as a clerk in the Accounts Department of the Port Trust Office at Madras on a salary of only Rs. 20 per annum.” Thus began the letter sent by 25 year old Srinivasa Ramanujan to Hardy, the then renowned Cambridge professor of mathematics. It was dated 16^th January 1913. The nine page letter contained around fifty mathematical results claimed by the Indian clerk. Ramanujan had explained in the letter “I have had no University education but I have undergone the ordinary school course.” What struck Hardy at the first glance was the strangeness of the theorems, not their brilliance. His first reaction was: is he a genius or a fraud?

The letter: The letter contained theorems in number theory, calculus, infinite series etc. Some of the formulae were familiar to Hardy, while others “seemed scarcely possible to believe”. For some reason, Hardy decided to consult his fellow mathematician Littlewood to reach a verdict on whether the author is a genius or a fraud. The duo spent three hours – from 9pm till midnight – going through the manuscript. At the end they concluded that its author is “a mathematician of the highest quality, a man altogether exceptional originality and power”. Some of the results Ramanujan sent to Hardy in his letter belonged to breakthrough category – Hardy was to conclude later. Hardy persuaded Ramanujan and the government to bring him to Cambridge.

The marvel of intuition: Ramanujan’s Indian friend in Cambridge, Mahalonobis who later went on to found the Indian Statistical Institute once asked him how he got a startling result. Ramanujan said, “Immediately [after] I heard the problem it was clear that the solution should obviously be a continued fraction; I then thought, which continued fraction? And the answer came to my mind.” The answer came to my mind sums up how Ramanujan got many of his results. Question is: How did answers come to Ramanujan? Did they get handed down by the goddess Namagiri of Namakkal in his dreams as some believed?

Ask yourself “What is 2 x 2 = “ and now ask yourself “What is 19 x 37 =” An answer would come to your mind immediately in the former case while nothing comes to your mind immediately in the latter case. Daniel Kahneman explains in “Thinking, fast & slow” that there are two different modes of thinking: a fast mode and a slow mode. The fast mode (called system-1) is intuitive, effortless and automatic while the slower mode (called system-2) is rule-based, effortful and controlled. You could choose to start the computation of “19 x 37” using the rules of multiplication learnt in school and also stop in between if you wish to do so (slow mode). You had no such control for “2 x 2”. The answer came to mind automatically (fast mode).

For an expert, such as a chess master, when he looks at a board position, several patterns and associated offensive and defensive moves come to mind immediately (like “2 x 2”). They come from a vocabulary of 50,000 to 100,000 patterns stored in memory. Psychologists believe that it takes 10,000 hours (about 6 years of playing chess 5 hours a day) to reach this level of expertise (or active vocabulary). Had Ramanujan done this kind of practice?

By 1900 (age 12) Ramanujan had mastered S. L. Loney’s Trigonometry. However, the year 1903 was a turning point when he found a book written by Carr containing 5000 equations related to algebra, trigonometry, calculus, analytical geometry, differential equations. From this point, life of Ramanujan who graduated from school that year with a reputation of being “off-scale” went off-balance. He didn’t do anything other than mathematics. He failed four attempts to pass in college in 1904, 1905, 1906 and 1907, lost scholarship and didn’t do well even as a math tutor. And yet, this five year period of 1904 to 1909 was the most productive time in his life because, in all likelihood, he was at home manipulating equations in all of his waking hours – on a slate, on a paper and in the mind. It is also quite possible that his fast mode of thinking was so active that during sleep it continued to work on the half-solved problems. The fast mode is known to be working even when we are not conscious. Ramanujan had easily finished his quota of 10,000 hours well before 1909.

Did his intuition ever trick him? Yes, it did, occasionally and it showed in his first letter to Hardy as well.

The flaw of intuition: In his first letter, Ramanujan had written that he had found a function which exactly represents the number of prime numbers less than x. After Hardy demanded a proof, Ramanujan sent one. And Littlewood figured out that it was wrong. Well, Ramanujan’s formula wasn’t bad. It was off by only 53 for calculating primes up to first nine million (which are 602,489). However, the difference became bigger as numbers grew larger. And this is what Ramanujan failed to see.

Checking a sketchy proof rigorously, at least partly, is a responsibility of the slow thinking mode. As Kahneman observes that the slow thinking mode is inherently lazy. If an answer given by the fast mode looks fine, it just endorses the verdict. In Ramanujan’s case the slow mode was not just lazy, it was weak. Because he never formally learnt how to write a rigorous proof until he reached Cambridge. The upside of this characteristic was that the fast mode was freerer than usual in its meanderings – making him highly creative in his approach.

What was interesting about Ramanujan was not that his intuition was sometimes wrong. Even a great mathematician like Andrew Wiles also had a serious hole in his first proof of the Fermat’s Last Theorem. What was different about Ramanujan before coming to Cambridge was that he was equally confident when he was right and when he was wrong.

Two key learnings from this story: One, a rich vocabulary of several hundreds of thousands of patterns resulting from a prolonged practice and timely invocation of appropriate patterns by the fast mode of thinking creates expert intuition. Two, knowing when not to trust the instincts is an important characteristic of a true expert. Ask yourself, "Which are the possible situations in which my instincts could be on a slippery ground?"

Sources:

The man who knew infinity by Robert Kanigel, Washington Square Press, 1991. (Thanks to my friend Ramprasad Moudgalya for recommending the book to me).

Conditions for intuitive expertise, Daniel Kahneman & Gary Klein, American Psychologist, Sept 2009.

Related articles:

My most favorite YouTube video and the marvels and the flaws of intuition, Sept 19, 2010 (On Kahneman's lecture at Berkeley on the same topic).

Impossible problems and successful approaches: story of Fermat's Last Theorem, Oct 28, 2008 (On Andrew Wile's successful attempt at solving 350 old most famous open problem).

Weighing scale, intelligent gossip and the culture of innovation

Gossip is an important element of every culture, be it in the café, corridor or conference room. In fact, Nobel Laureate Daniel Kahneman writes in the introduction of his new book “Thinking, fast & slow” that the primary objective of the book is to generate intelligent water cooler gossip. Which is the most powerful source of gossip? Perhaps there is no easy answer. However, “weighing scale” is certainly a good candidate. When ten of us, old school friends, met a couple of weeks back after a long time, the starting point of the conversation was invariably – how much weight one has gained or lost. What makes “weighing scale” such a remarkable gossip generator? Can we design “weighing scale” for measuring innovativeness? Let’s explore.

The first thing that strikes about any weighing scale is its simplicity. You don’t need a user manual. Have you seen 6-7 year olds weighing themselves? They don’t need any help. The second interesting property of weighing scale is its ease of access. As a kid I remember how weighing was performed as a ritual at the railway platforms every time we traveled by a local train in Mumbai. Anyone who is interested in weighing can find one – either free or at a low cost. The third property is very special and perhaps not understood by most as unique. Weighing scale is emotion-proof. It gives the same weight no matter how angry or anxious you are. Contrast this with blood pressure machine, voting machine and stock price – all are anxiety dependent.

Combination of the first two properties, simplicity & ease of access, creates what is sometimes called a self-test. It is like saying, “Go check it yourself”. Kahneman observes in “Thinking, fast & slow” that embedding “self-test” in the research papers helped he & his co-author Amos Tversky reach out to a wider audience outside psychology fraternity. Authors Chip & Dan Heath mention in “Made to stick” that self-test is a powerful way to build credibility for your idea. An ECG or an MRI scan are not self-tests. Neither can you do it yourself (yet), nor can you diagnose the results.

Designing a measurement system that has a self-test and is emotion-proof is like creating a “weighing scale”. At the very least, you are generating an intelligent gossip. When I wrote about a simple innovation dashboard for checking how innovative you are a year and a half ago, I was trying to create a “weighing scale”. Contrast this with a perceptual survey which is based on questions like “Do you feel the environment in your company is conducive for innovation?” etc. It is neither self-testable nor emotion-proof. I don’t mean to say that these kinds of surveys are not useful. It is just that they are not “weighing scale” like and hence may not lead to intelligent gossip.

In the spring of 1884, Thomas Edison supervised 2,774 lamp experiments at Menlo Park. In 2010, Google engineers performed 20,000 experiments to improve the search algorithm and took 500 ideas live. Won’t it help to build a richer vocabulary of this kind and in fact, generate intelligent gossip from it? I believe it can be a first step in building a culture of innovation.

Related articles:

Innovation dashboard: 4 indicators of idea velocity

Innovation pipeline: a popular lead indicator metric on innovation

Catalign Quarterly – Dec 2011

Catalign Quarterly is an attempt to put together insights relevant for fostering a culture of innovation in organizations. This is a first such issue.

There are five articles in this issue. The first two articles are insights from guest speakers at our innovation management workshop at IIMB last October. The first article summarizes how innovation program at Tanishq evolved over the last 7 years. The second one presents insights from Cognizant on how to build creative confidence. The third article is an inspiring narrative from Gyanesh Pandey, CEO of Husk Power Systems which is electrifying rural India (HQ in Bihar). Then there is a review of an excellent book called “Where good ideas come from” by Steven Johnson. Finally, we have the latest benchmark data on the idea management systems from INSSAN (Indian National Suggestion Scheme Association).

1. Managing innovation: journey of Tanishq, jewelry division of Titan

2. Building creative confidence: Insights from Sukumar Rajagopal of Cognizant

3. Gyanesh Pandey tells Husk Power Systems story of Bijli from Bhoosa

4. book review: “Where good ideas come from” by Steven Johnson

5. Benchmark data from INSSAN Excellence contest in suggestion schemes 2011

Who improved the world more: Thomas Edison or Ramana Maharshi?

Steve Jobs visited India along with his friend Kottke in 1973 in search of a crash course on enlightenment. Unfortunately, one of most promising gurus of the time, Neem Karoli Baba, had died a few days before the duo made it to his Ashram in Kainchi in Uttarakhand. They met a few other babas but the crash courses didn’t turn out to be very effective. Steve recalls his realization at the end of the trip in his famous quote, “We weren’t going to find a place where we could go to for a month to be enlightened. It was one of the first times that I started to realize that may be Thomas Edison did a lot more to improve the world than Karl Marx and Neem Karoli Baba put together”.

Among the three people Steve mentioned I have no expertise on two: Karl Marx and Neem Karoli Baba. However, I have a huge respect for Thomas Edison – I consider him to be the father of systematic innovation and have written a dozen articles in this blog referring to Thomas Edison & his contributions. I also know a few things about another baba: Ramana Maharshi – who fits the bill of a spiritual teacher who didn’t do much, didn’t speak much, didn’t travel much, didn’t wear much etc. – I guess you get the picture. In this article I want to visualize a hypothetical tennis match between Thomas Edison and Ramana Maharshi where points are scored based on “improvement to the world”. Shall we begin?

Before we begin, it may be good to look at a few things that were common to both Edison and Ramana. First, both were school dropouts. Edison had 3 months of formal schooling while Ramana went to school till age 15. Second, both were gifted with deep sleep. Three, both gave more importance to experiential learning to knowledge-from-the-books. Now let’s turn to the differences especially in how much they “improved the world”.

Let’s start with Thomas Edison, for the simple reason that he is umpire-friendly. It is much easier to count the score. In a career spanning sixty one years (1868-1930) Edison filed 1093 patents. That makes a batting average of 1 patent every 20 days. He made huge contributions to bringing practical incandescent bulb, gramophone and movie camera to the world. He made several improvements to telecommunications and storage battery. His legacy General Electric is one of the largest and most admired companies in the world today. He has inspired countless innovators – most notable being Henry Ford who remained his lifelong friend and Steve Jobs. With such an impressive scoring line-up, the question should be more like “How many Ramanas do we need to match one Edison?” Nevertheless, let’s go ahead and give Ramana a fair chance.

Let’s look at Ramana’s “career” from the point he started living in a cave called Virupaksha Cave in 1900 on a mountain called Arunachala at Thiruvannamalai where his “not-doing-much” started. Ramana lived there for 16 years after which he and his disciples built an Ashram at the foothills of the same mountain where he lived for the rest of his life till 1950. Ramana mostly wore a cloth diaper and preferred silence to talking as a medium of communication. His notable contributions to worldly matters included cooking – he was the chief chef of the Ashram for several years and architecting the Ashram design. You must be thinking this doesn’t look like much of a match so far. Be patient. As we noted earlier, Ramana is not very umpire-friendly.

An important aspect of Ramana’s day-job was having dialogues with visitors to the Ashram – either through silence or through words. Some people would come from nearby places, others would come from places as far as US. I don’t know the total number of unique visitors who met Ramana. More importantly, was meeting Ramana making any difference? Sometimes ‘yes’ and sometimes ‘no’. Again this ratio of “yes-visitors” to “no-visitors” is not known. And even if we take the total number of “yes-visitors” to be a million (perhaps a gross exaggeration), Edison can win the match hands-down just with his light bulb. Well, on what basis do we give Ramana any points? So let’s ask, “What is the crux of his teaching?” At least we will give him some points for that and make this match less embarrassing.

This is where the game becomes really tricky. Because the crux of Ramana’s teaching is concerned with the umpire himself i.e. the scoring system in my mind. Ramana felt that the biggest problem in the world was that the umpire ("I") falsely identifies himself with the scoring system. Steve Jobs himself was a super-umpire. He not only had opinions, his opinions thrived on super-villains (like Bill Gates). However, I really appreciate Steve for an important and yet overlooked keyword in his quote: "may be". I would like to stay with "may be" until I really understand the "I who wants to keep the score" very well.

Hope you enjoyed the match!

Sources:

I read Steve Jobs quote in “iCon: Steve Jobs, the greatest second act in the history of business” by Young and Simon, Wiley-India, 2008, pg 25.

For more on Ramana Maharshi, I recommend Arthur Osborne’s “Ramana Maharshi and the path of self-knowledge” or David Godman’s interview with Maalok.

Benchmark data from INSSAN Excellence Contest in Suggestion Scheme – 2011

Idea management systems exist in the organizations at different levels – process improvements (kaizen), new product development (NPD), new business development (NBD), Intellectual property management (IPR) etc. Indian National Suggestion Scheme Association (INSSAN) has been benchmarking the suggestion schemes in primarily manufacturing sector for the past 20 years. The latest bulletin (Sept-Oct 2011) presents the benchmarking data from 27 organizations for financial year 2010-11 – Automotive (6), Engineering (6), Fertilizers (7), Associated (6) and Steel (2). Mr. Sudhir Date has presented the highlights in the bulletin (pg 14).

As discussed in an earlier article, I try to view the innovation metric from following three perspectives: (1) idea pipeline (number of ideas & participation of employees) (2) idea velocity (rate at which ideas move forward) (3) batting average (net potential impact in savings / revenue). Let's apply this lens to the INSSAN 2011 data.

Idea pipeline: Ideas per person per year is an excellent proxy for idea pipeline. For the past few years TVS Motor consistently stands out for ideas per person per year metric. On an average, a TVS employee gives a suggestion almost every week (46 in a year) as compared to India average of once in 2 months (6.5). India average has been hovering around 5-6 for the past 5 years. Participation percentage varies from 22% in Fertilizer sector to 90+% in Steel and Auto sectors (see figure below). Steel and Auto sectors were the first in India to embrace suggestion schemes. So this is not surprising. More the participation, more sustainable is your process.

Idea velocity: Unfortunately we don't have a good data on this. Lowest lead time for evaluation of suggestion is definitely an indicator and Maruti’s performance of 2 days is commendable. However, we don't have average data on this and we can guess why.

Batting average: Suggestion schemes measures the impact primarily through savings. Savings per accepted suggestion is a good indicator. India average of Rs.19,681 makes a good case for running the suggestion schemes.

On an average 70% of the suggested ideas are implemented and that looks pretty healthy.

Following table shows the data sector-wise.

Let’s hope we get similar data for other types of idea management systems in India as well.

Related articles:

Idea management systems in India: Benchmark data from INSSAN 2005-2008

INSSAN 20^th Annual convention: where shop-floor innovators are heroes

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