Insights of a Catalyst in Alignment & Innovation

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

2012-01-30T09:46:00.005+05:30

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

2012-01-14T15:12:00.013+05:30

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

2012-01-09T11:13:00.000+05:30

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

2011-12-18T09:58:00.004+05:30

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?

2011-12-13T12:07:00.005+05:30

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

2011-12-07T10:31:00.014+05:30

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

“Where good ideas come from” by Steven Johnson

2011-12-07T07:08:00.004+05:30

“Where do good ideas come from?” This question is typically approached from two directions. One: What kinds of people create good ideas? Two: What kinds of environments create good ideas? Steven Johnson’s book “Where good ideas come from” approaches the question from the second direction and identifies seven patterns that recur in fertile environments. His TED talk gives a great overview. Let me articulate three of the seven patterns below:

1. Adjacent possible: In the year following the 2004 Indian Ocean Tsunami, the Indonesian city of Meulaboh received eight incubators from a range of international relief organizations. By late 2008, when an MIT professor name Timothy Prestero visited the hospital, all eight were out of order – due to power surges, tropical humidity and lack of expertise to repair them. Prestero is an expert on robust designs and the founder of Design that Matters organization. He realized that designing an incubator in developing country wasn’t just about creating something that worked. It was also a matter of something that could be maintained by local people. Rosen, a Boston doctor, observed that small towns in Indonesia were able to repair the Toyota 4Runners. So Rosen approached Prestero with the idea: What if you made an incubator out of automobile parts? That is how NeoNurture incubator was born. It was doubly efficient because it tapped both the local supply of parts and the local knowledge of automobile repair.

Johnson observes that good ideas are like the NeoNurture device – they are inevitably constrained by the parts and skills that surround them. That is why encouraging prototyping is so important because it validates if we know what kind of spare parts to look for and whether we have the skills to put them together. Charles Babbage designed a programmable computer in 1837 but couldn't build a prototype in his lifetime (died: 1871) because the spare parts were simply not available. It wasn’t an “adjacent possible” idea for the time. Do you encourage prototyping? Do you make spare parts easily accessible?

2. Slow hunch: Charles Darwin wrote about his moment of epiphany on September 28, 1838 when he conceptualized the famous theory of natural selection. However, more than a century later, when a psychologist Howard Gruber went through the copious notes that Darwin had kept he realized that Darwin had been working on the key concepts from 1837 onwards. Sir Tim Berners-Lee designed the first prototype for sharing information with hypertext in 1980 at CERN. However, it is only in 1989 that he submitted the proposal for building world-wide web. The first web-site was build at CERN and put online on August 6, 1991.

Good ideas are more like slow hunches. They often mature by stealth, in small steps and fade into view. Does your organization encourage working on hunches?

3. Exaptation: What is common between the two innovations: Printing press and Jaipur foot? Both took a set of mature technologies in one domain, combined them to solve an unrelated problem. Exaptation is a trait developed in an organism optimized for a specific use but then it gets hijacked for completely different function. Johannes Gutenberg used the screw press technology used for making wines and made modifications to the metallurgy behind the movable type system to create a printing press. In case of Jaipur Foot, Dr. Promod Sethi and Ram Chandra a doctor-sculptor team looked at the retreading of a truck tire with vulcanized rubber in a roadside shop and applied it to create prosthetic legs – what is popularly known today as Jaipur foot.

Does your organization create a space for the "doctors" & "sculptors" to come together? Or does your organization encourage Chandras to visit new places like “cycle shops”?

I highly recommend this book for anyone interested in finding out “Where good ideas come from?” I am sure you will get a fresh perspective.

Building creative confidence: Insights from Sukumar Rajagopal of Cognizant

2011-12-01T21:31:00.005+05:30

When you ask the question, “How many of you are creative?” to either students or employees in India, very few, perhaps only 20%-30% of people typically raise hands. Why is that? There is a school of thought which says that it is primarily a confidence problem. Ability to be able to speak up your idea in a meeting with managers / senior managers without fear of failure / ridicule is what is called “creative confidence”. Mr. Sukumar Rajagopal, Senior Vice President, Chief Information Officer and Head of Innovation at Cognizant, shared his insights on how to build creative confidence based on his experience of running a managed innovation program at Cognizant. He was one of the guest speakers at our workshop on innovation management at IIMB last month. How do you build creative confidence? Let’s look at a few of the insights Sukumar shared.

If you want to build creative confidence, breakthrough innovation is not a good place to focus

Organizations need all kinds of innovations: breakthrough, enhancing, sustaining etc. However, if you want more people to feel confident about how they can contribute to innovation, then breakthrough innovation is not the right place to focus. Why? First, breakthrough innovations are rare, they don’t happen very often. Second, breakthrough ideas create cognitive dissonance and hence early reactions are usually negative (see a study from Cornell). Robert Goddard, the father of modern rocketry was ridiculed in New York Times in 1921, “Professor Goddard does not know the relation of action to reaction and seems to lack the basic knowledge ladled out daily in high schools”. Note that this does not mean that breakthrough innovation is not important.

Each of us is empowered to implement ideas within our own area of work

When people suggest ideas related to areas where they don’t have any control, then most of them get ignored. This leads to frustration. Lack of empowerment to experiment is a major hurdle in moving ideas forward. Hence, ideas within your own area of work are excellent candidates where the employees can experiment without asking for anybody’s permission. Perhaps one can fail and still continue without worry of any punishment.

When small ideas are implemented, the idea authors build credibility

If you want people take your big idea seriously, you need credibility. How do you build credibility? One way to do it is by implementing small ideas first. If you say that over the last year I have implemented 7 ideas, chances are high people might take your potentially big idea seriously.

Direct creative energies at problems that have stakeholders & sponsors

When we go to people and say, “Give me all your ideas”, we will be inundated with thousands of ideas like “Cafeteria food should be like this” or “Give all of us laptops”. These ideas don’t go anywhere unless they address problems that have stakeholders and sponsors. And when nobody looks at your ideas, the idea authors will get frustrated. Hence it is better to launch idea campaigns with sponsored challenges and make sure that you will implement top 5 / 10 ideas.

Sukumar derives a lot inspiration from Toyota’s kaizen, a system through which employees implement millions of ideas every year. Percent of people who have submitted one or more ideas last year is a good indicator of the creative confidence in the organization.

Gyanesh Pandey tells Husk Power Systems story of Bijli from Bhoosa

2011-11-23T22:32:00.007+05:30

I got an opportunity to listen to Gyanesh Pandey, CEO of Husk Power Systems in IIM Bangalore last month. I don’t know why but I find the HPS story of producing Bijli from Bhoosa (electricity from husk) fascinating. And listening to the story from Gyanesh increased my fascination even further. Based out of Bihar, HPS is doing to eradicate needless darkness in rural India what Aravind Eye Hospital has done for eradicating needless blindness. It has so far electrified 450 villages / hamlets (mostly off-grid) in Bihar & UP. I have tried to condense the narrative below by keeping Gyanesh’s language as much as possible. You can find the fuller version of the story here.

I grew up hating my place (in North Bihar). Nothing made sense to me. Every single thing in the village costs you a little more, quality is poorer and people are lethargic. During holidays, I reluctantly came home from the boarding school. I tried to find reasons for not coming home. I could feel the depression all around.

I ended up becoming an engineer and going to the US for higher studies. During my PhD I came home to attend my sister’s wedding. On one of those evenings with the extended family members I was telling them stories of America. Naively I ended up saying, “It’s hard to tell you guys – You can’t even dream of how it is (in the US)”. I didn’t mean to offend anyone. However, an old guy in the room said, “For us, it will always be a dream. Because people like you will always maintain a distance from us.” I don’t know what he meant, but his words resonated somehow somewhere with me. This was 2001.

I automatically assumed that something is not being done because technology for doing it doesn’t exist. This was a big mistake. For the next 5 years, I partnered with Ratnesh Yahav, my best friend from childhood and experimented with several leading edge technologies like polymer solar cells, fuel cells, micro-tidal energy and finally Jatropha based bio-diesel. All of them failed. By 2006 I was back to Bihar from the US and badly depressed after the Jatropha project failure.

At this point, I got an appointment to see a director at the Renewable Energy Development Agency. He asked me, “How are you going to electrify villages?” I said, “I don’t know. I will do something”. He hit a buzzer and called the peon. “Call the guy who just left the room” Then he told me, “Talk to him. He sells gasifiers. Why don’t you use something like that?” I knew biomass gasification was an old technology developed by Hitler for wartime. People don’t use it anymore. The dealer told me that there were 40 gasifiers being used in Bihar. I said, “Wow!” He thought I am an NRI and he was trying to sell gasifiers to me.

The gasifiers were running on rice husk. 40% diesel and 60% gas – what is called dual-fuel mode. I came home after talking to him and worked out the math. I realized that 40% diesel model would not be economical. I started thinking, “Why can’t we use 100% gas?”

I started by finding out all I could on gasification based power generation. I found a paper from IISc and it said you can’t run an engine only on producer gas. Gasification is where you burn a biomass that generates a certain mixture of carbon monoxide and nitrogen and that mixture is combustible and becomes fuel. IIT Delhi had done a project. However, I couldn’t find a single instance where anybody said, “It has worked”. I tried to talk to a professor and he wasn’t even willing to talk to me. I just knew that all these people are wrong. I had no reason why.

At this point a scientist from MNRE, Mr. S K Singh encouraged me. Singh helped getting me hooked with a small engine maker from Agra. This was in June 2007. By August 15, 2007 we had a working system. We had electrified our first village. Soon after this we put out 2 systems electrifying 5 villages. By then we were out of money.

How did Gyanesh-Ratnesh manage to raise money? How does HPS business model work? How did they do the pricing? You can find the full story here.

In photo: Prof. Abhoy Ojha of IIMB (left) along with Gyanesh Pandey.

Managing innovation: journey of Tanishq, jewelry division of Titan

2011-11-12T09:22:00.001+05:30

I got anopportunity to listen to Mr. L. R. Natarajan (LRN), head of innovation councilat Titan and Chief Manufacturing Officer of Tanishq, Titan’s jewelry division.He was one of the guest speakers at our workshopon innovation management at IIM Bangalore. The first thing you notice aboutLRN is the passion he carries for building a culture of innovation. Afterlistening to the seven year journey LRN presented, most of us felt, “There is alot more we can do in my organization”. What kinds of innovation management practicesare followed at Tanishq? Here is a short summary.

“What’snew” campaign (2004):The journey at Tanishq began in 2004 where each of the 14 manufacturingdepartments was given a structured white board. Each team was supposed to write“What’s new” they are attempting on the whiteboard given to them. Competitivespirit was created by defining a review process and attaching rewards. Thissimple and effective process is still active after seven years of its launch.

Dreamingworkshop & HOD fund (2006): In 2006, Titan had a workshop called “future shock” inwhich the MD asked 600 managers to dream about “Where do you see Titan 5 yearsdown the road?” More than 130 new business ideas were generated. Through aselection process they were narrowed down to 2 new brands to be launched:Goldplus and Eyeplus.

“HOD fund”was initiated after observing that purchase of any capital item goes through along chain of approvals – Sr. Manager, Deputy GM, GM, VP, COO, Corporatefinance, Corp purchase & finally MD. By then the person who initiated theprocess loses interest. HOD fund created a shorter route for innovative ideas.Each Head of the Dept (HOD) was given a budget of upto Rs. 1 Lakh which he canapprove himself.

Innovationschool of management (2008): Between 2004 and 2008, many ideas got implemented. However, a closerlook revealed that ideas had come from only 10% of the employees. Innovationschool of management was started to involve every employee in this journey. Asix month course was created and a written test & viva were conducted toselect the first batch of 30 participants. For the first 3 days, theparticipants are taught about what, why and tools and techniques on how to thinkcreatively. Then they were given a challenge to work on. If the inventory is 1crore the challenge could be “How can we manage with 10 lakh inventory?” AllHODs are trained mentors and they mentor the participants. Each participant isgiven 6 hrs per week to work on the challenge. There is a review once a month. Atthe end of the course, the MD hands over the certificates. The goal is to haveall the employees as trained innovators by 2014-15. So far 187 out of 400employees in the factory have been certified through the school.

Currently innovationgroup in Tanishq has 9 full-time members with 1 division manager, 3 managersand 5 executives.

3 successstories: (out ofseveral LRN presented)

1. Diamond setting: The process for preparing the castingmould was improved so that a highly skilled job of diamond setting becomeseasier. In place of 100 to 150 stones a karigar is now setting 1500 stonesevery day. This process improvement idea has been patented.

2. Diamond bagging: Diamond bagging is a process of startingwith a work order, picking the right set of diamonds from hundred differentvarieties, putting it in a bag and giving it to the production to put it in thenecklace. The idea of automating this process came from the theme that waslaunched in 2007: “Simplify and automate”. After about 4 years of workingclosely with the machine building division, a robotic arm was created that automateddiamond bagging. This may be first time diamond bagging got automated in theworld.

3. Gold out of stone: Hard silicon carbide crucibles werelying around the factory. People knew that these might contain gold. However,people didn’t know what to do. One day, Rajsekhar, one of the operators got aroad-roller from his neighbor and crushed the crucibles. About four and a halfkilos of gold was recovered.

Beyond jugaad: A summary of current practices and participant takeaways in managing innovation

2011-11-06T10:34:00.003+05:30

Three of us(Prof. Rishikesha T. Krishnan, Prof. S. Rajeev and I) facilitated a three day ExecutiveDevelopment Program at IIM Bangalore last month titled “Goingbeyond jugaad: Building a systematic innovation capability”. 22 executivesfrom 12 organizations participated in the workshop. On the third & lastday, one representative from each organization presented their currentpractices for managing innovation as well as areas they would like to improveupon based on the learning at the program. Here is an attempt to summarize their perspective (not meant to be exhaustive and limited by what I captured in my notes).

Before welook at how different organizations are managing innovation in India, it makessense to see participant and company profiles. The 12 companies representedfollowing sectors: Aircraft manufacturing (India center), Automotive manufacturing, Consulting, Indiacenters of high-tech products, IT services, IT enabled services (BPO) &Media (leading FM radio channel). Titles of the executives varied from CTO, DGMInnovation cell, VP New business / Marketing, Group Manager, Sr. DevelopmentManager, Mobile Architect, Technical Fellow, Senior Staff Engineer etc. All theparticipants were very serious and active players in the innovation initiativesin their respective organizations.

Let meclassify their perspectives into 3 key areas: idea management, buzz creationand learning & development.

1. Ideamanagement: Almostall the participating organizations had a system in place for managing ideas.What varied was the scope of the innovation. In some organizations there was abias for the IP (patent) management. In some cases the global process for bigideas was very active. However, the contribution from India centerwas low. In some places the system was active only in some part of the organizationand in a few places the existing approach was primarily top-down.

Keytakeaways: Encouragesmall ideas, implement bottom-up approach, create a challenge book (problemfocus), make the measurement system more robust, improve the ideavelocity, use cross functional teams. A couple of executives said theirfocus would be large impact idea creation using strategy models.

2. Buzzcreation: Manyorganizations had events such as sponsored challenge or bright idea campaign togenerate ideas and buzz around innovation. In some cases these events generatedseveral hundred ideas every year. Garage forums encourage prototyping, Techfair creates a platform for technical paper presentation, Inspire seriesinvites external speakers, Wall of innovation displays innovators, Quarterlynewsletter raises awareness on innovations inside and outside the organization.

Keytakeaways: Almostall executives felt that they need to improve the participation level. Somesaid they need to improve the reward and recognition system.

3. Learning& development: Foreducating employees on innovation, organizations conduct idea generationworkshops using methodologies such as design thinking, encourage informal communitiesfor knowledge sharing, sponsor MTech/PhD and introduce innovation duringcompany induction program.

Key takeways: More awareness building, Spot newtrends in a structured manner, Inculcate right brain thinking.

12 organizations is a small sample. However, wehope that the seriousness demonstrated by the executives spreads in theirorganizations and beyond. Let’s build a culture of innovation systematically!

Innovation dashboard: 4 indicators of idea velocity

2011-09-01T21:26:00.005+05:30

Last year I presented a simple innovation dashboard with 4 parameters: pipeline, prototypes, portfolio and participation. What do these parameters measure?

Pipeline: How many ideas do we generate?
Prototypes: At what rate do ideas move forward?
Portfolio: What is the total potential impact?
Participation: Is the innovation activity likely to sustain?

A few months back I wrote about innovation pipeline and how CEOs are using it for strategic decisions. In this article

I want to focus on idea velocity – the rate at which ideas move forward. What are the different indicators of idea velocity? Let’s look at 4 such indicators below.

1. Responsiveness: How fast does the system respond to an idea submitted? In places like Boardroom Inc, a Connecticut publisher, ideas get evaluated in weekly team meeting. Many small ideas can be implemented within the team and don’t need any approval of higher authority. In Toyota, it works in a monthly cycle and uses hierarchical approval system. Small ideas get evaluated and awarded locally. In any process that takes more than a month to respond to the idea author, it is a cause of concern. In a social network with a voting system, the feedback can start very quickly.

2. Prototypes: First prototype could be a paper sketch (used by Tata Nano team), a skit depicting the usage scenario or a computer simulation model. What matters is how fast does the idea go from a concept to a prototype? And then from the first to the second and so on. First AdSense prototype was built in a few hours by Paul Buchheit. Amy Radin, Chief Innovation Officer of Citigroup, looks at: getting x number of pilots in market by y date. Google says, it performed 20,000 experiments in 2010 to improve its search algorithm and finally took 500 ideas live.

3. Champions: How many ideas have a champion? Champions are people with clout. They can push your idea through the resistance faced within the organization or outside. You are lucky when the idea champion is the group chairman (like Ratan Tata). However, more often he is likely to be a senior manager like David Patrick at IBM. Sometimes, your customer could also become your champion. For example, Lego involved selected advanced users in co-designing & championing its Mindstorm NXT.

4. Dedicated team: Any not-so-small idea can run only so far as a side activity. It needs a dedicated team, even though it could be just 3-4 people to begin with. Dedicated team is an indicator of the seriousness and attention from the management. For example, Tesco India has a problem solving track where a cross-functional team attempts to solve a chronic problem of the businesses. Rigor and rhythm of innovation reviews play an important role in making sure that selected ideas get appropriate resources.

I am sure there are more or better indicators you may be using. Your input will really help me get a better view of this metric.

Poor Economics: Designing robust interventions to fight poverty through randomized experiments

2011-08-29T09:15:00.009+05:30

When I hear a professor from MIT saying she knows how to fight poverty, my first reaction is that of skepticism. “Does she even know what poverty is?” That’s how my mind would respond. And yet when I heard the TED talk by Prof. Esther Duflo of MIT titled “Social experiments to fight poverty”, I was thoroughly impressed. It took me some time to understand what exactly in the talk that impressed me so much. Subsequently I bought the book “Poor Economics” which she co-wrote with Abhijit Banerjee. Now, I am slowly beginning to understand why Amartya Sen has said, “A marvelously insightful book by two outstanding researchers on the real nature of poverty”. In this article I want to highlight three things that I find interesting in the book.

Intractable problem, manageable sub-problems: Poverty eradication looks like an unsolvable problem. People from Karl Marx to Mahatma Gandhi have taken a shot at it. However, it is not clear whether we have a handle on it. Silver bullet approach like “give aids” is not helping. Banerjee-Duflo take a different view. They feel that instead of trying to answer the top question, why not look at some sub-problems – each of which might have a definite and practical solution. For example, in the talk, Duflo presents three such sub-problems: How can we have more kids immunized? How can we get more people to use bednets that can reduce malaria affliction? How can we get students to attend school more number of days for a given dollar spent on the cause? The book, like the talk, shows how we can go about systematically addressing these sub-problems.

Randomized experimentation: Let’s take the question of immunization. In Udaipur district of Rajasthan, it was found out that only 1% of the children are fully immunized. The vaccines are there and are available for free. It is not that the parents don’t care about their kids. When their kids get measles parents end up spending thousands of rupees in treatment. So you have empty village sub-centres on one hand, and crowded hospitals on the other hand. So looks like the intention is not translating into action. What do you do? Dulfo & team decided to try random trials in 134 villages in Udaipur district. For one third villages there was no change, another one third villages had immunization monthly camps conducted and the last one third had camp plus a kilo of lentil free for camp participant. As it turned out the immunization percentage jumped by a whopping 37%. Note that this approach is analogous to randomized control trials used in medicine to discover drugs.

Design as if implementation matters: The beauty of Banerjee-Duflo approach is not that it does not make any assumption about the culture, anxiety, aspirations of the poor. The experiments reveal their biases anyway. I call this approach of designing an intervention – design as if implementation matters. Note that the approach does not advocate laboratory experiments – the experiments are performed in-field in actual conditions. I feel that experimentation and immersive research are the heart and the soul of systematic innovation. Banerjee-Duflo approach epitomizes both. Now, I know why the TED talk struck such a chord with me.

I strongly recommend the book for every student of social innovation.

Maganlal Gandhi: Mahatma Gandhi’s innovation partner

2011-08-20T15:46:00.009+05:30

"He [Maganlal] was, in my opinion, a genius... He laid the foundation of the science of Khadi by writing his Vanat Shastra” said Mahatma Gandhi at the inaugural ceremony of Magan Museum of Khadi (pdf) at Wardha on Dec 30, 1938². Ever since I read this, I became curious about Maganlal Gandhi. Where did Maganlal learn the science of khadi? Was this science backed up by rigorous experiments? If so, where did Maganlal perform those experiments? I wanted to find out. Finally, I got a peek into the story when my friend Prof. Rishikesha Krishnan connected me to Prof. Shambu Prasad of XIMB Bhubaneswar. Shambu has done extensive research on science of Gandhi. I found answers to some of my questions in an excellent article written by Shambu “Gandhi and Maganlal: Khadi science and the Gandhian scientist”. Here is a short summary.

Maganlal Khushalchand Gandhi (1883-1928) was Gandhi’s nephew (a grandson of his uncle) and 19 years younger to him. Maganlal met Gandhi in 1902, two days before Gandhi was to leave for South Africa. Maganlal was then on the lookout for a job in his native Kathiawar. Gandhi asked Maganlal to come to South Africa offering it as a land of opportunities with ample scope for growth. Maganlal was immediately put into business and was running a family shop of the Gandhis. When Gandhi quit his practice and decided to set-up a farm and take to farming as an occupation, Maganlal was the first to join him unconditionally knowing it involves self-imposed poverty.

In a short time, Maganlal picked up several skills at Phoenix Farm - composing and running the machines in the press, farming, carpentry and tailoring, keeping accounts of the settlement and teaching the children Gujarati and Mathematics. It was Maganlal who suggested the name Sadagraha to Gandhiji when he solicited a better term for “passive resistance” in the local newspaper Indian Opinion. Gandhi later modified Sadagraha to Satyagraha.

Later in India, Maganlal set-up and ran the khadi laboratory at Sabarmati Ashram as he was the head of the Technical Department of the All India Khadi Board (later the All India Spinners Association). Maganlal traveled to Madras Presidency to learn the art. The technical department of the Ashram, tested several samples of yarn (over 300 every month) and gave feedback to the Provincial Congress Committees. These results were widely reported regularly in Young India and Navjivan. As a resource centre in the field of khadi the Ashram used to send its staff, spindles, specimens of yarn, and charts explaining the effect of the wheel to exhibitions all over the country. Gandhi relied on Maganlal to test the various machines and always wanted Maganlal’s opinion on technical developments whether it was Mirabehn’s discovery of the soft spindle, Shankarlal’s Gandiva spinning wheel or the Ramachandra lift pump.

In 1922, a ‘Khaddar Information Bureau’ was constituted to provide or collect information on khadi from the provinces, to inform congress committees and selected workers on reports from the centres. Maganlal edited its ‘Khadi Bulletin’. A syllabus was formulated in 1923 for the weaving school with a regular six-month course. A khaddar service scheme was also instituted under which 600 instructors were to be trained in home carding.

Maganlal passed away while at work in Bihar due to typhoid on April 23, 1928, at the peak of his life and that of the khadi movement. In a moving tribute, titled ‘My Best Comrade Gone’ Gandhi remarked that: ‘The world knows so little of how much my so-called greatness depends upon the incessant toil and drudgery of silent, devoted, able and pure workers, men as well as women. And among them all Maganlal was to me the greatest, the best and the purest.’

Source:

1. Gandhi and Maganlal: Khadi science and the Gandhian scientist” by Shambu Prasad, Presented at the Seminar ‘Gandhi and his Contemporaries’ held at the Indian Institute of Advanced Studies, Shimla, April 13-15, 1999

2. “Mahatma: Life of Mohandas Gandhi” by D. G. Tendulkar, volume 5, page 6.

3. Maganlal’s photo is from “Khadi Guide” published by All Indian Spinners Association, Ahmedabad, 1929. (Thanks to: Prof. Venu Madhav Govindu of IISc)

How GE develops innovation leaders through the LIG program

2011-07-24T15:22:00.005+05:30

GE launched Leadership, Innovation and Growth (LIG) program in September 2006 and ran it till September 2008, mostly in Crotonville, epicenter of GE’s learning & development. Altogether 2,500 senior managers in 260 teams went through this four day program. The purpose of LIG was to make innovation and growth as much of a religion at GE as Six Sigma had been under Jack Welch. On day four the course wrapped up with a plenary session at which each team had 20 minutes to deliver a presentation to Jeff Immelt, GE’s CEO. When Immelt was asked why he devoted so much time to LIG, he said, “LIG gave me a way to drive change and develop leaders at the same time”. What happened at LIG? Here is an overview on what GE Power senior management team went through at LIG. (source: An excellent HBR article “How GE teaches teams to lead change” by Steven Prokesch, a senior editor of HBR who was invited to attend one of the LIG programs in October 2007).

LIG program is a brainchild of Susan Peters, GE’s VP of executive development and Daniel Henson, then CMO. Before attending the LIG, the senior managers at a business would assess their team’s success in creating a climate supportive for innovation. The assessment would generate an innovation dashboard that would be used during the program. During the program there would be talks by external gurus as well as internal role models. A large amount of time – about 15 to 20 hours – was set aside for breakout sessions. What happens during these breakouts?

During the first breakout on the morning of day one, the Power Gen team guessed and the learned their actual team scores for the 360 degree review of their growth values. This triggered a reassessment of almost every aspect of their business. Some of the questions that got raised by the team were: “We’re not as good at anticipating major trends as we ought to be”, “Is solar a good place to be?” or “Renewable energy, clean coal, nuclear – all are going to be policy dependent. Are we good at this?” The reassessment continued in this manner throughout the four days.

The reflections generated insights – may be the old rules don’t always apply; may be limits on carbon emissions and tax incentives for clean, renewable power matter more. That sparked a conversation about GE’s ability to understand and influence government policies. Managers agreed that it was deficient and that beefing it was therefore a priority. In the next breakout session the Power Gen managers talked soberly about the state of their core. Unless the operations are strengthened it is difficult to free up time for innovative thinking.

At another breakout session the team assessed their innovation portfolio by putting each project in one of the three boxes, a framework created by Prof. Vijay Govindarajan: incremental (aimed at strengthening the core), adjacencies (taking existing technologies to new markets or taking new technologies to its existing markets), nonlinear shifts (discontinuous shifts in technology or markets with radically new products or business models).

The final LIG session involved the reports to Immelt. Power Gen team led by Bolze talked about their biggest takeways from the program, their 10-year projection of revenues (from $13 billion to $40 billion with renewables’ share going from 30% to 50%), and a vision statement – “Powering the world responsibly”. They committed themselves to strengthening the core. They confessed they needed to get better at looking around the corners to spot nonlinear shifts. They listed the capabilities they needed to build: regulatory expertise, faster product development, creating emerging-markets products “in country for country”. They vowed to lighten up a bit and become more playful, a characteristic of innovative companies. As they spoke Immelt asked questions and shared observations.

Within a few weeks after the LIG session Steve Bolze, as required, sent a commitment letter to Immelt, laying out the measures his team would take to increase the pace of organic growth. Such a letter becomes a living contract between Immelt and the team.

image source: ge.com

Managing innovation: story of Tesco India

2011-07-02T09:15:00.004+05:30

Last week I got an opportunity to listen to Sandeep Dhar, CEO of Tesco Hindustan Service Centre (HSC) on how Tesco India manages innovation at CII Innovation Forum. Tesco is the third largest retailer in the world by revenue and the second largest in terms of profits. Tesco HSC is responsible for standardizing all back-office processes impacting Tesco business globally and it currently employs 4000 associates. Sandeep demonstrated with examples how Tesco has made innovation an every day practice. How is it different from other places? Let’s see in this article.

Idea qualification: At Tesco, like everywhere else, every idea needs to have a business case which typically means cost saving for an idea from HSC. However, at Tesco, it needs to meet two additional criteria: One, it should improve or maintain customer experience. Two, it should simplify or at least maintain employee work complexity. Several ideas end up getting dropped for not meeting these criteria.

Continuous improvement track: Small ideas are taken seriously at Tesco. In fact, if an idea can reduce average time taken to handle a customer at the TIL by one second, it saves the company 2 million pounds a year in UK alone. How to keep people motivated for doing continuous improvement? At Tesco HSC this is ensured by how the team KPI or SLAs are set. For example, there is a team in India which receives calls when particular equipment like a refrigerator or air-conditioning unit is malfunctioning. Team’s job is to call the relevant vendor of the town and the vendor would send people to the Tesco store for servicing. Typical KPIs of such call-centric team would be percentage of calls serviced in 90 seconds, percentage calls tracked to closure etc. With these metric the improvements would be directed towards improving the efficiency of handling calls. They deliver limited value. Tesco changed the KPI of the team to “reduce the amount of money Tesco spends on maintenance”. With this the orientation of the team changed. They started looking into the reasons for equipment failures, some of the early warning and on preventive maintenance measures. Two years after this change the maintenance budget has come down by 40 percent.

Another team in India is responsible for making payments for the traffic violations of the truck drivers carrying Tesco supplies. Typical KPI would be timely payment of the fine and the accuracy of the payment. This KPI was changed to “figure out ways to reduce the fine”. One of the team members visited the traffic authority web site and found out a mechanism to challenge the fines. He and a couple of his colleagues started looking into the data and started challenging the fines selectively. At times the challenge would be successful, at times it wouldn’t. Then the team went one step further and analyzed the reasons for the traffic violations. They identified some commonly made mistakes and sent the information to the drivers. They were able to identify drivers who were more prone to making traffic violations.

Problem solving track: This is the track where the businesses are asked to share some of their chronic problems. Tesco India sets up cross functional teams to work on them. One such problem was related to Tesco’s online website. Tesco is world’s largest e-grocer. The web site has a favorites list which currently includes all the items a customer had shopped in the past. The drawback of this mechanism was that the favorites list becomes very long and inconvenient for the shopper. A Tesco India team worked with IISc experts and came up with a statistical algorithm that predicts what a shopper might be shopping on a day. For example, if you have purchased 3 gallons of milk on Monday, it would not show milk in favorites on Tuesday. But it may show it on Friday. This has resulted in reducing the favorites list to one third of the original size. This has been piloted and going into production.

In-store work experience: All managers in India go through Tesco Week in Store Together (TWIST) program whenever they visit a country with Tesco stores. For Sandeep a TWIST a year is mandatory. He said if he doesn’t spend a week working the store, his KPI goes down by a notch. When Sandeep spends a week in the store, he may spend a day at check-out counter, another day stacking products, third day he may be doing stock count, on the fourth day he may be going out with the delivery van.

Retail test lab: In 2007, Tesco HSC established retail test lab where recreated all hardware environments that exists in different Tesco stores. For example, sales counters and handheld devices etc. When IT develops a software it is tested in this simulated environment which improves the reliability of the deployment.

Prof. Ulrich Weinberg on Design Thinking

2011-06-25T11:00:00.004+05:30

Thanks to Prof. Rajeev and Supriya Dey of IIMB, yesterday I got an opportunity to meet Prof. Weinberg over lunch and subsequently attended his presentation “Design thinking: Looking beyond obvious” at IIMB. Prof. Ulrich Weinberg is the director of the School of Design Thinking at Hasso Plattner Institute, Potsdam, Germany. The school is modeled after D-school of Stanford. According to Prof. Weinberg at HPI D-school you get no credit points, no grades and no certificate worth any official value and yet within four years of its founding it has students from 70 disciplines and 20 nations. Natural question is: What is going on there? And what exactly do these students do that they value learning experience over credits and certificates?

The students participate in 1 hr, 3 hr, 1 day, 3 day, 1 week, 3 week and 6 week workshops / projects which progressively prepares them for the 12 week final project. Every project starts with a cross-functional team of 4 to 6 students and students rotate after every project. With students coming from disciplines as varied as art, history, medicine, engineering, psychology, law, forming a cross-functional team is not a challenge at HPI. The faculty works with industry-Government partners to generate a set of challenges. One such challenge came from DHL: How might we transfer packets from point A to B in the inner cities of future where no cars are allowed? London, Beijing, Mumbai are good candidates. If you feel that the challenge statement is simple looking, mind you it would have taken several days of work for the faculty members to work with DHL to arrive at the crisp looking statement which reflects user needs and pain points.

Out of the 12 weeks, half the time i.e. 6 weeks would be spent in understanding, observing and synthesizing the experience. This means going to the inner cities and observe how things work. Students observe how people walk to bus stops or train stations or cycle. In the DHL project the team was inspired by the workings of Dabbawalas of Mumbai. The most difficult part of this first phase is to switch your solution engine off. This is especially harder for engineers who are so used to solving problems. One of the deliverables is the creation of a detailed persona of the customers whose pain you are addressing. In the DHL case it could be thirty-five year old Chris or a twenty-two years old Sangeeta, a resident of the future city who either works for DHL or partners with DHL in moving the packet forward.

The next phase consists of ideation, prototyping and testing. Since the team has spent enough time in the field, ideation generates hundreds of ideas relevant to the problem. The school has created spaces with movable trolleys and white boards that help these teams in brainstorming. Every day there is a three minute presentation to the rest of the class on your prototype and you get immediate feedback. Weinberg says, “No other feedback can be as powerful as this inputs from your colleagues and faculty”.

The team working on DHL problem came up with an idea of citizen participation in packet delivery. They named it Bring.buddy. It taps all the consumers moving through a city each day, whether via bike, public transport or on foot. Interested participants indicate their travel route for the day using a downloadable smartphone app; a text message then lets them know of any packages needing delivery along the way. When there is such a package, the participant picks it up from the local kiosk where it's waiting and delivers it as they go about their daily business. In exchange for their help, the program rewards them with points that can be redeemed for free train tickets, merchandise coupons or CO2 credits. Check out the YouTube video BringBuddy.

Bring.Buddy created so much buzz in Shanghai trade show and even in Berlin that people started asking DHL when they are implementing it. Finally DHL has decided to pilot it in China along with the student team at HPI. Whether the service reaches market is anybody’s guess. However, can you doubt the learning the students are getting in the process?

If you want to get a glimpse of what design thinking experience might look like, I suggest watching 3-part video of Ideo’s Deep Dive.

Evolution of 3M's Nonwoven technology platform over seven decades

2011-06-24T05:35:00.004+05:30

A typical technology platform far outlives the first product which uses it. One of the classic examples is 3M’s Nonwoven technology platform. Originally used in making ribbons for decorating gifts, the platform over seven decades has been used in cleaning pads, surgical tapes, drapes & masks, fasteners, floppy disk liners, absorbent material to combat oil slicks, “metered” paint rollers for home improvement and sound deadners in cars. What does it mean to develop and manage a technology platform like nonwoven? Let’s look at the story in brief.

Al Boese didn’t have a high school diploma and started his career in 3M as a mail boy. In 1938 his boss in 3M’s tape lab, Dick Drew, suggested that he might not be cut out for technical work. Perhaps, Drew counseled, Boese should take time off to find a different job. Boese hung around the lab anyway. One day Drew off handedly mentioned that 3M specifications called for an inexpensive, noncorrosive backing that was fibrous, but not woven, for its popular electrical tape. Rather than hunt for a new job Boese found the best library on fibers at the University of Minnesota’s Home Economics Department and he spent the summer there.

“One day I was walking by the rubber colander in the tape lab,” Boese said, “I stuck a little tuft of acetate fiber in the colander. It heated the surface of the fibers and bonded them together. That was the opening to make nonwovens. Heat and pressure.” Boese started experimenting with this process and set up a small lab called Carfab Lab. Boese’s new process didn’t produce a better backing for electrical tape, but gazing at a department store one day in the mid-1940s, he had an idea. May be, if the new nonwoven material was dyed and sprinkled with color flecks, it could be used in decorative display. Or why not slit the material into strips and make ribbon for decorating gifts?

Boese’s early attempts at ribbon failed as it was structurally weak for wrapping packages and it wasn’t very attractive. “It was obvious to everybody that we had a product failure,” Boese said. In three years the ribbon brought in about $800,000 in revenues and the losses totaled $200,000. Boese was given three months to make it profitable and he did. The new product, 3M Sasheen decorative ribbon, was a hit when it was introduced in 1950s, along with a companion product, Lacelon ribbon.

From ribbon, 3M “married” nonwovens to abrasives in the 1950s to produce Scotch-Brite scrubbing and polishing pads, floor maintenance supplies and industrial polishing materials. A decade later, new dampening sleeves were made from nonwovens that made offset printing much more economical. Disposable surgical face masks and Micropore surgical tape opened the door to other nonwoven medical products.

There were some disappoints along the way, too. 3M never successfully developed nonwovens for book covers, draperies and window displays. A novel product called Skimmit was heralded as the easy way to skim oil off liquids like soups, but consumers never thought so. Early attempts at creating comfortable shoulder pads for clothing fizzled.

Nonwovens had become a part of so many 3M products that a Nonwoven Technology Center was created in 1983 to offer technical knowledge and expertise across the company. By then, about 10 percent of 3M’s business or nearly $1 billion in sales from about 20 divisions represented some form of nonwoven application in products ranging from diapers to diskettes. By the late 1990s that percentage had grown to 15 percent overall and sales of about $2 billion.

Note: I am looking for an example of a technology platform that has evolved in India over a decade or two. In case you have any information, do let me know by either writing a comment on this blog or by sending email to: vinay at catalign dot com.

Source: A century of innovation at 3M (story on pages 50-53, image on page 180).

Gandhi’s failed self-help experiment at Shantiniketan: a lesson in culture-unfriendly intervention

2011-06-10T10:12:00.005+05:30

Every organization has a unique culture and any act to bring about a sustainable change needs to be sensitive to the existing culture. Gandhi, in 1915, either didn’t understand this yet or he hadn’t fully internalized it. Gandhi had a four day visit to Shantiniketan in February 1915 a month after his arrival in India. During this visit he conducted a self-help experiment with all the students and teachers. Like his visit, the impact of the experiment was short-lived. What was the experiment? And why did it fail? Let’s explore it here.

In 1904, Gandhi had established an Ashram in South Africa in a town called Phoenix about 14 miles from Durban. In 1915, when Gandhi returned to India many of his Phoenix Farm associates followed him as well. It so happened that the Phoenix party arrived before Gandhi arrived and found a home in Shantiniketan. After visiting Gokhale in Pune and meeting relatives in Rajkot and Porbandar, Gandhi proceeded to Shantiniketan.

The phoenix family had been assigned a separate quarters at Shantiniketan. Maganlal Gandhi, Gandhi’s close associate in Phoenix Farm, was their head, and he had made it his business to see that all the rules of the Phoenix Ashram should be scrupulously observed. Among Gandhi’s friends Andrews and Pearson were also present.

Soon after his arrival Gandhi mixed with the teachers and students and engaged them in a discussion on self-help. He suggested to the teachers that, if they and the boys dispensed with the services of paid cooks and cooked their food themselves, it would enable the teachers to control the kitchen from the point of view of the boys’ physical and moral health. Also it would give lessons on self-help to the students. Some nodded their head tentatively, some appeared more enthusiastic. Gandhi invited Rabindranath to give his opinion. He said he didn’t mind it provided the teachers were favorable. To the boys, he said, “The experiment contains the key to Swaraj”.

Thus started an experiment involving the entire community of 125 boys and their teachers. Boys were running the kitchen, handling the garbage, cleaning the latrine, sweeping the ground and as Gandhi’s biographer Louis Fischer puts it, “forsaking the muse for the monk”. Pearson was looking after the cooking part and Nagenbabu was looking after the sanitary cleaning. It was difficult for the students. Some began to show early fatigue. Cleaning of vessels was especially tedious. A group of students played sitar next to the kitchen so as to make the task feel less cumbersome.

Gandhi had to leave Shantiniketan abruptly to attend Gokhale’s funeral. And the experiment was stopped after some time. As Gandhi notes in his autobiography, “I am of the opinion that the famous institution lost nothing by having conducted the experiment for a brief interval, and some of the experiences gained could not but be of help to the teachers.”

Gandhi and Tagore were united by their love for India and mankind. However, they were very different personalities. In the words of Louis Fischer, “Gandhi was the wheat field and Tagore the rose garden, Gandhi was the working arm and Tagore the singing voice, Gandhi was frugal and Tagore was prodigal”. At Shantiniketan, Tagore’s pupils sang and danced, wove garlands, painted sunrise and made life sweet and beautiful. Gandhi’s experiment essentially turned the place upside down. It is no surprise, it was shortlived. I feel it is a great lesson to understand what culture-unfriendly intervention is like.

Related articles:

Mahatma Gandhi and the heart and soul of systematic innovation

4 types of innovation leaders (Gandhi, Jamsetji Tata, Vikram Sarabhai, George Fernandes)

Sources:

An autobiography, M. K. Gandhi (part V, chapter IV, Shantiniketan)

The life of Mahatma Gandhi, Louis Fischer, HarperCollins

Photo: mkgandhi.org (Gandhi in 1915)

3 Challenges in building an innovation sandbox

2011-05-23T11:56:00.001+05:30

It has been a year since C K Prahalad passed away and two years since my only interaction with him – over email. He sent his inputs to my paper on Dynamic Innovation Sandbox. CKP is remembered more for his work on Bottom of the Pyramid (BoP) and on core competence. However, for me, his metaphor of “innovation sandbox” holds more fascination. It is almost three years since I wrote about it first in 2008 and subsequently wrote thrice in 2009 (1, 2, 3). Here is an attempt to reflect on the question – What are the challenges in building an innovation sandbox?

1. Taking a strategic bet – When Biocon started its oral insulin program in 2002, they didn’t know what the product may look like if the program succeeds. Moreover, timeline was hazy. However, two constraints got identified – affordability and oral insulin and a study began. It would be another two years before Biocon partnered with Nobex to get the right technology platform. To develop an innovation sandbox, in CKP’s words, you need “an unflagging commitment to strategic intent”. I see senior management sometimes waver while taking a position.

2. Finding a leader: Playing within the innovation sandbox also means dealing with unusually high degree uncertainty. Like Ravi Rajhans, a member of the initial Tata Nano team recalled, “We were really, really scared. It was a big project and we were not sure where to start, where to draw even the first line”. You need a leader who can manage and more importantly keep the team motivated through the ups and downs. Getting these leaders is usually hard. Good organizations develop them.

3. Making collaboration work: Tata Motors ex-MD Ravi Kant has put this very well. He said, “In today’s world, you have to realize that you cannot do everything and you cannot control everything and therefore you need to have a collaborative workplace. For project of this kind to succeed, you need to have everyone collaborating, which is easier said than done. Leading collaboration is a gigantic task in any organization”. In CKP’s words, “They must not innovate in isolation”. This is hard.

Sources: (For Nano) Nanovation by Jackie Freiberg, Kevin Freiberg, Dain Dunston, Portfolio, 2010

Image source: thinkers50.com

Innovation in Railways: story of how Jaruhar enabled wagons to become heavier

2011-05-05T07:46:00.007+05:30

I got an opportunity to meet Prof. Ramnarayan, an authority on change management, at the Innovation Educators’ Conference in ISB last week. When I asked him about his favorite organizational change story from India, he modestly pointed to his book – “Changing tracks: Reinventing the spirit of Indian Railways” which he co-authored with V. Nilakant. I bought it in the ISB book store and started reading it in Kacheguda Express on the way back from Hyderabad. It is by far the best book I have read on an organizational transformation in the Indian context. After all we are talking about a 150 year old organization whose trains cover a total daily distance greater than the distance from earth to moon and back and support 1.1 million pensioners. Here is one of the fascinating innovations from the book on how Mr. Jaruhar, member (Engineering), broke a fifty year old myth on how much weight the trains can carry on Indian rail tracks. This was one of the key levers to bring the Railways back to profitability from close to bankruptcy.

Soon after taking charge as Railway minister in 2004 Lalu Prasad and his partner Sudhir Kumar launched the campaign – “Heavier, faster and longer” trains. The first part of running “heavier” trains was based on the observation that the Indian Railways ran trains carrying about 4,700 tonnes while the comparable figure was 15,000 in the US, 30,000 in Brazil and 20,000 in China. In railway jargon, this was based on a parameter called axle load – the maximum weight of a train per pair of wheels allowable for given section of tracks. In 2004, the permissible axle load was 20.32 tonnes and it was unchanged since 1960s. The axle load ranged between 25 and 35 in other countries with rails comparable in quality.

On 4 March 2005, three days after he took charge as member (Engineering), Jaruhar called a meeting of his directorate. He posed them the challenge, “Railway needs to carry additional 350 million tones of freight in the short term and much more than that in the long term. How do we meet this demand?” His staff responded enthusiastically and within a week ideas started flowing. A number of technical objections were raised on the proposed solutions and the consensus was that this was difficult to do. Jaruhar realized he needed to challenge the engineers in a different way.

Jaruhar proposed that first they needed to investigate how the original value of (20.32 tonnes) was arrived at. Second, they needed to find if there was any permissible tolerance. How come the train becomes suddenly unsafe after the axle load goes beyond 20.32? Jaruhar knew that he was entering a forbidden territory. The laid down procedure for modifying axle load was complex and time-consuming. It involved detailed trials and studies and required the approval of independent bodies such as the Commission of Railway Safety, a non-railway body. It is no surprise the permissible axle load wasn’t modified for several decades.

A turning point came when Jaruhar realized that the existing codes and provisions allowed him to conduct experiments. He decided to experiment with running higher axle loads on trains. In consultation with traffic department, Jaruhar selected routes which had mainly freight traffic and very little passenger traffic. He increased the axle load on freight trains running on these routes. He engaged independent agencies such as Structural Engineering Research Centre, IIT Chennai and Railways’ own Research, Design and Standards Organization (RDSO) in Lucknow to measure the forces and stresses on rails.

The pilot began on 7 May 2005 and ran till August that year. The train load was increased from 4,700 tonnes to 5,400 tonnes. Extensive data was collected both by his own teams and the neutral independent agencies. Jaruhar organized a seminar in Delhi in August 2005. Each zonal railway that participated in the pilot project made presentations based on the data they had collected on rail tracks, bridges, locomotives and wagons. Two other members of the Railway Board also attended the seminar. There were no adverse reports.

Additional questions had to be answered before moving ahead. Would it increase the frequency of renewal of rail tracks? By how much? At what cost? Would it result in increased rail fractures? What if something goes wrong? Subsequently Jaruhar’s experiments addressed these issues systematically and demonstrated how axle load can be increased safely resulting in significant revenue growth. Lalu Prasad acknowledged the contribution this project in his 2006 budget speech.

For anyone serious about leading organizational change “Changing tracks” is a must read case study.

picture source: business.rediff.com

Lessons from ATIRA’s early efforts at innovating in textile mills in Ahmedabad

2011-04-19T21:05:00.006+05:30

Eighty years after Ranchhodlal Chhotalal founded the first textile mill in 1861, Ahmedabad’s mill owners were still dependent on Manchester experts for technical guidance. By 1940s the industry had grown to run eleven million spindles and 195,000 looms. Finally the mill owners under the championship of Kasturbhai Lalbhai established Ahmedabad Textile Industry’s Research Association (ATIRA) in 1947, a co-operative research institute modeled on the lines of research associations in Britain. Scientific experiments at the lab lead to process and product improvement ideas that promised savings and productivity gains to the tune of several crores. However, the ideas were met with huge resistance from the technicians and the mill owners themselves. What could be the reason? Could it be possible that the early interventions were not robust? Let’s explore.

It all started with Kasturbhai asking Vikram Sarabhai to study the structures of industrial research institutes in the UK and Europe with a view of implementing them at home. Vikram was just back from his second stint at Cambridge. He was an apt choice because he was a trained scientist and one of their own – the son of one of the city’s leading mill owners. ATIRA, India’s first co-operative industrial research lab, was started with an initial contribution of Rs. 50 lakh from Ahmedabad mill owners. The initial staff of four – a statistician, a social psychologist, a high-polymer chemist and a physical chemist – was a unique cross-functional team. Vikram was the ring-master. Over the next few years he hired seventy people, most of them young like himself, with no experience of textile manufacturing.

By February 1952, a pilot mill had come up equipped with machinery and facilities for simulating the actual workings of a mill. Studies began to tackle the problems which were assumed to be endemic till then by the industry. One study confirmed that low productivity in spinning was due to inadequate maintenance of the machinery and absence of process controls. Another study proposed methods for reducing cotton wastage. Tamarind kernel powder, an agricultural waste product, was tested as a substitute for starch. Suggestions were made for improving ginning and weaving techniques, decreasing humidification costs, conserving energy, and so on. An estimated Rs. 20 crore, much of it in foreign exchange, was to be saved these innovations over the next two decades. And what was the result? Vikram’s methods were openly attacked in board rooms and technicians in the mills were convinced that ATIRA staffers were spies for the management. What went wrong? After all it was the same mill owners who had funded the initiative.

Well, it is not hard to see that these early interventions weren’t culture-friendly and hence non-robust. First, Vikram and ATIRA challenged the conventional gut-feel based decision making of mill owners and advocated scientific methods which were totally alien to them. Second, it emphasized independent research to home grown ideas from within the mills. It is hard to believe that there would be no bright spots in the form of ideas and practices in the century old industry. ATIRA could have identified and amplified these as a starting point. This would have built mutual trust and prepared the mills folks for accepting more radical ideas. Third, all the ATIRA staffers came from outside the textile industry and hence it became hard for them to find champions inside. ATIRA could have encouraged participation from technicians.

Over the next few years Vikram & ATIRA learnt about ‘the human problems involved in introducing change’ with significant contribution from Dr. Kamla Chowdhry, who was the head of industrial psychology division at ATIRA.

Source: Vikram Sarabhai, a life by Amrita Shah, Penguin, 2007

4 types of innovation leaders

2011-04-03T18:36:00.004+05:30

Innovation leaders influence innovations and inspire innovators – sometimes for many generations to come. What are the different types of innovation leaders? Let’s look at one such classification: Solvers, surfers, capacity builders and champions.

1. Solver: When Gandhi returned from Africa to India there were many problems he felt drawn to – Lack of vocational education, poverty, discrimination against women, caste system, political struggle. Eventually he focused on only one of them – political freedom. And he attacked the problem in a way that is still inspiring many generations more than half a century after he is gone. Solvers like Gandhi immerse themselves in a difficult problem and are always several steps ahead of their contemporaries in their approach. Other solvers that come to mind are: Muhammad Yunus (Grameen Bank), Baba Amte (Anandwan), James Watt (Steam engine), Thomas Edison (Light bulb), Andrew Wiles (Fermat’s Last Theorem), Steve Wozniak (Apple).

2. Surfer: When ring spindle, a new technology, was brought to the notice of Jamsetji Tata he immediately bought two frames and started experimenting at Empress Mill. Neither any mill in India nor the main supplier from England (Pratt) had thought of adopting the new technology. When Jamsetji encountered a report suggesting possible iron ore deposits in Chamba district, he immediately took a sample to Germany for testing. Surfers are always looking for waves, especially BIG waves. Many times they don’t know where the wave is going to lead them to. Some of my famous surfers include: Bill Gates, Steve Jobs, David Grossman (IBM), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook), Masaru Ibuka (Sony).

3. Capacity builder: When Padmanabh Joshi wrote his PhD thesis – “Vikram Sarabhai: A study on innovative leadership and institution building” from Gujarat University in 1986, the term “innovation” itself wasn’t fashionable let alone “innovation leadership”. And yet he couldn’t have chosen a more apt title for the thesis. Vikram Sarabhai was instrumental in building innovation capacity in India through institutions such as – ATIRA: India’s first textile research cooperative, Physical Research Laboratory (PRL), ORG: India’s first market research organization, IIM Ahmedabad. As if this wasn’t enough, Sarabhai architected India’s space program. The secret, according to him, was in establishing a firm foundation: “The early beginnings of any institution are crucial, and the “culture” (or lack of it) brought the first entrants plays a significant role in establishing norms, procedures and practices” he said. Capacity builders work on various elements of the innovation ecosystem. Another of my favorite innovation capacity builders is: A G Lafley (P&G).

4. Champion: George Fernandes took over as railway minister in December 1989. Next month in January, he called for a board meeting at Raj Bhavan, Lucknow. In his talk he mentioned that there were two projects which were uppermost in his mind and they were his dreams for a long time. One was a railway link between Chithoni and Bogha in Bihar crossing the mighty Gankat river and the other was the west coast railway connecting Bombay and Mangalore (later called Konkan railway). Dr. E. Sreedharan attended the meeting as an engineering member from railways. Fernandez told Sreedharan in the meeting, “I will depend on you for realizing these two projects”. Fernandes neither had the technical know-how nor had the resources. But he used his influence with Chief Ministers like Mulayam Singh and Lalu Prasad Yadav and senior ministers like Ramakrishna Hegde and Madhu Dandavate and removed the hurdles for each of the projects. Champions support others’ ideas and help them move forward faster. Other champions I can remember are: the role Einstein played for Satyendra Nath Bose or the role Patrick played for Grossman at IBM.

Sources:

Vikram Sarabhai: A life by Amrita Shah

Story of Konkan Railway of India by E. Sreedharan

Warren Buffett’s biggest mistake and the psychology of decision making

2011-03-25T10:44:00.003+05:30

When Warren Buffett speaks it appears as though an old sage is speaking. And yet he is so fond of talking about his fallibility. During his first India visit this week, he said in an interview with ET, “I have made plenty of mistakes. Over the last 60 years, sometimes I have misread the future. [And] that’s gonna happen to me again in the future”. Interestingly his biggest mistake didn’t happen because he misread the future. It happened because he got mad at the person on the other side and ended up buying instead of selling. How did that happen? And what were its implications for Buffett? Let's see in brief below.

Berkshire Hathaway (BH) was formed in 1954 in New Bedford, New England from the merger of two textile mills each of which traces its origin to 19^th century. By the time Buffett’s buddy Dan Cowin from Graham-circle suggested him the idea of buying BH, it was making losses for over a decade. However, BH was interesting to Buffett because it was selling cheap. According to its accountants it was worth $22 million as a business or $19.46 per share. And yet, you could buy a share for just $7.50. BH’s President Seabury Stanton knew this as well and whenever he would close a mill and sell its assets, he would issue a tender to buy-back shares. So Buffett devised a strategy to buy BH on a low tide and sell whenever Stanton issues a tender for stock purchase at some profit. The point is Buffett started buying BH not for keeping it forever but for selling it.

In his usual style, Buffett drove up to New Bedford one day to see the place for himself. When Buffett was reluctantly ushered into Stanton’s palatially furnished, ballroom-size office, he saw that there was no place anywhere near Stanton’s desk to sit. The seventy one year old six-feet two niches Stanton was used to summoning people to stand before him while he sat behind his desk. The two men seated themselves at the uncomfortable rectangular glass conference table in a corner and Stanton asked Buffett at which price would he sell when the next tender comes up. Buffett said, “I‘d sell at $11.50 a share if it’s in the reasonably near future”. However, when Buffett actually received the tender letter back in Omaha a few weeks later, Stanton had quoted $11 3/8. Buffett felt Stanton cheated him for 12.5 cents less per share. He got furious and decided he would buy a controlling stake of BH and fire Stanton. And that’s what he ended up doing.

Unfortunately, what Buffett got at the end of the heroic act was a lousy business. This is how Buffett remembers what happened next in his 2010 letter to shareholders, “The dumbest thing I could have done was to pursue “opportunities” to improve and expand the existing textile operation – so for years that’s exactly what I did. And then, in a final burst of brilliance, I went out and bought another textile company. Aaaaaaargh! Eventually I came to my senses, heading first into insurance and then into other industries.” No wonder when MBA students at University of Georgia asked him about his mistakes, he said, “Number one is Berkshire Hathaway”

Elephant-Rider model we looked at earlier tells us that our decisions are mostly governed by the Elephant side of our thinking. And the Elephant is emotional. And when emotion takes over, the tiny Rider which is the rational side of our thinking has no chance of influencing the decision. This Warren Buffett story illustrates how weak the Rider is even if you have the best Rider in the world.

Source: The Snowball, by Alice Shroeder (Chapter 27, Folly).

Image source: www.rationalwalk.com/?p=5052

Innovation pipeline: a popular lead indicator metric on innovation

2011-03-15T09:39:00.004+05:30

It is no use hearing the fire alarm after the fire engulfs you. The real value of any metric system is in raising alerts so that you have time to take action. Innovation pipeline seems to be the most commonly used lead indicator metric by CEOs to track innovation in the company. In fact, GE CEO Jeff Immelt told his top leaders, “If you can do only one thing well, this is what I’d pick: Make sure this pipeline is always full”. What kind of strategic actions are taken by CEOs after reviewing the innovation pipeline? Let’s look at a few examples from 3M, GE, Biocon, HUL and Infosys.

Following story is narrated in 3M’s storybook “A century of innovation”: One Saturday morning in 1940 CEO McKnight analyzed the “birth rate” of 3M products. He ticked them off: Wetordry waterproof sandpaper in 1921, Scotch masking tape in 1925, Scotch transparent tape in 1930, Colorquartz roofing granules in 1933 and rubber cement in 1934. Then there was a six-year dry spell. Although Scotchlite reflective sheeting was created in 1937, the rewards of that new product had not yet been recognized. “While these dates are only approximate and are really predicated on when the product commenced to yield some profit, it indicates rather a long period of hunger . . . nothing appears to have been developed since the rubber cement birthday,” McKnight wrote Carlton. McKnight took an action the same day and 3M’s New Products Department was born. In a memo dated October 12, 1940, McKnight wrote, “3M is spending a substantial and an increasing amount on research every year. It’s time to create a department to cooperate with all interested parties in studying the commercial value of each research project upon which money is being spent.”

One of the initiatives that Jeff Immelt kicked off when he became CEO of GE in 2001 was “Imagination breakthrough”. It is a pipeline of ideas that could generate more than $100M in incremental revenues. Out of the 30 ideas that entered the pipeline in the first year, about 20 of them turned out to be good projects. Today the pipeline is managed by CMO Beth Comstock and has 100 plus ideas in the pipeline with everything from new stroke technologies that are offered to ambulances to solar or wind energy technologies. Immelt tracks about 30 of them every month.

I am sure Indian CEOs review their innovation pipeline as well. Biocon CEO Kiran Mazumdar-Shaw has mentioned in the annual meeting in 2007 that there is an “enviable research pipeline” and she mentions a few programs in the pipeline like oral insulin, an antibody for Rheumatoid Arthritis etc. In a Q&A session at India Knowledge @ Wharton HUL CEO Nitin Paranjpe mentions that “We have a robust innovation pipeline across categories.” Similarly, Sandeep Dadlani, Head, Retail, consumer goods and logistics at Infosys mentioned following in the analyst meet in July last year, “There is a significant innovation pipeline of new ideas, new solutions, new IP at Infosys which is being evaluated literally every month. Business plans are being reviewed and approved.”

If everybody tracks innovation pipeline, what is the differentiator? Is it about how some of those ideas are linked to customer’s anxieties and aspirations at a deeper level? Perhaps coming out of an immersive research like P&G does or a “dreaming session” with customers like Immelt does? Is it about a discipline of funding & protecting investments in the good ideas and parking the rest? Is it about ensuring the speed of experimentation and customer feedback cycle? I don’t know. Any thoughts?

Walchand Hirachad Doshi: A daredevil innovator

2011-03-12T13:47:00.005+05:30

Each of the four businessmen in Gita Piramal’s “Business Legends” – Kasturbhai Lalbhai, Ghanshyamdas Birla, Walchand Hirachand Doshi and J R D Tata – is legendary in his own way. However, Walchand Hirachand appealed to me in a special way. If Jamsetji Tata and Mahatma Gandhi epitomized systematic innovation then Walchand Hirachand epitomized non-systematic innovation. If Warren Buffett was paranoid about wide margin of safety then Walchand thrived on narrow margin of safety. Why do I call Walchand, the man behind several pioneering works in India from Bhor Ghat railway tunnels between Mumbai and Pune to Hindustan Aeronautics Limited (HAL) in Bangalore, a non-systematic innovator and yet adore him so much? Let’s see in this article.

Walchand was born on 23 November 1882 in Sholapur, Maharashtra, to Raju and Hirachand Doshi, a devout Digambar Jain trader family. Walchand learnt the tricks of trade the hard way, losing money in the first two attempts – a speculative jowar trade and even more speculative cotton trade. His loss in the second attempt was even bigger than the first. Walchand had also concluded that banking was not for him as he considered collecting interest was ‘a woman’s job’.

A turning point came when Walchand was twenty-one years old and frustrated with life. This is when he met Laxmanrao Phatak, a thirty-something ex-railway Brahmin clerk. Both shared a love for Marathi literature, theatre and movies. By the time the two met, Phatak had gained a thorough knowledge of the way the wheels of railway affairs revolved, what strings to pull, how to manipulate the allotment of funds and turn it to advantage. In 1903, Phatak and Walchand joined hands and bid for a tender to lay seven mile narrow gauge track near Barsi. Walchand convinced his father and uncle to put in Rs. 80,000 and a partnership registered in October that year was to last fourteen years and take both their careers to new heights.

Walchand entered shipping accidentally. Mr. Watson, a senior Crompton executive, told him over lunch in a train journey to Bombay that a steamer which had been purchased by Maharaja of Scindia during the war was up for sale. Walchand was so fascinated by the idea of a shipping venture that on reaching Bombay he drove straight to the docks to inspect the ship. It was love at first sight. “Then and there I resolved to leave no stone unturned in order to buy SS Loyalty”, he would recall. Before the end of the day, Walchand had roped in friends to buy the ship for Rs. 25 lakh.

A series of surprises popped up as Loyalty commenced its first voyage from Bombay to London on 5^th April 1919. Walchand was told in Bombay that Loyalty’s repair cost would be Rs. 1 to 1.5 lakhs. In London he discovered them to be Rs. 7 lakh. Six weeks of stay extended to five months. Walchand utilized the time to study his primary competitor the then Microsoft of shipping – British India Steam Navigation Company (BI) and decided to buy a fleet of six medium-sized cargo steamers from Palace Shipping Company in Liverpool for a million pounds. After paying a deposit of £100,000, Walchand realized he had to first obtain a shipping controller’s sanction. Walchand launched an emotional propaganda at the backdrop of Jalianwala massacre and ended up buying the entire Palace Shipping company instead of just six steamers. After two more rounds to Europe it was clear that Loyalty wasn’t economical and was sold in February 1923 as scrap for Rs.1,35,250.

Scindia decided to focus on cargo in Bombay-Rangoon sector, an area monopolized by BI. As expected, BI slashed its freight on rice from Rs. 18 per ton to Rs. 6. This tactic had worked for several of the 102 Indian shipping companies that went into liquidation since 1860 including Jamsetji Tata’s company. To fulfill cargo requirements Scindia started subsidiaries to trade rice and coal. Bill Gates of BI, Lord Inchcape offered Rs. 25 for every share which was traded for Rs. 6 on Bombay Stock Exchange to buy Scindia. Walchand went to meet Inchcape in Delhi along with another Director Narottam Morarjee on 14^th March 1923. Inchcape said, “We look on the Scindia Company which has trespassed into our field as pirates. That’s what you are – pirates!” Walchand flung back, “Who are pirates? We or you?” and walked out of Inchacape’s office. The second meeting opened with Walchand proposing, “Scindia is not for sale, on the contrary we are prepared to buy BI. Name your price.” It was like a local chain in Bangalore like M K Ahmed proposing to buy Wal-Mart. What guts!

This is how Walchand describes himself, “I am a dreamer, oblivious to reality, creating friction where I should not, obstinate and opinionated, allowing no peace either to myself or others.” How many of us have an image of ourselves as rooted in reality as Walchand’s? And if we have how many of us have the guts to say it openly? Hats off to the daredevil!

Why does Edgar Schein say, “A culture of innovation doesn’t scale up”?

2011-02-26T18:28:00.005+05:30

“DEC is dead, long live DEC” by Prof. Edgar Schein is a forty year saga of the rise and fall of an innovative organization – Digital Equipment Corporation (DEC) – seen primarily through a “culture” goggle. Founded in 1957 DEC grew to become the number two computer company in the US with $14 billion in sales at its peak in late 1980s and from there on waned over a decade and got sold to Compaq in 1997. Schein, an authority on corporate culture, draws 15 lessons towards the end of the book. According to him, the most powerful lesson is, “A culture of innovation doesn’t scale up”. What does Schein mean by “culture of innovation”? And why does he say it doesn’t scale up? Let’s explore these questions in this article.

To understand some of the tenets of DEC culture, let’s look at two stories from the book. The first episode occurs in 1967 when Schein participated in an Operations Committee offsite at a hotel on Cape Cod. The committee decided to review all the projects that were under way in the various parts of DEC. The presenter was Ted Johnson, who stood at the blackboard and wrote down the list of projects he knew to which others contributed. The list grew to some thirty fascinating projects. Schein’s curiosity began to be aroused as to how the group would now set priorities and make decisions about where to allocate resources and effort. CEO Ken Olson was very quiet and seemingly uninvolved. The group took a long look at the list and nodded approval and then went on to the next item on the agenda! In action was an underlying belief of internal competition and “Let the market decide”.

The second story unfolds in 1980 at the beginning of PC revolution. Ken Olson, an engineer at heart, is said to have described IBM PC as “a piece of junk” and so DEC was set out to produce a more elegant product. Operations Committee approved three PC projects, Professional, Rainbow and DECMATE. The market was not interested in a proprietary PC and hence rejected all three. Following the debacle the engineers at DEC wrote a proposal in 1984 for a PC clone. It was called DEC PC25 and 50 proposal. Compaq was just being founded. Ken killed the project – DEC is not a copycat. Underlying tenet was “DEC defines the product spec, neither market nor IBM”.

According to Schein the cultural elements at DEC that guaranteed a continuous stream of innovation were – the philosophy of empowering people, holding them responsible, depending open and truthful communication, forcing broad consensus and buy-in in decision making and ultimately trusting people at all levels to do the right thing – essentially operating like an extended large family. As organization grows, you have silos, turfs, lack of communication and it becomes almost impossible to get active buy-in (only on-paper agreement). This he feels makes it difficult for a large organization to innovate successfully. And hence Schein says, “A culture of innovation doesn’t scale up.”

If Schein’s claim were true, IBM (Rev: $100B), P&G ($80B), 3M ($23B) & Google ($23B) shouldn’t be innovative. A G Lafley’s claim that P&G built repeatable and scalable process of innovation should be false. Perhaps Schein doesn’t mean this to be a sweeping generalization. In fact, Shein does advocate the role of leaders as “change agents” in this article “Leadership and organizational culture”. However, it is not clear how many organizations are serious about developing change agents. For that matter, how many CEOs consider themselves as change agents?

(Note: As I was writing this article, I realized that Ken Olson died earlier this month at age 84. Hats off to the legend!)

3M’s innovation storybook: A time-travel experience through a culture-capsule

2011-02-08T09:58:00.005+05:30

We have a natural bias to focus endlessly on the problems with our culture and in the process ignore what is working well already. What can we do? Perhaps 3M’s “A century of innovation” holds the key. This innovation storybook not only brings out the success stories like Spencer-Fry’s Post-It and Okie’s waterproof sandpaper but also learnings from some of the failures like Thermo-Fax copiers or magnetic audio-video recording. Here are the three things I liked about the book.

1. Stories behind the pithy wisdom: Like every organization 3M’s culture would carry a number of pithy sayings many of them still active in some form or the other e.g. “Patient money”, “15 percent rule”, “Look behind the smokestacks”. When KcKnight was appointed sales manager in 1911 he knew that 3M’s sandpaper product was no better than competition. But rather than just talking to the front-desk of the furniture manufacturers McKnight asked if he could step into the back shop to talk to the workers. The usual front office answer was, “What for?” McKnight’s reply was, “We are new that’s why we are anxious to learn what you need”. Luckily some “gatekeepers” let McKnight into the factory’s inner sanctum and men on the production line told him what they thought, including how sub-par some 3M products they had tried actually were. This information went back to the product team. This is how the practice of sales folks “Looking behind the smokestacks” and going right to factory floor was born.

2. Company’s defining moments: Every company has defining moments where its core beliefs get tested. Stories of such moments as to how the company responds during such moments are quite inspiring. One such story relates to “Three-M-ite cloth” which became 3M’s first profitable product, after 12 long years of wait since 3M was started in 1902. But the glory was short lived as their biggest competitor from New York, The Carborundum Company charged 3M with patent infringement and demanded that they stop making Three-M-ite cloth. 3M hired a tough Chicago lawyer, Paul Carpenter, decided to fight. Ultimately, Carpenter argued that Carborundum’s patent was invalid: his argument was so strong 3M prevailed. This incident educated the young company about the importance of patents, a philosophy that endures today.

3. Celebrating the heroes: In 1951, James Hendricks, a manager in Tape Research, a tall man with a professorial style, invited every technical person at 3M - 400 in all - to join a forum called “Technical Forum”. An organization in which participation was purely voluntary, its original goals were to foster idea sharing, discussion and inquiry among members of the 3M technical community, while educating technical employees. In 1971 the forum had its first female chair, Julianne Prager and the forum started its Visiting Technical Women program in St. Paul area schools during 1970s. Marlyce Paulson, coordinated Tech Forum activities from 1979 to 1992. Paulson says, “The forum pulled specialists like polymer chemists across the divisions to share what they know.” I like the way this storybook highlights the work of non-CXO people like Hendricks, Prager and Paulson.

I hope more organizations use storybook as a way of communicating its values and legacy to employees, customers and other stakeholders.

Applying the Elephant-Rider model to a failed innovation program

2011-01-13T08:46:00.004+05:30

A large insurance company hired a new CEO who concluded that among the company’s main problems was a lack of innovation. He launched multiple programs to increase innovation including various campaigns to reward innovation (suggestion boxes, prizes for new ideas) yet received little response. Why? A number of employee focus groups were launched to analyze the problem. In reviewing the company’s history it was revealed that past success was based on a tightly structured system of figuring out the best solution to any given problem, documenting the solution, putting all of the solutions into large manuals organized by every conceivable kind of problem that could arise, and systematically rewarding employees for using the rules written out in the manuals.

Over the years, employees had learned that the road to success was to apply the rules. The number of manuals grew to cover every new situation that arose. Employees who did not like to work in this kind of rule-bound, structured environment were encouraged to leave the organization, leading to a workforce that was comfortable in the structured environment. Previous CEOs had glorified this system of working, and indeed it had been highly successful in building the company. It came to be taken for granted that the best way to work was to follow the rules in the manuals.

Given the situation it is not surprising that the program failed. But how could the CEO have done any better?

To understand the options, let’s first see a simple and useful model of how human brain works. According to this model the human brain has two independent systems or processes of thinking at work all the time. The first one is intuitive and emotional. It is the part that makes you duck when a ball is thrown at you unexpectedly or makes you nervous when your airplane hits turbulence. The second part is the one that plans, analyzes and looks into the future. It is the part that makes a new years resolution that you will go for a morning walk three times a week.

Chip and Dan Heath use an analogy for this model in their bestselling book Switch which I like. In this analogy the emotional side is like an Elephant and deliberating side is like a Rider. Perched atop the Elephant, the Rider holds the reins and seems to be the leader. But the Rider’s control is precarious because the Rider is so small compared to the Elephant. Anytime the six-ton Elephant and the Rider disagree about which direction to go, the Rider is going to lose. He is completely overmatched.

Elephant carries all the baggage from the past like the employees of this insurance company which are habituated to “following the rules”. Even if the Rider gets an idea, the Elephant would ask the question, “Where is the rule?” One option is to shape the path for the Elephant and make the new direction easy. In fact, Edgar Schein who narrates this story in “Corporate culture survival guide” suggests following: “Every month every department had to invent three new ways of doing things and write up a manual to that effect!!!” The Elephant may still feel like doing the old way and in a slightly different way. Behaviroral economist Richard Thaler calls this a “Nudge”.

The other option is based on the assumption that response to an initiative in any organization is never completely zero. There will be a few people in some corners who would have submitted ideas. We zoom in to those people and ask, “Why the hell is it working here?” Then we try to clone the situation in other places. This technique directs the Rider and is called “Follow the bright spots” and I wrote about it last year.

Image source: www.wpclipart.com

My theme for 2011: Robust intervention for systematic innovation

2011-01-08T09:53:00.004+05:30

I had identified four themes for study last year. I pursued all of them – some with more seriousness others with less. This year I am down to only one theme which I call “Robust intervention for systematic innovation”. It means either I am more focused this year or getting older. I have mentioned what systematic innovation means earlier. But what does a “robust intervention” mean?

Bailout of banks, radiation therapy of a cancer patient or launch of an innovation program – each is an example of an intervention. An intervention is an act in order to bring about a change. I read the term “robust intervention” in an interview of Nobel Laureate Joseph Stiglitz in Economic Times. He said, “By that [robust intervention] I mean interventions that are simple enough that you don’t have to very fine tune to make them work, even if you have a bad president like President Bush.” Stiglitz says robust interventions work in spite of dysfunctional systems or flawed institutions. OK, so what is not a robust intervention? Here are a few I came across:

· An initiative in an organization where Economic Value Added (EVA) based scorecard was percolated from CEO all the way to the first level manager. The EVA number was not so easy to compute and was too abstract for many. The initiative was a disaster.

· Telling our son, “Don’t play games on the computer”

· An innovation program whose scope was defined by a set of “creativity” workshops covering as many people as possible. Everybody had good fun. Nothing happened after that.

What are the examples of robust interventions? Here are a few I have written about in this past:

· A G Lafley’s open innovation program at P&G. I wrote about it here and here.

· Jerry Sternin’s community program in Vietnam that reduced malnutrition.

· Dr. Kiran Bedi’s reform program at Tihar Jail

Now, here is what I would like to study further. What are the characteristics of a robust intervention? How do we go about carrying out such an intervention?

Here is my initial take on the characteristics of a robust intervention. I could be wrong here and your inputs will help.

1. Non-dependence on scarce resource: If an initiative depends upon “non-corrupt politician” or “good quality teachers” or “systems thinkers”, it is not a robust initiative. There are just so few of them around. Sugata Mitra’s idea of Self Organizing Learning Environments (SOLE) depends upon teachers not playing any role in teaching. Does it make it a better candidate for robust intervention? I don’t know.

2. Appealing to both the Rider and the Elephant: To borrow Dan & Chip Heath’s metaphor from their book Switch, the intervention should appeal to both the emotional Elephant part of our brain and the ever-analyzing Rider atop the Elephant. The EVA initiative mentioned above did not appeal even to the Rider let alone the Elephant. Telling our son to stop playing the computer game is certainly not appealing to his Elephant.

3. Margin of safety: There is a high chance that the initiative moves 4 steps forward and with some bad luck may move 2 steps backward. However, the initiative carries extremely low probability of moving 2 steps forward and 4 backward. How to create cushion against the Black swans?

Giants of Enterprise: My favorite read of 2010

2010-12-31T14:46:00.006+05:30

It has been almost a year since I first read Richard Tedlow’s “Giants of Enterprise” and I still haven’t got over the hangover. Several times I revisited the book for some specific incident or information like to check George Eastman’s early experiments and I ended up spending the next half an hour reading much more. It is a kind of stuff I had never read before. The book opened a door of a totally new discipline for me – that of “business history”.

What is “Giants of Enterprise” about? The book contains biographies of seven innovators who built large enterprises in America from railroads to microprocessors: Andrew Carnegie (Steel), George Eastman (Kodak), Henry Ford, Thomas Watson Sr (IBM), Charles Revson (Revlon), Sam Walton (WalMart), Robert Noyce (Intel). In my opinion to say that the book is a bunch of biographies doesn’t do justice to it.

Here are three things that I find unique about this book:

· Role of influencers: For each of the innovators, Tedlow identifies one or two key influencers in their life and shows how a few individuals influence formative minds. If your boss fires you, chances are high you will hate him. And if you don’t, it is almost certain you won’t continue to adore him. Well, even after John Patterson fired Thomas Watson Sr. from National Cash Register, Watson continued to adore his ex-boss. Watson’s son wrote, “Oddly, dad never complained of this treatment and revered Mr. Patterson until the day he died.” Watson told his son one day, “Nearly everything I know about building a business comes from Mr. Patterson”. As Tedlow writes – “Both men dominated their organizations. Both were big spenders on themselves and on the others. Both demanded, explicitly or implicitly, complete allegiance to their views. Both were, in a sense, totalitarians.” Tedlow shows how Tom Scott played a similar role for Andrew Carnegie.

· Psychology of turning points: One of the specialties of Tedlow is to identify one or two key turning points in one’s life and analyze them psychologically. For example, one such point Tedlow presents is the day Henry Ford announced on January 5, 1914, “The smallest amount to be received by a man 22 years old and upwards will $5 per day…” According to Tedlow, this was the point where Ford’s modesty became a thing of the past. He developed an insatiable appetite for headlines. To borrow Warren Buffett’s terminology, Henry Ford forgot about his “circle of competence”. And Tedlow concludes that from this point onwards it was all downhill for Ford. You may or may not agree with Tedlow. But I enjoyed his analysis.

· Anatomy of innovation: If a general reading about an innovation, say through wikipedia, can be compared to watching a dressed up man, then reading this book is like seeing the man in an operating theatre and a surgeon showing you the details from inside. Not everybody may like it. But for me, it is a like having a “flight simulator” to play with. If you want to know exactly at what point Eastman might have got curious about photography or how much money was he already making from his photography business before he quit his banking job or when did he realize that patents are not enough and he needed to create a brand (like Kodak) you can find it in the book with all the gory details.

“Chance favors prepared mind” is my favorite law of innovation. I found this book to be the best so far that gives a glimpse of what “chance”, “a prepared mind” and “favors” mean. Tedlow shows again and again that “success” is like any other addiction. One doesn’t know where to stop.

Personally “History” had lost to “Science” as a cool subject by a wide margin when I was in school. After reading Tedlow, it rekindled my interest in history. Thanks to Tedlow I got an opportunity to appreciate the worlds of Gita Piramal (Business Legends), Ramchandra Guha (India after Gandhi) and many more.

An article I wrote based on a story from this book:

Kodak: story of how George Eastman resolved the patent paradox

4 characteristics of an innovative culture

2010-12-24T07:49:00.007+05:30

Last week I made a presentation on “Role of a manager as an innovation catalyst” to 50 odd managers at their company’s offsite. One manager asked me, “What are the characteristics of an innovative culture?” For some reason, I was not happy with my answer. Hence, the question stayed with me. Here is an attempt to present my view of 4 characteristics of an innovative culture in an organizational context.

Experimentation: The first sign that an organization is innovative is visible through the kind of experiments being performed. Typically experiments manifest themselves in the form of prototypes. For example, in a hospital the CEO showed me a checklist prepared by a nurse and subsequently institutionalized in all other branches. In another place, I saw a portal which sourced the latest blogs, ideas, news posted within the organization and showed it in different windows. In a place like Tihar Jail the prototype could very well be the notebooks of the inmates trying to learn alphabets (see the picture above).

Reflection: When you take the question, “How are you doing?” seriously, what you do next is called reflection. Similarly, when a team sits around after a milestone and asks, “What did we do right? What could we have done better?” it is a collective reflection. Why is reflection important? Because that is when you try to make sense out of the clutter in your mind. Only when I reflected did I realize the impact of Daniel Kahneman’s talk on “Psychology of intuition” on my thinking. Only after reflection a team may come to know the diverse set of assumptions under which development and test teams were working. Reflection is visible through the nature of communication in meetings, post project analysis reports, blogs, newsletters, quarterly communication etc.

Recognition: There are two forms of recognition: covert and overt. When an idea suggested by Paul Buchheit or David Grossman gets selected by the organization for further development it is a form of covert recognition. When Toyota announces gold, silver and bronze medals for the best innovators it is overt recognition. When TVS Motors sponsors Srinivasan to attend Kaizen conference in Malaysia that is also a form of recognition. When P&G’s feminine care division gives “Presidents Fail Forward Award” to the “team or individual that enabled the organization to significantly learn from a failure”, it also sends a message about what company values.

Collaboration: Collaboration happens at multiple levels: within a team, across teams, across business units and across companies. If “experimentation” is the first sign of an innovative culture, “collaboration” is the defining characteristic of innovation maturity. At Tihar Jail, collaboration was fostered through various communities like Legal Panchayat, Food Panchayat run by inmates. At another client, every year they form a cross-functional team and send them to the market and ask for their suggestions on the new trends and possible areas for new investments. This year I met a senior engineer who meets his friend from a different group for an hour every month to thrash out ideas – some of them turn out to be patents. I feel "collaboration" especially cross-functional collaboration is the toughest of these four to inculcate.

Related articles:

1. Edgar Schein's fundamental laws of organizational change

2. The myth of innovation DNA

When does an intervention begin? Story of Dr. Kiran Bedi’s first day at Tihar Jail

2010-12-09T17:14:00.003+05:30

My engagement with my clients is called an intervention. It is similar to your doctor or fitness coach intervening in your regular routine through your working engagement with them. The objective is the same: help client become healthier. The question is: When does an intervention begin? There are two schools of thought. One school says that an engagement has two parts. The first one is about diagnosis which in an organization setting begins with surveys and/or interviews of various stakeholders and ends with planning of the intervention. The second part is the actual intervention. Prof. Edgar Schein belongs to the second school which says that intervention begins with the diagnosis itself i.e. with the first question you ask your client. Now, you might say, “What difference does it make?” Following story tells how much of a difference it can make.

The post of Inspector General (IG) of Tihar Jail, India’s largest prison was lying vacant for many months when Kiran Bedi was posted there. By then she had finished nine months of “paid wait” period after a full tenure as Deputy Inspector General of Police in Mizoram, in the North-East of India. The appointment was more like a “punishment posting”. One of the ex-IGs (Prison) told her, “What will you do there? There is no work there! I was IG (Prisons) many years ago; I received just two files a day. So I used to clear them from my home.”

Monday 3^rd May 1993 was Kiran’s first day at Tihar. She had made a brief visit the previous Saturday and met her direct reports. Without settling down Kiran went for a round of Prison No. 1 (there are 4 prisons in Tihar). It was just a 20-yard walk from her office. She had to pass through two giant gates before actually entering the prison wards. Wearing a uniform was not mandatory. So Kiran wore a full-sleeved pastel pathan suite topped by a waist-length Nehru jacket. “This gave me a full cover, with a sense of grace” She writes. The Superintendent of the jail, K. R. Kishore, followed her. There was no armed guard. She held a notepad in her hand to record on-the-spot observations.

As Kiran filed past the waiting prisoners, the Warders, perhaps from the force of habit, started to physically contain the prisoners without the slightest provocation from them. Some even waved their sticks menacingly the onlooking prisoners, in a gesture to show concern for her security. Kiran signaled the Warders to stop doing this.

There were blank stares all around her. Kiran stood there not knowing what expression would be most suitable for the moment. Not being in uniform had already communicated a desire of informal tone. She started wondering if our system was at all designed to help change offenders and forgive those who were willing to mend. Perhaps in continuation of the thought, she suddenly broke the silence by asking them: “Do you pray?”

No one answered.

She repeated: “I am asking you, do you pray? Please tell me.” She spoke in Hindi.

The men looked towards the Warders as if to ask them if they were permitted to speak. The Warders were confused.

Kiran moved closer to the bunch and directed the question to one inmate chosen at random.

He answered, “Yes, sometimes,” nodding his head.

“Very good. Who else does? You?” She pointed to another prisoner, again at random, getting even closer to the crouching men.

And then one after another, voices joined in saying, “Yes, I also do. I recite the path. Most of us pray at our own timings…”

Perhaps the first human contact was made. She probed on, “Would it be better if ‘we’ say a prayer together? Would you like to?”

They fell silent again. They had never prayed together.

Then one of them, with one eye one the staff and the other on me, said hesitantly, “Yes…” Others nodded their heads in agreement, wanting to be part of the prayer.

She said: “All right, which prayer should ‘we’ sing together? Can you suggest one?”

Silence.

“Do you know ‘Aye Malik tere bande hum, aise hon hamare karam, neki par chalen (O Lord we are your creation/ May our actions be worthy)?” She asked.

This time there was an enthusiastic and instant response, “Yes!”

She said: “Get up to sing together.”

“Close your eyes and sing with me”

And they sang. Kiran says, “When our eyes opened, theirs and mine, I felt we had together succeeded in giving out the first signal of mutual trust which could set the pace and for our work relationship from now on”

Imagine if Kiran had sent out a survey through the Warders as the first step to gather the data!

Source: “It’s always possible: Transformation of one of the largest prisons in the world” by Kiran Bedi, Sterling publishers.

Killing an idea: The good, the bad and the ugly way

2010-11-21T17:05:00.003+05:30

If you are serious about innovation, then killing an idea should be normal. And even if you feel, you don’t kill ideas, chances are high ideas are getting killed anyway by not allocating resources to them. So the action need not be that of commission (pulling the trigger) but could very well be that of omission (not supplying enough oxygen). Hence people serious about innovation activity don’t debate whether we should kill ideas or not. The real question is, “What is a good way to kill ideas?” In this article let’s look at the good, the bad and the ugly way to kill an idea.

The ugly: Alan Robinson and Dean Shroeder narrate this story of a lieutenant colonel in their book “Ideas are free”. In the mid 1960s, as the Vietnam War was intensifying, the lieutenant colonel put an idea into one of Pentagon’s suggestion box. His office produced a constant stream of reports for senior officers, all with the fame format – an executive summary, a table of contents, and a thick divider sheets with protruding alphabetically ordered tables to identify the various sections. The divider sheets came in standard packets of twenty six, one for each letter of the alphabet. Most reports had only 5 or 6 sections and hence only 5 or 6 dividers in each packet were used. Lieutenant colonel suggested that if one report used sections A through F, begin the next report with section G. He thought his idea would save the office several thousands of dollars every year. One day he was summoned to the office of his commanding officer.

“Is this yours?” the general asked.

“Yes, sir”

“Eat it”, the general said.

“Excuse me, sir?”

“Eat it. Now!” the general ordered. The lieutenant colonel stepped forward, took the paper from his superior, put it in his mouth, chewed it up and swallowed it. He was abruptly dismissed and nothing was ever said about it. Decades later, after that lieutenant colonel retired as army’s top generals, he still remembered the incident.

The bad: Dan Ariely is a professor of behavioural economics at Duke University and also at MIT and known more for his best-selling book “Predictably Irrational”. He narrates following incident during an interview at PurpleCar in July this year: Dan met with a group of 80 people around May-Jun 2010 from this big big software company based in Seattle. This group had been working in an incubator on some new ideas. They came up with this idea that they thought would revolutionize the computer industry. They met with the CEO a week before Dan met them and CEO told them that he’s burying the project. They had worked on it for two years and Dan felt he had never seen a more deflated group of 80 people in his life. It was bad way to just bluntly telling people that their idea is killed. The CEO did better than the army general but could do much better. How?

The good: Dan did something interesting. He asked the group, “What would you do if you were to kill a project and not deflate the project team?” Lots of ideas came up. What if the CEO allowed them to present their work? Not just the product but the thought process and ideology around it etc. and then say, “Look we have decided to cancel it but there is lots to learn from it.” Or let the team share working prototypes with people in the company and see what they feel about it (something similar actually happened with Google’s AdSense)

Perhaps Bill Packard of Hewlett-Packard (HP) understood some of this several decades ago. This is how David Hewlett recalls Bill’s “hat-wearing process” in “The HP Way”. Upon first being approached by a creative inventor with enthusiasm for a new idea, Bill immediately put on a hat called “enthusiasm”. He would listen, express excitement where appropriate and appreciation in general, while asking a few general and not too pointed questions. A few days later he would get back to inventor wearing “inquisitor” hat. This was a time for very pointed questions, a thorough probing of the idea, lots of give-and-take. Without a final decision, the session would be adjourned. Shortly thereafter, Bill would put on his “decision” hat and meet once again with the inventor and with appropriate logic and sensitivity, judgment was rendered. No wonder many HP folks remembered the method with admiration.

Searching the source of "low-cost car" idea in India

2010-11-13T16:44:00.006+05:30

“Don’t go looking for the source of a river” goes a saying in my mother tongue – Marathi. A BBC documentary does exactly that as it traces the source of river Ganges from Gangotri to Gomukh to a trickle up the snow peaked mountains. As the documentary shows the real source is usually far more obscure and mostly impossible to find. Perhaps the same principle is applicable to ideas. The closer you look at an idea, you start seeing some other idea(s) which was a source for this idea. In this article, I will try to do to the idea of “low-cost car in India” what BBC did to river Ganges.

Today low-cost car in India is synonymous with Tata Nano. From mid 80s to 90s, it was Maruti 800. In fact, Maruti 800 was used as a reference while designing Nano. Where did Maruti idea come from? R. C. Bhargava, Chairman of Maruti Udyog Limited (MUL), tells the history of the car in his book “The Maruti story”. It is the first detailed biography of a product developed for Indian market that I have come across. Where did Maruti idea come from? It leads us to a different Maruti.

In November 1970, the Cabinet decided to manufacture a small car in public sector and discussions were held with foreign car makers, including Renault, Ford and Nissan. However, the estimate of Rs. 57 crore as initial investment turned out to be too much for the time. Instead private entrepreneurs wanting to manufacture a low-cost car were talked to. Eleven letters of intent were issued, one of those receiving the LoI was Sanjay Gandhi. Out of the 11 LoI, only three were converted into industrial licenses. Apart from Sanjay Gandhi, the other two went to Manubhai Thakkar of Vadodara and Sunrise Auto Industries of Bangalore, perhaps non-serious players by design.

Ever since his return from Britain, Sanjay had been obsessed with the idea of making a small car. He along with Captain Tillu an instructor at Delhi Flying Club, set up a workshop in 1966 in Gulabi Bagh, a congested locality in north Delhi. The workshop had minimal equipment and two mechanics. Maruti Motors Limited (a private company) was registered in 4 June 1971. Later Sanjay acquired 297 acres of land for Maruti in Gurgaon for Rs. 35 lakh. A prototype of the car was demonstrated at the India International Trade Fair in 1972. Another prototype was sent for testing to the vehicle research department of defence ministry, which gave it the certificate of roadworthiness. The car was test driven in Jammu & Kashmir, Rajasthan, Haryana, Punjab and Uttar Pradesh. Sevety-three dealers were appointed and each had to pay a deposit. Commercial production never started.

It was an impossible proposition considering the need to manufacture and procure all the required components, including gearbox and engine, locally. Two things shifted the priorities away from the project: First, the national emergency which came into force in June 1975 and subsequently Janata Party came to power in Jan 1977. And second, the aircraft crash on 23 June 1980 that killed Sanjay Gandhi. Sanjay's unfinished dream acted as an emotional force for Indira Gandhi to push government to start a small car project called Maruti Udyog Limited incorporated on 24 Feb 1981. Was Sanjay's Maruti Motors the first low-cost car project in India?

In late 1950s government formed an Ad Hoc committee on the Automobile Industry under economist L. K. Jha to look into the possibility of manufacturing a low-cost passenger car. It was meant to cater to those whose monthly salary with below Rs. 1,000. The committee, dubbed the Cheap Car Committee, studied different models and collaborators and submitted a report in 1960 laying out the criteria that should decide the model. The committee received 24 proposals from various firms including Hindustan Aeronautics, Renault, Hindustan Motors, Premier Automobiles, Telco (now Tata Motors). However, the tenure of the committee was over before it could take any action.

Does it really matter where the source of an idea is? What matters a lot more is how much impact the idea eventually makes, just like river Ganges.

Electronic Voting Machine: An innovation from Bharat Electronics Limited (BEL)

2010-10-30T07:27:00.004+05:30

Imagine you are designing a product that will be used by several hundred million users within a matter of a few days. What do you think would be your topmost requirement? Usability? Reliability? For Electronic Voting Machine (EVM) designed by Bharart Electronics Limited (BEL), it was “security”. In a country where the election story is never complete without rigging and booth capturing, this is not surprising. Last Wednesday we got an opportunity to listen to the EVM story from Mr. I V Sarma, Director R&D, BEL at the Innovation forum meeting held at IIMB. EVM was first introduced in a Goa state election and rolled out nationally in 2004 General Election.

Security was implemented in EVM at three levels: Technical level (tamper-proof hardware and software design), operational level (security during voting process) and procedural level (throughout the deployment process). For example, the selection of EVMs for polling stations is a random process. Moreover, the machine has no operating system, no network and no external devices connected to it. Imagine a BEL product manager telling this with pride to a Nokia product manager! In spite of this, there were several court cases filed against EVM and it hasn’t lost any yet. For a detailed analysis on security of EVM and its possible loopholes, look at a recent study, “Security analysis of India’s Electronic Voting Machine” by Prasad et. al. presented at the 17^th ACM Conference on Computer and Communications Security (CCCS’10) this month.

Apart from security, what were the other challenges in developing EVM? Sarma mentioned two more:

Simplicity: EVM had to be used for diverse and many illiterate people. Ease of use was important. Hence, the design is kept as close to the ballot paper as possible. Similarly the operating mechanism is similar to the old style. A polling officer presses a button which releases a vote and then the voter presses a button.

Reliability: It had to work in adverse weather conditions sometimes without electricity and should be light-weight. In fact, in the last general election the kit had to be carried on a 45km trek to reach a remote destination in J&K valley.

The idea of EVM originated within BEL to automate an internal election. And then Election Commission picked it up. Guess what was the first hurdle it hit? Indian constitution didn’t permit electronic voting. So a bill had to be passed in the parliament!

What kinds of enhancements are planned to EVM? One problem with the current device is that the voter does not have any way of knowing that the vote has been cast. The new version of EVM will have a small paper strip (2 inch x 2 inch) that will fall off giving a visual cue to the voter. EVM is currently being exported to Nepal, Bhutan and Namibia. Patents are filed both inside and outside the country to protect the IPR.

So what is in the next big innovation coming from BEL? One is weapon locating radar and the other is software defined radio.

What legends learn from gambling: Warren Buffett & the Rules of the Racetrack

2010-10-14T16:57:00.003+05:30

I don’t gamble. At least that is what I would have liked to believe. “Nice people don’t gamble” is what I was told in school and at home. But when I look back on various decisions I took – like my investment in Satyam stock or leaving the job to become self-employed – each looked no different from a gamble. What differed were the odds and the stakes. Now I no longer look at gambling as – stuff that only other people do. It is something we do all the time whether we know it or not. What do people learn from real gambling? Here is an interesting tale from the chapter titled “The rules of the racetrack” in Warren Buffett’s biography “Snowball” written by Alice Shroeder.

“Pop, there is just one thing I want. I want you to ask the Library of Congress for every book they have on horse handicapping.” This is what Warren told his dad Howard who was at that time a Congressman living in Washington D. C. Howard cribbed, “Well, don’t you think they’re going to think it’s a little strange if the first thing a new Congressman asks for is all the books on horse handicapping?” Sixteen year old Warren persisted (1946) and got several books from the library. He studied them all and created his models. Tested them on old data he found in old racing forms in North Clark Street in Chicago. Through this process Warren discovered The Rules of the Racetrack:

Nobody ever goes home after the first race.
You don’t have to make it back the way you lost it.

The racetrack counts on people to keep betting until they lose. Couldn’t a good handicapper turn these rules around and win? Warren was to discover the answer first hand soon.

Warren found a new friend to go to racetrack with, Bob Dwyer, his high school golf coach. Together they started going to the racetrack in Charleston, West Virginia. Dwyer taught Warren advanced skills in reading the most important tip sheet, the Daily Racing Form. Warren recalls, “Sometimes you would find a horse where the odds were way, way off from the actual probability. You figure the horse has a ten percent chance of winning but it’s going off at fifteen to one.”

Then one time, Warren went to Charleston by himself. And he lost in the first race. But he didn’t go home. He kept on betting and he kept on losing, until he had lost more than $175 and his pockets were stripped nearly bare. This is what Warren recalls:

“I came back. I went to the Hot Shoppe, and I treated myself to the biggest thing they offered – a giant fudge sundae or something – and there went all the rest of my money. While I ate, I figured out how many newspapers I had to deliver to make up what I had lost (Note: Warren used to deliver Washington Post in the morning). I was going to have to work more than a week to make back the money. And I’d done it for dumb reasons.

You are not supposed to bet every race. I’d committed the worst sin, which is that you get behind and you think you’ve got to break even that day. [That is when I really learned] The first rule is that nobody goes home after the first race, and the second rule is that you don’t have to make it back the same way you lost it. That is so fundamental, you know. It was the last time I ever did anything like that.”

It is time we give some respect to bookies. By the way, which school do they go to?

S. Chandrasekhar and his attempts to get away from Astrophysics

2010-09-30T10:00:00.005+05:30

I went back to Nobel Laureate S. Chandrasekhar’s biography a few months back after 17 years. Chandra written by Kameshwar Wali was a birthday gift I gave to my wife a few months after she joined me in Buffalo, New York after our wedding. If you have given books as gifts to folks at home, you must be aware of the hidden agenda. I don’t remember who started reading the book first, but I was definitely the first one to finish it. It was the first biography I read where the hero of the story co-operated with the author in a frank manner and the author has done a splendid job with the narration. Why did I go back the book now?

I had a specific objective – to re-read the story of “Chandrasekhar Limit” – the idea that languished for several decades before gaining acceptance by the scientific community eventually leading to a Nobel. It is a masala story with lots of twists and turns. It even has a villain, Prof. Eddington then doyan of Astrophysics, who launched a campaign to kill Chandra’s idea. But that would be a topic of a separate article. In this second reading of the book one of things that struck me was Chandra’s two serious attempts in getting away from Astrophysics. Why did Chandra try to do that? And what happened in each attempt? Let’s see briefly in this article.

Chandra’s career in Astrophysics was more of an accident. By the time Chandra landed in Cambridge he had already published a paper based on the work of Fowler, a Fellow of the Royal Society. Chandra had encountered Fowler’s paper while browsing the newly arrived journals in university library in Madras. In fact, Fowler helped him secure admission at Cambridge. So it was natural for him to start his PhD work under Fowler in Astrophysics.

1930s were hey days of theoretical Physics as a totally new foundation known as quantum mechanics was being built. Chandra soon realized that working in Astrophysics was more like being on the periphery. The real action was in pure Physics. In the meantime, Fowler left Cambridge on sabbatical and Dirac who had nothing to do with Astrophysics became Chandra’s official guide. Chandra consulted Dirac who advised him to visit Niels Bohr and co in Copenhagen. Folks at Copenhagen indeed turned out to friendlier and it is here Chandra made his first serious attempt at pure physics. He wrote a paper titled “On the statistics of Similar Particles” and sent it to Dirac in Cambridge. Bohr had already given his nod. But pretty soon Dirac found an error in his paper. “My paper sent to the Proceedings of the Royal Society is WRONG. That is all” Chandra wrote to his father in Nov 1932. Over four months of work was down the drain. Pressure started building up to submit a thesis. Chandra went back to Astrophysics.

Chandra’s second attempt at quitting Astrophysics happened just after he finished PhD in 1933 and was elected to trinity fellowship. Could this be the time to shift to pure Physics or pure Mathematics? The dilemma ended soon when he got an advice from a senior Fellow Harold Davenport, “You can’t teach an old dog new tricks. Why don’t you continue in astrophysics? You got the fellowship on that account. There is enough time to do mathematics later.”

Fortunately for Astrophysics, Chandra not only stayed with it but made a significant contribution in bringing Astrophysics part of main stream physics. Today 10% of the 12^th standard Physics syllabus my wife teaches is Astrophysics. Incidentally, we will be hearing a lot more of Chandra in the coming months as this year is Chandra’s birth centenary year. In fact, Kameshwar Wali will be giving a talk at a conference on Chandra at Indian Institute of Astrophysics, Koramangala, Bangalore in December. I hope to attend it.

My most favorite YouTube video and the marvels & the flaws of intuition

2010-09-19T11:27:00.007+05:30

Chances are high your most favorite YouTube video is very different from mine in its form and content. Mine is neither a funny clip nor a music video although I enjoy watching both kinds of clips. But here is what is perhaps common between your favorite video and mine. Like you, I have watched it a dozen times so far. But more importantly I have listened to the audio extract of the video several dozen times by now. I listened to it in the gym a couple of days back and I listened to it before going to bed last night. It is titled “Explorations of the mind” and it is an hour-long lecture given at University of California, Berkley by the father of behavioral economics and Nobel Laureate Prof. Daniel Kahneman of Princeton. Who is Kahneman? And what is this video all about? And why do I like it so much? Let me briefly describe in this article.

Kahneman was born in 1934 (same age as my dad) to Jewish parents of Lithuanian origin and spent his childhood in France where his parents had migrated in 1920s. He says in his bio at the Nobel Prize site, “I had grown up intellectually precocious and physically inept”. His school PE teacher felt to pass him means to stretch his extreme tolerance. Kahneman made up for what he lacked in his physique by writing essays in a notebook like, “What I write of what I think”. Kahneman became a psychologist and together with Emos Tversky formulated a theory known as Prospect Theory. This theory turned upside-down a long standing belief among economists that human decision making is a rational process and eventually earned him a Nobel in 2002.

This video is titled “Explorations of the mind: Intuition: the marvels and the flaws”. The video can be divided into three parts. Part 1 is where the speaker is introduced (0-4:20). In part 2 Kahneman sets the context and defines the question he is planning to address for the rest of the talk (4:20-20:10). Part 3 (20:10-55:05) is where he presents a simple and useful model that addresses the question.

What is the question Kahneman addresses in this talk? It is as follows – On the one hand we encounter marvels of intuition when we see world class chess players, basketball players, fire fighters consistently making accurate decisions in a “blink” of an eye (check out Malcolm Gladwell’s Blink for stories on this). On the other hand, we have “experts” like the Chief Economists of the International Monetary Fund (IMF) Olivier Blanchard who on September 2, 2008 said, “If the price of oil stabilizes, I believe we can weather the financial crisis at limited cost in terms of real activity”. Within two weeks some of the biggest financial companies in the world collapsed (check out Nassim Taleb’s Black Swan for stories of these kinds). Why is it that the human intuition works beautifully in certain areas like sports and doesn’t work in some other areas like long term forecasting?

Why do I find this question so interesting? I have a deep-rooted fascination for the learning process. And I believe this question is at the heart of this process. I encounter people all the time who have spent decades managing projects but have stopped learning a while ago. Surprisingly, they believe that with every passing year, they are learning more. But actually they are not. The talk sheds light on what happens when we learn or stop learning.

Vinay Deolalikars proof of P=NP and the power of "web-test"

2010-09-01T11:57:00.007+05:30

There are several ways of making a million dollars. One way suggested by Warren Buffett is to start with a billion dollars and invest them in an airline company. Unfortunately, for most of us this is not a practical way. There is another way which surprisingly needs no investment. Well, it needs a pencil and a paper which you can borrow from your friend. And of course, it needs your time which you can steal from your employer like Einstein did at Swiss Patent Office. Or better still, like Srinivas Ramanujam, you can make your dreams work for you. But here is the catch – you should be able to solve one of the six open problems in mathematics called the “Millennium Problems” defined by the Clay Mathematics Institute. The original list contained seven problems but one was solved by Grigory Perelman of Moscow in 2002. Three weeks back, on August 8, an HP researcher Vinay Deolalikar put up a draft of a proof sketch for one of the six Millennium Problems called “P=NP” on the Internet. Will Vinay get his million dollars?

I am supposed to have studied ABC of complexity theory in my undergraduate and graduate schools. But I pretty much don’t remember anything except for what “P” and “NP” means. Class P contains problems like sorting and searching which have fast computer programs. The other class NP contains problems which don’t have fast programs yet but if someone gives us an answer, we can write a program that can check its correctness quickly. Nobody has been able to mathematically prove whether P is equal to NP or not equal to NP. The problem is around 40 years old and was proposed by Steven Cook in 1971.

For an abstract subject like complexity theory, Prof. Richard Lipton writes amazingly lucid blog titled Godel’s lost letter and P=NP. In the months of May, June and July Richard wrote 8 blogs every month and averaged 17, 20 and 33 comments respectively on each blog entry. That’s very high for an abstract mathematical topic like complexity theory. But something even more extraordinary happened earlier this month. From Sunday 8^th August till next Sunday 15^th August Richard wrote 6 blogs on topics related to Vinay Deolalikar’s proof. Here is the list of blogs and the number of comments on each blog:

8-Aug A proof that P is not equal to NP (188 comments)

9-Aug Issues in the proof that P not equal to NP (121 comments)

10-Aug Updates on Deolalikar’s proof that P not equal to NP (184 comments)

11-Aug Deolalikar responds to issues about his P not equal to NP proof (129 comments)

12-Aug Fatal flaws in Deolalikar’s proof? (311 comments)

15-Aug P=NP “Proof” is one week old (257 comments)

That’s an average of 198 comments, roughly 8 times his average over the past 3 months. Some of the comments came from students and amateurs. But many comments came from what Richard called “The group”: Timothy Gowers, Gil Kalai, Ken Regan, Terence Tao, and Suresh Venkatasubramanian a powerful collection of top experts in the field. The Group found out three major gaps in the proof which Vinay has worked on and sent a final version for publication to a journal. Only time will tell whether his proof can fill the gaps but at this point odds are stacked against him.

Following sample comment gives us an idea of what Richard’s blog meant to readers:

I also want to thank Dick Lipton for the monumental effort. I am very thankful not only for the things already said (things learned, putting N != NP in the spotlight, etc) but also for something else that many researchers here take for granted: this was a public showing of the rigorous peer-review process that many people, specially aspiring researchers, non graduate students and amateur scientists, are unfamiliar with. For somebody attending a good university in his/her country of origin but where top notch research is not conducted, this whole exercise provided a glimpse about what’s like doing cutting edge work. Hopefully that might be a motivation to pursue a career in math or science later on.

Peer review in scientific publishing is undergoing a shift. “web-test” is becoming a powerful alternative to traditional “it-may-take-a-year” kind of review. Will review of this kind happen also in literature & social sciences? I guess so. Shakespeare Quarterly a 60-year old prestigious humanities journal is going to open its review to the web. “web-test” is still in its infancy but holds a great promise.

I would like to thank my friend D. Sivakumar for sending me the link to Richard’s blog. It is because of Siva that I can claim – I have a friend who is an expert in complexity theory!

Entering the game-changer funnel: story of SAP Labs India

2010-08-20T08:11:00.003+05:30

When Boria Majumdar, the cricket expert (he has a PhD on history of cricket from Oxford!) was invited to give a talk at SAP Labs Gurgaon, little did anyone know that it will catalyze the first idea from India Lab to enter the game-changer funnel. Game-changer is a new business incubation process at SAP Labs where only 3 ideas enter every year each having a potential of generating at least $20M of annual revenue. Last Wednesday V. R. Ferose, MD of SAP Labs India, narrated this story in Bangalore Innovation Forum at IIMB while speaking on how SAP Labs India is building an environment of innovation. What’s cricket got to do with software products? Let’s look at the story in brief and related questions that came up during the Q&A session.

When Ferose took over as MD at SAP Labs Gurgaon, he observed a fundamental issue with the environment. There were 500 smart employees with an average age of 26.5. However, they were surrounded by the same kind of people. Even outside the office they were mingling with their friends who were also from the same background i.e. IT. If one of the tenets of innovation is to “think different”, how can that happen when everybody thinks the same? Of course, one can’t control who one makes friends with. Then can we invite people with different background to the company and share their perspectives? That got a series of talks started where a non-IT person was invited every week for an hour. People who visited SAP Labs during this series are: Kiran Bedi, Dr. Abdul Kalam, Rahul Bose, Harsha Bhogle, Harish Hande etc. Boria Majumdar visited as part of this series.

Boria spoke about the problems with cricket administration. He mentioned how corrupt the whole administration is and how there is a huge need for bringing in efficiency in sports administration perhaps through a software. One of the employees picked it up as a potential opportunity. During the market survey it was clear that if we take into account the cash rich sports clubs like English Premier League (EPL) then there is indeed a huge opportunity. Perhaps IPL belongs to the same category. The idea was taken further – relevant patents were filed. And the idea got selected to enter the global business incubator i.e. game-changer process.

Q1: How did the idea author get rewarded in this case?

The idea author gets recognition in two forms. The first is that he becomes part of the incubation team not necessarily as a leader to the take the idea further. It took one and a half year for the idea to be incubated. The second form of recognition is an option given of going for a week to a design school either at Stanford or in Berlin for a course on design thinking.

Q2: Did $20 M goal act as a deterrent in submitting ideas?

We realized that technology people are not good at creating a business case. We have a value engineering group who help pre-sales in creating value propositions for prospective customers. We got the good ideas from technology people validated from the value engineering folks. This brought out the business potential of the ideas.

Q3: Have you come across an idea which started as incremental and then led to a disruptive innovation?

I don’t know all the innovations that came out from SAP Labs. However, from my experience I haven’t seen any incremental idea becoming disruptive.

Lessons from Einstein’s career progression at Swiss Patent Office

2010-08-02T13:42:00.003+05:30

Imagine you have got a game-changing idea. You prototype it in your spare time and the demo get appreciated by a few people including a VP and a product manager. Then comes your performance appraisal and your boss rates you “above average”. He tells you the reason for the “above” part of the rating – it is because you got the Six Sigma certificate during the appraisal period. He doesn’t mention anything about your idea. Sounds surprising? Well, what happened here is similar to what happened to Einstein at Swiss Patent Office. The game-changing idea was that of “Special theory of relativity” and the certificate was the PhD degree from University of Zurich. Let’s see how the story unfolded during Einstein's six year tenure at the patent office.

In August 1900 Einstein was the only student among his friends to graduate and not get a job in spite of a respectable 4.91/6.00 average. He felt “I was suddenly abandoned by everyone standing at a loss on the threshold of life”. He had yet to publish any paper and had no credibility. After two short teaching stints in schools lasting a few months each, Einstein got called for an interview from Swiss Patent Office at Zurich in early 1902. In the interview “Albert was examined for two full hours. The director placed before him literature on new patents about which he was required to form immediate opinion. The examination unfortunately disclosed his obvious lack of technical training.” Einstein was offered a job in spite of the interview because of the good word put in by, his friend Marcel Grossman’s father Herr Grossman with the institute director Herr Friedrich Haller. The position offered, Technical Expert class III, was provisional and one level below what he was interviewed for i.e. Technical Expert class II and the salary was 3,500 francs a year. Einstein took up the job within a week of getting the formal letter sometime in the summer of 1902.

After two years, in September 1904, Einstein’s salary was revised from 3500 to 3900 francs when Haller wrote to Federal Council, Einstein had “proved himself very useful.” He should, however, remain class III rather than promoted to class II since, “he is not yet fully accustomed to matters of mechanical engineering”. The next revision happened in 1906 when his salary was increased by another 600 francs. Haller then wrote, “Einstein had continued to familiarize himself with the work, so that he handles very difficult patent applications with the greatest success and is one of the most valued experts in the office. He has acquired the title of Dr. Phil. from the University of Zurich this winter and the loss of this ma, who is still young, would be much regretted by the administration of the office.”

It is interesting to note that in the 1906 appraisal, the director did not even mention the three papers the young employee had published in the single issue of Annalen der Physik in 1905, his annus mirabilis – one important enough to take him to the history books (on Brownian motion), one which brought him the Noble prize sixteen years later (on photoelectric effect) and the third containing the outline of Special Theory of Relativity.

Moral of the story? If you have a game-changing idea, don’t expect to get “excellent” rating from your boss, at least not in the next appraisal cycle. Even by the turn of the decade (1910) there were only a handful of people in the world who had understood the impact of relativity. Einstein had to be extremely lucky to have a boss to be one of them.

What did the patent office job mean to Einstein? Three things: One – “Besides eight hours of work … eight hours of idleness plus a whole Sunday”, second, "He (Haller) taught me to express myself correctly", and third, what Einstein mentioned on his seventieth birthday, “It gave me the opportunity to think abut Physics. Moreover, a practical profession is a salvation for a man of my type; an academic career compels a young man to scientific production, and only strong characters can resist the temptation of superficial analysis”.

Source: Einstein: The life and times by Ronald Clark

Acharya Jagadis Chandra Bose: The father of systematic experimentation in India

2010-07-22T17:35:00.004+05:30

Thanks to the gift we got from Prof. Dipan Ghosh during our visit at IIT Bombay (alma mater of me & my wife) I got an opportunity to see the special issue of Physics News published in October 2009 on the 150^th anniversary of Sir. J. C. Bose. It was fascinating to read about the man who, as The New Cambridge History of India says,” invented national science for India as laboratory science.”

In 1895 JCB gave his first public demonstration in Calcutta of electromagnetic waves, using them to ring a bell remotely and to explode some gunpowder. In 1896 the Daily Chronicle of England reported: “The inventor (JCB) has transmitted signals to a distance of nearly a mile and herein lies the first and obvious and exceedingly valuable application of this new theoretical marvel”. It would be two more years (1897) before the first successful demonstration of Marconi in Salsbury Plain in England. JCB had used semi-conducting crystal as a detector for radio waves. Sir Neville Mott, Nobel Laureate in 1977 for his own contribution to solid-state electronics remarked that, “J.C. Bose was at least 60 years ahead of his time” and “In fact, he had anticipated the existence of P-type and N-type semiconductors.” What do I find unique in JCB story? Let me articulate 3 things:

1. Fighting spirit: When JCB returned to Calcutta after completing BA from Cambridge in 1885, he had a recommendation letter from Viceroy Lord Ripon. Principal of Presidency College didn’t like this and JCB was given a position but at a salary one third the salary of sahib teacher. JCB continued to teach and yet didn’t accept any salary for three years until the Principal relented. JCB received all his arrear salary as a teacher in the senior grade with retrospective effect from the date of his joining the college.

2. Pursuing one’s passion: On his thirty sixth birthday in 1894, JCB took the now famous vow of devoting his life in the pursuit of scientific research. He converted a small enclosure adjoining a bathroom in the college into a laboratory. His productivity as a researcher zoomed during the following year. In May 1895 he read a paper before the Asiatic Society of Bengal; by October 1895 he was able to dispatch to the Royal Society another paper, while three short articles would appear in The Electrician in December 1895. Impressed by his work Royal Society offered him a special Parliamentary grant for his research. JCB would later say, “That day the closed gate opened and for five years this progress was uninterrupted”.

3. Role of instruments and laboratory: JCB developed extremely sophisticated instruments in his lab like resonant recorder, high magnification crescograph, photosynthetic recoder etc. The resonant recorder could automatically record velocity of excitatory impulse with an interval down to 1/1000^th of a second.

Here is how JCB described his own method of research: “The first condition is imaginative faculty, for the true laboratory is one’s own mind where every experiment has first to be visualized in all details and where behind all illusions one catches glimpses of truth. Aimless experimentation without clear vision is futile… The researcher has next to compare his thoughts with facts to be discovered by following surer paths of demonstration. Unrestrained imagination inevitably leads to widest speculation which is subversive of intellectual sanity. Thus, methods of introspection and experimentation must equally balance, one supplementing the other. Two other conditions for successful prosecution of research are the facilities of a well equipped laboratory and the invention and construction of new equipments of extreme delicacy and precision.”

Source: Physics News, Bulletin of Indian Physics Association, Sir J. C. Bose 150^th Anniversary issue, October 2009,

The work of Jagadis Chandra Bose: 100 years of mm-wave research by D. T. Emerson (1998)

1930: The year when Benjamin Graham re-discovered “Margin of safety”

2010-07-19T07:56:00.004+05:30

1930 was the year when the Great Depression was in its infancy and Warren Buffett was born. It was also the year when Warren’s guru Benjamin Graham was at his career’s mid-point and he would re-discover the principle of “Margin of safety (MoS)”. MoS would become one of the core principles of Graham’s investment style known as value-investing. It would be published in the book Security Analysis in 1934. MoS, I believe, is also one of the core principles of systematic innovation. Question is – How did Graham forget the principle in the first place? And how did he re-discover it? Let’s see it in brief in this article.

By 1930 Graham was 36 years old and had been in Wall Street for 16 years. He had experienced what it means to lose big-time twice. The first loss was in 1903 when Graham lost his father. Graham was 8 years old and his father 35. For the next several years Graham saw practically all the assets including furniture and jewelry disappearing from home, some of it to the pawn shops. The second loss was during the market panic of 1907 when his mother’s margin account was wiped out and her bank closed down. Things began to change slowly for Graham when he entered Columbia on an Alumni scholarship.

During the great bull market of 1920s Graham saw considerable reversal of fortunes. In the middle of 1929, Graham’s fund was sitting on a two and a half million dollars capital – put in long terms investments and short term hedging & arbitrage operations. By the end of 1929, in spite of the September crash of Dow Jones, Graham’s fund had lost only 20 percent compared to a much larger loss of Dow Jones. In a few circles, Graham was being referred to as “financial genius”.

In January of 1930 Graham visited Sr. Petersburg, Florida for holidays along with his family. He met a man named Mr. John Dix who was ninety three years old. Mr. Dix’s father had founded the John Dix Uniform Company of Long Branch, New Jersey. Dix asked Graham all about his business, how many clients he had, how much money I owed to banks and brokers and innumerable other questions. Graham answered them politely but with smug self-confidence. Suddenly Dix said with greatest earnestness, “Mr. Graham, I want you to do something of the greatest importance to yourself. Get on the train to New York tomorrow; go to your office, sell out your securities; pay off your debts, and return their capital to your partners. I wouldn’t be able to sleep one moment at night if I were in your position in these times, and you shouldn’t be able to sleep either. I am much older than you, with lots of more experience, you’d better take my advice”. Graham felt the old man couldn’t possibly understand his business and thought Dix’s ideas were preposterous. Of course, Dix was 100 percent right, Graham 100 percent wrong.

Graham would remember Dix in June when the Dow Jones would reach the abysmally low level of 42 from the April level of 279. Graham’s loss in 1930 was 50 percent, in 1931 it was 16 percent and in 1932 only 3 percent. Graham suffered but perhaps far lesser than others. Surprising part is - Graham doesn’t blame himself for the failure to protect himself against the disaster. What is it that Graham regrets?

In 1928 Grahams had moved into a duplex apartment with terrace on the 18^th and 19^th floor of a thirty storied building at the heart of New York City. It had ten rooms and a rent of $11,000 per year and the lease was to run ten years. Considering Graham’s gains of $600,000 before taxes for the closing year, the expenditure appeared modest even by highly conservative methods. He was proved wrong and pretty soon Grahams moved out of the apartment. What was Graham’s learning?

The true key to material happiness lay in a modest standard of living which could be achieved with little difficulty under almost all economic conditions. Graham would remember Mr. Dix and the New York apartment experience for the rest of his life.

Source: Benjamin Graham: The memoirs of the Dean of Wall Street, McGraw-Hill, 1996

Margin of safety: My most favorite insight of 2009

Edison’s folly and understanding the exposure to negative Black Swan

Laxmanrao Kirloskar: A pioneer of Indian machine-tools industry

2010-07-14T17:49:00.005+05:30

In 1907 Henry Ford was busy designing his 9^thcar model to be named Model T coming after the 8 models – A, B, C, F, K, N, R and S. Around the same time another gentleman named Laxmanrao Kirloskar in Belgaum, India was getting ready to launch his 2^nd product – iron plough. Ford was creating a history in the world while Laxmanrao was doing the same in India. Why? Because until then no Indian had started a machine-tools product development business in India. How did Laxmanrao, a J J School of Art dropout, go about pioneering a machine tools industry in India? Let’s explore in this article.

Laxmanrao was born in 1869 (same year as Gandhi) and was fond of two things: mechanical objects and painting. Against his father’s wish and with financial support from his eldest brother Ramuanna, Laxmanrao joined J J School of Art in Bombay in 1885. Unfortunately, he had to quit after 2 years as he was found to be partially color-blind. He gave up painting but continued to study mechanical drawing at the institute. This skill came handy and lead him to a position of Assistant Teacher of Mechanical Drawing at Victoria Jubilee Technical Institute (VJTI) on a salary of Rs. 45 per month.

At VJTI Laxmanrao developed a habit of reading American Machinist, Scientific American and Foundry. He worked at the institute’s workshop and learnt to install, operate, repair, dismantle and reassemble various machines. He took pride in in describing himself as a 'ghisadi' - a blacksmith. He also started accepting jobs for installing and repairing machines. Soon he was called Prof. Kirloskar and Principal Mr. Phythian appointed him to teach ‘Steam’ – perhaps the equivalent to ICT of today. Sometime in early 1890s Laxmanrao started bicycle dealership – he would buy bicycles in Bombay and send them to his brother Ramuanna in Belgaum where he would sell them. For a cycle of Rs. 700 to 1000 Ramuanna would also charge Rs. 15 for teaching how to ride.

A turning point came in 1897 when Laxmanrao was passed over for promotion at VJTI in favor of an Anglo-Indian. Laxmanrao quit VJTI and joined his brother at the cycle shop in Belgaum. Soon the duo discovered another luxury item of interest to the rich in and around the town – Windmill. Soon they acquired a dealership from Samson Windmill of USA and went on a vigorous sales drive. They sold so many windmills in a year that Samson folks gave one free to the brothers. Like any luxury good, they soon ran out of customers.

In 1901 he was contracted by the king of a small princely state of Aundh to construct an assembly hall. However, within no time the king died and bitter disputes followed for succession. Laxmanrao’s work came to a grinding halt and his investments locked up. He had to return back to Belgaum. This setback got Laxmanrao thinking for what he could do for a steady income. And he thought of making his own products that would appeal to mass market - that of farmers.

The brothers had continued to subscribe to the three American magazines and Ramuanna used to meticulously file and index them. They also received mail-order catalogues from the USA. In one of the catalogues, an illustration of a fodder-cutter caught Laxmanrao’s eyes. The description said that the cutter would chop fodder into fine bits, including stems and roots which cattle normally reject. He ordered one and tested it. Finding that it worked well, Laxmanrao decided to copy it.

He built a small hut as an extension to his shop, bought a few tools and fixtures and started to make fodder-cutters, buying the castings for them from Bombay. He advertised in the newspapers in the local language. In 1901 this was the first Kirloskar product. As sales picked up, Laxmanrao bought an engine (2 ½ HP), a small lathe, a drilling machine and a small emery grinder, all of which he installed in the hut.

Like Henry Ford, Laxmanrao would also pioneer establishment of an industrial township in India called Kirloskarwadi in 1910 (although on a much smaller scale). Kirloskar Brothers would remain a leading industrial house in India throughout most of the 20^th century. However, it would take India another hundred years to launch its own “model-T” called Nano that would catch world’s attention. And it would be done, not by Kirloskars but by Tatas.

Source: Cactus & Roses: An autobiography by Shantanu L. Kirloskar (Laxmanrao’s son).

Space tourism: A peek into Sir Richard Branson’s mind & method

2010-07-12T08:45:00.004+05:30

Prof. Jagdish Sheth of Emory University delivered a great speech in 2005 in a jam-packed auditorium at Sasken, my ex-employer. He talked about various tectonic shifts that are happening around us. Someone asked Prof. Sheth during the Q&A, “What do you think of space tourism?” Everybody laughed. Sheth answered, “I wouldn’t laugh. Richard Branson has entered the game. He is not a fool.” I didn’t know much about space tourism and Richard Branson at that time. But a question came to my mind, “Is Richard Branson really serious about this? Or is he one of those crazy rich guys who don’t know what to do with their money?” Recently I came across Richard’s book Business stripped bare in which he has narrated the process that went behind his investments in space tourism and formation of his venture Virgin Galactic. How did Richard go about investigating and investing in space tourism? Let’s explore in this article.

After the recommendation of Margaret Thatcher, Gorbachev invited Richard for a meeting at Yalta on the Black Sea. A few days later Richard was given a VIP tour of Star City at Baikonur in Kazakhstan. This was the secret world where Sputnik satellite, the Vostok, Voshkod and Soyuz manned missions were designed. This was where Yuri Gagarin blasted off in space in April 1961. Richard was offered once-in-a-lifetime opportunity - To be the first space tourist in the world. Price tag? Over $30 million. Richard declined. Dennis Tito, an engineer at Jet Propulsion Laboratory, became the first civilian to go into space in 2001. Another half a dozen have followed suite since then with a cumulative ticket price of $200 million.

During the Kazakhastan visit curiosity bug bit Richard. Can the price tag be lowered significantly? Since then he had been keeping tabs on anything and everything to do with going into the space. In 2002, Furton one of the leading space consultancies predicted that from 2011 there will be 2000 tourist astronauts a year. And as the costs come down by 2021 there will be 15000 a year and revenue potential will be $700 million a year. Richard felt that Furton study is pessimistic. He set a target price of $100,000 for a space tour.

The tipping point came with the announcement of Ansari X Prize by space entrepreneur Peter Diamandis 1996. The X Prize set a simple challenge: carry 3 people 100km above the Earth’s surface, twice within two weeks. The contest had 29 entrants but only three serious contenders. Of these, only one managed to get serious funding – SpaceShipOne or simply SS1. SS1 was backed by Microsoft co-founder Paul Allen.

SS1 was started by Burt Rutan, the designer of Voyager, the largest all composite aeroplane ever built. It was made from glass, graphite and aramid and bonded with epoxies and resins. SS1 design extremely fault-tolerant and very green. Exactly how green? Well, a flight into the space and back would release less CO2 than equivalent of a person flying from London to New York and back. Contrast this with NASA’s Space Shuttle which has the same environmental output of the population of New York over the average weekend!

On 17 December 2003 SS1 broke through the sound barrier during its first manned test flight. On 21 June 2004, Mike Melvill flew SS1 above 100km altitude. This was space. After space flights on 29^th Sept and 4^th Oct 2004, SS1 won the Ansari X Prize. By then $100 million had been spent on the program. On 27 July 2005 Virgin Galactic and Burt announced a partnership where Burt’s company would undertake all the R&D and certification of the spacecraft and Virgin would do the marketing.

Wikipedia says - Richard unveiled the rocket plane on Monday 7th December 2009. SS2 was presented to the world in the Mojave desert, in California. The vehicle will undergo testing over the next 18 months before being allowed to take ticketed individuals on short-hop trips just above the atmosphere. It is expected to carry six passengers with a total sub-orbital flight of 3.5 hours. The weightlessness will last approximately 6 minutes during which time passengers will be able to release themselves from their seats and float around the cabin! Price tag? $200K with a $20K deposit.

Are you game?

The myth of innovation DNA

2010-07-03T11:32:00.005+05:30

My business is based on an assumption that it is possible for any organization to become more innovative – irrespective of its size, sector, culture and leadership. Hence, when I read a senior leader say, “Either you have an innovation culture or you don’t” – I realize it is time to introspect my business assumption. Could my assumption be wrong? Moreover, when the remark comes from Justin Rattner, CTO of Intel, you know you can’t take it very lightly. Is innovation really a DNA which either you have it or you don’t? Let’s explore this question in this article.

To understand the context better, let’s see what question Justin was asked in an interview last Tuesday and what he said. Economic Times asked Justin, “How seriously does Intel take innovation?” Justin said, “Intel spent $5.7 billion on R&D in the downturn year 2009 – approximately the same amount as the year before. However, R&D investment is not sufficient for a successful innovation practice. That latter depends upon developing a set of cultural norms that welcome and reward innovation. In other words, the company must display an intellectual curiosity that challenges its employees to find a better way to do each and every function of the company. Innovation can’t be selectively applied. It is either part of your corporate culture, like it is at Intel, or it’s not”.

I like what Justin is saying about the importance of innovation being a cross-functional process. You can’t say that we have a great research department, we spend a lot of money on R&D and hence we are bound to be very innovative. Perhaps you have a weak marketing or perhaps your R&D and marketing don’t talk to each other. However, it is the claim in the last line that makes me jittery. Here Justin says, “Innovation is either part of your corporate culture or it isn’t”. Is innovation culture really a “binary thing” – on or off?

Andy Grove was asked in an interview in 2007 to explain what “Creosote Conundrum” meant for Intel. Creosote bush is a desert plant found in Arizona. Its characteristic is that it drips poisonous resins around it so that no new plant can survive and all the water comes to the creosote bush. The analogy was applied to Intel to indicate that all the R&D money & management attention flows into microprocessor business and it acts like a creosote bush. Hence no other new business opportunity survives under it. However Andy is not convinced of the analogy and says, “I have a vague nagging doubt whether creosote bush is a good analogy to what was happening there anyway. What if no other plant (other than microprocessor ideas) was coming out? Did Intel have a good enough innovation culture – whatever that means? Too many unproven and unsubstantiated assumptions” Perhaps Justin knows something about Intel that Andy Grove didn’t.

It is easier to look at a company that has published how its innovation practices evolved over a century – 3M. It took 3M more than a decade to understand the importance of quality assurance. It took another 20 years before someone assessed the rate of success for its new product introduction and established a one man innovation department. Later it learnt how to develop innovation platforms and technical career paths.

Perhaps Justin has discovered a switch that turns your innovation culture from off to on. Until we find more about it, I will stick to a simple innovation dashboard, an ecosystem view and a method of innovation that has evolved from Edison to Lafley over the last 130 years.

Jyotiba & Savitri Phule’s girl school (1851): A radical innovation

2010-06-21T09:12:00.008+05:30

Think of radical innovation and you are likely to conjure up images of telephone, electricity, airplane, computer, car, Internet etc. These are indeed great innovations. But not all radical innovations are anchored in technology. Girl school started by Jyotiba Phule in 1851 in Pune was radical by whichever definition of “radical” you use. Jyotiba’s wife Savitri was the headmistress of the school. She had to use two saaris; one for the road during which cow dung and mud would be thrown at her. And the second saari was for the school use. What were the challenges faced by Jyotiba, Savitri & team while running the school? And how did this innovation come about? Let’s see a few insights that come out from the report of the second annual examination of the girl school held on 12^th Feb 1853. It was attended by 3000 people including 20 British patrons and 30 notable Indian citizens of the times.

Let’s start with some data. The school had 9 girls on the first day when it started and had expanded to three schools all in Pune with 237 girls on its roll by 1853. The average attendance was a little less than 200 (84%). Salary expenses were Rs.760 and administrative expenses (rent, books, benches, etc) were Rs.610. This includes prizes in the forms of books worth Rs.177. The school got Rs.900 from government (Dakshna fund) and collected Rs.1072 through subscriptions. The report mentions – The progress exhibited by girls was far greater than that made in any Boys’ schools during the same period.

If absenteeism and performance wasn’t a big challenge then what was it? One issue was that the girls were “loaded with valuable ornaments” and had to be escorted to and from school by the peons. But the biggest obstacle comes out in this paragraph – A few of the girls who were then at the head of their respective classes have ceased to attend in consequence of their marriage, and the whims and caprices of their fathers and mothers-in-law. It will thus be seen that the custom of the early marriage offers the strongest opposition to female education to this country. The committee, therefore, proposes introducing into the schools under their management, the system of stipendiary scholarships, to induce the poorer parents or fathers and mothers-in-law, to allow their little girls to attend the schools. This is, however, a partial remedy.

Where did the money come from? Unfortunately, not much support came from wealthy Indians. Education for girls especially from lower-cast was against Hindu scriptures. Sponsorship came primarily from the British well-wishers like Sir Erskine Perry, Ex-Chief Justice of Supreme Court, Bombay, Major Candy, Principal of Poona College and E. C. Jones. Slowly a portion of Dakshna fund, originally meant for Brahmins only, was being given to the school.

How did they sell the concept to the moms? We don’t know. But perhaps we can guess it from the following sentence – The prejudices against teaching girls to read and write began to give way to the general desire of mothers to get rid, during the time of work, the annoyance of their little ones. So if you were to prepare an ad campaign for the school what would you do? “Hassled by the troubling little girls at home? This is your best chance, send them to school!”

Sources:

Mahatma Phule samagra vanmaya (marathi) – Complete works of Mahatma Phule compiled by Y. D. Phadke, published by Govt. of Maharashtra, 1991.

Wikipedia on Jyotiba Phule and Savitri Phule.

Mahatma Jotirao Phooley, Dhananjay Keer (Google books)

India as a hub for low-cost experimentation: my favorite theme from 6th India Innovation Summit 2010

2010-06-21T08:23:00.002+05:30

India is known worldwide as a hub for low-cost execution especially in IT and BPO sector. But India as a hub for low-cost experimentation? Well, if some of the stories from 6^th India Innovation Summit 2010 held at Taj Residency in Bangalore last week (17-18 Jun) is any indication, it certainly holds a promise. What kinds of experiments are happening in India? And where do we need to do more work? Let’s explore these questions in this article.

Microsoft started a research lab in India in 2005 and Dr. Anandan MD of Microsoft research presented their charter in the first India innovation summit held in June 2005 at Leela. In the fourth India Innovation Summit held in 2008, Assistant MD of Microsoft Research Kentaro Toyama presented their work in the field of education. In one of the projects, a visiting research scholar, Udai Pawar (son of NIIT’s Rajendra Pawar) was trying to address a typical challenge in India where you have multiple children crowding over one computer screen. He asked, “Can we attach multiple windows and mice to a single computer?” Learning from this project has morphed into a Microsoft product called multipoint server 2010 which was launched this year and guess what is the initial target market for the product? The USA. Also it is worth noting that the early prototype was demonstrated in 2006 and it has taken Microsoft 5 years to go from research project to a finished product. Innovations typically have long cycles and jury is still out whether the multipoint server will be a success. But the point is India did contribute as a low-cost experimentation center in this story.

From education let’s move to healthcare, a sector that is craving for innovations in India and abroad. Preetha Reddy, MD, Apollo Hospitals mentioned a number of experiments in this field. Today India does around 2000 telemedicine interventions per day, perhaps the highest in the world. We serve people not only in India but also from Africa, Bangladesh, Myanmar, Malaysia and Sri Lanka. Clinical trials for stem cell research are happening in India. Preetha mentioned that a low-cost 150 bed high-end acute-care hospital can be set-up in a smaller city serving 100-200 villages nearby with less than Rs.20 Cr. Folks from China, Africa and Korea are visiting to find out how this low-cost model works.

So, what’s missing? Personally, I feel a disciplined approach to low-cost experimentation is missing. Hardly anyone at the conference spoke about the cost and speed of experiments they are conducting and how it can be improved further. Systematic experimentation needs creation of sandboxes or innovation platforms. Thomas Edison supervised 2774 experiments on the electric lamp during the spring of 1884! The point is not that the number was 2774 but that Edison was rigorous in tracking the costs and speed of experiments he supervised. Hope to see more of such rigor going forward in Indian organizations.

A look at Tata Nano through “Dynamic innovation sandbox” lens

4 levers of systematic experimentation: story of Wright brothers