Innovation Stars

Employees at a number of India’s top companies responded to a survey that gauged the innovativeness of their organizations. Based upon the responses to the survey, companies were classified as Innovation Stars, Aspirants and Non-starters. Innovation Stars were found to be more profitable, to have more satisfied employees and to have much lower employee turnover. Stars: These companies excel in all areas, tangible and intangible. Such companies are characterized by high profits, superior quality of products and services, high levels of creativity, brilliant marketing practices, strong brand equity and image, wide market presence and low employee turnover. The Star is an extremely innovative company, which has succeeded in maximizing innovation in all areas of its operations. The climate of such a company is extremely nurturing and rewards creativity while being supportive of experimentation. People working there are excited about going to work; they are thrilled about their company’s future.

Energy and resources spent on creativity

Creativity needs time and energy. The 6Ms (Men, Materials. Machines, Methods, Markets and Money) should be made available to the initiative over the long-term. Sustained innovation requires that resources are set apart for practice of the innovation process. Innovation spirals should meet. A manager comments: “I m not sure I want my people to be more creative; they have trouble getting their work done on time and within the budget as it is.”

Expenditure in R&D compared to competitors

Companies with high R&D budgets compared to market norms are more likely to be innovative. This shows that a company is investing resources in innovation.

Driving creativity in star performance

The way a company treats its top performers provides role models for all others. If such fast track performers are innovative, then others will see creativity and innovation as the path to success. If most star performers are cautious and rule bound, the clear message would be, “Be careful and just follow rules if you want to move up. Creativity does not pay”.

The organization's response to unsuccessful risk taking

A risk, in fact anything new, involves the possibility of failure. The path to successful innovation may pass through a period when nothing seems to work. The organizational response to an unsuccessful innovation holds the key to whether the company will develop into an innovative company or not.

The organization's response to successful risk taking

Organizations that institutionalize successful risk-taking by teams and individuals by public rewards and affirmations, are more likely to reinforce innovation through new and riskier paths. Performance should be monitored. Champions should be rewarded.

Top management’s relevance to risk taking

Taking risk is key to innovation. The more formal a company is, the less likely people are to do anything to rock the boat. Doing new things does involve some professional risk to the person leading the initiative. A lot of handholding by top management can encourage people to take risks. Innovation happens on small budgets as proved by Velvette Shampoo, sold in one-rupee sachets for the poor.

Innovation does not always call for big budgets

 Dyanora Television, acting in collaboration with Matsushita, took televisions to low-income households through hire purchase and direct selling.  Hindustan Lever’s Shakti Ammas, acting as door-to-door retail agents, now have incomes to buy consumer products.  Amul brought Lakshmi, the goddess of wealth, into the homes of poor dairy farmers through the magic of co-operatives.  Kegg Farms did the same for poor poultry owners by developing a hardy, local variety of poultry called Kuroilers that could be raised in rural backyards.

Allocating time for new product development

New product development is the best way to reap first mover advantage. Time has to be budgeted for new product development. While many traditional companies have their own R&D teams, there are fast moving IT giants who have outsourced innovation to smaller, less expensive, outside teams. They have vice-presidents of External Innovation. Whatever the strategy may be, time has to be allotted for New Product Development. A lack of resources can result in extraordinary innovation • Toyota’s Kanban system of Just In Time management was the direct result of acute space shortage in Japan. • Holland with limited land and water resources became the foremost exporter of cut flowers, capturing a major share of the market. They grow flowers on rock wool and recycle all the water.

Interacting directly and consistently with customers

Tapping customer creativity is a tool to help negotiate new products with customers. It is the kind of process that reinvents the future. For instance, customers were not even aware of the possibility of a Walkman. Only an intense negotiation between top management, manufacturing and customers could have created it. Customer interaction can be induced by the following: • Management by Walking Around (MBWA) is the most appropriate way to ensure that the customer’s voice is built into products and processes. • Advisory committees of opinion leaders can be an effective method of keeping one’s finger on the pulse of public opinion. • Focus group interviews enable customers to explore ideas with skilled facilitators, trained to go below the surface of suggestions and complaints. Asia Brown Boveri (ABB) regularly involves shop floor workers, marketing executives and customers in an annual process of negotiating the future.

Investing in new technologies

Investing in new technologies can happen rapidly by global scanning. It can provide instant innovation from an outside source. The only problem is that it is quite expensive. Often foreign technologies also come with strings attached: sometimes Indian corporations are not given key secret processes. In India, this has resulted in cheaper import substitutes, using easily available local resources. India, with its vast human resources, would do well to invest in developing innovation in its own backyard instead of buying it readymade. Innovating internally would also make India globally more competitive.

Appreciation for diversity

Innovation is more likely to occur in a melting pot of exotic diversity. Homogenous groups are less likely to spark off innovative ideas. Corporations that celebrate diversity and respect it are more likely to create a stable of innovators. Using an inexperienced outsider or a naïve resource can create major breakthroughs in traditional industries. In some cases, companies that network with competitors have benefited more in terms of innovation.

Appreciation for diversity

Innovation is more likely to occur in a melting pot of exotic diversity. Homogenous groups are less likely to spark off innovative ideas. Corporations that celebrate diversity and respect it are more likely to create a stable of innovators. Using an inexperienced outsider or a naïve resource can create major breakthroughs in traditional industries. In some cases, companies that network with competitors have benefited more in terms of innovation.

Constructive performance feedback

Productivity depends on performance feedback, as does innovation. 360-degree feedback provides young innovators the opportunity to give their bosses clear feedback on a less than conducive environment. A system to clearly map individual competencies and provide consistent, timely feedback, can result in providing appropriate training when required. The immigrants of diverse races who moved to the USA, created a dynamic flow of new ideas and thus helped in forming a leading economy.

Listening to all members

There is no doubt that each person in an organization has ideas. If there is one thing the quality movement has taught us, it is that it makes sense to listen to everyone, particularly the workman who does the work. People who feel that they are heard are more likely to solve problems. There is no incentive to think outside the box when no one listens or cares. Positive affirmation is the key to ensuring that people stretch to think innovatively. Participation is the reward we give to those who respect us. Einstein developed his theories in a Swiss patent office.

Developing alternatives in good times

Many management teams are involved in fire fighting and solving urgent matters that have developed into critical situations. Time needs to be set apart to study alternative solutions for the problems that lie under the surface of a running organization. ‘Don’t fix it if it ain’t broke,’ say the Americans, meaning, do not change something that is working well. This is disastrous advice in the present context of rapid change. Status quo is the gateway to overnight obsolescence. Innovation should be planned when things are going well. When things are going badly, when survival itself is an issue, no one has the time or energy to look for alternatives. Ashok Leyland has a YES program to harvest new ideas from young executives