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CREATIVE THINKING

INNOVATION
HOLDS THE
KEY
Innovation has long been the success mantra of many a company. But in a
slowdown it seems to be the only tool to stay afloat

KAUSHIK MUKERJEE ing the extant slowdown when the entire corporate
world is beholding a round-the-clock churning. Be
top talking. Start doing’. This bon mot from it Barista Coffee unveiling its blue ocean strategy

S IBM did a great deal to drive those resolute


managers shift their work-wagons to action
gear, and all this by being a little innovative
with the four words. Innovation may not be a new-
found model adopted to script some of the most high-
by introducing idli-dosa on its menu just a few days
back, or McDonald's which not long back began
selling aloo-tikki burger to attract those with
still-a-desi appetite, despite having to put at risk
its international image and brave the ostentatious
flying success stories, but it is definitely moving up eyes of some brand-conscious Indians who strongly
in almost every company's chart of strategic prior- opposed the idea — the word is innovation.Though
ities. So much significance the need to innovate has the meaning of innovation runs deep, it can be
assumed in recent times that experts insist it has broadly categorised into two: 'Breakthrough inno-
taken the sheen off 'quality', which was the deter- vation' and 'incremental innovation' (see Box 1).
miner of a product's popularity in the 1970s and 1980s, Experts say a company should go for both kinds
and has subtly but surely replaced it as a company's of innovation instead of focusing on just one, as
focus area. both are cognate.For instance,there are times when
Not just for growth,innovation has become a tool for a breakthrough innovation several incremental
as much necessary for mere survival,especially dur- innovations are a must like in the case of Tata

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CREATIVE THINKING CREATIVE THINKING

access to the thoughts uploaded by others. Besides, about 30:70. As a result, the room to manpower ra-
there are awards for employees who have light bulb tio at Ginger is 1:0.36 compared to 1:3 in business
moments — the Copy Cat Award is for the best idea hotels. Besides, the company sought customer re-
that has been successfully copied and incorporated sponses from the initial three variants set up in
into the bank's practices,while the Idea Laboratory Bangalore, Haridwar and Bhubaneshwar. Vending
award is given to the business unit that generates machines, check-in kiosks, ATMs, wi-fi connectiv-
the maximum number of ideas. ity, etc helped lower service costs while offering
ICICI Bank is not alone in this innovative drive good value to the customers. Customer satisfaction
through ideating. Managers at ITC have the oppor- is always tracked and suitable changes are intro-
tunity to present their proposals during specially duced as and when required such as 20-inch LCD
organised conferences.In fact,it was during one such TVs in rooms or the use of one-tonne ACs instead
meetings that e-Choupal was conceived.Linking di- of 0.75 tonnes. It was all this innovation that went
rectly with rural farmers for procurement of agri- into the making of the low-cost yet successful busi-
cultural produce through e-Choupal, the company ness for the Tatas.
eliminated the need for the middleman who used to Today, Ginger is fast spreading its wings and
pocket most of the profit in any deal. Also, earlier would soon be covering many new cities like Man-
there was no incentive for the farmers to invest and galore, Guwahati, Tirupur, Pantnagar, Durgapur,
produce good quality output as the difference in the Ludhiana, etc.
price for good quality and inferior quality was way It does not necessarily take a big business
too slim. With e-Choupal active in over 40,000 vil- group like the Tatas to come up with innovations to
lages across eight states, the farmers now have a cover the value gaps. Lesser-known Paras Pharma-
choice and the company is bloating its bottom line. ceuticals has successfully filled in various gaps in
Another kind of successful the over-the-counter category with
Not just for growth, Motors which launched Indica and Ace before break- ping on fancy-looking multi-coloured soft drinks, innovation is combination of ex- its much popular products like
innovation has ing through with the Nano-vation. and made coffee the new in thing. isting ideas to create something Another kind of Set Wet, Itch Guard, Krack, etc.
become a tool as
Clayton Christensen of Harvard Business School Taking a slightly different but similar take,Gary new.For example,Cinema + Shop- successful innovation These products competed against
much necessary for
mere survival says that to succeed with innovations, 'disruption' Hamel,who was some time back ranked by The Wall ping + Dining = Multiplex (such those from much larger companies
and 'doing things differently' are of prime impor- Street Journal as the world's most influential busi- as Adlabs) and Singing + Danc- is combination of such as Godrej Sara Lee.
tance. Here, the word disruption may sound a bit ness thinker,feels it is by focusing on 'big problems' ing + Contestants' off-the-show existing ideas. For Likewise,Jyothy Laboratories
jarring,but think Tata Motors.Instead of rolling out that opportunities for innovation can be unearthed. snippets = Reality show (such as example, Cinema + launched Ujala that made life
a car priced slightly below the cheapest available Best to demonstrate his thought was the launch of Indian Idol). Experts say such a difficult for Reckitt Benckiser's
car, read Maruti 800, it chose to 'disrupt' the mar- Fair & Lovely by Hindustan Unilever, then Hindus- combo is a highly potent inno- Shopping + Dining = Robin Blue.
ket by launching the one-lakh rupee wonder. Simi- tan Lever Limited.The 'big problem' it targeted was vation and is a surefire Multiplex These are just two examples.
lar was the case with Cafe Coffee Day when it broke that of the dark-complexioned girls in India. So success scheme . In the innovation business, many
into the young crowd flaunting their youth by sip- much was the success that even men with that 'big But while going for the kill, Davids have slain many a Goliath.
problem' went in for this fairness therapy which came there's one thing that cannot be ignored — every in- But one thing that is common in these two cases is
at a negligible price. novation initiative requires the commitment of op- the proper spotting of 'value-gap'. Products like
TWO KINDS OF INNOVATION Box 1
So far so good, but then there's a word of cau- timal resources. Here comes into the picture a com- Itch Guard and Krack by Paras offered solutions to
BREAKTHROUGH INNOVATION INCREMENTAL INNOVATION tion on such 'breakthrough innovations'. Rosabeth pany's success with 'value-gap', astutely exhibited customers that the bigger players neglected. Like-
Creating new markets Launching a new variant of the product Moss Kanter,professor at Harvard Business School, by the Tata Group when it floated its much vaunted wise, Ujala offered whiteness in clothes without
EXAMPLE: Café Coffee Day made coffee EXAMPLE: Dabur launching Vatika variants says that going for the big one erodes the opportu- three-star category 'Ginger' hotels offering neat leaving blue patches, again something overlooked
drinking popular among Indian youth by like Henna Conditioning Shampoo, fairness nities to launch several smaller innovations. Be- rooms with fares as low as between Rs 999 and by the big players.
offering an environment and value face pack, etc
additions sides, there is that usual high risk involved, like the Rs 1,699. It was a breakthrough indeed, but the Yes, it is the same old business talisman — cus-
one experienced by Motorola when it launched the question is how did the company pull it off? tomer is King, treat them like one and your empire
New to the world products Better packaging Iridium Mobile Telephony Service that virtually To start with, it had a fantastic price to perfor- will grow. Customer-centric innovation can be un-
EXAMPLE: Tata Motors' Nano was the EXAMPLE: Marico's Parachute offering a brought the company to its knees. No reason. Just mance ratio. A 100-room Ginger hotel can be built dertaken in a significant manner which can make
first car that offered a car for a super-low flip-top cap for greater convenience to that the breakthrough innovation didn't click. on 40,000 square feet, unlike the usual 2-3 acres the value proposition more lucrative for the buyer.
price with acceptable style, comfort, customers
and safety So, what makes for a successful innovation? required for three-star hotels.The cost per room works This has been sagaciously done by Café Coffee Day
Adoption of technology for Value addition in services ICICI Bank says it's synergy of thoughts,and its proper out to less than Rs 10 lakh. Functions like house- which focused on youth and made several little in-
better products EXAMPLE: Banks like ICICI offering implementation. The company itself has deployed keeping,restaurants,laundry,and maintenance are novations to showcase itself as a part of Gen-Y
EXAMPLE: Mosquito repellent vapourisers services like phonebanking, ATMs, internet various measures like intranets which enable its em- outsourced.This leads to a high outsourcing equa- lifestyle.Instead of being a just-another coffee shop,
like ‘All Out’ banking and 8 AM-8 PM banking
ployees working in various parts of the world to up- tion of 90:10 which further enhances the price-per- it took a number of initiatives and endeared the
load their ideas on a site, at the same time getting formance ratio since the same for luxury hotels is brand to potential customers. A few initiatives that

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CREATIVE THINKING CREATIVE THINKING

McDonald’s began A cyclist pedals


selling aloo-tikki past a new
burgers despite Motorola
several people advertisement in
raising eyebrows Beijing. The launch
of the Iridium
it took are … Mobile Telephony
1. CAFÉ BEAT: A 16-page colour tabloid that is avail- Service had
able across 800-plus outlets for free reading. Quite virtually brought
obviously, the topics in this tabloid include movies, the company to
its knees
music, travel, lifestyle, e-dating, books, career, etc.
2. WWW.CAFECOFFEEDAY.COM: A website en- 3. MERCHANDISE: There is a range of items like 'cool ures,and has also garnered a sizable number of loyal ... the act that endows resources with a new capac-
abling the youth to 'connect' with each other and T-shirts' and 'funky caps' apart from the chic cof- customers.What was done with Indica and Scorpio ity to create wealth." IM
share photos, files, etc. fee filters and mugs that a coffee shop is expected was to focus on the customer segment's pain points.
to offer. Another example of a similar innovation which The views are personal. The views of the author do not
4. GIFT CERTIFICATE: A gift voucher that can be has proved very potent is Titan's GoldPlus stores necessarily represent those of the organisation where
GETTING INNOVATIVE Box 2 bought from the shop and used as a gift, again ful- which drew customers by promising a 'pure prod- he is employed.
INNOVATION TRIGGER ILLUSTRATION filling another regular need of the youth. uct', at the same time offering an enjoyable shop-
Companies that have innovated successfully ping experience. A study by ASSOCHAM reveals REFERENCES
Spot value gaps in the market Big Bazaar launched departmental stores
targeting cost-conscious customers have realised the importance of being persistent in there is a significant loss for customers due to 'im- Bowonder B, Kumar S, Kumar R, Sridharan A, "Innovation
their efforts and have accepted the imperative of mak- pure product'.Titan offered them a credible option and Innovativeness - The Tata Experience", Tata Management
Focus on customer pain points ICICI Bank offers multiple channels and ing it a continuous process while not expecting mir- away from the local goldsmiths who dominated the Training Centre, Group HR Publication, May 2009.
extended banking hours acles from the first launch of their 'innovative prod- market before GoldPlus happened. Christensen, Clayton M. "The Rules of Innovation" Technology
Focus on emerging trends arising out of VLCC launching nationwide slimming uct'. For instance, Indica was launched in the late An analysis of some of the successful innova- Review, June 2002, Vol. 105 Issue 5, p32
social/cultural/environmental changes centres to cater to the stay-fit trend 1990’s,while its success came a few years later with tions presents the various triggers (see Box 2) used Hamel, Gary, "THE WHY, WHAT, AND HOW OF MANAGEMENT
across cities
the V2 version which had noteworthy improvements. for innovations by various companies. INNOVATION", Harvard Business Review, Feb2006, Vol. 84
Technology-enabled solutions to cater to Bharat Matrimony launching a matrimonial
current needs more efficiently website www.bharatmatrimony.com Likewise, the Scorpio from Mahindra & Mahindra The present as well as the future no doubt be- Issue 2, p72-84
has also been upgraded over the years and its re- longs to the companies which have mastered the art Kanter, Rosabeth Moss, "Innovation: The Classic Traps",
Analyse the value chain to introduce Dabur launching the H & B (Health &
suitable value additions Beauty) retail stores cent launch of the automatic version with the 2.2 of succeeding with innovations, while those which Harvard Business Review, Nov2006, Vol. 84 Issue 11, p72-83
(e.g. backward/forward integration) litre mHawk engine has been the culmination of a haven't are likely to be left behind. Perhaps Peter
Relook at the core need fulfillment – Suzlon focusing on energy (the core need) long-standing innovation agenda. The Scorpio has Drucker, the father of modern management, gets it ABOUT THE AUTHOR
could there be other ways of fulfilling it? through wind energy instead of thus far been able to beat competing SUVs from precisely correct: "Innovation is the key to success Kaushik Mukerjee is senior practice consultant with
conventional sources
leading automakers when talking about sale fig- and is the specific instrument of entrepreneurship Tata Management Training Centre

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