Unleashing Innovation

AIMA-Bosch Limited 38th NATIONAL COMPETITION FORYOUNG MANAGERS

THEME: “Unleashing innovation across the value chain – A mantra for growth”

Team : 1) Mr. Apoorve Khandelwal

2) Ms. Mansi Dubey

3) Mr. Ullas Batra

Organisation: Bharat Petroleum Corporation Ltd.

Address: PLOT NO. A-5 AND A-6, SECTOR -1, UDYOG MARG, Sector 1, Noida-201301

Tel No : 9910440684 (Apoorve), 9650130278 (Mansi), 9760154033 (Ullas)

Fax No: 0120-2354172

E-mail : [email protected], [email protected]

[email protected].

Number of words: 2500 approximately

Signature of a Member

Unleashing innovation across the value chain – A mantra for growth

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Abstract“The enterprise that does not innovate, ages and declines. And in a period of rapid change such

as the present, the decline will be fast." — Peter Drucker.

India is seeing a transformation from ‘Jugaad technology’ to ‘Frugal Innovation’. Globally

commended Innovations like Tata Nano, Tata Swach, Narayan Hrudayalaya etc have

strengthened brand ‘Innovative India’. But 3rd largest GDP (by PPP) of the world, India, still

ranks 62nd in Global Innovation Index. There is a long-long way to go!

The study is based on exploratory research comprising of Interviews with 15 Business leaders,

survey aimed at 103 employees across 42 organizations and case study of 20 innovative

companies. It was found that transformational leaders influence the innovation process directly

as well as indirectly by driving an appropriate culture, which facilitates the process of

innovation, & thus play the most crucial role in driving innovation across organization.

Study suggests that companies must innovate

with a vision (innovision). Essential ingredients

for unleashing the innovation were identified as

Leadership, Enablers, Actors & Process. Thus we

propose he LEAP framework to enable

organizations take a leap to their innovision.

Assessment Methodologies have been developed

to help organizations (1) evaluate the Innovation

Feasibility of the company & identify the weakest

links that need intervention (2) and evaluate Innovation Performance to enable continuous

monitoring of value creation by innovation across organization. Towards the end an India level

LEAP analysis has also been done. Inspired leadership & collaborative culture at organizational

as well as nation level have emerged out as the need of such turbulent and challenging times.


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1. Introduction

India’s Prime Minister Sh. Manmohan Singh declared the years 2010-20 as India’s

Innovation Decade. He followed this up by appointing a high profile National

Innovation Council to evangelize the cause of innovation and spread an innovation

culture across the country. But can we expect India to emerge as the next Silicon

Valley? Are we going to see the likes of a Google or an Apple emerging in India in the

next ten years? (Ivey Business Journal, 2011)

1.1 Innovation: “Moving Beyond R&D”

There is a widely held view that Innovation is primarily driven by high-end technology

and R&D. However, high-end technology and R&D are only two of several sources of

Innovation. The reach and impact of Innovation is seen across the value chain also

includes other sources of Innovation such as various processes and services,

marketing, branding, trade, entrepreneurship, market research, customer surveys, etc.

Therefore unlike popular belief, innovation isn’t all about idea generation alone, for a

new product or a service offering. In a competitive and fast changing business world

of today, innovation needs to move far ahead of just the product perspective and

span across dimensions such as business model, selling techniques, partnerships,

process flows, technology, HR practices.

1.2 Why Innovation in India ?After liberalization, Indian economy has been growing with a healthy growth rate.

While opportunities for growth still exist, some product categories are becoming

saturated, or at least the most lucrative customers have already been tapped. This is,


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for example, true in mobile services where penetration has already reached 70

percent. This means that to sustain growth and profitability, companies will have to

look at new ways to excite customers. Another option is to explore ‘fortune at the

bottom of the pyramid’, to quote C. K. Prahalad’s evocative idea, But getting to that

treasure will require an ability to understand emerging customer needs well, designing

of products and services to meet these needs, and find processes and business models

to deliver these products and services at an affordable cost. India’s humongous social

challenges call for path breaking innovations. More over current turbulence in business

ecosystem would require even more innovative business practices.

Management thinker CK Prahalad’s vision for India at 75 has 30 Indian companies in

the Fortune 100 list, with the country accounting for 10% of world trade and having

the largest pool of trained manpower. The Global Innovation Index Report 2011

released by the Confederation of Indian Industry (CII) in association with INSEAD

Business School, France has ranked India 62nd on the Global Innovation Index (GII).

India in fact has been on a decline for the last 3 years, losing 39 places from 23rd

position in 2007-08. India granted only 6,168 patents during the year 2009; Japan gave

a maximum number of 1,93,449 patents in 2009 followed by the US (1,35,193), China

(1,28,489). In 2010-11, of the total 7,486 patents granted in India, Indians could claim

only 1,272. On the other hand, foreigners walked away with 6,214 patents.

The future prosperity of India in the new knowledge economy will increasingly

depend on its ability to generate new ideas, processes and solutions, and through

the process of innovation convert knowledge into social good and economic wealth.


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In a globally competitive world, India’s challenge is to unleash its innovation potential

to increase capacity, productivity, efficiency and inclusive growth. If innovation

capacity is to become endemic to the eco-system of India’s growth and development it

has to permeate all sectors of the economy from businesses and government, to

people at all levels and universities.

India today has a number of strengths: a strong R&D base; academic talent; it is a

leading innovation player in certain key economic sectors such as biotechnology,

pharmaceuticals, automotive components, Information Technology, software, and IT

enabled services (ITES); and a stable and supportive macroeconomic climate. While a

handful of companies have successfully embraced innovation across one or more of

these dimensions, it is becoming an absolute must for every Indian enterprise to

unlearn its traditional view to innovation and adapt innovation in more radical ways

than ever before. To keep pace with changes in the external business environment,

where every business faces challenges such as more demanding customers, intense

competition from regional as well as global players, complex supply chains, ever

increasing shareholder expectations it becomes important to create an innovation

framework that can help today’s Indian enterprise unlock its full potential.

2. State of Innovation in India: A Glimpse

Figure below demonstrates the types in which Innovation takes place in a typical firm.

The largest proportion (more than half ) of large firms lies in the systematic

incremental quadrant, as can be seen from figure, which may be an indication that

large firms in India are still in the mindset of incremental Innovation as compared with

breakthrough Innovation( National Knowledge Commission).


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Exhibit 1,Source: National Knowledge Commission

In the last two decades, corporate India has clearly displayed a high level of execution

confidence – the ability to take on challenging execution tasks and make them happen.

As India embraces innovation, companies now face the challenge of building creative

confidence.

3. Innovision: Innovation with a vision

Invariably all successful innovative companies like Apple, Google, 3M, P&G etc. consider

innovation as an integral part of their strategy and strive to create breakthrough/disruptive

innovations. In our research we found out that only 44% of respondents agreed that leaders

across levels in their organization have positioned innovation as an integral part of business

strategy. A 57% of respondents find innovating efforts in their company being only incremental

in nature whereas 37% of respondents see their organizations spend most of its innovation

efforts on reacting to change (exhibit 2). Most of the innovation efforts seem to be directed

towards ‘Sales & Marketing’ & ‘Operations’; mostly because these two have direct & swift

impact on bottom line (exhibit 3). Although bottom of the economic pyramid is an emerging

5% 27.5%

15.5% 52%

Breakthrough

Incremental

SporadicSporadic

Systemic


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market and contains the fortune of future growth, but astonishingly has received the least

attention in terms of innovation (exhibit 2)

Innovation has to have a vision, a vision to grow; grow to become an innovative company

carrying out more and more strategic innovations with due focus given to breakthrough ideas

(exhibit 3). But, ‘to innovate’ is not a formula that can be copied from successful innovative

companies and implemented. A company, based on its scale, innovation capabilities;

Incremental

57%

Both9%

Breakthrough

34%

What is the nature of innovationin your organization?

30%24%

47%40%

7%

0%10%20%30%40%50%

Where do you seemaximum innovation

happening in yourorganization?

Exhibit 3, Survey Results



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Incremental

57%

What is the nature of innovationin your organization?

Leadingthe

Change25%

Both38%

Reacting toChange

37%

My organization spends most ofits innovation efforts on

7%

Where do you seemaximum innovation

happening in yourorganization?




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My organization spends most ofits innovation efforts on




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long/short term strategy vision etc., must c halk out its innovation plan/portfolio that it’ll

targets to achieve. The innovision should be analyzed on two primary criteria:

I. Scope of Innovation:

a. What and how many strategic areas/fields, the organization should target to innovate

in?

b. How much stress/attention the company will give to non-strategic, day to day

operational improvements.

II. Intensity of innovation:

a. How much focus on breakthrough ideas?

b. How much effort to be put on incremental innovations?

The organizations must gradually strive to shift more and more focus on quadrent-1:

Breakthrough-Strategic innovation. The difference in the current & future innovation portfolio

represents the strategic transformation targeted in the innovision.

Exhibit 4, The Innovision Model-Positioning the Future Innovation


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in?











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in?











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4. The LEAP Framework-Towards Innovative India

On the basis of research, it was found that there are four essential pillars, namely Leadership,

Enablers, Actors & Process, that drive innovation in a successful innovative organization. An

organization must strengthen these pillars for taking a ‘LEAP’ to unleashing the innovation

through out the value chain. The “LEAP” spear-head helps in identifying & implementing the

approaches which have so far set the tone of successful innovations in various innovative

companies.

The LEAP to unleash innovation

Exhibit 5: The LEAP Spearhead


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companies.




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companies.




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Exhibit 6: LEAP in Context of Innovision; the extent/type of LEAP varies depending on theINNOVISION

4.1 Leadership

Leadership is the catalyst and source of organizational creativity and innovation. The

importance about the role of leadership was made more compellingly in a recent work

by Gary Hamel. In a widely-read 2009 Harvard Business Review article, Hamel stresses

the need to innovate the role of management itself. In DDI’s Global Leadership

Forecast 2011, fostering creativity and innovation was rated as the third most critical

skill for the near future by over 12,500 leaders from around the world, and showed the

biggest surge between its criticality in the past three years, and for the next three. Yet,


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4.1 Leadership









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4.1 Leadership









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50 percent of the leaders in the sample considered themselves ineffective at doing it,

more than any of the other critical skills. In the survey conducted by us to understand

role and support of leadership it was found that although visionary leaders are highly

important for fostering organizational innovation but on an average the respondents

did not strongly feel that leaders have not set the vision and area of priority as far as

organizational innovation is concerned.

In many instances, the type of leadership required to foster innovation is

transformational because culture change needs enormous energy and commitment to

achieve outcomes. Transformational leadership uses the six factors proposed by

Podsakoff, MacKenzie, Moorman, and Fetter (1990) shown in the exhibit below:

What is the level of importance of visionary leaders in driving organizational innovation?



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Edgar Schein whose work on Organization Culture is widely acknowledged, has shown

that leaders are the ones who develop the culture of the organizations. While top

leaders are the ones who influence the culture but it is the leaders at all levels who

ultimately drive the climate for innovation which was also rated high by the

respondents of our survey (Exhibit 9).

Thus the top leaders set the culture for the entire organization which has a major role

in influencing the macro aspect. The leaders across rung derive their inspiration from

this culture while they ultimately influence climate for innovation. They influence at

ProvideIndividualSupport

Provide RoleModels

What is the level of importance of leaders across levels in driving organizational innovation?



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TransformationalLeadership

ArticlulatingVision

Foster GoalAcceptance

Set HighPerformanceExpectation

IntellectualStimulation

ProvideIndividualSupport

Provide RoleModels




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the grass-root level where the actors of innovation are involved in taking the process

of innovation forward.

Following cases strongly support that leadership has supreme role in driving the

culture of innovation.

Leadership

Attribute

Case in

Point

Influence

StrategicLeadership

GE &IBM

When IBM had to change culture in order to renew theorganization, they brought in a new CEO, Lou Gerstner whore-created IBM with new business model. Similarly, it tookJack Welch, a new CEO, to change the culture of GeneralElectric to help it become highly innovative and successfuland he made GE the leader by driving innovative strategyand innovative management practices.

VisionaryLeadership

Apple Steve Jobs is considered to be one of the supreme visionariesworld ever had. He stimulated intellect at Apple through his“Think Different” campaign and always got unique anddifferent things envisioned and done.

Innovation Culture: Influences behaviour at macro level

Innovation Climate: Influences behaviour at grass-root level

Exhibit 10, Leadership as a determinant of Culture


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Leadership

Attribute

Case in

Point

Influence

StrategicLeadership

GE &IBM


VisionaryLeadership


Apex Leadership: Sets the Culture


Leaders across Levels: Sets the Climate




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Leadership

Attribute

Case in

Point

Influence

StrategicLeadership

GE &IBM


VisionaryLeadership



Leaders across Levels: Sets the Climate




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ManagementInnovation

Infosys Infosys was the first company to successfully providecomputing services from India to clients around the world,often at much lower cost. Narayan Murthy, one of thefounders of Infosys himself drove several of the big humanresource initiatives of the last decade, including the DiversityOffice and the Global Internship Programme. Other seniorexecutives aspire to be equally progressive. Infosys also runsperformance engagement workshops to create a platform oforganizational change agents who will light the next round offires.

4.2 Enablers

Most researchers and theorists agree that the organizations can be designed to have a

structure, a culture, and processes that are conducive to innovation (Roger and Roger

1976; Kanter 1998; Amabile 1988; Jonash and Sommerlatte 1999; Hamel 2000). As

innovation has become a more pressing concern for companies in almost every sector

of the economy, the literature has increasingly explored the factors that enable or

hinder an organization’s capacity to innovate. Our study shows that all the enablers

can largely be classified under the following heads:

Resources: Resources needed to sustain an innovative system include human, physical,

technological, and informational resources. In regard to human resources, functions

Reso

urce

s

These include variousrequirements in termsof fund/time etc. tosupport innovationprocess.

Exhibit 11, Enablers of Innovation


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4.2 Enablers










Enab

ling

Cult

ure These include

various aspects

of culture which

fosters innovation




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4.2 Enablers













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required to administer the innovation must be carried out by an adequate number of

qualified, committed staff (Bauman et al., 1991; Scheirer, 1993; Streefland, 1995).

O’Loughlin et al. (1998). Further, technology and data resources are critical to generate

information that informs needs assessment, and it is important to have evaluation

data that provides effectiveness feedback to the system (Schwartz et al., 1993; Lee,

Bonson, Yarmirr, O’Dea, & Mathew, 1995; Goodman, 2000; Neville et al., 2000).

Funding in terms of R&D expenditure and in other means is another important

requirement to support system of innovation. It is however pertinent to note that

“resources” as enablers only facilitate the innovation system but there is no

correlation as such in terms of more resources leading to higher innovation. A 2011

study of Booz & Co shows (Exhibit ) that top 10 innovative companies are not the top

10 R&D spenders.

This fact also became evident from our survey where we found that enablers like

funding, time, technological systems, innovation officer etc. were not rated to be of

high significance in driving innovation.



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Culture: Often the culture of an organization determines the desire for innovation.

Employee behavior is shaped by organizational culture and therefore influences an

individual’s actions. Consequently it is possible that cultural values and norms are a

powerful means of stimulating creativity and innovation (Glasberg & Ouerghemi,

2011). Organizational culture becomes a powerful determinant of the innovative

potential and an organizational ability to sustain an innovative-supportive culture

(Khairuzzaman & Abdmajid, 2007). Booz & Company’s annual study shows that

spending more on R&D won’t drive results. The most crucial factors are strategic

alignment and a culture that supports innovation. Only about half of all companies say

their corporate culture robustly supports their innovation strategy. This disconnect, is

both a problem and an opportunity. Their study shows that companies with

unsupportive cultures and poor strategic alignment significantly underperform their

competitors (Jaruzelski, Holman & Loehr, 2011).

Our study further showed that important ingredients of an enabling culture for

innovation are collaboration, openness, encouragement, learning culture and freedom

to experiment.

Exhibit 13, Roadblocks to innovation


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Risk Taking Propensity

Learning Culture

Rewards & Recognition

Collaboration across teams and functions

Open Culture

INNOVATING CULTURE

OPE

NES

S

COLL

ABO

RATI

ON

ENCO

URA

GEM

ENT

LEA

RNIN

G C

ULT

URE

FREE

DO

M T

O

EXPE

RIM

ENT



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Following case studies portray the critical role of culture as facilitator for innovation.

Cultural Trait Case in Point Influence

Learning Culture BPCL BPCL has been a fore-runner in the ‘Innovative Marketing’initiatives in Oil Marketing. Learning with times is what BPCLhas learnt over the years. The process of Informationacquisition, distribution and interpretation have been driventhrough various Projects with defined goals leading tovarious innovations viz. products, processes, services etc. areshown in the exhibit .

Encouragement &Openness

IDEO IDEO is considered to be most innovative product design firmand its culture is a breeding zone of Designers. Newcomers atIDEO are taught to practice the IDEO-specific everydayinteractions of designers, which are most visible inbrainstorming and meetings. The newcomers are encouragedto seek help, share knowledge, and give help. This culture ofinnovation is enhanced by IDEO’s reward systems, which arelargely based on informal reputation among fellow designersand peer reviews (Hargadon and Sutton, 1997).

Collaboration 3M The 3M Corp., one of most innovative companies, makestechnical collaboration across divisional boundaries a normalway of operating, having become such a standard practicethat sharing talent and cross-silo collaboration does notentail the battles common in other companies.

Exhibit 16, BPCL’s Innovation Journey

Exhibit 15, Pillars of Innovative Culture


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4.3 Actors

Human ‘Actors’ make the innovation happen! The most important ‘actor’ is obviously

the talent, the possible innovators who are actively involved in the process of

innovation. In our survey also, ‘talent’ emerged out as one of the most important factors

for driving innovation (exhibit 16) and this is where Indian organizations are facing the

biggest roadblock/crunch too.

Some people are born innovators, but more importantly, rest can become innovators

too! The pioneering research (Christensen et. al, 2009) by Hal Gregersen at INSEAD,

Jeffrey Dyer at BYU, and Clayton Christensen at Harvard shows that there are 5 skills,

What is the level of importance of Talent in drivinginnovation across value chain in an organization?



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4.3 Actors









Low2%

Medium46%High

52%

What is the level of importance of Talent in drivinginnovation across value chain in an organization?



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4.3 Actors











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namely Questioning, Observing, Experimenting, Networking & Associating, which

differentiate an innovator, and those can be practiced. “Innovative entrepreneurship is

not a genetic predisposition, it is an active endeavour” (Christensen et. al, 2009).

Another Equally important ‘actor’ is the ‘active supporters’ to the innovators. They

may be the peers who chip in ideas and motivate or the line-managers trying to

actively pitch for internal sponsorships for the innovator. Actors, whether innovator or

active supporter, can be either part of the organization (internal) or be external. More

over an ‘actor’ may be an individual or a group (exhibit 17).

Case Study: The “Actors” of Innovation

Actor Actor type Innovation Role Played

OrkutBüyükökten

Individual,internal, activeinvolvement

Orkut Orkut was launched on January 22, 2004by Google. Orkut Büyükökten, a Turkishsoftware engineer, developed it as anindependent project while working atGoogle. It was a great success forGoogle. Orkut’s current Alexa Rank is336 (as of July, 2012) & is one of themost popular social networking site inIndia and Brazil currently

Egyptians Collective,internal, activeinvolvement

Revolution 2.0,the EgyptianFacebookrevolution

For the first time social media wascollectively used as a very active tool tobring out national revolution. Twominutes after the Facebook page “WeAre All Khaled Said” was started, on June8, 2010, 300 people had joined it. Three

Individuals

Collectives

Comprise

Exhibit 17, About Innovation Actors


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OrkutBüyükökten






Internal

External

Presence

ActiveInvolvement

Active Support

Contribution



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OrkutBüyükökten






ActiveInvolvement

Active Support

Contribution



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months later, that number had grown tomore than 250,000. What bubbled uponline inevitably spilled onto the streets.“We Are All Khaled Said” helped ignitean uprising that led to the resignation ofPresident Hosni Mubarak and thedissolution of the ruling NationalDemocratic Party

Users/Testers atGoogle Labs

Collective,external, Activesupport

Google Labs At GoogleLabs.com, Google used tomake the beta versions of new projectsavailable for tests by users who used togive feedbacks for improvementsdirectly to the engineers who developedthem.

Apple’s supportto iStore Appdevelopers

External, Activesupport

Appdevelopmentfor iOS

(openinnovation)

In beginning of 2008, Apple released aniPhone Software Development Kit (SDK),making it possible for third-partydevelopers to create applications, & aniPhone Developer Program to enable thedistribution of third party developedapplications via a new App Store. Appstore was launched by Apple in mid2008. For developers, the App Storecreated a link to all iPhone and iPodtouch users. One year onwards from itslaunch, there were 100,000 developersin the iPhone Developer Program. InNovember 2009, the amount ofapplications available in the App Storehad passed 100,000 with about 10,000downloads per day.

4.4 Process

On the basis of the interviews conducted and the secondary research, the process of

innovation can be divided in four phases:

1. Ideation & Development: Ideas may be novel (new to the world) or adopted

once. Idea adoption may happen from other organizations (new to the

company) or from other business unit within the organization. Potential ideas

are further chiselled & developed into ‘opportunity’.


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2. Evaluation: Proposed ‘opportunities’ across the organizations are evaluated &

selectively funnelled:

a. to optimize risk Vs potential impact

b. to check coherence with organization’s innovision

3. Implement: First two phases must be followed by speedy piloting and then full

throttle commercialization

4. Maximize: To realize the full potential of an innovation efforts must go on for:

a. Continual improvement.

b. Replication/echoing of the innovation across the organization wherever

applicable

Feedback: All the phases must interact with each other by a corrective

feedback network. This is very crucial for preventive risk management (exhibit

17). The swifter the feedbacks are, earlier the corrections happen saving a lot

of time, efforts & cost.

Exhibit 16a, Process of Innovation


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applicable







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applicable







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As the process of innovation is sequential in nature, a bottle neck or weak link at any

step will slow down the overall innovation output (Morten et.al, 2007). So this is

extremely important for an organization to analyze the organizational strengths and

weaknesses with respect to each phase of innovation in order to ensure targeted

efforts to strengthen the innovation process.

Case Study: The “Process” of Innovation

Company Initiative Impact

Ideation &

Development

Uniliver Open Innovation:

Unilever established a so-called openinnovation unit to work with outsidepartners in 2009

The share of external ideasthat are adopted by thecompany’s business units hasincreased from 25 percent to60 percent

Exhibit 17, Managing Innovation Failure


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Ideation &

Development






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Ideation &

Development






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Sony ‘Not invented here’ syndrome:

(a) Sony was late in making flat-screen TVs, because its engineersbelieved that, even though customersloved this device, the availabletechnologies were not up to Sony’sstandards.

(b)Rivals were introducing next-generation products such as the iPod.Sony didn’t adapt external ideas. Itsdigital music players didn’t play MP3s.

(a)Once a market leader,Sony, hasn’t made a profit in4 consecutive years.

Sony lost the leadershipgained by Walkman’s successto iPod

Evaluation BPCL Annual Ideas Competition evaluateshundreds ideas throughout theorganization at a singular stage.Screened & selected ideas are takenup for implementation

At BPCL, we have completeda decade of IDEAS forum;over 1000 screened ideashave been implementedgenerating value over 100Crore!!!

Implementation P&G Because of P&G’s rigorous market-test policies, managers launchedPampers diapers in France five yearsafter the product was first introducedin Germany.

Colgate-Palmolive, noticingP&G’s early success inGermany, launched a me-tooline of diapers in France,gaining dominant marketshare there, two full yearsbefore P&G introducedPampers in that Country.

Maximize HUL The pilot Shakti Amma project,started in 2001 in Nalgonda, AndhraPradesh, proved to be successful BOPmarketing innovation. Following thepilot test, HUL aggressively replicatedthe innovation.

Currently HUL has a ShaktiAmma and Shaktimaannetwork in 1,00,000 Indianvillages reaching 3 millionhouseholds in 15 statesproviding HUL an unbeatablereach to BOP market.

Value Network of Innovation: To unleash the innovation throughout value chain

The agenda is to ‘Unleash’ innovation not to just to ‘improve’ innovation. What’s

needed is not just an ‘action/reaction’ but a ‘Chain reaction’ of ‘Innovation Echoes’ &

‘Idea Adoptions’. The sequential innovation process must take a form of innovation


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network (exhibit 6b). Ideas must flow in crossing the organizational boundaries & be

adopted; successful innovations in one part of organization must be replicated and

adopted in others where ever applicable. Continual efforts for improvement will

occasionally strike novel ideas that would be carried forward.

Exhibit 16b, Unleashing Innovation Model


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5. Innovation Feasibility AssessmentAs we have seen above that process of Innovation is influenced by Leaders, Enablers

and actors who determine its success at each level. It is therefore important to assess

whether these influencers have been able to influence as desired or there are some

gaps somewhere. The assessment table given below helps in arriving at the

assessment of each influencer at various level of innovation evolution.

Process InfluencersL-LeadershipE-EnablersA-Actors

Assessment Parameters Assessment(Agree-3PartiallyAgree-2Disagree-1)

AverageScore(in therange of1-3)

IDEATION L Leaders in my organization generally trigger IDEAgeneration.Leaders in my organization have themselves displayedcreative genius.Leaders in my organization encourage systemic ideageneration process.

E The culture in my organization makes it easy forpeople to put forward novel ideasMy organization provides sufficient learning whichhelps me in thinking differently.I am given sufficient information about the futurestrategy/goals of the company which helps inidentifying areas of opportunity for value creation.

A Most of the people in my organization have ability tothink creatively/out of the box and generally come outwith innovative ideas.My organization connects to external people for newideasBy and large people in my organization directly orindirectly collaborate and contribute in Ideageneration.

Evaluation L Leaders across levels contribute extensively in IdeaEvaluation process and provide inputs on theevaluation parameters.Leaders ensure support of concerned people/mentorsto the Idea Generators to help them in evaluatingideas.Leaders extend all support required for IdeaEvaluation whenever approached.

E My organization provides ample resources toinvestigate creative ideas.There is adequate time/flexibility granted to evaluateIdeas.


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There is ample support of other employees inevaluating new Ideas.

A The Idea generators and those connected displaystrong competence in timely evaluation of new ideas.The people evaluating the ideas are in a position toascertain the possible pros and cons of ideasuccess/failure.Those who evaluate ideas reach out to all those whocould be influenced by implementation of ideas fortheir inputs.

IMPLEMENTATION

L In my leaders take onus of the implementation ofevaluated ideas.Leaders actively support in removing the roadblocks inthe path of idea implementation.Leaders in my organization clearly define priorities interms of idea to be implemented.

E My organization has a strong culture of executionwhich enables new idea implementation.The execution of new idea in organization is fast dueto ample support provided.My organization rewards and recognizes implementedideas.

A The people involved in the implementation of ideasensure its timely implementation.The people involved in the implementation of idea areable to garner support to successful ideaimplementation.The Idea generators in my organization are able toensure its implementation as well.

SUSTENANCE

L Leaders in my organization encourage replication ofideas across organization.Leaders in my organization encourage improvising theideas further.Leaders in my organization themselves play an activerole in sustenance if Ideas by appropriateinterventions.

E My organization has a strong culture of replication ofimplemented ideas.My organization has strong culture of improvement ofideas for further value addition.My organization provides all resources required forimplementation of the Idea.

A The new ideas are echoed by all others whom the ideacan benefit.People in my organization generally look atopportunities of further improving already existingidea.In my organization people at all levels workcollectively for sustenance of an implemented idea.


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The average score obtained above can be plotted as shown below (the figure below is only an

indicative one) to understand where are the gaps which need to be filled and which are the

weakest link in the evaluation value chain to be worked upon.

6. I-Card : The Innovation Score-Card

It is important to assess whether the innovation has been able to deliver the expected value

creation or not. The expected value creation could be in the area of financial performance,

customer (internal/external) satisfaction improvement, operational impact and overall

organization performance. During the stage of evaluation it is important to assess the

expected value in terms of the indicators mentioned above. Innovations may be linked to all or

some of the broad parameters. Therefore it is important to set an expected metrics in place on

the lines of card given below:

3

00.5

11.5

22.5

3Leadership

EnablersActors

LEAP Assessment Framework

Ideation

Evaluation

Implementation

Maximize

Exhibit 18, LEAP Assessment Framework


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The I-card would only state whether on the indicators and parameters outlined, the

innovation effectiveness is on/above/below expectation on the basis of which

performance snapshot could be obtained. Therefore the expected value should be set

in advance and final value realized should be compared to decipher the value creation.

These I-cards may be drawn at team/department/organization level.

7. INDIA: Taking LEAP of Innovation

Organizational activities are always directly or directly inter-linked with National

business environment, infra, government policies etc. and thus obviously national

limitations adversely affect the companies’ growth (exhibit 20). Although some of the

issues essentially need governmental intervention, but there are many areas which

may be dealt well in a win-win way by collaborative efforts of Indian companies,

academia & government.

Financial Performance Indicators

-Revenue generation through new products

-Cost optimization

-Market share improvement

-Return on R & D

Organization Performance Indicators

-Brand Perception Improvement

-Employer Brand Improvement

-Shareholder perception improvement

-Recognitions & Rewards

-Impact on Competition

Exhibit 19, Innovation Scorecard format


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Financial Performance Indicators

-Revenue generation through new products

-Cost optimization

-Market share improvement

-Return on R & D

Customer Satisfaction Indicators

-Customer Satisfaction Enhancement

-Employee Engagement

-Customer Complaint Reduction

-Improvement in market share

Organization Performance Indicators

-Brand Perception Improvement

-Employer Brand Improvement

-Shareholder perception improvement

-Recognitions & Rewards

-Impact on Competition

Operational Benefits

-Increase in Efficiency

-Increase in Productivity

-Improvement in average life of plant/machine

-Reduction in lead time

Value Creation



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Customer Satisfaction Indicators

-Customer Satisfaction Enhancement

-Employee Engagement

-Customer Complaint Reduction

-Improvement in market share

Operational Benefits

-Increase in Efficiency

-Increase in Productivity

-Improvement in average life of plant/machine

-Reduction in lead time



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Exhibit 20, Source: Nov, 2011 Bulletin; National Innovation Survey by Govt. of India

As a nation is also an organization, but that of a giant size, LEAP frame work also helps

Indian organizations and government in identifying approaches and develop macro

strategies to collaboratively ‘Unleash the innovation through out the value chain

through out the Nation’

7.1 Leadership

There is a need of visionary leaders across levels in India that can set conducive climate

for innovation and inspire the people, across levels, to innovate. Recently GOI has

started some optimistic initiatives by gathering some great Indian innovation leaders

under one roof. Win-win initiatives such as ‘Spark the Rise’, lead by Mahindra &

Mahindra & ‘Srishti’, lead by Dr. Anil Gupta (Professor, IIM A) are setting up a climate

& platform to energize & support Indian entrepreneurs across levels. But these

leadership efforts are still insignificant when it comes to unleashing innovation in a

nation where 12.8 million youngsters enter the workforce per annum.


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Leadership Efforts Impact

Governmentof India

The President of India set thestage by declaring 2010-20 asthe ‘Decade of Innovation’.National Innovation Council(NInC) has been set-up underthe Chairmanship of Mr. SamPitroda, Adviser to the PM onPIII, roping in 16 innovators likeDr. Shetty (NarayanaHridayalaya), Ms. KiranMazumdar (Biocon) etc, todiscuss, analyze and helpimplement strategies forinclusive innovation in India andprepare a Roadmap forInnovation 2010-2020.

State/Sectoral Innovation councilsare being set-up. Pilot stage ofIndustry/University InnovationCluster program has been launched.India Inclusive Innovation Fund isbeing set-up. Impact is still to beseen

Mahindra &Mahindra

Spark the Rise: a digital platformfor individuals, groups andorganisations to submitentrepreneurial project plans.Visitors to the site can viewprojects to offer advice or getinvolved by volunteering ordonating money andequipment.

Started in Aug 2011, Spark the Risehas become a community of>250,000 people working togetherto drive positive change in India.Thousands of people from all acrossIndia submitted >6,000 projects, ofwhich 1,346 have been showcasedon www.sparktherise.com, and 48projects have received a grant fromMahindra. Mahindra’s brandstrengthened; a win-win situation.

(SRISTI),founded byDr.AnilGupta

www.techpedia.in & HoneybeeNetwork: Connecting innovatorsfrom all over the country withindustries through a portal

The network has collected 100,000inventions and the idea is spreadingrapidly around the globe. Productshave been created, the revenue isshared between theinventors, foundations and thenetwork.

GujaratTechnicalUniversity(GTU)

GTU has linked its 502 affiliatedcolleges with 166 industryclusters in collaboration withTechpedia.in, at SRISTI todevelop innovation zonesknown as ‘Navsarjan Sankuls’

These innovation zones encourageand facilitate close interaction andcooperation between the industry,students and academia.


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7.2 Enablers

Resources: India's GERD equals slightly more than 1 percent of GDP & the government

has committed to increasing this figure to at least 2 percent of GDP. But Indian

business R&D are lagging behind & still represents only 30 percent of GERD. Indian

companies need to direct more resources to let innovation spur.

Culture: Of the 183 countries in the Doing Business 2012 report, India ranks 166th in

starting a business, 181st in dealing with construction permits, 147th in taxes, and

182nd in enforcing contracts which speaks of a disabling climate. In our research two

major cultural issues ‘lack of creativity in educational system’ & ‘lack of collaboration

amongst firms & universities’ emerged out as the biggest roadblocks to innovation in

India (exhibit 21).

Government must take corrective measures to set the business climate right while the

companies, academia & government need to put aggressive efforts to strengthen and

proliferate collaborations to (1) improve employability & creativity of fresh employees

(2) increase crosspollination of ideas/innovations & harness synergies of collaborative

efforts.



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7.2 Enablers










India (exhibit 21).





efforts.



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7.2 Enablers










India (exhibit 21).





efforts.



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7.3 ActorsIndia needs entrepreneurs! The demographic advantages of having a large population

under the age of 30 open up exciting opportunities for India. However, only 11.4

percent of the population aged 25-64 has a tertiary degree and only 25% of the

engineers graduating annually are actually employable, says a study by McKinsey.

Against 12.8 million per annum new entrants to the workforce, the existing training

capacity is just 3.1 million per annum. And whatever training infra structure is there is

not designed to empower creativity (exhibit 21). Ironically, Indian companies are

facing a skilled workforce crunch when the Nation is facing unemployment! Indian

firms and Government must work collaboratively to unleash the innovation potential

of Indian youth. The success of Infosys’ pioneering College Connect Program & Wipro’s

Mission10X initiative has confirmed how macro issues like talent can be solved in a

win-win way. Through National Skill Development Council & University/Industry

Innovation Clusters, Govt. of India, has also initiated targeted collaborative efforts to

unleash the innovation potential of Indian youth. Industry-Academia collaborative

efforts are the need of the time

7.4 Process

Number of patents granted, is an important indicator of ideation capability of a nation

& India ranks very low on that. India granted only 6,168 patents during the year 2009

whereas Japan gave 1,93,449 patents, US & China gave 1,35,193, & 1,28,489

respectively.


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New ideas need to be supported by funds to allow them getting developed and at least

see a pilot test. Govt. of India, through Dept. of Scientific & Industrial Research (TePP

initiative), Dept. of Biotechnology (BIPP initiative) etc. is trying to provide financial

support to entrepreneurial ideas. Indian companies like Mahindra (Spark the Rise), GE

(Ecomagination Challenge) etc. have come forward to create a platform for

entrepreneurial idea evaluation and funding. A 75 percent (above global average) of

Respondents in the GE Innovation Survey (2012) agreed that private investors are

supportive of companies that need funding. Because of poor Industry-Industry &

industry-academia collaboration culture in india, potential innovations either die in

silos, as they are never taken up for full throttle commercialization, or never replicated

and adopted well across different organizations to exploit their full potential.

According to Dr. Anil Gupta (Founder, Srishti) more than 1 Lakh engineering research thesisannually developed by passing out engineering graduates, get stored as waste paper in theirrespective colleges and never referred to again. Through www.techpedia.in he is trying tocollect and digitify all this research at one place and making it usable & available to industry.


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8. Recommendations

Leadership: India needs transformational leaders across levels to set thespark of Innovation, be it in industry, academia or governance. It’s high timethat they invest time in facilitating innovation process actively andcommunicating the areas where innovative solutions could be devised.

Enablers: India needs to focus on enablers that accelerate the process ofInnovation. There should be an increasing emphasis on the culturalelements like freedom to experiment, openness and encouragement inIndian organization. The tradition leader-follower hierarchical organizationwill need to have a re-look within. A highly collaborative culture atorganizational as well as nation levels is the need of such turbulent andchallenging times

Actors The Indian organizations tend to confine actors of Innovation asIndividual Innovators within the organizations. However there needs to bean intervention to create collectives actively pursuing innovation and toconnect with customers, foster diversity where the roots of innovationopportunity lie.

Process: Although Idea generation is an important aspect of innovation andIndia needs to inculcate innovation mindset in its talent pool, but unleashingthe innovation requires focus on aspects like effective implementation andmaximizing the innovation impact in the long run, which would require highlevel of collaboration and support from all levels.

Innovision: India needs to become a leader rather than being just a fastfollower. India needs to position its Innovation vision in the minds of itspopulation. The same holds true for any Indian Company. There is hugescope for innovation at “The bottom of the pyramid” and it holds key tobright future of India.


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Annexure A

Interview

In order to understand the Indian context of Innovation and to gain a broad

perspective on areas of intervention we interviewed fifteen senior leaders who threw

light on various aspects related to innovation in Indian Context. This helped us in

providing a broad structure to our study from where we took off. We asked following

questions to the senior leaders.

What is the need of Innovation in the Indian organizations?

Where do you see the weakest link in innovation value chain in Indian

organizations- whether it is ideation, evaluation, implementation,

replication, continual improvement?

What measures do you think will help in overcoming the same?

What are the traits of leaders who successfully drive innovation in their

organizations?

What is an ideal culture for driving innovation in an organization?


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Annexure B

SurveyLink to Survey:(https://docs.google.com/spreadsheet/viewform?formkey=dFV6a0VvRU9PUG1mR0NZX3dsWWNUbnc6MQ#gid=0)

Drivers of Innovation in Organization-An exploratory study Please do not restrict the definition of innovation toR&D/Product Development and look at the broader scope of innovation across valuechain in the organization

Age Group

20-30 years

30-40 years

40-50 years

50-60 years

Work Experience

0-2 years

2-5 years

5-10 years

10-20 years

20-30 years

30 + years

Sector in which your organization operates

Manufacturing

IT & ITES

Banking & Finance

Retail

FMCG

Health Services


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Energy

Infrastructure

Education

Other:

I see maximum innovation in my organization in the area of:(you may select more thanone option)

R & D

Human Resources

Sales & Marketing

Operations

Finance

Approach towards innovation in my organization is:

Systemic

Sporadic

The nature of innovation in my organization is:

Breakthrough

Incremental

Both

Following best describes philosophy behind innovation in my organization:

for sustaining profitability

addressing social issues

to enable high standard of living for masses

to meet customers' expectations

for sustainable future through optimum utilization of resources

for beating competition in marketplace

Other:


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The major roadblocks to innovation in India are:(you may select more than one option)

Lack of collaboration between firms in industry

Insufficient market pressure to innovate

Skill shortages

Lack of creativity in educational system

Lack of government incentive

Lack of collaboration between firms and universities

Other:

My organization fosters a culture that expects everyone, at every level, to contributeto the innovation process.

1 2 3 4 5

Strongly disagree Strongly agree

My organization effectively breaks down barriers between different functional areas sothat ideas can be exchanged

1 2 3 4 5

Strongly Disagree Strongly Agree

My organisation’s ability in making innovation happen is supreme?

1 2 3 4 5


Innovation is widely celebrated and rewarded in my organization.

1 2 3 4 5


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My organization extends all support possible to champions of innovation.

1 2 3 4 5


Leaders across levels in my organization have positioned innovation as an an integralpart of business strategy.

1 2 3 4 5


Leaders in my organization have prioritized areas which require innovative solutionsand have allocated resources to ensure implementation.

1 2 3 4 5


Leaders in my organization facilitate effective lines of communication acrossorganization.

1 2 3 4 5


The innovation happening in any part of my organization is replicated in the entireorganization.


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1 2 3 4 5


My organization spends most of its innovation efforts on:

Responding/Reacting to Change

Leading the change

Both

Is there a dedicated team/ innovation officer to drive innovation in your

organization.

Is there innovation fund in your organization to finance the innovators.

What is the level of importance of the following parameters in driving innovationacross value chain in an organization?

Low Medium High

A dedicated team/innovationofficer to drive innovation in

the company

Financial Support/InnovationFund

Time to explore ideas

Intrapreneurial mindset

Talent

Collaboration acrossteams/functions


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Low Medium High

Open Culture

Rewards and Recognition forInnovation

Measurement ofInnovation/Innovation Index

Knowledge ManagementSystems

Support from leaders at alllevels

DevelopmentProgrammes/Training for

potential innovators

Alignment of employees tooverall strategy of the company

Visionary Leaders

Risk taking propensity in theculture/Freedom to experiment

Learning culture in organization

Market pressure to innovate

Flexibility to manage your work


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References

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Documents

Unleashing Innovation