Three of the most outstanding innovations of recent years (the web, Google and iPod) share three qualities that have much relevance to Indian businesses. By Stephen Manallack
Three of the most outstanding innovations of recent years (the web, Google and iPod) share three qualities. These qualities have much relevance to Indian business as it grapples with the challenge of innovating for long-term success.
Each provide simple user interfaces, each reuses existing information and each was created by a small group of people, not high-powered and slow-moving committees or casts of thousands.
The lesson for businesses wanting to innovate is clear, according to Steven Berlin Johnson, author of Everything Bad is Good for You , "These three innovations make existing information easier to find and organise", and he points out that none of them created something completely new - they were "innovative recyclers" in a way.
The challenge for most successful businesses is to keep the innovative qualities and agility of a start up when it comes to introducing new products and improving old ones.
The leading innovative companies identified by the Wharton Business School are Apple, 3M, Microsoft, GE, Sony, Dell, IBM, Google, Procter and Gamble, Nokia, Virgin, Samsung, Wal-Mart, Toyota, eBay, Intel, Amazon, Ideo, Starbucks and BMW. Wharton combines with Indian giant Infosys to present annual "Business Transformation Awards".
There is a warning for potential innovators and it comes from Jim Andrew, head, innovation, at the Boston Consulting Group, "Companies sometimes fail to measure and manage innovation, but that is a mistake that can be avoided. To sum up, you've got to measure inputs, outputs and process performance."
The Boston Consulting Group also notes that companies with innovative cultures retain their people better – more opportunities, it is not seen as a boring job and it is exciting to create new ways to meet customer needs.
Most commentators believe that a visionary chief executive is the best way to ensure that an organisation will innovate, but they also see a need to build a company wide culture of innovation – at least reducing the dependence on the one person. The whole process is unpredictable. Anne Mulcahy, chief executive of Xerox, put it this way, "Most innovation happens by accident and experiment, not design. It's allowing people to push barriers."
Microsoft has many ways to reach innovation, with seven research laboratories worldwide, including one in Bangalore, India, which focuses on emerging markets and low-cost computing.
But innovators warn that success can be a barrier to innovation – it's like losing by winning. Many big, successful companies were at one point innovative and this is why they grew – but then these winners become losers as the will to innovate reduces.
Tom Kelley, general manager, IDEO, a design and innovation consultancy, puts the problem this way, "People start to edit themselves so that they don't make the boss angry. There's a sense that we're big and it's hard to change."
The positive message for India's giant businesses is that according to the Wharton School, "Big, established firms with staid cultures can change." They cite the example of Procter and Gamble (toothpaste, soap, diapers and detergent), which has turned around in just three or four years. IBM is another example of a leading innovator that in middle age became staid but then turned away to become an innovator again.
Indian business leaders may have a leaning towards the school of "you can't manage what you can't measure" but innovation is trickier than that, with even the experts disagreeing on what is the best metric. Is it savings; is it sales; is it neither?
Ashwani Rishi is President of the Indian conglomerate, ITC, and he says, "If innovation means profit, you can always measure it." He proposed a metric called "intellectual horsepower" which would take into account such factors as total number of new ideas, the number of those that are implemented and the number of implementations that yield profitable products. This suggests a long-term approach to measuring the results of innovation.
You should never be too busy to innovate. Consider Microsoft founder and boss, Bill Gates, who each year escapes to a hideaway in Washington State to ponder 'what's next', 'what will be the next leap forward'. He encourages all Microsoft employees to submit written proposals for new products or services and he reads them all while on retreat. This is what it takes to retain a commitment to innovation, even when you are way to busy to find the time.
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articles by Stephen Manallack