Building India into an innovation-led country

The Quality Conundrum - How Indian Industry is managing quality

There is a need to look at innovation in the wider sense. We must consider the "flat world" as our market place and countries and companies must ensure that an ecosystem is built to support innovation.

The academia must participate and benefit, the venture capital market must thrive and a strong intellectual property rights framework must be in place. Companies, however, must be careful to not think they can "jump" into a state of innovation unless they are of world-class quality.

Research by Sumitra Dutta, the Roland Berger Professor in Business and Technology and dean of External Relations at INSEAD, shows that countries make migrations across three phases "" from low-cost manufacturing to high-quality manufacturing "" i n their bid to become innovative.

There is huge potential for India to follow the same path. The country has the opportunity of creating new business models, products and services for the poor not just at home, but for countries in Africa and Latin America. Often, companies go for the easier solution, that is, capturing the high-paying foreign market customer.

The winner in the current scenario could be disruptive innovation: developing low-cost products for the bottom of the pyramid. These products could be taken to the other developing economies of the world in stage two. The innovator could then bring in higher-end features in the product to enter the higher level of the domestic market and, subsequently, launch the product in global markets.

But most people understand innovation as product innovation and confuse it with invention. Few understand it in terms of business processes, organisation issues or new businesses.

A company is perceived to be innovative only if it can develop a product that is saleable and replaces an existing product. However, innovation includes services, manufacturing processes, customer facing and back-end process in services.

To me, Bharati Airtel is the most innovative company of our times for the way it has created a successful business model. The company has outsourced everything but its customers, thus being able to offer mobile telephony at 10 paise a minute; nowhere in the world can you get such rates.

Maruti Udyog Limited (MUL) is another great marketing innovator of our times. It launched innovative schemes to widen its market base. In September 2004, for instance, MUL launched a scheme aimed at teachers, in association with State Bank of India. Almost 10,000 teachers benefited from the scheme.

Manufacturing companies can also innovate in marketing and customer services. For instance, Toyota and Lexus innovated in customer services by building their showrooms such that the salesman could read the licence plate of the car driving in.

The salesman could feed the number into his laptop and obtain information about the customer. By the time the customer walked into the showroom, the salesman was able to ask the customer about the performance of the car with reference to the last time it was at the showroom.

The generation of ideas is the critical aspect. There are those who get ideas, are able to build on them and implement them. There are others who look for customer pain points and come up with solutions.

To get others to ideate, there are well-defined ideation processes defined by experts; synectics and brainstorming being two instances.

Synectics, developed by Willaim Gordon, stimulates thought processes of which the subject is generally unaware. The central principle of the process is "Trust things that are alien, and alienate things that are trusted." It encourages fundamental problem analysis and alienation of the original problem through creation of analogies, which sometimes lead to new solutions.

The brainstorming approach to innovation requires groups of people to ideate together and arrive at solutions. Brainstorming is a deeply engaging creative thinking session that helps people originate and develop breakthrough ideas.

The process of brainstorming could lead to new solutions for existing or unknown problems. CII's Manufacturing Innovation Mission has been working with innovation and breakthrough management experts such as Shoji Shiba, Clayton Christensen, Whitney and the Blue Ocean Strategy Network to help companies follow the process of ideation.

Dr Surinder Kapur is chairman, CII Mission for Manufacturing Innovation, and chairman and managing director, Sona Koyo Steering Systems