Innovation is a journey with a compass

Written by Baiju Kalesh | MG Arun | Updated: May 21 2012, 09:04am hrs
As Tata Group chairman Ratan Naval Tata steps down in December to pass on the baton to Cyrus Mistry, he leaves the $83-billion diversified groups next phase of focus on innovation to build products for future consumers and markets, with a thrust on sustainability. Under Tata, the group went through major organisational phases rationalisation, globalisation, and now innovation, as it attempts to reach a reported $500 billion in revenues by 2020-21, roughly the size of what Walmart is today. The group formed the Tata Innovation Forum in 2007, under the leadership of R Gopalakrishnan, executive director, Tata Sons, to inspire and help create a culture that promotes innovation in Tata Group companies. It is no longer enough to be the first to the market, but sustaining in the market place, and constantly meeting the new needs of consumer is what is important, says Gopalakrishnan in an interview with FEs Baiju Kalesh and MG Arun. Edited excerpts:

After phases of rationalisation and globalisation, the group has started the process of institutionalising innovation, with the Innovation Forum, the Innovation Awards, measuring innovations through the InnoMeter and so on. What drives these initiatives

These phases should not be taken too literally. They are a way of charting a path in the groups journey, and not water-tight compartments. In the 1990s, we wanted to restore a certain degree of order, process orientation, focus on cost and profitability and generation of cash. When that was done, we adopted the Tata Business Excellence Model and created the Group Corporate centre, the Tata Strategic Management Group and Group HR. Then we created resources to enable managers to achieve some of those roles.

By early 2000s, many of the goals were achieved, but the journey continues. Then we set a new challenge, and that was globalisation. The idea was to find new markets for our products. So, when you have generated the cash and have got the discipline to do that, you can keep it sustainable only by doing new things. We can either keep trying old things in the new way or new things in a new way. Thats where innovation plays a vital role.

How much does the requirements of the new marketplace make innovative ideas imperative

Consumers are changing today. As many as half a billion in India are lifted out of poverty, so is another half a billion in China and a similar number from around the world. The world is looking at this phenomenon with bottom, middle and top of the pyramid expanding. This creates new opportunities and our group companies are engaged in the process (of identifying them) and at the group level, we are enabling it by providing financial and management bandwidth. In technology, for instance, e-retailing is changing the nature of shopping, and Trent is already tapping these avenues. With group companies, each innovation has ferreted out something small and unique for itself. Some are small, some are matured, and some others will die in due course.

What is the role that the group plays in fostering innovation

All the action is in the respective group companies. Any move from the group is to support or alter the direction or nurture, and not to direct. Tata Business Excellence Model is a resource group, with training. They wanted to undertake the excellence journey, which is a movement rather than an initiative. We are unleashing the energy of our own people. All the efforts from the group in innovation are directional and inspirational, but not directive.

How far have you reached What are the challenges you face

This is a journey with a compass and not with a map. The challenge for managers, and this is not just restricted to innovation, is how to apply the and formula rather than or.

There used to be a time when you could have focused either on better quality or lower cost, either entrepreneurship or control management, but not both. People then began to say they wanted both. So, we need to run our business in a disciplined way and be creative at the same time. Changing peoples mind takes a lot of time. You have to be persistent and patient. People will have either a fixed mindset someone who does something good, and will be happy to do more, or a growth mindset those who will try to learn other things too. Every organisation will have a mix of both. A good, innovative environment means you allow to be inspired by everybody else, but do what you are good at. It may not be practical to think all 4 lakh employees are on the innovative path. You must reduce the detractors, increase the number of those passionate about innovation.

The group has globalised and acquired large companies overseas. How have they contributed to innovations

The number of participants and entries for the innovation awards are going up from our group companies across the globe. Tata companies have realised that there is a storehouse of knowledge within, and outside. They are connecting with universities and other companies like Dupont, 3M, Corning and Procter & Gamble. Seventeen of our people drawn across Tata Steel, Tata Projects, Tata Chemicals, Rallis and Voltas went to Israel on a mission in sectors like agro, water and life sciences.

What have been the learnings from these missions

There are many. For instance, I was always obsessed with an idea that the first to the market was a winner. But through all these influences, I have concluded that surviving in the market is more important than getting there first. Altair was the first computer, not Apple, but the former doesnt exist any more. So, building a sustainable model is more important. Be it the cheapest or smallest, you have to create demand to make it sustainable.

What would you classify as an innovation, considering there could be several incremental ideas coming from group firms

Classifications do not matter. We will follow the Aristotelian philosophy of letting each idea reach its potential. TCS invented the offshore delivery model without the intent it would be a breakthrough. Prejudging things to a fault may not be a good idea.

The group has the advantage of a diversified conglomerate...

Thats a great advantage. It gives multiple points of view. Tata Steel makes steel rebars. TCS is now working with them on a technology to save time and money by making counting rebars easier. The Swach water purifier is the result of TCS, Tata Chemicals and Titan Industries coming together. Diversity, will and openness are at the heart of innovation.

How is the innovation journey being recorded

It is a personal journey. We are trying to create an archive recording the corporate memory that future generations can access. That will create a permanent or a semi-permanent culture of innovation and that will create value. Culture comes out of recognising where you came from, not where you are headed.