8 STEPS TO INNOVATION - Catalign

1 8 STEPS TOINNOVATIONG oing from Jugaad to ExcellenceVINAY DABHOLKARRISHIKESHA T. KRISHNANF irst published in India in 2013 by Collins BusinessAn imprint of HarperCollins Publishers IndiaCopyright Vinay Dabholkar and Rishikesha T. Krishnan 2013 ISBN: 978-93-5029-358-42 4 6 8 10 9 7 5 3 1 Vinay Dabholkar and Rishikesha T. Krishnan assert the moral right to beidentified as the authors of this views and opinions expressed in this book are the authors ownand the facts are as reported by them, and the publishers are not in any wayliable for the rights reserved. No part of this publication may be reproduced,stored in a retrieval system, or transmitted, in any form or by any means, electronic,mechanical, photocopying, recording or otherwise,without the prior permission of the PublishersA-53, Sector 57, Noida, Uttar Pradesh 201301, India77-85 Fulham Palace Road, London W6 8JB, United KingdomHazelton Lanes, 55 Avenue Road, Suite 2900, Toronto, Ontario M5R 3L2and 1995 Markham Road, Scarborough, Ontario M1B 5M8, Canada25 Ryde Road, Pymble, Sydney, NSW 2073, Australia31 View Road, Glenfield, Auckland 10, New Zealand10 East 53rd Street, New York NY 10022.

2 USAT ypeset in 12/16 Goudy Old Style atS RYAP rinted and bound atThomson Press (India) Can Innovate1 Jugaad vs Systematic Innovation4 What Is INNOVATION ?7 Three Myths of Innovation11 Three Goals of Idea Management Systems16 Two Villains21 The Elephant and Rider Conflict25 PART 1: BUILD AN IDEA PIPELINE1. step 1: LAY THE FOUNDATION35 Why Start an INNOVATION Programme?35 Toyota s Forty Years, 20 Million Ideas38 The Idea Management Process41 Idea Selection: Small vs Big Ideas46 Designing a Campaign:49 Positive vs Negative EmotionHeavier, Faster and Longer51 INNOVATION Schools552. step 2: CREATE A CHALLENGE BOOK62 Mahatma Gandhi s Probation Period62U&I Portal at HCL66viiiContentsPetition Box at Tihar Jail67 Harry Potter and the Mirror of Erised68 How to Build a Challenge Book?

3 70 Feel the Pain72 Sense the Wave76 See the Waste813. step 3: BUILD PARTICIPATION86 Chandra s Motivation86 Role Models90 Communities of Practice94 INNOVATION Catalysts97 Clarification, Communication and Connection 99 Rewards and Recognition101 Managerial Behaviour Influences Idea Flow105 PART 2: IMPROVE IDEA VELOCITY4. step 4: EXPERIMENT WITH LOW COST114AT HIGH SPEEDD adasaheb Phalke s Pea Plant Experiment114 What Is an Experiment?116 Experimentation in Services121 How to Design a Low-cost Experiment123 Failure Fallacy125 Organizing for Rapid Experimentation127 Experimentation When the Stakes Are High131 Finding Kalams and Rewarding Failures133 Contentsix5. step 5: GO FAST FROM PROTOTYPING TO138 INCUBATIONF actors that Move Ideas Forward138 What Do Champions Do?

4 141 When a Customer Becomes an Idea Champion 144 Can We Make Ideas Stick?148 The Curse of Knowledge151 Use Cases, Curiosity Flow and152 Testable CredentialsHow Google Discovered its Most Important155 Source of RevenueInnovation Reviews and Incubation Structures 1586. step 6: ITERATE ON THE BUSINESS MODEL164 What Is a Business Model?164 What Is My Customer168 What to Offer? Product vs Service170 Going from a Product/Service to a Solution173 How to Reach the Customer176 How to Make Money from an Innovation179 Enhancing Value through Complementary Assets 182 Monetizing a Business Model in Rural India:185 Husk Power SystemsPART 3: INCREASE THE BATTING AVERAGE7. step 7: BUILD AN INNOVATION SANDBOX198 Transforming Transportation198 Aurolab201xContentsAffordable Loss Heuristic204 Platform Thinking208 Platforms Outlive Products:2123M s Micro-replicationPlatforms in Indian Companies213 The Power of Open Innovation2158.

5 step 8: CREATE A MARGIN OF SAFETY223 The Day Air Deccan Switched its IT System223 How Expert Innovators Are Tricked226 Three Ways the Rider Can Alert the Elephant 229 Doing the Last Experiment First232 Margin of Safety and the Buffett Test2359. CONCLUSION: FROM AN INNOVATION244 PROGRAMME TO INNOVATIVE CULTUREAny Organization Can Become More Innovative 244 How Innovative Are We? A Simple Dashboard 246 Getting a Quick Win and Celebrating252the Bright SparksStructures Enabling Innovation255 The Elephant, the Rider and the259 INNOVATION ProgrammeAcknowledgements262 Notes and References267 Index294 Introduction Once your mind stretches to a new level, it never goes back to itsoriginal dimension 1 Abdul KalamANYONE CAN INNOVATE India s new symbol for the rupee was designed byD.

6 Udaya Kumar, an architect-turned designer fromTamil Nadu. Kumar s main interest is in Tamiltypography, but his moment of fame came in 2010when the symbol he designed integrating the best ofinternational design creativity with a distinctive Indianflavour was accepted by the Reserve Bank of Thiyagarajan Ramaswamy, an engineering student,and son of a Pondicherry-based weaver, reworked thedesign of commercially available wet-grinders (used tomake batter for idlis, a south Indian rice cake) so thathis mother could make idlis as soft as the ones madefrom a traditional hand-ground batter. His design28 STEPS to Innovationwon him several national awards and was finallyadopted by a number of commercial Anandraj Sengupta became the first young Indian tobe featured on the cover of the prominentinternational business magazine Businessweek in2003, as an icon of India s emerging strength intechnology and INNOVATION .

7 An employee of GeneralElectric s John F. Welch Technology Centre, thelargest multidisciplinary multinational research anddevelopment (R&D) centre in India, Anandraj waswell known for his system-level innovations, includinghis contribution to a new method to enhance theeffectiveness of rail track inspections using ultrasoundtransducers, which was awarded a US Anand Kumar, then a mathematics student at PatnaUniversity, started the Ramanujam School ofMathematics in 1992 to further his love formathematics. When Anand was unable to take up ascholarship to attend Cambridge University becauseof his poor financial condition, he usedthe Ramanujam School to train poor but talentedstudents for competitive examinations.

8 Since 2003,Anand has selected thirty poor and talented studentsevery year and trained them for the joint entranceexamination (JEE) to India s prestigious IndianInstitutes of Technology (IITs). In the last eight years,212 of the 240 Super 30 students have qualified foradmission to the Nagaraja, a diploma-holder working at BharatElectronics Limited, came up with an idea to replacegold-headed transistors with nickel-headed ones,leading to savings of more than Rs 18 crore for hiscompany. In recognition of his efforts, Nagaraja wasgiven the Government of India s Shram Ratna Awardfor the Year An INNOVATION by factory employees participating invarious programmes in the INNOVATION School ofManagement at Titan Industries jewellerymanufacturing division has led to deskilling of themould-setting process, a cumulative savings of Rs 43crore and the Tata Group s award for the Everyone can fly, promised low-cost aviation pioneer CaptainGopinath, and the examples given in the box suggest that thereis much more that everyone can do perhaps anyone caninnovate.

9 Maybe, you might be thinking, as long as theconditions are right. Can we create organizations that canprovide support for INNOVATION ? Are there ways in whichorganizations can ensure a steady stream of innovations? Is itpossible to promote systematic INNOVATION ?An emphatic yes is the answer to all these questions. Readon, to find out STEPS to InnovationJUGAAD VS SYSTEMATIC INNOVATIONIn 1959, the Hindustan Machine Tools (HMT) Factory inBengaluru started the assembly of radial drilling machines mainlyout of imported components from Kolb in Cologne, Patil, who would later go on to become the chiefexecutive officer and managing director, was a general managerthen.

10 In 1960, when the manufacture of the machines wasindigenized, the machines started making jerky noises whileascending and was found that a worn-out screw was causing themalfunctioning. A workaround was devised and implemented,which only served to increase the customer complaints. Theunit was assigned to expert assemblers yet the defect fact, the rate of failure increased and one in five machinesstarted getting stuck. Eventually, an assembly foreman of thesame section was sent to Kolb to study the methods followedthere. After three weeks the foreman returned, confident thathe could fix the problem. The confidence didn t last long as herealized that the problem persisted even after close monitoringof the assembly day in 1961, Patil was taking a walk through the shopfloor when the foreman of the heavy parts planning section let s call him Rajappa told him that he had a solution for theproblem.