Tuesday, November 23, 2010

Rules of Gandhian Innovation ...

Gandhian values look at affordability ( for the masses and middle class) and sustainability ( for the earth, for all people) of products for the people.

Some of the rules associated with it are

1. Inclusive growth - try to serve the unserved customer too. This challenge pushes executives to relook at the price performance envelope to improve affordablity and to think of increasing scales to reduce costs. There should be a desire to serve more people. Rather than asking the question, "given our costs, which customers should I serve?", it should be, "given that I need to serve more customers, what should be my costs ?"

2. Unambiguous vision - Leadership is an essential quality in building good organisations. A clear vision with a human dimension is the corner stone of Gandhian innovation. Ratan tata, Sunil Bharti Mittal and Gupta of Lupin have all demonstrated this in great measure.

3. Set ambitious goals - By setting ambitious goals (strategic intent) that are beyond the company's existing resources to attain, the CEO will compel employees to be innovative and entrepreneurial. The mismatch between aspirations and resources is the essence of entrepreneurship. Faced with this mismatch, companies have the choice of either finding innovative uses of existing resources or changing the rules of the game.

4. Learning to innovate even when faced with constraints : Only when we are pushed to a corner will we feel the need to innovate. Constraints are there all the time, and innovating within these constraints is the sure shot path to success.Tata Nano's "Innovation sandbox", the constraints about price, safety, environmental standrads, space and design with fuel efficiency forced the company to come up with a cheap, safe , fuel efficient car for the unserved middle class of the country. Working within self imposed boundaries will help the innovators come with radical designs that can change the whole industry.

5. Focus on customers : Making products affordable to the masses will ensure the scale and critical mass to make products at lowest costs with myriad applications that can arise from these millions of users.

6. Influence of Metrics : concentrating on different set of metrics which look at tracking profit and loss, return on capital employed, cash flow, capital intensity, access and influence, innovation efficicncy, volume and costs and at the same time concentrating on new markets makes all the difference between companies that succeed and not in the new age of global innovation.

Ref : Innovation's Holy Grail - C K Prahlad and R A Mashelkar, Harvard Business Review, July August 2010.

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