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Unleashing INNOVATION across the

VALUE CHAIN

Presenters:

Tarun Gupta, IIM Ranchi

Jubin Goyal, IIM Ranchi

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INNOVATION

What

Context

LG Fridge/Washing Machine

FlipKart

SarvaJalShaadi.com

Innovation isnt about great

ideas. Innovation is a chain

that requires strength at every

link to succeed.

Incremental Improvement:

Net Books

Radical Breakthroughs :

Toyota Battery powered Prius

Creative Destruction

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Is Innovation Growth ?

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Gains of Innovation

Source: NISTADS February12 Bulletin

Product Outcome Process Outcome Other Outcome

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Innovations are mostly adoption of the market trend in terms of product quality, machine

etc. Himachal Pradesh scores better in every aspect of innovation mainly due to the presence

ofpharmaceutical and electric goods industryand also due to the presence ofPSUs.

Source:NISTADS February12 Bulletin

Scope of Innovation

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Culture of Innovation

Leadership Lays the Foundation: Senior Managements Priority

Build Innovation Into the Organization: Clear system of approving & Funding,Innovation built into the annual review process

Hire the Right People: PHD Graduates

Celebrate Innovators: Weekly slack time of 5 hours is provided for personal projectsUse Social Media to Tap ideas:A social network called IdeaMax, lets people submit idea,

where other people can comment or vote for it.

Discovery of Microbe that helps plants grow in saline soil.

The use of Super computer for drug discovery Eka mKrishi, a database on 5 crops to provide information to farmers about when

and which seeds to sow.

Case Study: Tata Group Innovation Forum (TGIF)

Products out of TGIF:

TCS Chief Technology Officer Ananth Krishnan, coins that 10% of revenues of TCS are directly traceable to innovation activity.

Source: Bloomberg Business Week

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Weaving Innovation in day-to-day activities

Problem: Shortage of Power supply

Case Study: North Delhi Power Ltd. (NDPL)

I want power when I need it the most.

Source: http://www.tata.com/innovation/articles

Induced Demand side Management

to reduce Peak-hour demand.

Supply of2 MW to Delhi Jal Board was

shifted to Off-peak hours, thereby

reducing peak hour demand.

A first of its kind initiative in India,

where electricity board and water

board have joined hands.

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Managers rolein Creating a Learning

Organization

- Stability: Consistent commitment tochange, innovation.

- Reduce power distance: Flattenedorganizations, cross- functional teams

- Celebrate Effort: rewarding successes &failures both, it helps in fostering trust.

- Judicious Slack of resources: allows roomfor innovation.

- Organic Organization: flexibility,value external knowledge

P&G (Wrinkle free Shirts)

- Disagreement is good: teachpeople to give up having to be in agreement with

everything.

Source: Harvard Business School Publications

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Top-down VsBottom-Up

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TakeawaysImpact of Organizational environment on creativity:

Source: Prof. Teresa Amabile, HBS; creativity & innovation in organizations.

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Measuring InnovationPercentage of

Respondents

Revenue

realized from

offerings

launched in the

past 3 years

Projected Vs

Actual

performance

Total funds

invested in

growth

projects.

Allocation of

investments

across

projects.

Average

development

time of each

project

Number of

projects that

meet the

planned

targets.

Number of

projects killed

or tabled at

each milestone

Percentage of

ideas funded

Cannibalization

of existing

product sales

by new

offerings.

Source: BCG Senior Management Innovation Metrics Survey

a) Only 35% of the Senior Executivesare satisfied with their companys

innovation measurement practices.

b) 43% of the Senior Executives feel

that the innovation initiatives are

not held to the same level of rigor

as companys core businesses.

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Improving company measurement practices

Innovation effectiveness:

1. Only 20% companies consistently tie incentives to innovations.

2. Tie medium or long-term compensation to innovation metrics .

All components of the Cash Curve should be measured :

Source: James P. Andrew & Harold L. Sirkin, Payback: Reaping the rewards of Innovation (Boston: Harvard Business School press.)

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Sources of process & product innovation by firms in India:

Source: ASCI Journal of Management

Role ofEducational Institutions

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Role ofEducational Institutions

Annual Graduate Production:

Source: ASCI Journal of Management

Total size ofIndias R&D talent pool is three times smaller than that of China. PhDs account for less than 2 per cent of post graduates in India .

India produces three times as many postgraduates as the UK, but the

UK produces 1.5 times more PhDs than India.

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Role ofEducational Institutions

Access

Concepts

CreationApplication

Services

Source: http://knowledgecommission.gov.in/

http://knowledgecommission.gov.in/http://knowledgecommission.gov.in/

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Words of Wisdom

There is a way to do it better, find it.

Thomas Edison

Thank you

We are open to questions now