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L12. Innovation’s Holy Grail - Coggle Diagram

- - - - The only common link is that they’re all radically innovative.
        
        When we devised a framework to help other enterprises innovate along similar lines, we found that two variables merit analysis.
        
        One is, of course, the source of the technologies involved. They can be bought; adapted or synthesized in a fresh way; or built ab initio.
        
        At one end of this spectrum, companies can disrupt business models by using existing capabilities but at a lower cost.
        
        The other key factor is the organization’s capabilities, by which we mean the competencies, knowledge, and skills that the company must apply in order to be successful.
        
        At the other, they can create entirely new capabilities.
        Those in the middle modify capabilities.
        
        The two-way classification, we find, leads to three types of Gandhian innovation.
        
        Modifying organizational capabilities
        
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        Creating or sourcing new capabilities
        
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        Disrupting business models
        
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- - - - Some products and services needed a new infrastructure for development and delivery, so these companies also built unique innovation ecosystems.
- - - - These companies often draw on the knowledge base of specialized institutions oversea and set the standards in India even as they develop unique research capabilities.
- - - - Indian entrepreneurs have a penchant for undertaking small projects and using capital carefully. They’ve changed their approach to scale since 1991, but they maintain an unwavering focus on capital efficiency.
    - - Most target the aspiring middle class family, which lives on $5,000 a year. As a result, they’re forced to develop value-for-money products and services by changing the price-performance equation.
    - - Indian engineers, backed by government funding, developed nuclear weapons, rockets, imaging techniques, supercomputing, and weather modeling by depending only on their own ingenuity.
    - - The mix of minuscule research budgets, small size, low prices, and big ambitions has created the need to think and manage differently.
        
        Enterprises anywhere in the world can do so by modifying the philosophical underpinnings of their innovation processes.
        
        I must set stretch targets.
        
        CEOs must establish ambitious goals and clear time frames for achieving them.
        
        Companies should ask:
        
        “What is our man-on-the-moon project?”
        
        “What is our Nano project?”
        
        By creating aspirations that lie beyond the company’s existing resources or current approaches to the delivery of products, CEOs will compel executives to be innovative and entrepreneurial.
        
        The mismatch between aspirations and resources is the essence of entrepreneurship.
        
        Executives then have only two choices:
        
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        We must learn to innovate even when faced with constraints.
        
        Gandhian innovators start by accepting that there are constraints that won’t go away.
        
        Leaders must force project teams to work within self-imposed boundaries that stem from a deep understanding of consumers.
        
        That will result in a novel, outside-in view of innovation.
        
        My vision should be unambiguous.
        
        Leadership is crucial to building Gandhian innovations in organizations.
        
        In addition, their visions always have a human dimension
        
        helping poor Indians travel safely and aff ordably with their families
        
        using connectivity to improve people’s work and lives; and enabling patients to buy cheap medicine
        
        These leaders also engage with project teams constantly, providing a safety net that protects the teams from self-doubt during despondent times and moderates overconfi dence.
        
        Our focus should be on people.
        
        Their innovation projects had to be profitable and build shareholder wealth, of course, but the focus was always on customers.
        
        The language inside their organizations was about consumers as people, suppliers as partners, and employees as innovators.
        
        Consider one constant managerial complaint:
        
        “At the price levels in these markets, we cannot make profits.”
        
        This assumes that companies can’t lower cost structures, that they can’t reduce operating margins, that there’s no price elasticity, and that poor people don’t have much use for high-tech products
        
        The Indian innovators simply said:
        
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        My goal is inclusive growth.
        
        CEOs must develop a deep commitment to inclusive growth, which will force them to think of unserved customers, be they rural poor who don’t have access to telephones or urban poor who don’t get emergency medical services.
        
        A focus on inclusion challenges executives to push price-performance envelopes to ensure affordability, and to think about increasing scale to lower costs.
        
        The starting point has to be the desire to serve more people, though.
        
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