Innovation is that unique ‘something’ in a product or process which creates value. Innovation has the potential to create unique value in today’s competitive environment. That is what makes leaders put innovation at the top of their strategy agenda.
Innovation cannot, however, be seen as a string of a few successes. It has to move beyond just periodic sparks. That is possible when it is institutionalised in an organisation. Let me share with you my experience.
My first tryst with innovation was early — as soon as I had stepped into business. We then had a tiny consumer products business. Parachute was packed mainly in 15-litre tins.
When it came to small containers, coconut oil was only available in tin packs, in which Parachute had an insignificant share. An innovative perspective led us to think of changing the game — what if we offer consumers coconut oil in plastic containers?
That will be attractive, convenient to use, and cost-effective! We took the idea to our dealers and retailers, only to run into huge resistance to stocking coconut oil in plastic containers! Their reluctance was based on experience with a competing product which offered coconut oil in square plastic containers. But that product did a shoddy job of filling the packs — coconut oil kept spilling out of the containers.
This led to a bad experience for the retailers, as rodents found the square, oil-smeared containers an easy target. We leveraged this insight and developed a round plastic bottle. Rodents found it difficult to get hold of these containers. We also ensured that our packaging was hygienic and smear-proof. To test the packaging, we kept our plastic packs in rat cages for a few days.
We gained confidence as days passed with rodents still unable to bite the round containers! We went to the retailers with the results and showed them Parachute’s rat-proof plastic containers.
Eventually, the rest of the coconut oil market not only copied our shape but also converted from tin to plastic. We could share the cost savings with consumers, even as we supported our innovation with advertisements. Our consumer insight-based innovations did not end there.
Our sales team, through insightful tracking, realised the challenges of winters, when coconut oil would freeze and consumers would revert to tin containers since they found it easy to scoop out from widemouthed tins. We then developed a wide-mouthed Easy Jar container that mimicked the tin container.
Types of Innovations: There are three kinds of innovations: The first has an impact on existing core business activities. The second is a change in areas adjacent to the core businesses. And the third is disruptive innovation.
The first two are easier to achieve. The change from tin to plastic packaging for coconut oil was an innovation related to the core business. For Saffola Oats, we did an adjacency innovation with a variant called ‘masala’ oats. It had not been tried before and yet was not completely different from what we already had.
I don’t think we can claim any disruptive innovation, but something like the Tata Nano car would surely be one such. Such innovation is transformational but requires a completely different approach. It is more difficult to achieve and requires dedicated teams, and yet, at times, you might not get a result and you need to be okay with that fact.
A co-ordinated approach to innovation, covering products and processes is the mainstay. The culture for innovation is one where people are encouraged to take risks, to go outside their routine mandate. An innovative organisation is thus ‘at it’ all the time. How does an organization institutionalise innovation? Based on my learnings, I have identified a few critical ingredients:
Culture, Mindsets & Leadership: The culture in the organisation plays a pivotal role in such sustenance of innovation. It can spur every person in the organisation to think of innovation and be keen to make innovation happen. Leaders have to take innovation beyond mere tools and processes. Leaders need to have an ‘innovation mindset’ — they need to keep reinforcing innovation on a perpetual basis.
“Outside In”: Leaders should bring the ‘outsidein’ perspective into the organisation. For that, they must enhance their team’s exposure to learning by travelling internationally, researching through literature or Internet or through a perspective from thought leaders in the industry.
Consumer-Centricity: It is also important to highlight the role of consumer-insighting across the organisation, and not only in marketing. At Marico, we regularly train our marketing, sales and R&D teams in consumer insighting. The training enables them to delve deep into consumers’ minds and spot latent needs which the consumer herself often does not know.
Persistent & All-Round Focus: Leadership and the organisational environment have to keep demanding and celebrating innovation at every opportunity. We at MaricoBSE -0.16 % have institutionalised innovation awards where we receive 30- 40 entries every year for innovations across the spectrum, including factories, brand, sales and HR, virtually covering the whole organisation.
We also reckon that there will be failures. Unless one is ready to fail, one will never succeed. Innovation needs to be both wide and deep. It is not a one-time event. It is the oxygen for the organisation— its future depends on innovation.
Innovation is also not a functional activity, it is a business activity. One needs every component of business — sales, marketing, manufacturing, finance — as a participant.
No Straight-Jacketing: Innovation is tough to manage, especially for the conventional management mindset that demands consensus, control, certainty and status quo. Innovation thrives on the opposites —instinct, uncertainty, freedom and iconoclasm. Innovation does not happen only in labs but also through dialogues in different parts of the organisation and through interactions with consumers and thought leaders. Such dialogues and interactions are feasible only if the organisation has a culture of openness, a high degree of candour and boundary lessness. Innovation spawns in an ecosystem that encourages people to imagine and think broadly, collaborate, capture serendipity, and have the freedom to create.
Execution: It is a myth that innovation is all about creativity. In fact, innovation is far beyond just great creative ideas. It is about due rigour in implementation, persistence and detailed execution. Any innovational journey is going to be exciting, but it will be tough. One needs all the ingredients I have listed above, but if I have to pick just one, that would be “an open mind”. Frank Zappa, the American composer, musician, and film director may not have been a Parachute Coconut Oil user. But he was dead right when he said — “A mind is like a parachute. It doesn’t work if it is not open.” If one applies conventional thinking, one will come up with conventional solutions. But with an open mind and one will find a world of opportunities opening up. One can then ‘Parachute’ one’s way to success!