The colour blue...in Hinotia

Hinotia is a small village in Madhya Pradesh, close to Vidisha, some kilometers off the main road, and surrounded by soybean fields. I was there with a small team from ITC as a part of our project on rural distribution.

In the last few months I have had the opportunity to visit plenty of villages deep inside UP, MP and Rajasthan - somehow Hinotia stands out for me. I was amazed by the simple beauty of this village - narrow but clean lanes, artistic layout and the use of the color Blue!

Many houses had been recently painted for Diwali, so they looked new. I asked the local Sanchalak if there was a significance to the color being used so much - he said "bas..logon to pasand hai" (people seem to like it here -:).

The unorganized retail segment in India - what are the Innovation challenges?

Two of the current innovation projects I am working on involve an Insight study of the unorganized business sector in India. We are seeking first-hand Insights into this sector that can help us design new business models, new products and a host of new solutions…

Primarily this involves studying unorganized retail. These include your neighborhood convenience store (popularly called the Kirane-ki-dukan in north India); or the hardware shop at the corner of your street selling everything from bathroom fittings to paints and small construction tools; or the slightly more organized medical store and a host of other small retail businesses in apparel, electronics, food etc.

With retail growing in India at a breakneck speed, there are plenty of statistics available on this sector:

• The retail sector in India is worth USD 394 billion and is growing at the rate of 30% annually
• The sector is highly fragmented with 97% of its business being run by the unorganized retailers like the traditional family run stores and corner stores.
• The sector is the largest source of employment after agriculture, and has deep penetration into rural India generating more than 10% of India's GDP

(Sources: Ernst &Young, The Great Indian Retail Story, 2006), Indian Retail Sector Analysis 2006-2007 and more details, ..

These are huge numbers, by any standard. And the statistics and analysis surely point us in the direction of the rapid growth, modernization and of course innovation that is going to sweep this sector in the near future.

However for the purpose of the next few blog posts, I am going to move away from the statistics and focus my attention on the people who make up this industry.

The obvious entities of this eco-system are the ‘dealer’ the ‘retailer’ the ‘contractor’, the ‘distributor’ the quintessential ‘small-time businessman’ (There are a few women too in family run businesses, but its still a strong hold of the businessmen).

Apart from this there is the ‘government’ with its policies and the ‘company’ that is a critical entity producing the products and a host of entities on the manufacturing end.



It is interesting to note that analysts predict that even by 2013, 84% of retail in India will continue to be unorganized. If innovation is to be applied here, then it becomes critical to understand:

• What will keep the % of unorganized business so high?
• What are the fundamental assumptions behind the terms organized and unorganized, that are locking us ?
• Why will organized retail not be able to create a significant dent in this sector?
• What mindsets hinder or enable innovation within the entities of this sector?
• What are the potential breakthrough sensitive areas – that need innovation?
• Current approach to Innovation – is it based on applying urban ‘American’ concepts of suburban growth to this sector? How limiting are the current mindsets?
• Therefore what could be some new radical directions in innovating this sector?

I will be exploring these areas and more in a few days…. stay tuned.

Primary colours in Pondicherry

This was a weekend trip to Pondicherry in March'08. My first to this little township. Enchanting of course. I'd heard so much about Pondy, had visualized the streets, the ashram and the 'french-ness' of the place from what I had seen and heard about it.

The day we got there it was pouring rain. Unnatural for this part of the year. It was torrential. It poured through the weekend - so we spent time in the beautiful Promenade hotel, watching the ocean swell with the rain.

But when the rain cleared it left behind clean, washed streets, and all the colors in the environment seemed to stand out boldly...there was a cheer in the air...

So I decided to capture Pondy in three primary colour compositions - yellow, blue and red...

Breaching boundaries.... IPL ishtyle

Cricket's new entertainment format the Indian Premier League has some very interesting innovation lessons...

The number of players allowed in a side hasn't changed. The boundaries of the stadiums haven't really changed. The ball is still made of leather and the bat of wood. But everything else about the game is dramatically, visibly, radically, excitingly different.

If innovation is about creating unique and compelling solutions - then this is a hugely innovative format. It respects the norms of the games, but questions every single condition fundamentally and essentially asks the bold question - what if cricket was not just a game, but instead a 3-hour action flick that was packed with drama, adventure, emotions, heroes, heroines...

What if?

Would we look at the game differently, then? Is there a huge blind spot somewhere in our current understanding of the game, that could change the very nature of this game? What are we taking for granted, that has the power to release locked-in value? What boundaries are we unwilling to breach today? What would create history in this game?



And sure enough whats been created is not just sport. Thats just the entry criteria! Its a proposition that packs in a new business model, combined with new product offerings, combined with the creation of dynamic new relationships between viewers, players, team-owners and the media.

Its not just the cricket eco-system in India that IPL has challenged and impacted. Soap operas and cranky family dramas at prime time is a finished industry now I guess. Movies Theaters will have to think up new strategies to get people away from television over the weekends. New movie releases will get impacted in the weeks that the IPL is on. Earnings from a cricket team could become a part of a corporate organizations balance sheet -:). The impact is far beyond the sports industry...especially in a cricket crazy country like India.

Its obvious that a truly compelling proposition has the power to create fans in minutes, convert observers into active supporters and shake up the eco-system that it occupies.

Takes me back to the start point for innovation. Seeking a solution that solves a current problem is a terribly incremental approach. If you really want to innovate then ask - what can we do differently that will question the most fundamental norms of the game and therefore change the game forever. That question will set you up for a journey onto a brave new path.

In fact if you are not willing to ask that question, then don't bother innovating.

PS: Tata's Nano is the other example of a Global-Indian Innovation that started with the same thought...

Innovation occurs outside organizations - far more than inside them...why?

The classic tug of war between the 'individual entrepreneurial DNA' and the organizational need for systemic structure.

The outcome? Organizations that wish to become breeding ground for entrepreneurs (or intra-preneurs), instead, end up becoming backyards full of incremental, half-baked ideas.

In the last few years I have heard more and more IT professionals say – I want to be an entrepreneur. Quit my job, set up something of my own. Get some funding. Never have to work for an organization again.

That’s great. So we have several independent entrepreneurs coming out of large organizations and setting up smaller ventures.

But why is it that a large organization, with all its scale, investment capability and desperate need for Innovation, is unable to engage its employees in long-term entrepreneurial initiatives?

Lets look at it this way. At a personal level, have you ever had an idea to create a radical new software solution for your client? Or maybe experiment with a new business model that could earn the company two times more revenue?

Chances are that if you are trying any of these in a large organization, you will be faced with a few questions from people around you.

What if the client hates it?

What if he doesn’t pay?

What if we spend a year building it and competition brings out something sooner?

What makes you think you can do this?

And the classic - if this were so easy, someone would have done it already don’t you think?

How do you respond to these questions? Have you found yourself stalling? And rationalizing that it might be just better to continue regular stuff?

Does the environment become a reason for you to say – when I get that great idea I will leave this organization and set up my own company. Till then, let me just continue business as usual….?

Here lies the myth of Innovation in an established organization. Having people who can generate ideas is only 10% of the exercise. The remaining 90%, is building an Innovation ecosystem that can engage with the idea and facilitate the journey of an idea - from concept to reality.

And thats where lies the gap. We seek to generate innovative ideas. Not build an innovative ecosystem within the organization that can nurture, sustain and grow.

But what are the manifestations of an innovative ecosystem within an organizations?

The first - Inspired and committed innovation champions

In a Technology Services Company where Erehwon is facilitating a mission, Srinivasan, a successful Mission leader recently shared his personal learning. He had always been very organized about his career. Knew what he wanted to do. Planned his career growth, in a few years he would be in a senior position and really well established.

Then he was asked to change his role. And lead a team that would take on an ambiguous but ambitious innovation challenge.

He says, “I had to ask myself why I wanted to do this. I had to be very clear why I would want to take on a journey that could easily jeopardize everything I had done so far? I had to be ok with failing. ”

This is a fundamental question. And one that every Innovation champion, in an established organization, asks himself or her self at some stage in the innovation journey.

In this instance, the supervisor’s message was clear. Take it on like the CEO of a new business. Something that you will pursue, set up and take forward. We need the next million dollar businesses coming out of this.

Srinivasan shares that for him this was an interesting perspective. He could leapfrog his career, build something new and be recognized for that.

He shared that in his mind he shifted the lens. “I would think of myself like an entrepreneur. And everyone in my organization including the stakeholders would become venture capitalists for me. If I heard a ‘no’, I would seek to enroll, excite the venture capitalist…”

In a journey lasting over a year, this individual is now known for his capability to enroll and excite stakeholders onto radical propositions. His biggest challenge he says has been to help people in different divisions see how something could be of real value to them, why their inputs are needed on the proposition, why this must become priority for them as well.

So what keeps him excited on this journey? “We have clear insight on what will work, we haven’t earned revenue yet. I believe we will. We just have to find a way to get there”.

And this differentiates the Innovation Champion. A deep conviction in the purpose, clarity around the Insight and a mindset that is focused on making it work.

But how many individuals can self-sustain the entrepreneurial drive in an established environment?

The second element of an innovative ecosystem - the creation of an extra-constitutional green channel that is designed to facilitate the idea’s journey from concept to reality.

The traditional processes applied in an organization are just not equipped to deal with such innovation initiatives. Multiple divisions, and decision-making structures that keep the organizational engine running in the normal course create a drag for radical innovation.

The direct impact, therefore, of taking an idea through the regular channel is dilution. The idea that finally gets built is one that meets everyone’s minimum requirement. And as a result it is an incremental idea, creating no significant impact for the customer.

If an organization is seriously looking at creating breakthroughs and enabling Innovation teams to deliver radical results, then investing in creating an extra constitutional channel for decision-making, prototyping and rapid experimentation is a must.

Unfortunately, however, a channel is misconstrued. An idea database or processes to review innovative ideas is treated as a channel for Innovation.

In our work with the R&D division of a leading electronics manufacturer, the myth of the database came to the surface.

Wanting to create an innovation environment, the division set up an idea database. And to complement it, IP generation was included into the KRAs of all employees. IP coordinators were set up to review the ideas and the person with the most ideas contributed would also win a special award each year.

Logically, this should have worked. There was enough incentive. The process was set up. The intent was genuine. They tried it for almost 2 years. But it did not seem to be working. There was an initial burst of ideas that became solutions and then… a dry idea pipeline.

An Innovation diagnostic threw up some interesting rhythms. For an employee in this division, every idea put into the database would get him/ her closer to recognition and an award at the end of a year.

So instead of sharing ideas with others and building them further, people would just put a raw idea into the database.

Several such ideas populated the database. But most of them were very raw, undeveloped thoughts. The IP coordinators would review these ideas, check against an IP database and declare that many ideas were already copyrighted or not ‘exciting enough’.

No one was sharing anything with each other; therefore no idea was really getting developed into a possible proposition. And it became the IP coordinators job to grow the ideas.

And since IP-ability was the measure for an idea’s selection, several raw ideas got dropped. The database was full of small, incremental ideas. However, none was really orbit shifting, or quantum or even prototype-able. This had become a graveyard for ideas. Not a breeding ground.

Today this process is being re-architected. An idea needs to be shared as a more developed proposition. With inputs on the Insights that it is based on. The potential impact it could create for customers has to be shared. The person or team who submits the proposition also owns driving it to reality. Leadership is enabling entrepreneurial energy being applied by team members.

Think about it. How long have you had an idea database in your organization? How many really breakthrough ideas are coming through the database? How many are getting translated into breakthrough solutions? Is the database becoming an excuse for an incubation channel?

Why is the strike rate so low?

Innovation in the context of the established organization is not about generating tons of ideas.

It’s about creating sustained entrepreneurial energy needed to take ideas to reality. Giving them the extra constitutional bandwidth that is needed to get them up and running fast.

The biggest challenge today for an established organization is in being able to turn itself upside down, unshackle the processes that make it an ultra efficient engine, challenge every assumption that has enabled them to succeed so far and build a new breed of entrepreneurs who will create the next billion dollar businesses from within.


Includes some content from the original article published in the magazine IT.com, January 2008, by Parvathi Menon.

No power sockets in the wall...

What paradigms constrain innovations in ensuring electricity is available for all?

The world energy council recently published a very thoughtful report. Energy Scenarios 2050. Based on Accessibility, Availability and Acceptability of solutions that will ensure everyone in the world has access to modern energy solutions.

Four possible scenarios have been drawn up that elaborate on these. The future includes more solar power, bigger pipelines for natural gas, technology enabled turbine solutions, green initiatives, sustainable energy policies…and a lot of good English.

Somewhere it fundamentally assumes that everyone in the world wants to plug an equipment or an appliance into a wall socket and draw energy from there to fulfill everyday needs. And so, naturally, the areas of innovation become:
1. How to get more power to that wall socket, with lesser losses
2. How to get cleaner, greener power to the wall socket
3. How to get this power to reach more people (especially the poor and unserviced), more effectively.

And these questions map the current paradigm of new electricity solutions. What could be a radical new question that we could ask ourselves that would fundamentally alter our approach to energy solutions?

A few hour’s drive from Lucknow are villages like Parora and Seri. Electricity is infrequent. A village gets an average of 5-6 hours of power supply daily. Intermittent supply, fluctuating voltage and availability for a bare handful of hours during the night. Never really enough for irrigation, or home appliances or running a computer or charging a phone or any of the million things you believe you need electricity for…

One enterprising villager I met in Seri told me that he has found the solution for lighting up his home. Flashlights. He removed all bulbs and tube lights from his house and instead hung flashlights in every room. Without any electricity reaching the village he found that the bulbs were pretty useless most of the time. And the fluctuations in power meant frequent replacements. A heavy expense for an ordinary villager. But flashlights? How does that light up a house? What about batteries? Isn’t that expensive? And strength of the light?

What he held in his hand was an LED handheld torch from Eveready. Priced at Rs. 90 per piece, this is taking over the market from Philips in the bulb and tubes category in villagesor Uttar Pradesh. A torchlight that gives out powerful, clear, white light, uses 2 cells, can run for 3-4 months on 2 cells at 5-8 hours per day. What I walked into was a rather well lit room.

No wall sockets being used.

Another villager took me to the terrace of his house to show me the V-Sat dish installed by ITC, to help him run his e-choupal center. But what I noticed was that his was not the only house with a dish. Almost every household had a small ‘chatri’ as a dish is locally called – a satellite television connection.

In that village almost 80% of the households have a television and a Chinese made DVD player. DVD films are very popular. They can be bought for as little as Rs. 10 per DVD and have 2-3 films included in each disc. Picture and sound quality is rather bad. But quality is not the primary driver here. Need for entertainment is.

How are these powered? A little battery box in each home that provides an alternate source, combined with a few entrepreneurs in the village who own diesel generators. If regular electricity supply cannot recharge their batteries, the Villagers take their batteries to the generator point and charge their batteries for a few rupees per hour at the generator. A self-sustained ecosystem. No plug sockets in the wall.

These are small solutions.... within an ecosystem starved of the traditional solutions. And they may have a high carbon footprint....but maybe we need to take our learning from here - and not from the most advanced laboratories. No wall sockets. No wires. Self-generating. Ecological. locally creatable. What would be the paradigm shift for electricity solutions?