This interview provides more information on the topics discussed in our report Innovating for the next three billion: the rise of the global middle class — and how to capitalize on it.
R. Gopalakrishnan is a Director at Tata & Sons and the chair of the Tata Group Innovation Forum. Here, he discusses the importance of innovation culture and the value of conducting frequent, small experiments.
As a company headquartered in a rapid-growth market, do you feel that the Tata Group has an advantage when innovating for lower-income customers in these markets?
Rather than use terms like frugal innovation, we like to position our approach as being one of “bringing relevant innovations to the consumer.” This kind of innovation comes very naturally to an emerging-market company because we are immersed in the environment. If you saw a mother, a father and two children on a two-wheeler motorcycle, you are more likely to have the idea for the Tata Nano than someone in the United States who is hardly aware that this is a consumer problem.
How do you foster an innovative approach across the entire Tata Group?
The Tata Group is comprised of a large number of independent companies, and the way we operate is to provide good counsel from the center. It's like a parent and child relationship where we provide advice, but we don't dictate everything that each company does. We have created a body called the Tata Group Innovation Forum, which has representatives from many of the Tata Group companies. The idea behind it is to share experiences and knowledge across the Group and learn from each other. It is not prescriptive, but it is encouraging and nurturing.
What is more important to innovation at Tata – culture or process?
You can't have one without the other – there is a place for both, and you need to know when to emphasize process rather than culture. They need to interact with each other. We try to encourage our people to use the intuitive powers of their observation to bring an idea to the table. The really successful, frugal engineering cannot come out of an analytical process. Although we certainly think about process in our innovation, we are not dependent on it.
How important is it to learn from failure as part of the innovation process?
We think it's vital. We have implemented a program that rewards honest failure. Our view is that it is OK to fail if you have made an honest attempt. The key, then, is to learn from that failure. If you can demonstrate that you have done this, then you can actually win a prize at Tata. This encourages people to experiment and learn from failure.
Experiments are valuable to innovation, but at what point do you apply a formal process for evaluating ideas and deciding which ones to scale?
If you are committing US$400 million to the company, then obviously you can't do it by intuition alone. So there is a very formal stage-gate process with these kinds of larger investments. But there is an earlier stage before that where there is, and should be, a cornucopia of things going on. We want innovators who have the stamina and resourcefulness to be experimenting constantly and thinking of ways to get their idea to the next level. You need to take an incremental approach to developing new ideas. It's like taking small bites of an apple. This approach gives you more shots at success.
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