September 2008 | R Gopalakrishnan

Ideas that meet real needs

R Gopalakrishnan, executive director, Tata Sons, and chairman of the Tata Group Innovation Forum, talks about the intrinsically innovative nature of the Tata group and the unique dimensions of innovation

R Gopalakrishnan

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Innovation is the hallmark of the evolution of mankind. Man has always been innovative. That's how he has become what he has become. I would say that innovation is probably one of the most important things from a sociological, psychological or a learning perspective. And whether it is the Tata group, or other Indian companies, or any international company, innovation is at the heart of the business. It's all important.

Innovation is not a new thing in the Tata group. The group's organisational structure itself is very innovative. There is no other business group, to my knowledge, which is structured like the Tata group – which is owned by charitable Trusts, where the profits are invested in building the nation and in social causes, and which is structured in a manner that nobody can change this structure. The parent company (Tata Sons) is held privately so that it can take a very long term view of the business; and the subsidiary companies are public so that they are sensitive and responsive to their customers and the community.

I believe that the Tata group has been very innovative for a long time but we innovate in such a natural way that we don't notice it. It is a characteristic of the human mind that when something becomes a part of your nature you cease to notice it and I think that has been the case with the Tata group.

The Nano

On innovation as differentiator
In the olden days, people said that the characteristic or differentiator for success in business was your access to technology. And there was a great deal of thrust on acquiring technological knowhow, whether it was in motive power through steam or through electricity and power generation or later through information technology.

Pretty much as a good tennis player goes through the early stages in the development of his game, all the good tennis players, the world class players, achieve parity on technical parameters. And in the world of business too, the big players have achieved pretty close parity in terms of technological parameters. What, therefore, counts is their ability to innovate at the next level. And if I may say so, with no disrespect to the technologists, technology is one step on the escalator to innovation. There are other steps. For example, the innovation of the whole revenue model, the innovation of the business system – these are far more difficult to replicate. They are not patented, but they are very difficult to replicate, and the Tata group has many such examples of innovation.

If you look for contemporary examples, I think what the Tata group has done with the Eka, the supercomputer, or with the Nano, which is yet to hit the market, but conceptually these show the promise of innovating a total business model rather than just a technological breakthrough.

On the social context of innovation
There are three or four dimensions to innovation, and we have to be able to define what innovation is. So let me deal with the latter first. There is a popular perception that innovation is something which no man has ever thought of and that it has changed the whole world. I think these are relative; there are such innovations – I do agree. But innovation, at the heart of it, has to be something that is unique to a particular context.

So, if a smokeless chullah (stove that burns firewood) can be made for the rural consumer in India -- we may say that such an invention may not win the Nobel prize, though there is no reason why it shouldn't -- it is definitely a huge innovation. And indeed the award of the Nobel prize for the Grameen Bank and Mohammed Yunus is a very clear example that the world is recognising that innovation is contextual.

The second thing about innovation is that it has to do something that is much larger than the innovation itself. It must do what innovation means; applied invention is innovation. So what is it applied to? It is applied to society, it must do something good for a large number of people, and there are many examples of that around us.

So if you apply these two parameters, we are indeed trying to develop not necessarily things that that can be patented a hundred times over to prevent other people from entering the doors but in a rather more open way, to see how quickly we can deliver those results to people. For example, Ginger Hotels is an example of taking a good idea and repackaging it in a manner which becomes highly relevant to a group of people  – and, in this case, a very large number of people  – and meet a consumer need. The ability to take a common commodity, something that you take for granted, like common salt, and packaging it and making it India's largest and most respected food brand and developing a whole ecology of a business system around it, is a huge innovation which we tend not to focus upon because we take it for granted.

And I think the Tata group is trying to innovate not only in these areas but also, I should add for completeness, trying to innovate in certain areas of social entrepreneurship as well. Innovations that are being attempted right now with the Tata Udyog Parbo (an initiative that celebrates entrepreneurship) or the Tata International Social Entrepreneurship Scheme are examples of the kind of things that in the future might be seen as having made a very significant difference to the whole area of social entrepreneurship.

On fostering an environment for innovation
I think the group, while collectively innovative, has not so far democratised the process of innovation. I am a great believer in human nature. God has made us all innovative; the day a child is born, the child is innovative and naturally curious. Then the social and educational systems in which children are raised start to dim all these natural instincts. If we can restore people back to their basic core nature, then curiosity, innovativeness, tinkering around, doing new things will come back.

In the case of a 140-year-old organisation like ours, we obviously have layers and layers of systems and cultural DNA embedded in the very way we work. And I think where we need to improve is in trying to peel those off and democratising innovation so that more and more people see that innovation is the core of their job, that that's what they are paid for. It doesn't matter if they are raising invoices or loading trucks or working in a research lab.

If I may say so, there are two ways in which people in an organisation can promote innovation. One is trying new things, introducing new systems that help people innovate, putting in more processes; and the second is to simply focus on removing obstacles. I think, certainly where we are concerned, in the Tata group, if we can just remove obstacles, the natural propensity of people will flower forth in a way that will really amaze all of us; and that will be our hope for the future.