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Tatas in search of next 'Nano'

June 25, 2009 09:54 IST

On July 29, Tata Sons Chairman Ratan Tata will be the chief guest of a function in Mumbai that will be seen live by employees of all group companies across the world via video conference.

That's nothing unusual, except for the fact that Tata will be giving away awards to 12 winners of Innovista, the group's internal competition designed to stimulate and support innovation.

"That's our way of celebrating innovation. Recognitions have to come from the top and they have to be visible for a buy-in," says R Gopalakrishnan, executive director, Tata Sons, and chairman of the Tata Innovation Forum.

Going by the response, the buy-in has happened already: Three years ago, the inaugural event attracted just 100 entries. That number has gone up to 1,700 this year. The number of participating companies has gone up from 33 to 62.

The global finals will be held on July 28, a day before Tata gives away awards in three categories: Innovations that have been implemented, those that are in the idea stage and those who have 'dared to try' -- an honour the group bestows on those who took on ambitious projects and failed.

Sunil Sinha, CEO of Tata Quality Management Services which is behind the innovation initiative, says the next 10 years will be a decade of innovation for the group. Agrees Gopalakrishnan: "If the past two decades have been of cost and global competitiveness, the next will belong to innovation.

"Some innovations happen because of well laid-out processes and some by accident. But the fundamental question we are asking is whether it is possible to innovate without being conscious of it. That's the mindset change that the group is aspiring to achieve," he says.

The biggest winner of this drive to drill down innovation to every person on every shop-floor will of course be the Tata conglomerate. While the most visible symbol of this has been the Nano, insiders say Tata has already started asking his senior executives, 'What is the next Nano?'

The innovation drive is seeking to answer that question.

So what is the group doing to make that happen? For one, it is entering into 'innovation alliances' with a host of global companies such as DuPont, Honeywell, Philips and Intel, just to name  a few.

The initiative is far-reaching. Top executives of seven group companies are in touch with 800 scientists of DuPont to form a common forum to explore constant innovations in the areas of biotechnology, biofuels, speciality proteins and carbon dioxide absorption.

Similarly, the information technology heads of Tata companies are in touch with Intel to absorb the best practices in IT for possible collaborations.

The focus of such collaborative innovations, Sinha says, is to "find solutions to a problem from creative ideas outside as it's not possible to find everything inside the organisation." He gives the example of Procter & Gamble to show how such 'open innovations' allow companies to source an idea from outside and implement it with outside help.

Secondly, it is going beyond simple product or process innovations and opting for a more holistic approach -- something that the Nano showed and something that is almost impossible to replicate.

The Nano, for example, went much beyond just engineering innovation; it covered the areas of management, marketing, services, delivery, etc. "That's something you can expect more and more from the group in the years to come," Sinha says.

Thirdly, the group sees the next decade to see a host of innovations towards a low-carbon economy. The group has already with an organisation called Global Leader in Technology Exchange to find out how various group companies can achieve this.

And finally, it will also go in for more social innovations like group companies Tata Consultancy Services and Tata Teleservices did. After the tsunami, the two companies worked together to develop an SMS weather alert system for fishermen on the high seas.

What gives the Tata group confidence is that it has already achieved a lot in innovations, some of which may have not engaged the mind space as much as Nano, but  have been trailblazers in their own way.

Look at the way Tata Motors developed the Ace mini-truck. The company, Gopalakrishnan says, sort-of caught hold of a young manager and told him: Why don't you take a group of five people to Thailand, do something and come back? It took two or three years, but at the end the company had Ace, a bestseller in its category.

Take, for instance, the Eka supercomputer -- recognised as the fourth fastest computer in the world and the fastest in Asia. What makes Eka unique is the fact that it was developed by the group's Computational Research Laboratories in a record time of six weeks, at a cost of $30 million.

Its impact on other group companies has been phenomenal.

For example, in the area of automotive design, CRL is working with Tata Motors and Jaguar Land Rover to save design time. The Indian Space Research Organisation used Eka for weather prediction for the Chandrayan -- I launch.

There were many other examples as well -- Tetley, Tata Tea's UK subsidiary, for instance, has come up with a beverage-dispensing machine that doesn't use electricity. In another breakthough, the company managed to reduce the time taken in the lengthy process of tea-tasting by three-fourths.

Tata Consultancy Services' 19 innovation laboratories around the world have filed over 100 patents in the last few years.

Or, the launch of Ginger hotels -- the idea came during a meeting with management guru C K Prahalad. In a business model innovation, Indian Hotels adopted  a new concept of `smart business hotels' that envisaged a class of hotels sans frills and fuss, yet offering most of the amenities on offer at higher grade hotels.

To make sure that the concept makes business sense too, the hotel chain decided the following: in regular business hotels, the room to manpower ratio is 1:3, but for Ginger, it was decided to restrict it to 1:0.36.

This was made possible through outsourcing of management facilities, food and beverages and the reception facilities. For normal business hotels, the land required is two to three acres. Ginger decided to reduce this to 40,000 square feet.

To make sure that the innovation initiatives succeed, the Tatas have also developed a simple tool called Innometer, which will measure the innovativeness of a team. Some of the group companies went far beyond this by measuring the percentage of their turnover that comes from innovations.

Rallis, for examples, calls the proportion of the turnover that comes from innovations the 'freshness index.' Gopalakrishnan says he would like all group companies to mention their freshness index in their quarterly results presentations.

"That would be a nice change for business language," he says. It's over to the group's next decade of innovation.

BS Reporter in Mumbai
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