Nitin Seth

NASSCOM Regional Council Haryana organized a CEO thought leadership session on Innovation on May 17 in Gurgaon. The session was led by Prof. Rishikesh from IIM Bangalore who has written two books on innovation and is regarded as one of the foremost experts on this topic in India. We had a star cast of industry leaders for the panel discussion including Avaneesh Dubey from SAP Labs, Arvind Jha from Movico, Shyama Bijapurkar from HSBC, Vinood Sood from Hughes, and it was moderated by me (Nitin Seth from Fidelity).

In this note, I am sharing my opening comments at the session on why innovation is such an important topic for the Indian IT/BPM industry and the key questions that need to be discussed. I have also summarized the framework Prof. Rishi shared from his recent book on innovation, the key themes that came up in the panel discussion, and some early thoughts on role that the NASSCOM Regional Council could play in developing a supportive environment for innovation.

Innovation an imperative for the Indian IT/BPM industry

The Indian IT/BPM industry is at a crucial juncture. This industry has been the crown jewel of the India Shining story and one of the few areas where India is truly a global leader. However, industry’s growth trajectory has hit a few speed bumps in recent years. The economic environment has been challenging, customer needs are becoming more complex, competition is increasing, and technology megatrends like cloud, mobile, big data and social media are changing the rules of the game. Clearly give the combination of these forces, India IT/BPM industry needs to innovate to not just drive the next stage of growth but perhaps also to stay competitive.

In addition to the above industry specific imperative, there is perhaps a broader national objective as well. If we look at world economic history, the standard of living across different parts of the world has been pretty similar for most of recorded history. Divergence started happening after the Industrial Revolution. And, this divergence between the developed and developing nations has magnified with acceleration of technology innovation over the past 100 years. If we want significant progress in the economic well being of our people then it is necessary that we unleash a culture of innovation across the country.

In many ways the Indian IT/BPM industry is well placed to drive innovation and be a great example of what needs to happen more broadly in the country. We have scale and global penetration, we have built domain and business knowledge, most companies are resource rich sitting on pile of cash, and most importantly we have great talent. The young talent in particular offers great potential. They are ready and itching to do something creative and impactful with their lives.

However, as an industry we are perhaps lagging in both the quantum and quality of innovation. It is ironic that the Indian IT/BPM industry that in itself has been a huge, disruptive innovation over the past 20 years has slowed its innovation engine over the past 5 years. There is minimal differentiation in process and service offerings. There is minimal IP creation and brand building either at the company level or for the industry. And all of this passive behaviour while many companies have a lot of cash on their balance sheets!!  There are off course many examples of incremental innovation and of the famous Indian Jugaad at work. However there is little that suggests that wide spread systematic innovation is happening. It is precisely this challenge – from Jugaad to Systematic Innovation – that we need to address.

Key questions to be addressed on Innovation

There are perhaps 6 key questions that need to be explored:

1. How to encourage innovation in service companies? How to go beyond the “here and now”, service delivery pressures and step back to focus on Innovation that might yield results only in the future?
2. How to encourage young people to take risks?  How do you deal with failure?
3. How to drive game changing, breakthrough innovation?
4. How to sustain innovation journeys beyond the initial, well-intentioned enthusiasm?
5. How do you drive significant innovation in Global In-house Centers (or Captives) where the mandate/scope might be quite limited?
6. How can an industry body like NASSCOM help develop an ecosystem that facilitates innovation and entrepreneurship?

8 steps to innovation framework

Prof. Rishi along with co-author Vinay Dabholkar have written a book “8 Steps to Innovation: Going from Jugaad to Excellence” from which he shared key insights during the session on May 17. He has identified 3 key challenges to innovation: build the idea pipeline, improve the idea velocity and improve the batting average. He has then suggested a 8 steps process across these 3 challenges/themes:

Theme 1: Build a Pipeline

1. Lay the Foundation
2. Create a Challenge Book
3. Build Participation

Theme 2: Improve the Idea Velocity

4. Experiment with Low Cost at High Speed
5. Go Fast from Prototyping to Incubation
6. Iterate on the Business Model

Theme 3: Increase the Batting Average

7. Build an Innovation Sandbox
8. Create a Margin of Safety

You can read the introductory chapter of the book at:

http://www.catalign.com/data/8%20steps%20to%20innovation%20introduction.pdf

And, the book website is: http://www.8stepstoinnovation.com

Key themes from the panel discussion

There were 9 key themes that came up in the panel discussion and subsequent audience Q&A. Below is a brief synopsis :

1. You don’t need to be a genius to innovate. If you follow a systematic process, anybody can innovate
2. We search for game changing ideas, but never forget the small ideas. They can add up to significant impact
3. Just ideation is not enough. Key mantra is experimentation. Build capability to experiment with low cost at high speed
4. Need to reinforce the “creative confidence” of staff. Build a culture where risk taking is encouraged and new ideas supported
5. Important to create a buzz in the organization around innovation. Need to have clear signaling from the senior management and sustained employee engagement to build innovation momentum
6. Need to be aware that disruptive innovation can happen from outside the given industry. Good example is how Apples’s iPod disrupted the Walkman industry
7. You often need sponsorship of a strong leader to drive and sustain breakthrough innovation. For example, Tata Nano might not have happened without the support of Mr. Ratan Tata
8. The relatively steady growth and good financial performance of Indian IT/BPM industry perhaps does not result in a “burning platform” for driving innovation as a priority. Leaders of Indian IT/BPM companies need to demonstrate vision and courage to proactively invest in innovation so they can create the next growth curve for their companies and for the industry
9. It is likely that breakthrough innovation happens not in the large companies but in start-ups. Therefore, it is imperative that we develop an ecosystem where the smaller companies are encouraged and supported.

Role that NASSCOM Regional Council could play in spurring innovation

Sharing some initial thoughts on how NASSCOM Regional Council can contribute towards enabling an environment that supports innovation:

• NRC Innovation Mentors – a group of 10-12 industry leaders/ innovation experts who can mentor other companies around driving innovation initiatives
• Sharing best practices and success stories on topics such as  how to persist with an innovative idea, creating IPs, funding innovation etc.  These could be done via in-person group sessions and/or leveraging social media
• Mobilize participation of member companies at NASSCOM events/awards aimed around innovation. At the same time navigate existing programs/initiatives of NASSCOM in the region (for example, the 10,000 startups initiative).
• Conduct joint programs and exchange of content /speakers with similar organizations like Tie, CII.

Clearly innovation is an imperative for the Indian IT/BPM industry, whether it is the larger companies, start-ups, product companies or GICs. There needs to be a call to action for leaders and companies to spark and sustain significant innovation journeys in their organizations. Equally it is a challenge and responsibility for industry bodies like NASSCOM how they help create an ecosystem that ignites a culture of innovation.

We would love to hear your suggestions on what NASSCOM Regional Council should be doing to support innovation in the Gurgaon/Haryana region. Please send your ideas to nitin.seth@fil.com, arvind@movicotech.com, and nidhi@nasscom.in.

Thank you!!