Tuesday, September 8, 2009

Innovation In Action - Tata Group

It's not that there had been no innovation inside Tata Group, the 117-year-old Indian powerhouse responsible for that nation's first steel mill, power plant, and airline, among other achievements. But when India's long protected economy was opened in 1991, Chairman Ratan Tata decided that for his companies to survive and thrive in a global economy he had to make innovation a priority—and build it into the DNA of the Tata group so that every employee at every company might think and act like an innovator.

Today those 15 companies have produced such innovative products as the $2,000 Tata Nano car, and includes firms such as Tata Consultancy Services (TCS), the Mumbai-based IT services and outsourcing power, which earned almost $6 billion in revenues in 2008.

People often talk about being innovative and going against the status quo but it is another thing entirely to actually carry it out. It is even more impressive to establish a corporate culture that inspires innovation amongst the masses. It seems that is exactly what Tata Group has done. The article on the Tata Group in BusinessWeek found here, illustrates how the company has made innovation a part of the way they do business. I would love to work for a company that truly embraces ideas over the ability to walk the line. While reading this article there were a few things that really jumped out at me that we all can learn from.

The first thing that caught my attention was a lesson I have consistently been reminded of through my work with lean and continuous process improvement. As a change agent within an organization the different tools/methodologies of lean, six sigma, theory of constraints, or whatever continuous improvement theory you are utilizing are the easy part. Most people can see the tools working or at least acknowledge that the reasoning behind them are sound. The most difficult part is changing the culture. And most often it is the lack of leadership commitment that gets in the way. I believe that change can come from the bottom, but it is a hell of a lot easier and quicker when the top lives it. I put this lesson simply as, "what the leader wants done, gets done." Tata not only says that innovation is important, but the leaders promote those who have experience as innovators. It is important to leadership that the next wave of leaders be experienced in creating change. I don't know how many programs there are in the Air Force that leaders say are important, however after the "important speech" is made the leader never checks up on it again. People aren't stupid. You can say something is important, but the workers will always know what the few real priorities are.

TCS has also incorporated innovation into its formal annual review process, making it one of the nine categories on which employees are evaluated. If an employee wins the company's Young Innovator Award, he or she will see more than a salary bump. "It certainly accelerates your career track," says Krishnan. "I might pluck you up and put you in one of our innovation labs."

In addition to formal systems, TCS takes steps to stimulate innovative thinking. "We train people to think about improvement all of the time, to have what I call a culture of creative dissatisfaction with the status quo," says Krishnan. TCS has made innovation a component of training programs, from its leadership institute, to which 50 senior managers are sent every year, to its four-day "Technovator" workshop, at which its programmers are taught to think creatively.

I also thought it was pretty impressive that the company allows employees to use a certain amount of paid work time to work on personal projects. This 'skunkworks' or intrapreneuring style reminded me of 3M, a mainstay firm in the innovation arena. Talk about putting your money where you mouth is. They say that they value innovation at Tata, so they pay you to innovate and they empower you to thrive in a incubator unhampered by bureaucracy. Pretty cool stuff.

Five hours of an employee's 45-hour week can be used for personal projects, such as learning a skill or developing an idea.

The most impressive thing I read was with regard to a topic I have blogged about a lot since reading the book where Seth Godin coined the term; the topic of tribes. The company followed Seth's recipe for creating a powerful tribe to the letter by creating a vision and empowering tribe members to communicate and carry out that vision.

To better capture nascent ideas, the company launched IdeaMax, a Digg-like social network that lets any employee submit, comment, and vote on ideas. Since it was launched last year, IdeaMax has collected 12,000 ideas, several hundred of which have become projects. "Every quarter, I review the top 10 most popular ideas," says Krishnan. "The wisdom of crowds works for us."

The concept is very similar to the post I did recently on innovation in the music industry. The company is leveraging the expertise of the knowledge workers at process level to decide the best ideas are. There are no egos, only transparency and empowerment. From a corporate standpoint I can't really imagine too many cheaper ways to innovate either. All in all I think this company gets it, and I would love to do some more research on the happiness and retention of their employees. Even if the company is being aggrandized in the article the lessons can help you become a better leader, build a better business, or be a better person.

1 comment:

Matt said...

My manager used to work there. He is certainly innovative. :)