Innovation - The Key to Survival
These days the term 'Innovation' has come to be used quite frequently in relation to framing strategies not only to ensure survival of a business but to ensure its growth and progress. It is important to fully comprehend what innovation stands for. Professor Theodore throws light on it thus: " Creativity is thinking up new things. Innovation is doing new things". How cogently and concisely he has captured the very core of the concept of innovation. Many a good idea meets an infractuous end mainly because of lack of or inept execution. A company stays streets ahead of others in terms of competition with its unique competitive edge as it holds a superior position in proving to be as good in thinking up new ideas as it is in implementing them. It was quite some years before IBM's world-wide success in selling Personal Computers that Alto computer launched a product on similar lines and the product had too many features making it slow in response times but the company failed to feel the pulse of the market and eventually met with rejection. Such instances are many. There are people to whom the term innovation conjures up the visions of costly hi-tech exercises which essentially these are not! In truth, these are nothing but ideas which go on to add superior value.
Having discussed what innovation means it would be apt to examine its different types. Innovation can take place over a broad spectrum of business processes. It could be in business model, in operations or in products,services or marketing.
In recent years some great innovative business models have been developed in the form of unbundling which precisely means combining businesses of different characters under the same stable. Bharti Airtel follows this model. For example, the company has preferred outsourcing network operations to Ericsson and Nokia Siemens Network as it has done in relation to its IT infratructure to IBM while concentrating on market development and building distribution network and customer relationships.
In the matter of innovation in business model, ITC Limited's e-Choupal represents multi-sided platform of business model. It has largely succeeded in creating a single platform with multi-sided functionality. This unique platform has brought together many stake-holders in the agri-business like farmers,rural consumers and producers ensuring flow of information and knowledge amongst them. It has resulted in tangible mutual benefits to all of them and its remarkable success in eliminating middlemen from the chain merits particular mention. Thus it has become an e-hub of rural market establishing a network of relationships among ITC, Meteorological Departments, companies supplying farm inputs and commission agents. A great business model which could be replicated by other companies.
These days some companies look to customers for business ideas which could be termed as 'Customer Insight Driven Business Models. It is said that India's small family car "NANO" was the product arising out of this. Ratan Tata frankly admitted: " I observed families riding on two wheelers- the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family." It obviously captures the essence of this kind of business model.
While discussing various innovative business models "Freemium" models need special mention. As is evident that this a combo- word with terms 'free' and 'premium' forming it and the concept it underscores is that some basic products or services are offered free. Thus initiating the customers into the usages of them to demand a premium or price for usages of products or usages with advanced features. This is very smart thinking on the part of companies and we know of so many software IT companies following this business model. This kind of business model ensures service to both segments of paying and non-paying customers with incremental growth from non-paying segment from non-paying one.
The Open Source Business Model has been receiving greater importance now with its core belief in the fact that rich and valuable ideas can originate and come from different directions, internal and external. The sources could be customers, employees, experts, consultants or advisors. It is absolutely necessary to maintain openness in the matter of receiving ideas and examine their validity and suitability in giving an innovative edge in business.
Innovation can extend to operational spheres too. A company can take an innovative approach in relation to a host of activities like filling orders, developing products, providing novel ways to deal customers. Application of new scientific or technological methods to core processes in imaginative ways, efforts to optimize existing processes are all instances of operational innovation. We must have heard the exemplary eye-care services rendered by Arvind Eye Hospital and this hospital follows an operational process which is very unique. The entire surgical exercises are modeled on assembly-line.
Each surgeon performs surgery on two tables - one is meant for the patient undergoing surgery and the other for the patient being prepared for it. With each surgeon doing duty for 12 ours a day has a capacity to perform 100 surgeries a day which is ten times more than the national average! And its success rate is also enviable. What is remarkable that a percentage as high as 60 % or so of the patients can not pay the cost of surgery at the ruling rates but with such efficient operational standards in place whatever this hospital earns from those who can afford it, generates enough profits to take care of service to poor patients!
In the realm of products, services and marketing we witness significant efforts being made at innovation. A product innovation is a calibrated response to meet the specific needs of customers. There is no other perfect example than the use of ClimaCon technology. This wonder technology permits control of temperature in cloths and apparels. It has a range between 4 to 45 degree Celsius. A company named Dhama Apparel Innovations has adopted this technology to make jacket,gloves,helmets etc. Doesn't sound very futuristic?
Similarly we have innovation in the service category too. In the form of more intimate customer interface, introduction of new technologies in the existing processes, better delivery mechanism are all very good examples of innovation in this field. Even in the government sector efforts are on to introduce e-service. E-seva service of Andhra Pradesh government is an apt example in this regard.
There has been phenomenal progress in the filed of marketing innovation. The need to expand existing geographical spread has driven many companies to experiment with innovation by wider use of direct sales force and electronic channels. Micro-selling in the form of sachet is a new phenomenon based on the concept of reaching out to the last customer. Some years back some brands would not be available except in specific big or large sizes and now it is different story altogether.
Innovation, therefore, is not something which is exclusively the domain of big corporates. In fact, it is rather the mantra for survival of any business and of any size. In Indian scenario the latest trend is to embrace it in a big way to win customers,markets and to achieve global ambitions.
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