Category Archives: Leadership

1-By Laksh, Doing Business, Leadership, Strategy

Reverse Innovation: Prof.Vijay Govindarajan at ISB

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Key points from a talk at ISB on January 08, 2013
  1. What is Reverse Innovation: 
    • It is an innovation seen first, or likely to be used first, in the poor nations and then extended to rich nations. Rich and poor nations being classified based on the GDP bar as set by United Nations.
    • So, if an innovation springs up in India and if it is applied to US it becomes reverse innovation
  2. If it works here, it will work anywhere: The speaker presented a few examples from healthcare industry that illustrated the above point, emphasizing that low cost does not mean low quality. Infact, that it worked in India or Thailand, means that the product is world class, due to the extreme conditions this product is put to use.
    • A low cost ECG machine from GE (Though developed for $2/per day earning rural Indian, now finds place in the high way ambulances in US, where installing a million dollar ECG machine along with a high skilled technician does not make sense.)
    • World class Heart surgeries in India for a fraction of cost that has paved way to the medical tourism model. Infact, now in Cayman Islands, there is a project that is being developed where people from US can travel to and get their surgeries done for a fraction of cost
      • Narayana Hrudalaya performs a heart surgery for less than $2000, that takes typically $50,000 in a leading hospital in India
      • But the quality is still the best because of the equipment that is used and the demanding customers we have in India. (Indians are supposed to have weak(est) of hearts)
      • 60% of patients are treated free, but interestingly remaining 40% makes this hospital to still enjoy over 45% of gross margin!!
    • A low cost artificial limb (Though developed for Thailand, now is being marketed world-wide. Further they have perfected the model of training the amputees fitted with artificial limbs to fit the limbs for new patients, thus obviating the need for high skilled technicians as in US)
  3. Stop thinking like an American:  Further he presented the following that could be eye openers to companies when they extend to emerging markets.
    • A project for low cost house ($US 300) which is building momentum through a web project (http://www.300house.com/)
    • How channels like ESPN could benefit when they drop the US eye-lens and stop using the same market segmentation as in US and figure out India-specific segments to better sell their services.
    • How companies like Kellog could benefit from understanding Indian way of consuming cereals with hot milk etc…
  4. Be in India and Be an Indian is the mantra for Global companies
    • Focusing on India and its consumer is the way forward.
    • Innovation is not value for money, but value for many
    • Globalization of ideas is the key–and  reverse innovation will help you do it. Innovation isn’t meant to be hugely capital intensive. It can come from meager budgets and poor countries. Rich countries, large budgets is old school thinking
    • Master innovation for Indian consumer and you will have a global winner
    • When the terrain is tough and the villain is on the run, Rajnikanth chose a horse to chase down a Mercedes Benz!! That is innovation at its best.
    • Finally, innovation should aim at addressing the inequality in the world through ultra-low cost, high quality and global products. Amen!

My observations

  1. This speaker’s mentor/idol C.K.Prahlad came up with a concept called “The bottom of the pyramid”, which is about how new markets can be found while productizing for poor people (shampoo sachets, cheap phone rates through pre-paid cards etc). Reverse innovation is one step forward–how can such innovation be extended globally
  2. If whatever works in India works globally, does it mean that a block buster like ”Magadheera” or “3 Idiots” can appeal to world wide audiences? Did Thai/Korean/Chinese movie companies cracked it already?

1-By Laksh, Books, Leadership, Management

‘I too had a dream’

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“I too had a dream” is an excellent memoir, of a nationalist entrepreneur, Dr.Verghese Kurien.
( Wikipedia article http://bit.ly/QrsWgr)

Here are some quotes picked up from the last chapters of the book, where he summarizes his ideas on leadership, management and his life in general.

  • “What is the primary job of an excellent manager? In my book, it is to bring in and groom the right people on the team. Once this is done, the manager must then groom the successor most appropriate for the institution”
  • “While integrity and loyalty are core values, there are other values too, which are a prerequisite to achieve success in any field. For example, the leader has to set a personal example and make others understand in what ways ‘change’ is going to be useful. I believe that professionals working in our organizations must have a clarity of thought combined with a passionate pursuit of mastery of their subject. I have always emphasized that large endeavors are only the sum of many small parts and, therefore we must keep in mind not just where we are going but how we are going to reach there successfully. I also believe that a person who does not have respect for time, and does not have a sense of timing, can achieve little.”
  • “As I never tire of saying, my colleagues did all the work and I collected all the awards.”
  • “I remember often explaining to Nirmala that it is terrible to have too little money because you will not even have enough to eat and appease your hunger. But it is far, far worse to have too much money because then you will surely get corrupt.”
  • “I may be old fashioned in my thinking but I have always believed that it is only when you get less than you are worth, that you can look for respect; if you are paid much more than you are worth you will get no respect.”
  • “Bureaucracies do not exist only in Governments. Tragically, most institutions given time and allowed to grow big, tend to get bureaucratized. When employees begin to believe that the institutions exist for them, rather than that they exist for the purpose and ideals for which the institution was built, then clearly that institution has mutated into a bureaucracy. The revolutionary in me would demand that such an institution be broken down unabashedly, and built again anew.”
Leadership, Strategy

Lunch with BS: Vineet Nayar

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“Nayar says all revolutions, social and in business, come out of dissatisfaction. “Gandhi, for instance, spent a humongous amount of time convincing people why they should be unhappy with the British Raj. So, the first step towards any change is to understand that the status quo is not good enough, creating positive dissatisfaction as I call it.” Creating dissatisfaction is not enough, you have to show a vision for tomorrow, too, and connect the dots of strategy, according to Nayar.

Well said, but can an organisation stay in a state of perennial unhappiness? Isn’t there a danger of rocking the boat too hard? “Suppose you’re standing on the ledge of a building on fire and you know the only way out is to jump, but you also have a 100 colleagues standing along with you. How do you convince them to jump? And you have only 30 seconds to do it. You cannot say the solution for us is to jump because you have not created the threat with the status quo. You have to say I assure you if we keep standing here we’ll die. So, in companies when leaders want change, they have to first reflect and then direct the conversation to what would happen if they maintain the status quo.”

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