Sunday, November 21, 2010

Killing an idea: The good, the bad and the ugly way

If you are serious about innovation, then killing an idea should be normal. And even if you feel, you don’t kill ideas, chances are high ideas are getting killed anyway by not allocating resources to them. So the action need not be that of commission (pulling the trigger) but could very well be that of omission (not supplying enough oxygen). Hence people serious about innovation activity don’t debate whether we should kill ideas or not. The real question is, “What is a good way to kill ideas?” In this article let’s look at the good, the bad and the ugly way to kill an idea.

The ugly: Alan Robinson and Dean Shroeder narrate this story of a lieutenant colonel in their book “Ideas are free”. In the mid 1960s, as the Vietnam War was intensifying, the lieutenant colonel put an idea into one of Pentagon’s suggestion box. His office produced a constant stream of reports for senior officers, all with the fame format – an executive summary, a table of contents, and a thick divider sheets with protruding alphabetically ordered tables to identify the various sections. The divider sheets came in standard packets of twenty six, one for each letter of the alphabet. Most reports had only 5 or 6 sections and hence only 5 or 6 dividers in each packet were used. Lieutenant colonel suggested that if one report used sections A through F, begin the next report with section G. He thought his idea would save the office several thousands of dollars every year. One day he was summoned to the office of his commanding officer.

“Is this yours?” the general asked.

“Yes, sir”

“Eat it”, the general said.

“Excuse me, sir?”

“Eat it. Now!” the general ordered. The lieutenant colonel stepped forward, took the paper from his superior, put it in his mouth, chewed it up and swallowed it. He was abruptly dismissed and nothing was ever said about it. Decades later, after that lieutenant colonel retired as army’s top generals, he still remembered the incident.

The bad: Dan Ariely is a professor of behavioural economics at Duke University and also at MIT and known more for his best-selling book “Predictably Irrational”. He narrates following incident during an interview at PurpleCar in July this year: Dan met with a group of 80 people around May-Jun 2010 from this big big software company based in Seattle. This group had been working in an incubator on some new ideas. They came up with this idea that they thought would revolutionize the computer industry. They met with the CEO a week before Dan met them and CEO told them that he’s burying the project. They had worked on it for two years and Dan felt he had never seen a more deflated group of 80 people in his life. It was bad way to just bluntly telling people that their idea is killed. The CEO did better than the army general but could do much better. How?

The good: Dan did something interesting. He asked the group, “What would you do if you were to kill a project and not deflate the project team?” Lots of ideas came up. What if the CEO allowed them to present their work? Not just the product but the thought process and ideology around it etc. and then say, “Look we have decided to cancel it but there is lots to learn from it.” Or let the team share working prototypes with people in the company and see what they feel about it (something similar actually happened with Google’s AdSense)

Perhaps Bill Packard of Hewlett-Packard (HP) understood some of this several decades ago. This is how David Hewlett recalls Bill’s “hat-wearing process” in “The HP Way”. Upon first being approached by a creative inventor with enthusiasm for a new idea, Bill immediately put on a hat called “enthusiasm”. He would listen, express excitement where appropriate and appreciation in general, while asking a few general and not too pointed questions. A few days later he would get back to inventor wearing “inquisitor” hat. This was a time for very pointed questions, a thorough probing of the idea, lots of give-and-take. Without a final decision, the session would be adjourned. Shortly thereafter, Bill would put on his “decision” hat and meet once again with the inventor and with appropriate logic and sensitivity, judgment was rendered. No wonder many HP folks remembered the method with admiration.

Saturday, November 13, 2010

Searching the source of "low-cost car" idea in India

“Don’t go looking for the source of a river” goes a saying in my mother tongue – Marathi. A BBC documentary does exactly that as it traces the source of river Ganges from Gangotri to Gomukh to a trickle up the snow peaked mountains. As the documentary shows the real source is usually far more obscure and mostly impossible to find. Perhaps the same principle is applicable to ideas. The closer you look at an idea, you start seeing some other idea(s) which was a source for this idea. In this article, I will try to do to the idea of “low-cost car in India” what BBC did to river Ganges.

Today low-cost car in India is synonymous with Tata Nano. From mid 80s to 90s, it was Maruti 800. In fact, Maruti 800 was used as a reference while designing Nano. Where did Maruti idea come from? R. C. Bhargava, Chairman of Maruti Udyog Limited (MUL), tells the history of the car in his book “The Maruti story”. It is the first detailed biography of a product developed for Indian market that I have come across. Where did Maruti idea come from? It leads us to a different Maruti.

In November 1970, the Cabinet decided to manufacture a small car in public sector and discussions were held with foreign car makers, including Renault, Ford and Nissan. However, the estimate of Rs. 57 crore as initial investment turned out to be too much for the time. Instead private entrepreneurs wanting to manufacture a low-cost car were talked to. Eleven letters of intent were issued, one of those receiving the LoI was Sanjay Gandhi. Out of the 11 LoI, only three were converted into industrial licenses. Apart from Sanjay Gandhi, the other two went to Manubhai Thakkar of Vadodara and Sunrise Auto Industries of Bangalore, perhaps non-serious players by design.

Ever since his return from Britain, Sanjay had been obsessed with the idea of making a small car. He along with Captain Tillu an instructor at Delhi Flying Club, set up a workshop in 1966 in Gulabi Bagh, a congested locality in north Delhi. The workshop had minimal equipment and two mechanics. Maruti Motors Limited (a private company) was registered in 4 June 1971. Later Sanjay acquired 297 acres of land for Maruti in Gurgaon for Rs. 35 lakh. A prototype of the car was demonstrated at the India International Trade Fair in 1972. Another prototype was sent for testing to the vehicle research department of defence ministry, which gave it the certificate of roadworthiness. The car was test driven in Jammu & Kashmir, Rajasthan, Haryana, Punjab and Uttar Pradesh. Sevety-three dealers were appointed and each had to pay a deposit. Commercial production never started.

It was an impossible proposition considering the need to manufacture and procure all the required components, including gearbox and engine, locally. Two things shifted the priorities away from the project: First, the national emergency which came into force in June 1975 and subsequently Janata Party came to power in Jan 1977. And second, the aircraft crash on 23 June 1980 that killed Sanjay Gandhi. Sanjay's unfinished dream acted as an emotional force for Indira Gandhi to push government to start a small car project called Maruti Udyog Limited incorporated on 24 Feb 1981. Was Sanjay's Maruti Motors the first low-cost car project in India?

In late 1950s government formed an Ad Hoc committee on the Automobile Industry under economist L. K. Jha to look into the possibility of manufacturing a low-cost passenger car. It was meant to cater to those whose monthly salary with below Rs. 1,000. The committee, dubbed the Cheap Car Committee, studied different models and collaborators and submitted a report in 1960 laying out the criteria that should decide the model. The committee received 24 proposals from various firms including Hindustan Aeronautics, Renault, Hindustan Motors, Premier Automobiles, Telco (now Tata Motors). However, the tenure of the committee was over before it could take any action.

Does it really matter where the source of an idea is? What matters a lot more is how much impact the idea eventually makes, just like river Ganges.