Benchmark data from INSSAN Excellence Contest in Suggestion Scheme – 2011

Idea management systems exist in the organizations at different levels – process improvements (kaizen), new product development (NPD), new business development (NBD), Intellectual property management (IPR) etc. Indian National Suggestion Scheme Association (INSSAN) has been benchmarking the suggestion schemes in primarily manufacturing sector for the past 20 years. The latest bulletin (Sept-Oct 2011) presents the benchmarking data from 27 organizations for financial year 2010-11 – Automotive (6), Engineering (6), Fertilizers (7), Associated (6) and Steel (2). Mr. Sudhir Date has presented the highlights in the bulletin (pg 14).

As discussed in an earlier article, I try to view the innovation metric from following three perspectives: (1) idea pipeline (number of ideas & participation of employees) (2) idea velocity (rate at which ideas move forward) (3) batting average (net potential impact in savings / revenue). Let's apply this lens to the INSSAN 2011 data.

Idea pipeline: Ideas per person per year is an excellent proxy for idea pipeline. For the past few years TVS Motor consistently stands out for ideas per person per year metric. On an average, a TVS employee gives a suggestion almost every week (46 in a year) as compared to India average of once in 2 months (6.5). India average has been hovering around 5-6 for the past 5 years. Participation percentage varies from 22% in Fertilizer sector to 90+% in Steel and Auto sectors (see figure below). Steel and Auto sectors were the first in India to embrace suggestion schemes. So this is not surprising. More the participation, more sustainable is your process.

Idea velocity: Unfortunately we don't have a good data on this. Lowest lead time for evaluation of suggestion is definitely an indicator and Maruti’s performance of 2 days is commendable. However, we don't have average data on this and we can guess why.

Batting average: Suggestion schemes measures the impact primarily through savings. Savings per accepted suggestion is a good indicator. India average of Rs.19,681 makes a good case for running the suggestion schemes.

On an average 70% of the suggested ideas are implemented and that looks pretty healthy.

Following table shows the data sector-wise.

Let’s hope we get similar data for other types of idea management systems in India as well.

Related articles:

Idea management systems in India: Benchmark data from INSSAN 2005-2008

INSSAN 20^th Annual convention: where shop-floor innovators are heroes

INSSAN convention: sources & types of innovations and a good practice

“Where good ideas come from” by Steven Johnson

“Where do good ideas come from?” This question is typically approached from two directions. One: What kinds of people create good ideas? Two: What kinds of environments create good ideas? Steven Johnson’s book “Where good ideas come from” approaches the question from the second direction and identifies seven patterns that recur in fertile environments. His TED talk gives a great overview. Let me articulate three of the seven patterns below:

1. Adjacent possible: In the year following the 2004 Indian Ocean Tsunami, the Indonesian city of Meulaboh received eight incubators from a range of international relief organizations. By late 2008, when an MIT professor name Timothy Prestero visited the hospital, all eight were out of order – due to power surges, tropical humidity and lack of expertise to repair them. Prestero is an expert on robust designs and the founder of Design that Matters organization. He realized that designing an incubator in developing country wasn’t just about creating something that worked. It was also a matter of something that could be maintained by local people. Rosen, a Boston doctor, observed that small towns in Indonesia were able to repair the Toyota 4Runners. So Rosen approached Prestero with the idea: What if you made an incubator out of automobile parts? That is how NeoNurture incubator was born. It was doubly efficient because it tapped both the local supply of parts and the local knowledge of automobile repair.

Johnson observes that good ideas are like the NeoNurture device – they are inevitably constrained by the parts and skills that surround them. That is why encouraging prototyping is so important because it validates if we know what kind of spare parts to look for and whether we have the skills to put them together. Charles Babbage designed a programmable computer in 1837 but couldn't build a prototype in his lifetime (died: 1871) because the spare parts were simply not available. It wasn’t an “adjacent possible” idea for the time. Do you encourage prototyping? Do you make spare parts easily accessible?

2. Slow hunch: Charles Darwin wrote about his moment of epiphany on September 28, 1838 when he conceptualized the famous theory of natural selection. However, more than a century later, when a psychologist Howard Gruber went through the copious notes that Darwin had kept he realized that Darwin had been working on the key concepts from 1837 onwards. Sir Tim Berners-Lee designed the first prototype for sharing information with hypertext in 1980 at CERN. However, it is only in 1989 that he submitted the proposal for building world-wide web. The first web-site was build at CERN and put online on August 6, 1991.

Good ideas are more like slow hunches. They often mature by stealth, in small steps and fade into view. Does your organization encourage working on hunches?

3. Exaptation: What is common between the two innovations: Printing press and Jaipur foot? Both took a set of mature technologies in one domain, combined them to solve an unrelated problem. Exaptation is a trait developed in an organism optimized for a specific use but then it gets hijacked for completely different function. Johannes Gutenberg used the screw press technology used for making wines and made modifications to the metallurgy behind the movable type system to create a printing press. In case of Jaipur Foot, Dr. Promod Sethi and Ram Chandra a doctor-sculptor team looked at the retreading of a truck tire with vulcanized rubber in a roadside shop and applied it to create prosthetic legs – what is popularly known today as Jaipur foot.

Does your organization create a space for the "doctors" & "sculptors" to come together? Or does your organization encourage Chandras to visit new places like “cycle shops”?

I highly recommend this book for anyone interested in finding out “Where good ideas come from?” I am sure you will get a fresh perspective.

Building creative confidence: Insights from Sukumar Rajagopal of Cognizant

When you ask the question, “How many of you are creative?” to either students or employees in India, very few, perhaps only 20%-30% of people typically raise hands. Why is that? There is a school of thought which says that it is primarily a confidence problem. Ability to be able to speak up your idea in a meeting with managers / senior managers without fear of failure / ridicule is what is called “creative confidence”. Mr. Sukumar Rajagopal, Senior Vice President, Chief Information Officer and Head of Innovation at Cognizant, shared his insights on how to build creative confidence based on his experience of running a managed innovation program at Cognizant. He was one of the guest speakers at our workshop on innovation management at IIMB last month. How do you build creative confidence? Let’s look at a few of the insights Sukumar shared.

If you want to build creative confidence, breakthrough innovation is not a good place to focus

Organizations need all kinds of innovations: breakthrough, enhancing, sustaining etc. However, if you want more people to feel confident about how they can contribute to innovation, then breakthrough innovation is not the right place to focus. Why? First, breakthrough innovations are rare, they don’t happen very often. Second, breakthrough ideas create cognitive dissonance and hence early reactions are usually negative (see a study from Cornell). Robert Goddard, the father of modern rocketry was ridiculed in New York Times in 1921, “Professor Goddard does not know the relation of action to reaction and seems to lack the basic knowledge ladled out daily in high schools”. Note that this does not mean that breakthrough innovation is not important.

Each of us is empowered to implement ideas within our own area of work

When people suggest ideas related to areas where they don’t have any control, then most of them get ignored. This leads to frustration. Lack of empowerment to experiment is a major hurdle in moving ideas forward. Hence, ideas within your own area of work are excellent candidates where the employees can experiment without asking for anybody’s permission. Perhaps one can fail and still continue without worry of any punishment.

When small ideas are implemented, the idea authors build credibility

If you want people take your big idea seriously, you need credibility. How do you build credibility? One way to do it is by implementing small ideas first. If you say that over the last year I have implemented 7 ideas, chances are high people might take your potentially big idea seriously.

Direct creative energies at problems that have stakeholders & sponsors

When we go to people and say, “Give me all your ideas”, we will be inundated with thousands of ideas like “Cafeteria food should be like this” or “Give all of us laptops”. These ideas don’t go anywhere unless they address problems that have stakeholders and sponsors. And when nobody looks at your ideas, the idea authors will get frustrated. Hence it is better to launch idea campaigns with sponsored challenges and make sure that you will implement top 5 / 10 ideas.

Sukumar derives a lot inspiration from Toyota’s kaizen, a system through which employees implement millions of ideas every year. Percent of people who have submitted one or more ideas last year is a good indicator of the creative confidence in the organization.

Related article:

40 years, 20 million ideas: The Toyota suggestion system

Gyanesh Pandey tells Husk Power Systems story of Bijli from Bhoosa

I got an opportunity to listen to Gyanesh Pandey, CEO of Husk Power Systems in IIM Bangalore last month. I don’t know why but I find the HPS story of producing Bijli from Bhoosa (electricity from husk) fascinating. And listening to the story from Gyanesh increased my fascination even further. Based out of Bihar, HPS is doing to eradicate needless darkness in rural India what Aravind Eye Hospital has done for eradicating needless blindness. It has so far electrified 450 villages / hamlets (mostly off-grid) in Bihar & UP. I have tried to condense the narrative below by keeping Gyanesh’s language as much as possible. You can find the fuller version of the story here.

I grew up hating my place (in North Bihar). Nothing made sense to me. Every single thing in the village costs you a little more, quality is poorer and people are lethargic. During holidays, I reluctantly came home from the boarding school. I tried to find reasons for not coming home. I could feel the depression all around.

I ended up becoming an engineer and going to the US for higher studies. During my PhD I came home to attend my sister’s wedding. On one of those evenings with the extended family members I was telling them stories of America. Naively I ended up saying, “It’s hard to tell you guys – You can’t even dream of how it is (in the US)”. I didn’t mean to offend anyone. However, an old guy in the room said, “For us, it will always be a dream. Because people like you will always maintain a distance from us.” I don’t know what he meant, but his words resonated somehow somewhere with me. This was 2001.

I automatically assumed that something is not being done because technology for doing it doesn’t exist. This was a big mistake. For the next 5 years, I partnered with Ratnesh Yahav, my best friend from childhood and experimented with several leading edge technologies like polymer solar cells, fuel cells, micro-tidal energy and finally Jatropha based bio-diesel. All of them failed. By 2006 I was back to Bihar from the US and badly depressed after the Jatropha project failure.

At this point, I got an appointment to see a director at the Renewable Energy Development Agency. He asked me, “How are you going to electrify villages?” I said, “I don’t know. I will do something”. He hit a buzzer and called the peon. “Call the guy who just left the room” Then he told me, “Talk to him. He sells gasifiers. Why don’t you use something like that?” I knew biomass gasification was an old technology developed by Hitler for wartime. People don’t use it anymore. The dealer told me that there were 40 gasifiers being used in Bihar. I said, “Wow!” He thought I am an NRI and he was trying to sell gasifiers to me.

The gasifiers were running on rice husk. 40% diesel and 60% gas – what is called dual-fuel mode. I came home after talking to him and worked out the math. I realized that 40% diesel model would not be economical. I started thinking, “Why can’t we use 100% gas?”

I started by finding out all I could on gasification based power generation. I found a paper from IISc and it said you can’t run an engine only on producer gas. Gasification is where you burn a biomass that generates a certain mixture of carbon monoxide and nitrogen and that mixture is combustible and becomes fuel. IIT Delhi had done a project. However, I couldn’t find a single instance where anybody said, “It has worked”. I tried to talk to a professor and he wasn’t even willing to talk to me. I just knew that all these people are wrong. I had no reason why.

At this point a scientist from MNRE, Mr. S K Singh encouraged me. Singh helped getting me hooked with a small engine maker from Agra. This was in June 2007. By August 15, 2007 we had a working system. We had electrified our first village. Soon after this we put out 2 systems electrifying 5 villages. By then we were out of money.

How did Gyanesh-Ratnesh manage to raise money? How does HPS business model work? How did they do the pricing? You can find the full story here.

In photo: Prof. Abhoy Ojha of IIMB (left) along with Gyanesh Pandey.

Managing innovation: journey of Tanishq, jewelry division of Titan

I got an opportunity to listen to Mr. L. R. Natarajan (LRN), head of innovation council at Titan and Chief Manufacturing Officer of Tanishq, Titan’s jewelry division. He was one of the guest speakers at our workshop on innovation management at IIM Bangalore. The first thing you notice about LRN is the passion he carries for building a culture of innovation. After listening to the seven year journey LRN presented, most of us felt, “There is a lot more we can do in my organization”. What kinds of innovation management practices are followed at Tanishq? Here is a short summary.

“What’s new” campaign (2004): The journey at Tanishq began in 2004 where each of the 14 manufacturing departments was given a structured white board. Each team was supposed to write “What’s new” they are attempting on the whiteboard given to them. Competitive spirit was created by defining a review process and attaching rewards. This simple and effective process is still active after seven years of its launch.

Dreaming workshop & HOD fund (2006): In 2006, Titan had a workshop called “future shock” in which the MD asked 600 managers to dream about “Where do you see Titan 5 years down the road?” More than 130 new business ideas were generated. Through a selection process they were narrowed down to 2 new brands to be launched: Goldplus and Eyeplus.

“HOD fund” was initiated after observing that purchase of any capital item goes through a long chain of approvals – Sr. Manager, Deputy GM, GM, VP, COO, Corporate finance, Corp purchase & finally MD. By then the person who initiated the process loses interest. HOD fund created a shorter route for innovative ideas. Each Head of the Dept (HOD) was given a budget of upto Rs. 1 Lakh which he can approve himself.

Innovation school of management (2008): Between 2004 and 2008, many ideas got implemented. However, a closer look revealed that ideas had come from only 10% of the employees. Innovation school of management was started to involve every employee in this journey. A six month course was created and a written test & viva were conducted to select the first batch of 30 participants. For the first 3 days, the participants are taught about what, why and tools and techniques on how to think creatively. Then they were given a challenge to work on. If the inventory is 1 crore the challenge could be “How can we manage with 10 lakh inventory?” All HODs are trained mentors and they mentor the participants. Each participant is given 6 hrs per week to work on the challenge. There is a review once a month. At the end of the course, the MD hands over the certificates. The goal is to have all the employees as trained innovators by 2014-15. So far 187 out of 400 employees in the factory have been certified through the school.

Currently innovation group in Tanishq has 9 full-time members with 1 division manager, 3 managers and 5 executives.

3 success stories: (out of several LRN presented)

1.      Diamond setting: The process for preparing the casting mould was improved so that a highly skilled job of diamond setting becomes easier. In place of 100 to 150 stones a karigar is now setting 1500 stones every day. This process improvement idea has been patented.

2.      Diamond bagging: Diamond bagging is a process of starting with a work order, picking the right set of diamonds from hundred different varieties, putting it in a bag and giving it to the production to put it in the necklace. The idea of automating this process came from the theme that was launched in 2007: “Simplify and automate”. After about 4 years of working closely with the machine building division, a robotic arm was created that automated diamond bagging. This may be first time diamond bagging got automated in the world.

3.      Gold out of stone: Hard silicon carbide crucibles were lying around the factory. People knew that these might contain gold. However, people didn’t know what to do. One day, Rajsekhar, one of the operators got a road-roller from his neighbor and crushed the crucibles. About four and a half kilos of gold was recovered.

Beyond jugaad: A summary of current practices and participant takeaways in managing innovation

Three of us (Prof. Rishikesha T. Krishnan, Prof. S. Rajeev and I) facilitated a three day Executive Development Program at IIM Bangalore last month titled “Going beyond jugaad: Building a systematic innovation capability”. 22 executives from 12 organizations participated in the workshop. On the third & last day, one representative from each organization presented their current practices for managing innovation as well as areas they would like to improve upon based on the learning at the program. Here is an attempt to summarize their perspective (not meant to be exhaustive and limited by what I captured in my notes).

Before we look at how different organizations are managing innovation in India, it makes sense to see participant and company profiles. The 12 companies represented following sectors: Aircraft manufacturing (India center), Automotive manufacturing, Consulting, India centers of high-tech products, IT services, IT enabled services (BPO) & Media (leading FM radio channel). Titles of the executives varied from CTO, DGM Innovation cell, VP New business / Marketing, Group Manager, Sr. Development Manager, Mobile Architect, Technical Fellow, Senior Staff Engineer etc. All the participants were very serious and active players in the innovation initiatives in their respective organizations.

Let me classify their perspectives into 3 key areas: idea management, buzz creation and learning & development.

1. Idea management: Almost all the participating organizations had a system in place for managing ideas. What varied was the scope of the innovation. In some organizations there was a bias for the IP (patent) management. In some cases the global process for big ideas was very active. However, the contribution from India center was low. In some places the system was active only in some part of the organization and in a few places the existing approach was primarily top-down.

Key takeaways: Encourage small ideas, implement bottom-up approach, create a challenge book (problem focus), make the measurement system more robust, improve the idea velocity, use cross functional teams. A couple of executives said their focus would be large impact idea creation using strategy models.

2. Buzz creation: Many organizations had events such as sponsored challenge or bright idea campaign to generate ideas and buzz around innovation. In some cases these events generated several hundred ideas every year. Garage forums encourage prototyping, Tech fair creates a platform for technical paper presentation, Inspire series invites external speakers, Wall of innovation displays innovators, Quarterly newsletter raises awareness on innovations inside and outside the organization.

Key takeaways: Almost all executives felt that they need to improve the participation level. Some said they need to improve the reward and recognition system.

3. Learning & development: For educating employees on innovation, organizations conduct idea generation workshops using methodologies such as design thinking, encourage informal communities for knowledge sharing, sponsor MTech/PhD and introduce innovation during company induction program.

Key takeways: More awareness building, Spot new trends in a structured manner, Inculcate right brain thinking.

12 organizations is a small sample. However, we hope that the seriousness demonstrated by the executives spreads in their organizations and beyond. Let’s build a culture of innovation systematically!

Innovation dashboard: 4 indicators of idea velocity

Last year I presented a simple innovation dashboard with 4 parameters: pipeline, prototypes, portfolio and participation. What do these parameters measure?

• Pipeline: How many ideas do we generate?
• Prototypes: At what rate do ideas move forward?
• Portfolio: What is the total potential impact?
• Participation: Is the innovation activity likely to sustain?

A few months back I wrote about innovation pipeline and how CEOs are using it for strategic decisions. In this article

I want to focus on idea velocity – the rate at which ideas move forward. What are the different indicators of idea velocity? Let’s look at 4 such indicators below.

1. Responsiveness: How fast does the system respond to an idea submitted? In places like Boardroom Inc, a Connecticut publisher, ideas get evaluated in weekly team meeting. Many small ideas can be implemented within the team and don’t need any approval of higher authority. In Toyota, it works in a monthly cycle and uses hierarchical approval system. Small ideas get evaluated and awarded locally. In any process that takes more than a month to respond to the idea author, it is a cause of concern. In a social network with a voting system, the feedback can start very quickly.

2. Prototypes: First prototype could be a paper sketch (used by Tata Nano team), a skit depicting the usage scenario or a computer simulation model. What matters is how fast does the idea go from a concept to a prototype? And then from the first to the second and so on. First AdSense prototype was built in a few hours by Paul Buchheit. Amy Radin, Chief Innovation Officer of Citigroup, looks at: getting x number of pilots in market by y date. Google says, it performed 20,000 experiments in 2010 to improve its search algorithm and finally took 500 ideas live.

3. Champions: How many ideas have a champion? Champions are people with clout. They can push your idea through the resistance faced within the organization or outside. You are lucky when the idea champion is the group chairman (like Ratan Tata). However, more often he is likely to be a senior manager like David Patrick at IBM. Sometimes, your customer could also become your champion. For example, Lego involved selected advanced users in co-designing & championing its Mindstorm NXT.

4. Dedicated team: Any not-so-small idea can run only so far as a side activity. It needs a dedicated team, even though it could be just 3-4 people to begin with. Dedicated team is an indicator of the seriousness and attention from the management. For example, Tesco India has a problem solving track where a cross-functional team attempts to solve a chronic problem of the businesses. Rigor and rhythm of innovation reviews play an important role in making sure that selected ideas get appropriate resources.

I am sure there are more or better indicators you may be using. Your input will really help me get a better view of this metric.