Innovativeness to Innoventiveness

During the last couple of years, as the world has gone through turbulence having almost faced the worst recession of all times, the consumers have become wary of investments. The plastic-card happy consumer is embarking on an era of thrift. Today, as the consumers are saving more, they also want more value for every penny spent. To add to these woes the depleting material resource base across the world and increasing global population (expected to touch 9 billion by 2050) has only meant that the cost of living will increase significantly in the future. It would thus take a walloping effort from organizations and policy makers across the world to repudiate the Malthusian theory.

One such solution that could address the concerns raised above has been captured by an eminent Indian thinker, R.A Mashelkar. According to him what’s going to be crucial for the 21st century is Gandhian Engineering; which is all about getting “More for Less for More” (M4L4M) – more value for less cost for more and more people. This is possible only through a change in mindset of organizations across the world where they focus on innovation. However, this innovation has to be more of disruptive and less of incremental.

The last few grueling months however, have ensured that people across the world have realized the potential and importance of innovation for a sustainable growth. The following chart acknowledges the fact that there has been a credible increase in the amount of interest shown in innovation during the worst 2 years (2008-09) in recent times.

Incidentally, the last 2-3 years have also been the time when social scientists and policy-makers world-over have noticed a valuable Indian contribution to innovation and indeed have taken a serious note of that. The Indian contribution has been more on the lines of “low-cost innovation” punctuated by the idea of M4L4M, more famously termed as Jugaad, and is seen as the latest export to the developed world. Although the use of the term Jugaad remains controversial (the word originates in Hindi and has a negative connotation), it has become synonymous with low-cost innovation. As we can see from the graph below, across the world, the reference to the term “Jugaad” has been a very recent phenomenon and has had a major influence emanating from India.

The primary focus today is about organizations adopting the low-cost innovative ideas from India. However, I feel this new concept of Jugaad or low-cost innovation should be handled deftly and shouldn’t be seen as a blind man’s navigation device. The innovations arising out of the Indian heartland, although being very-very low cost ideas, are many a times the result of a necessity and thus are purely a matter of chance.

Hence, while organizations today are ready to adopt ‘Jugaad’, there are two more things that they should be ready to adopt: learning from low – cost inventions in India at one end and on the other high-cost inventions from the west.

Accordingly, what needs to be done by the organizations is not only to be prepared to replicate the successful innovative business models but also to have teams which have an eye for inventions from India. It becomes imperative to trap the local inventions (most of such inventive ideas from India/emerging economies don’t have a large outreach as they only fit the local bill) and tweak them to ensure a more global outreach. This would need organizations and policy makers to be ‘INNOVENTIVE’ rather than being simply ‘Innovative’ or ‘Inventive’.

As said earlier, being absolutely driven by low-cost solutions for people and having low-cost innovation business models would be a perfunctory approach. Business and policy makers should appreciate the necessity to also invest significantly in research to have the High-cost innovations. Although the probability of the realization of potential from high-cost business models is as good as the low-cost ones, the former model has the capacity to change the world in case of a success and examples in this area shall be: the emergence of Google or the stable of Apple products. These two organizations invest heavily to create a new market place for themselves, without compromising on their sustainability because of increasing costs.

A prime example of an organization in India which has adopted the three measures of ‘low-cost innovation’, ‘low-cost invention’ and ‘high-cost invention’, all under a single roof is the House of the Tata’s. Their ‘low-cost innovation’ comes in the shape of Tata Nano where they innovated the existing delivery model to produce the cheapest family car in the world. Their ‘low-cost invention’ comes as ‘Tata-Swach’ – a water purifier at less than $20 – where they invented a new technology and used naturally available resources to purify water. And finally, their ‘high-end inventions’ come from their foreign acquisitions of Jaguar-Land Rover and Corus.

How e-markets affect the supply chain

E-markets have been established in many industries as a sourcing option for buyers. Research  has implied that the e-markets have substitutional effect on the traditional supply chain, yet in many situations, e-markets are used by buyers as a benchmarking tool in negotiations with traditional suppliers.  The late 1990s and early 2000s have seen the rise and fall of many e‑marketplaces. Despite being hyped for their ability to benefit firms through dynamic pricing as well as lower transaction costs, most e‑markets failed, never reaching their expected potential.

Many suppliers long-term relationships with buyers, were reluctant to participate in e‑markets fearing that their products may be standardised and they may have to compete on price. On the buyer’s side, e‑markets introduced new suppliers, which for buyers created a greater risk of acquiring defective or inferior goods but prices would become cheaper also. Moreover, the decision of buying into a business-to-business (B2B) e‑market is often made by the procurement department, the functionality of being threatened by the e‑market. The decreasing bargaining power of sellers and increasing power of buyers led to a shift in dynamics. Those products were identified which have a strategic value to the firm, were directly sourced from suppliers, and the new mantra is focus on non-contractable investments in such relationships. All standardised products are now preferably sourced through e-markets (indirect sourcing).

E-markets have also affected the buyer supplier relationships. The firms should focus on building long term relationships (partnerships) and mutual value creation through investments of non-contractable nature, to be made by both the partners. But these partnerships should be dependent mostly on items having high volume and for those with high criticality. The firms today should focus on vendor development programs also. The rest of the requirements should be indirectly sourced through e-markets.

Harnessing the power of e-markets is the mantra of the day. No firm can survive without it. The problem is joining without understanding the dynamics of e-markets, the firm may be exposed to a high risk.

How to meet impossible business requirements

Business requirements often seem an impossible target for most of us when they are chalked out. What creates a difference in the successful completion of the same is how one plans out the fulfillment of the same. Planning is the crucial part which many professionals fail to pay sufficient importance to.

Spend your time chalking out actionable plans: Its crucial for your success.

3 Reasons Why You Must Use Facebook to Promote Your Business

It’s Free Advertisement

Facebook is a free website for world-wide social networking. It’s the second most popular website on the internet with more than 100 million users. If you have a business or product that you want to promote to the public, Facebook serves as the perfect, no cost outlet for advertising. You can fill your profile page with information about your business opportunity and allow your friends to discover the benefits of your services for themselves.

In addition to your profile page, you can advertise your opportunity via your Facebook wall, groups, fan pages, notes and videos. Although, friend requests, Facebook messages, chats and your friends’ walls are other outlets that can be used for promotion, these methods can destroy your credibility as a professional marketer. As an effective marketer, you should avoid unsuccessful and annoying promotional strategies that invade the personal space of your prospect. Present yourself as a real person rather than a salesperson who is only interested in pitching their business opportunity.

You Can Easily Reach Your Target Audience

Although Facebook is a free network, they have established a pay-per-click advertising system. Facebook advertising allows you to target your prospects according to sex, age, location, language and personal interests. Finding your target audience is ideal because these are the people who need what you have to offer. Yes, you will pay a price for attracting your prospects, but this Facebook feature allows you to narrow down your search to such a specific group of people that you should compare this investment to buying bait for fishing.

It Allows You to Build and Maintain Relationships

Realistically, everyone who adds you as a Facebook friend will not endorse your business opportunity. However, this doesn’t mean that it’s time to remove them from your friends list. Take time to develop a genuine relationship with your potential prospects. If you establish a friendship, they will be more inclined to trust you and value your opinion. Although they may not be interested in what you have to offer right now, they might change their mind in the future; and when that happens, they know exactly where to find you.

Philip Kotler on using IT for Marketing

Today, the dynamics of marketing are changing as rapidly than most marketers are comfortable about. Just a few days ago, the focus shifted from a transactional viewpoint to relationship marketing. Today the dynamics are again slowly shifting from relationship marketing to database marketing. Check out what the marketing guru Philip Kotler of Kellogg School of Management says about how understanding this change in dynamics will be crucial for senior managers of MNCs.

How IT projects are made

A small comic strip about how IT projects are developed. There develops a gap in the expected product / solution from the client’s side and from the development team’s understanding of the requirements. There is always a gap in communication which creates such problems in the industry.

Moral of the cartoon: Communication is crucial for success.