Monday, July 30, 2012

"Jugaad Innovation": A New Concept?

It’s difficult to be objective about a book that has a title similar to your own, and that reaches a completely opposite conclusion. But, in this review of Jugaad Innovation by Navi Radjou, Jaideep Prabhu and Simone Ahuja (Wiley/Random House India, 2012), I’ll try my best!

This book certainly engages the reader’s attention. It’s written well, with a typical business reader in mind, and makes its points forcefully. The broad theme is that the innovation process in multinational corporations (MNCs) has become too rigid and complex leading to huge costs of innovation and long delays in introducing new products and services. Given this, it’s no surprise that innovation has low success rates. Further, the large and growing demand is for low-priced, “value” products in emerging markets. Even customers in developed markets no longer want over-engineered, high price products because of prolonged economic downturns or a greater focus on sustainability.

So what should MNCs do? According to the authors, they should learn from the flexible and frugal innovators of the world (many of whom are from “emerging markets”). The authors propose six principles that would allow MNCs to embrace this (or, what the authors call “Jugaad innovation”): (1) seek opportunity in adversity; (2) do more with less; (3) think and act flexibly; (4) keep it simple; (5) include the margin; and (6) follow your heart.

Is this a New Problem?

It’s well established that as companies get larger, they become more structured and process-driven. In many companies, this results in bureaucratization and slow decision-making. As opposed to the nimbleness and agility of a typical start-up, a large corporation tends to look stodgy and slow. Routines that enhance predictability and efficiency become more important than change and innovation. Management scholars have been trying to address this problem for years!

The recognition of the need (and desire) of MNCs to be more flexible and adaptable is not new. Its more than 20 years since Sumantra Ghoshal and Christopher Bartlett did their pioneering work on Managing the Transnational. In this they pointed out that one of the key challenges before the MNC is balancing the needs of integration (for economies of scale and scope) with the needs of responsiveness (to local needs). Their solution to the problem was organizational in terms of complex, “transnational” matrix structures.

Another popular stream of work addressing a similar issue was Gary Hamel’s idea of “Bringing Silicon Valley Inside”: he proposed that large corporations make their innovation process more dynamic and responsive by simulating Silicon Valley within their organizations. Arguing that Silicon Valley’s success was due to the free flow of ideas, capital and talent, he called for democratizing innovation, providing multiple sources of capital, and removing constraints to the movement of people within large companies.

Several management trends over the years – reengineering, delayering, intrapreneurship, “lean thinking – all tried to address this problem in their own way. “Jugaad innovation” is the latest mantra in this quest!

What’s in a name?

My biggest problem with this book is not so much with the ideas, but with the name. To many of us in India, Jugaad is not a positive term (in fairness to the authors, they do mention this, but only in passing!). While it does represent ingenuity and frugality, it also represents a quick fix, crudeness, and getting around regulations and standards. Jugaad is usually not the romantic concept envisioned by Radjou, Prabhu and Ahuja. And Jugaad is not driven only by the ingenuity of those who practice it, but also by their lack of knowledge and expertise to do things differently.

To make Jugaad a positive term, the authors have had to enlarge its scope to include much more than the word normally represents, and ignore most of its negative connotations. In the process, “Jugaad innovation” embraces many of the contemporary ideas of innovation management including co-creation and open innovation. I am tempted to think that this is almost like the way Hinduism has sustained itself over centuries – by taking over challenging ideas and including them in its own fold (witness statues of Buddha as avatars of Vishnu in many Hindu temples!).

In their zeal to make “Jugaad innovation” all-encompassing, the authors have made some intriguing judgements. For example, in last week’s Economic Times, there was a graphic of “Jugaad Innovation” listing Indian innovations that symbolized the concept. Among these was the Tata Swach. While the Tata Swach had its origins in water filters rigged up to provide clean drinking water to people affected by the Bhuj earthquake, the final commercial version of the Swach is an elegant, well-engineered product that incorporates excellent design inputs, sustainability (rice husk is the raw material used for the filter) and modern technology (a nano-silver coating of the rice husk to enhance purity of the water). Yes, the Swach does have characteristics of frugality (though only to some extent – it’s still too expensive for many poor Indians!), and inclusiveness, but I would see it as an excellent example of how high quality engineering and design can transform an idea into a good consumer product. This is a far cry from what we conventionally see as Jugaad!

Clever Marketing

So, in effect, the Radjou, Prabhu & Ahuja idea of “Jugaad innovation” is a new concept. It includes some of the traditional notions of Jugaad as we know it, but has some additional attributes thrown in. This has made it a very marketable concept, and you have to hand it to the authors for a very successful introduction and launch. Starting with a series of blogposts on the HBR blogs site, over the last year there has been an effective build-up leading to the actual launch a few months ago.

While the book itself says that there are Jugaad innovators all over the world with their own local names, in India the authors have tended to refer to it as an Indian concept. In fact, in their recent article in the Economic Times, they write: “Jugaad offers a powerful way to solve not only India's major problems but also the world's. One might even argue that Jugaad will come to be seen as India's unique and enduring contribution to the world.” With our hunger for international recognition and acclaim, this makes the book and its ideas of greater interest to Indian policy-makers and the media!

I’ll return to a more detailed discussion of the book’s content in a subsequent post. Watch this space!

Monday, July 23, 2012

MOOCs re-visited: How are they different?

My post on MOOCs evoked several interesting responses, and I therefore return to this theme. A key question is what really differentiates MOOCs from a number of earlier experiments on web-based education? Another important question is what is required to make the learning opportunity offered by MOOCs more effective?

To answer these questions, I’ll start by looking at some of IIMB’s experiences in distance learning, and then return to the MOOC theme.

The IIMB Experience in Expanding Reach

Our existing academic programmes at IIM Bangalore (and most other institutions of advanced higher learning in India) are classroom-based and limited by physical constraints such as classroom capacity or pedagogical constraints (its difficult to conduct a case discussion effectively in a very large class).For long, one of our dreams has been to reach out effectively to larger audiences, but without diluting the quality of instruction.

In the last decade, we have tried out different experiments with varying degrees of success. From a pedagogic standpoint, the most “successful” experiment was a satellite classroom that we created in Chennai. This had a two-way video link with a classroom on campus in Bangalore, and we used an ISRO satellite to offer our Post Graduate Programme in Software Enterprise Management (PGSEM), a part-time MBA-equivalent course, to software professionals in Chennai. The students in the Chennai classroom got a classroom experience that was almost as good as being in the original classroom. Some classes were taught in the “opposite” direction – i.e. the physical class was held in Chennai, and the Bangalore students participated through video. The picture and sound quality were excellent, and the only issue was that the link would occasionally fail. Our colleague, Shankar Venkatagiri did a wonderful job in designing the system and making it work.

We have also used commercially available video-conferencing services such as those provided by Hughes and Reliance to create virtual classrooms for executive education programmes. In the latter, participants in multiple distant locations can attend the course by going to a local Reliance Webworld studio. This is again based on 2-way video technology. It is supplemented by the participants attending a part of the programme face-to-face on campus. Though this is conceptually similar to what we did in the PGSEM, the feedback here has been mixed. I sometimes think this is because the distant participants feel that the in-class participants are getting a better classroom experience.

However, these efforts resulted in just a marginal increase in our reach. None of them really enlarged the reach by an order of magnitude or more.

[Before all this, about a decade ago, we also tried to create our own web-based management education programme. That didn’t work out well. Faculty did not understand the medium (the web) well and struggled to adapt their content to the web. Our content development partner did not understand our domain well enough to convert our content into learner-friendly lessons. We gave up the effort after creating a few of the modules.]

New Technologies, New Options

With the improvement in video-streaming technologies, and the higher bandwidth available to most urban consumers, there is no longer a necessity to create separate web content, or to use dedicated communication channels to beam videos. Instead, videos can be used through a publicly-available medium like Youtube. Globally, the Khan Academy is a great example of this, and it has become very popular for providing engaging lessons for school and undergraduate college students. Within India, a collaborative effort of the IITs, mptel, provides video-based lessons on a broad variety of engineering subjects.

However, education is not just about having good access to professors through video. The learning process needs interaction and testing. So, even though the Massively Open Online Courses that I wrote about in my previous blog all use videos extensively, they do much more than that.

As Amit Kapoor wrote in response to my earlier blog, an MOOC is not as simple as video taping a traditional class and putting it online. To be effective, it has to include:

1. Awesome Facilitation - facilitation for learning and not a dry lecture mode!

2. Interesting and Interactive Content - Short videos + quiz + real-time assignments is how it is done at Udacity.

3. Engaged and Active Community - You need to create a community around the course. The course community is very active in Udacity through wiki and discussion forum - and good MOOCs provide a medium to enable this important peer-to-peer learning mode

4. Scalable and Responsive Context - The technology should be scalable.

The better MOOCs have a research-based learning philosophy that they embed in their offerings. For example, Coursera uses interactive exercises as they believe these enhance learning. Within their videos, at frequent intervals, the video stops, and students are asked to answer a simple question. This keeps students focused on the learning process. Coursera cites research that shows that even simple retrieval questions have pedagogical value. The Coursera platform often gives immediate feedback on a concept the student did not understand. Following the philosophy of mastery learning, they sometimes provide randomized versions of the same assignment, so that a student can re-study and re-attempt the homework. They cite research again to show that this improves learning outcomes by one standard deviation.

There is, of course, a technology angle to this as well. As Vijay Kumar Ivaturi, co-founder India Innovation Labs and ex-CTO, Wipro Technologies, wrote to me:

• High end platforms provide shared white board interaction across class rooms on net ( Single Instructor Multiple Classrooms model) and this is where it gets complicated. It is not very easy to provide two way HD video based white board interaction without doing some magic at a IP layer. Most of them demand leased line of 2MBPS for such an experience in HD Video. ( e.g. Elucido Networks)
• There are other solutions which provide an acceptable experience level on standard 100kbps throughput level without white board interaction. This is more towards Real time class over network and a video on demand library for later viewing by students. ( e.g. Aurus Networks which won Microsoft business challenge this year)

More difficult for Qualitative Subjects

Online learning has so far worked well for skills and for subjects that have a strong foundation and structure like Mathematics. It’s much more difficult to provide interactive learning opportunities on topics where questions don’t necessarily have a unique correct answer. This is a challenge we will have to face if we want to use online learning models such as MOOCs to teach the softer aspects of management.

Going Forward

So far, on-line learning and MOOCs have been used primarily as a complement to formal education programmes or for adult/non-formal learners seeking to gain additional knowledge for themselves. Where MOOCs are used in formal education, it’s often through a complex process (see figure below).

In India, we need to move much more aggressively to use MOOCs to offer formal education programmes. That’s imperative if we want to enhance access, which is clearly an important priority.

As is well known, many challenges exist. As Vinay Tamboli wrote to me, there is a significant last mile challenge i.e.

1. Bandwidth availability in towns

2. Infrastructure (PC / device , instructor / helper, assembly place)

But there are some interesting possible solutions as well. Vinay Tamboli suggests that:

One of the solutions could be to build learning centers similar to book libraries at various locations. The library would have books, table, chairs, lights, etc.; these centers will have PC / device, large screen, satellite dish connections, sitting arrangements, helper etc.

Another option could be to involve companies like Tata who have satellite TV service, open a dedicated education channel which will be based on MOOC.

Arun Rajamani Sivaramakrishnan points to some other challenges:

1. Cost and availability of devices, PC’s etc in the rural and semi-urban set up

2. Availability of content in local languages– cost and complexity of managing this.

3. Continuing need to have an instructor to help translate

A lot of exciting challenges, but tremendous scope for innovation!

Wednesday, July 18, 2012

Can we Leverage MOOCs to transform Indian Higher Education?

In my column in Edu Tech magazine in December 2011, I argued that India’s most important challenge in higher education is using technology to bridge the trade-off between quality and scale. Developments in the last six months suggest that the technology to make this happen is now available, but India doesn’t seem to be a part of this movement. I am referring to the emergence of “Massively Open Online Courses” or MOOCs that make the best professors accessible to learners all over the world. Top schools including Stanford and MIT have been quick to jump on the MOOC bandwagon, and alliances are being rapidly created. To start with, most of these efforts are separate and distinct from formal enrolment at the university, but this promises to change fast as universities contemplate blended models of online and classroom instruction.

Will MOOCs be a disruptive innovation?

In his classic The Innovators’ Dilemma, Clayton Christensen conceptualized the difference between disruptive and sustaining technologies/innovations. Disruptive innovation often starts off as far inferior to the current offerings and is not of interest to the current users of a technology. Existing suppliers of the product or technology often don’t embrace such disruptions because they are not of interest to their current customers. But, the innovation may address an altogether new set of users.

Such disruptive technologies often become better at a rapid pace. In the process, they often reach a point where they overtake the existing or sustaining technologies.

MOOCs seem to have all the characteristics of a disruptive innovation. They don’t meet the needs of the current customers of higher education (university students), but as they improve and the problems (revenue model, evaluation, feedback, certification) associated with them are resolved, they could become a significant mode of providing university education as well.

Several universities have embraced MOOCs by following Christensen’s prescription of creating separate organizational units that pioneer this kind of learning. The challenge will be to integrate them effectively with conventional learning models. This could involve wrenching change processes in academe. At least in the past, academia has not been the most conducive place for such changes!

Relevance of MOOCs to India

MOOCs are tremendously relevant to India where we have faculty and infrastructure shortages, and are desperately trying to transform our large reservoir of young people into a well-trained, productive resource. I only fear that the inadequacy of high quality, low-cost, broadband internet access will come in the way of our leveraging MOOCs. I am not totally clear as to the compatibility of MOOCs with mobile handsets and networks, but since MOOCs depend heavily on video, it is clear that it will be accessible on the mobile handset only on high speed 3G and 4G networks, and on higher priced handsets. The low cost tablets on sale could come in handy, but again they will need high speed internet access if they are to provide a good user experience.

Existing MOOC models seem to be driven exclusively from the US, and are based on English language content. We should embrace this technology quickly, and move to leverage it rapidly in our higher education system. Let’s hope that technology visionaries like Mr Pitroda and Mr Nilekani, and our IT entrepreneurs can take the lead on this.

Tuesday, July 10, 2012

Building Vibrant Professional Societies: Lessons from the AIB

Professional societies potentially play an important role in an innovation system. They not only help provide forums like conferences and journals for knowledge validation and sharing, they advance and sustain a field by supporting the training of new generations of scholars. And, from time to time, they can get involved in larger issues of public policy that are critical to the larger innovation ecosystem.

India has a number of professional societies. These include three science academies, the Indian National Academy of Engineering (INAE), and discipline-based bodies like the Indian Institute of Chemical Engineers (IICE). I have no idea what the total number of such professional societies is.

It’s been good to see these professional societies get more involved in issues that concern the nation as a whole. In recent years, the Science academies have been highlighting the need to improve the quality and quantity of science education in India. The INAE, as part of its Silver Jubilee, is organizing a special conference on “Towards a Better Innovation Ecosystem” later this year. The IICE had a session focusing on industrial innovation in its Chemcon 2011 conference at Bangalore last December.

But, from my experience, sustaining the core professional/academic agenda of these societies and advancing quality is not an easy task, at least in fields related to management. I have been involved with the Strategic Management Forum of India, a professional body related to the field of Strategic Management for several years, and we have struggled to enhance participation and quality.

It was therefore a pleasure and a useful learning experience to attend the 54th annual conference of the Academy of International Business (AIB) at Washington DC recently. The AIB, as its name suggests, is an association of scholars who work in the fields of international business and international management. The AIB has about 3,500 members. It was originally dominated by people from North America, but Asia is today the fastest growing region of the AIB.

A few things impressed me about the AIB conference:

• Though the conference had about 1000 participants, the average quality of papers was high.

• Participation of thought leaders in the International Business field was high, and they were all engaged in the conference. When our student Srivardhini presented her paper, the audience included John Cantwell (editor of JIBS, the best regarded journal in International Business), Yves Doz (Insead, a leading thinking on IB Strategy) and Ulf Andersson (Copenhagen Business School, another leading scholar in the field) among others. She got valuable feedback from some of these (and other) experienced scholars.

• With many of the editors of top IB journals present, participants got quick feedback on the publication potential of their papers.

• There were some excellent panels that gave a historical perspective of the field, and identified future directions for research. For example, in one of the panel sessions, one of the presenters (Myles Shaver, University of Minnesota) gave a very useful overview of the present status of “Entry Mode choice” research, one of the prominent sub-fields in the IB spectrum. This speaker gave a clear picture of which research tracks had very little potential because of diminishing returns as also which tracks might result in publishable research. Such advice would be invaluable to a young researcher in the field.

• In another panel held in memory of John Stopford (co-author of the legendary Managing the Multinational Enterprise), speakers such as Alan Rugman, Lou Wells and Julian Birkinshaw talked about critical issues such as balancing relevance, practical application and rigour in research. They discussed the importance of context in IB research. I found this panel gave an excellent historical perspective on research on MNEs, a perspective that would be difficult to gain otherwise.

• There were excellent sessions on IB curricula, new pedagogy, and how to use international field visits for effective IB education.

While other good conferences might have similar characteristics, the AIB conference seemed to be just the right size to have critical mass without becoming too unwieldy and fragmented, and seemed to have the right structure (mix of paper sessions, panels, commemoration events, and informal gatherings) that would be invaluable to doctoral students working in the field of IB. There is much we need to learn from these enduring professional societies about how to build professional societies in India.

Tuesday, July 3, 2012

Revisiting Multinational R&D in India

I am writing this blog on the sidelines of the Academy of International Business Annual Meeting at Washington DC. Many of the leading scholars of IB including Lou Wells, Alan Rugman, Yves Doz, and John Cantwell are attending this conference, as are 1,000+ delegates from all over the world.

A panel that Charles Dhanaraj and I put together titled “Emerging Trends in Multinational R&D in Emerging Markets” gave me the opportunity to step back and look at what’s happening in multinational R&D in India.

How Significant is MNE R&D in Emerging Markets?

But, first how important or how significant is the R&D that multinational enterprises (MNEs) do in emerging markets? That seems to depend on the country of origin of the MNE. In a presentation at the AIB conference, Heather Berry of George Washington University mentioned that the range is wide – Japanese MNEs spend only about 4% of their R&D budget in emerging market countries, while at the other extreme for Sweden it is in excess of 40%. For American MNEs, that number is about 11%. MNC R&D in emerging markets has been on the radar of researchers since the 2005 World Investment Report of UNCTAD recognized the growing importance of such R&D.

MNE R&D in India

MNE R&D in India is not new though its nature and scope has changed considerably over the years. One of the first major MNE R&D centres was set up by Hindustan Lever Ltd (an affiliate of Unilever) in the early 1960s, and this was, for many years, the showcase of MNE R&D in India. HLL’s India R&D was tightly linked to the company’s business in India, and supported the business in an era when there were several constraints placed on imports of technology.

But, the major boom in MNE R&D in India happened only after the first Information and Communication Technology R&D facility of Texas Instruments was set up in 1984-85. Other US MNCs like HP and Motorola followed soon thereafter.

Some broad trends in MNE R&D in India:

  • While the exact number of MNE R&D centers in India is not known, recent estimates indicate that the number is somewhere in the 800-900 range. Zinnov, a consulting firm focusing on the R&D globalization space, estimates that 851 MNEs have R&D Centers in India. Nasscom estimates that 750 MNE R&D centres employ about 400,000 scientists and engineers in India.
  • MNE R&D is predominantly in ICT. As Rakesh Basant and Sunil Mani point out in their recent paper, of the top 59 foreign company awardees of US patents from India in 2006-10, as many as 52 are from ICT.
  • MNE R&D in India was motivated by considerations of cost and access to talent (“resource-seeking” as it’s called in the academic literature), and at least to start with was intended to supplement work being done in the HQ and other developed country R&D sites. Some of this is changing now, but more about this later.
  • MNEs are becoming more prominent in the Indian R&D landscape. According to Basant and Mani, their share of industrial R&D (based on spending data) may be as much as 20%. But, their contribution to recognizable outputs of R&D is more substantial – as I showed in From Jugaad to Systematic Innovation, MNEs accounted for more than 50% of the US patents awarded to inventors from India between 1994 and 2008.
  • Indian R&D Centers are slowly becoming more important the R&D networks of the MNEs themselves. Though among the top 49 companies, the median proportion of patents coming from India is ~2%, for a small set of companies the number is much higher. For IT security solution provider Symantec, this proportion is close to 50% [Basant & Mani, 2012].
  • It’s broadly known that MNE R&D Centres have limited Links with the local innovation ecosystem but strong ties within their own MNE R&D network. This has been confirmed by recent work by Mrinalini, Pradosh Nath & Sandhya at NISTADS [Mrinalini, N., Nath, P., & G.D. Sandhya (2012) “R&D Strategies of MNCs in India: Isolation or Integration?,” Economic & Political Weekly, Vol. 47, No. 13, March 13, 73-78.]
 The Changing Landscape

As I have been documenting in my posts on this blog, the nature of MNE R&D in India has been changing in the last few years.

IBM India Research is a good example of this trend. While the Research Center continues to do work on software and analytics R&D that will help the company globally, with the growth of the company’s service business in India the Center also works on projects to support the services business (e.g. automation of parts of the recruitment process through text analytics), and achieve excellence in service delivery. A third prong is to work on innovative solutions to national problems in India such as bridging the digital divide through a spoken web that mimics the internet.

Thus, we see four different types of MNE R&D emerging:

Type 1: Using local talent and skills to solve problems/enhance products for global market

Type 2: Using local talent and skills to enhance efficiency of local operations

Type 3: Using local talent and skills to develop new products/services/components to achieve excellence in local business and build new markets for local business. The results of this are likely to be transferable to other countries as well, even back to developed markets (so-called “reverse innovation”).

Type 4: Using local talent and skills to address national problems. Quasi-CSR, but may have broader business impact.

Note that types 2 and 3 will be difficult to pursue if India is not a major market for the company or if an India-centric business has not evolved over time. That’s what we see in a company like Intuit where the business is primarily US-focused. Intuit’s India Development Centre is largely focused on types 1 and 4 as I documented in my earlier post on Intuit.

It will be interesting to see how the relative proportion of these different types of R&D evolves over time.