Anthony Ferrier, CEO of Culturevate, has observed eight changes in the corporate practice of innovation in the US during 2015. What can we in India learn from his report?
1. Indian companies can improve on the culture front
Few organizations manage to create and sustain a culture of innovation, despite my claim that it is relatively easy to do so. Ferrier says that American firms made significant progress toward that goal in 2015. In India, our aversion to risk, our focus on short-term performance, and our strong allegiance to tradition have kept us from achieving much here. Tata and Future Group are shining examples. I hope that more organizations will join them in 2016.
2. Indian companies have a great opportunity in start-ups
Again, the largest Indian companies, such as Reliance Industries, are leading the way, allocating capital to promising new ventures. The venture capital mentality–expect to lose money on 80% of your investments but score big on 10%–does not sit well with risk-averse managers. In my view, the massive growth potential and the technology transfer and cultural boost that come with start-ups make this opportunity too good to pass up.
3. Indian companies avoided problems by not adopting open innovation
Ferrier notes that American companies have discovered how complicated it can be to manage open innovation. Indian firms, who largely avoided this type of initiative, were spared the costly learning. At the same time, some types of open innovation have positive cost-benefit ratios (infographic).
4. Indian companies have stuck with incremental innovation, for better or worse
Ferrier writes that US companies are pulling back somewhat from disruptive innovation and focusing on incremental improvements. The Americans now see that disruptive innovation is harder to achieve and much less certain. Most Indian companies have simply never pursued disruptive innovation. My advice is to have a portfolio of innovation projects to drive growth consistently with occasional spikes from extraordinary discoveries.