The Hindu Business Line : Beyond benchmarking

A RECENT ADVERTISEMENT claiming exceptional water-saving properties of a popular detergent brings into focus the need to look at locally relevant, Third World innovation with new eyes. While poorer countries have traditionally borrowed systems, structures and products wholesale from the West, it is time to re-think, if not reverse, the process for the huge emerging markets of Africa, Latin America and Asia. The compulsions of selling low-cost, energy-efficient and small-size products apply to more than two-thirds of mankind. Thus, innovation in India is transferable to Brazil or Indonesia and vice versa. Perceptive multinationals have recognised this, and may well hold lessons for Indian industry as it plans to go global. When the country's market was protected and small, Indian CEOs gave low priority to local research and development. Innovation was rare and patents few. Today, competition is about being simultaneously innovative and relevant to the customer. Technology and knowledge are marketable, and customers, dealers, and employees can move more or less at will. What distinguishes one organisation from another must, by definition, be created within and not copied.

Benchmarking, a much-favoured buzzword, measures us against what someone else has achieved and can only lead to more of the same, perhaps a little faster, cheaper or more convenient, within the same industry. Seldom does breakthrough innovation come without original research, inspired by a different way of sensing the future customer. A big step forward, beyond benchmarking, is a different business model altogether. Dell (logistics and manufacturing), Nike (outsourcing and organisation), Southwest Airlines (pricing, cost management and positioning), Virgin Airlines (product concept and pricing) are among the most quoted cases in management. In India, too, many examples have been brought to the world's notice such as Amul dairy, Arvind Eye Hospital, Mumbai's dabbawallahs, microfinance organisations, women's Self-Help Groups, the Nirma phenomenon and the sachet shampoo.

Intellectual property can extend beyond the product — to packaging, positioning, retailing, pricing and the structuring of the firm itself. Competing on an altogether new business model is often the only choice — though fraught with risk — left to the small player in, or a late entrant to, any established category. Some experiments will fail and may prove costly. De-risking and promoting such experimentation is the challenge before the CEO, who must also tackle the insular, conventional wisdom within the business. Innovative structuring of a business is likely only if inconvenient questions are encouraged, and employees challenge the sacred cows. If we but suspended this mental censorship, we might well learn many things from completely dissimilar industries and adapt the ideas, with necessary changes in practice. Most firms today face the competitive issues that airlines, banks and hotels have always encountered. How do we escape sameness and yet retain relevance? Wise managers would do well to apply creative ways of looking at concepts from entirely different industries, and apply some metaphorical thinking rather than copy practices directly.

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