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Tatas learn to innovate

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The has instituted a number of mechanisms to encourage its large to innovate.

Scientists in Tata Consultancy Services’ (TCS) material sciences laboratory in Pune had discovered some time back that rice husk ash has properties that can purify water. But it did not take the learning forward. The technology was brought out of the backburner when tsunami struck the southern coast in 2004. quickly made filters with rice husk ash, put it in a shell and distributed the impromptu water filter in the affected areas. It was called Sujal, and was at the time little else than an act of corporate social responsibility.

Was there a commercial opportunity here, the Tata Group began to debate about three years ago. The filter held back 85 per cent impurities but did not kill bacteria. The challenge was to make it remove all impurities. Then scientists in Tata Chemicals’ Innovation Centre, also in Pune, said if silver nanotechnology was used with rice husk ash, the filters could stop bacteria as well. Titan Industries, the watch and jewelry company, said with its precision engineering skills it could make the filter switch off on its own once it reaches the end of its life. Thus was born Swach, the world’s cheapest water purifier which costs less than Rs 1,000. It’s not given free because that would mean no ownership. And Tata Chemicals, which will sell the purifiers, says it will make money on each machine in spite of the low price tag.

Self-discovery
The Tata Group, which has interests in such varied areas as automobile, information technology, steel, chemicals, telephony, watches, jewelry, medicine, fertilisers, retail, hotels, real estate, tea and coffee, has embarked on a journey of self-discovery. A conscious effort has been made to nurture innovative ideas and create the right culture for innovation. “We are trying to see how we can increase the attention paid to innovation, principally by creating a better atmosphere for innovation in our companies,” says Tata Sons Executive Director who heads the Tata Group Innovation Forum (TGIF), a 16-member think tank set up in 2007. “There is no fatwa or firman from the chairman (Ratan Tata) but he has said that he would like his companies to be more innovative.”

The Tata Group is no stranger to innovation. In 1907, Tata Steel became the first Indian company to raise capital in India. JRD Tata set up Tata Airlines in 1932 and TCS in 1968. Tata Motors made India’s first indigenous light commercial vehicle, the Tata 407, in 1986 and the first indigenous car, the Indica, 13 years later. Ginger budget hotels came up in 2002, small truck Ace in 2005, super-computer Eka in 2005 and the world’s smallest car, the Nano, in 2008.

Then there has been innovation within companies. Tata Chemicals Managing Director says his company, for instance, has run on innovation from day one. “The company had converted processes that ran on sweet water to sea water. Waste of soda ash was used to make cement. Iodised salt is a movement that Tata Chemicals started. Finally, it got promulgated as a law by the government,” says he. A premium has always been attached to newness in the group. Rallis, for instance, has run a Freshness Index for some years — the percentage of products in its portfolio less than three years old. Yet the need was felt to raise the bar. And this could happen only when creative ideas within the group were nurtured and taken to their logical conclusion.

Not that the Tata Group had closed itself to change. When the economy first opened up in the early 1990s, the group realised that its business processes were weak. So, in 1995, it instituted the Tata Business Excellence Model. Any company that uses the Tata brand name or logo has to abide by the model. Under this, companies are given scores out of 1,000 every year. “Companies like Tata Steel,” says Tata Quality Management Services (a division of Tata Sons) CEO Sunil Sinha, “started with 200 some 15 years ago but are now at around 700. Around 100 companies have signed up for this.” The acquisition of Corus and Jaguar-Land Rover has brought the average score down, Sinha adds.

Democratising innovation
Still, it was felt that innovation within the group was sporadic, though it was there in its DNA. “If only the Tata Group knew what it knows,” executives across Tata companies can these days be heard saying. “Innovation needs a different culture and mindset.

We had to accelerate and create urgency for the democratisation of innovation. This had become more important with the Tata Group going global and the Indian economy getting globalised,” says Sinha.

In 2006, an InnoMission (Innovation Mission) of 10 Tata Group CEOs went to the United States and saw innovation at work in companies like 3M, Microsoft, Intel, Hewlett-Packard and Raytheon. The next year, another mission was launched, this time in the other direction, to Japanese companies like Fuji, Olympus, Toshiba, Nissan and Hitachi. A third mission went to Cambridge to study the eco-system for innovation there. The first result was the formation of which was mandated to act as a catalyst for innovation. It meets every two months (in a different location so that local companies can participate) to take stock of the situation and remove hurdles.

The next step was to recognise and reward innovation within the group: InnoVista. These awards are regional as well as national. Ratan Tata gives the national awards once a year. There are two categories here: Promising Innovations and The Leading Edge which is the top honour. An independent jury judges the entries. From 101 from 31 companies in 2006, entries went up to 117 from 39 companies in 2007, 289 from 47 companies in 2008 and 1,552 from 62 companies in 2009. The jump in 2009 had a lot to do with the successful launch of the Nano. That, says Gopalakrishnan, has fired the imagination of the people in the Tata Group. Winners in 2009 included two proposals from Tata Steel: One, how to use nanotechnology to cool hot metal with lesser water; and two, how to harvest hydrogen from the blast furnace. The ideas could soon see the light of day.

There is a third category of awards in InnoVista: Dare to Try. This unconventional award is given to those ideas which did not work out and is meant to encourage intelligent failures. The idea is to remove the shame of failure from trying out something new at work. The trick seems to be working. From just 12 in 2007, entries rose to 17 in 2008 and 113 in 2009. There is a careful diagnosis of why the idea didn’t work, and the learning is used in subsequent innovations. Analysis done by TGIF shows the biggest reason for failure is technological barriers (50 per cent cases), followed by non-acceptance by the user (26 per cent) and commercial non-viability (24 per cent.)

The 2009 entries in this category included a proposal from Tetley to create a flavour in a pill or a capsule that could be put in any drink. But the idea failed because of technology limitations and a lack of buy-in. There was also a proposal from Taco for a plastic door for the Nano. But the concept was unacceptable to Tata Motors, though a successful prototype was ready. Other projects were Titan’s idea to build a wristwatch with a keyless entry system for automobiles, Tata Teleservices’ offer to locate calling booths in Mumbai public buses, and TCS’ proposal for a biometric voting system.

Lifting inhibitions
While this is aimed to lift the inhibitions that failure can cause, TGIF realised that several employees are afraid to question conventional wisdom. Thus in the works is a series of seminars called Courage to be Curious and Question. “The Tata Management Training Centre is working on it. This is to tell people how to ask questions without being intrusive and offensive. We will do the pilot in the next two or three months,” says Gopalakrishnan.

Before any effort to boost innovation, it is essential to know the state of innovation in the company. The treatment will emanate from this. After much deliberation, TGIF has adopted the Innometer developed by Julian Birkinshaw of the London Business School. It measures the innovation process and culture on a scale of zero to five, and can be run on the whole company, a unit or even a small team. So far, about ten Tata Group companies have gone through it. The scores, of course, are confidential. “We are medium to upper-medium. We are not on top. It’s a 5-point scale, and I haven’t seen a 4.9 score. But I have seen scores between 3.6 and 4.3,” says Gopalakrishnan.

Another barrier to innovation was that the various Tata companies wouldn’t talk to each other. There was always scope for collaboration, but seldom was it exploited. This was because large group companies like Tata Steel, Tata Chemicals and Indian Hotels Company were run like independent fiefdoms. Ratan Tata, when he became chairman in the early 1990s, eased out powerful chieftains like Rusi Modi, Ajit Kerkar and Darbari Seth. A cohesive group identity was forged, but collaboration still did not happen. So, TGIF decided to set up InnoClusters — groups of companies that could work together in different areas. There are four such clusters: Nanotechnology, plastics & composites, information technology and water. At the moment, the biggest cluster, of ten companies, is around nanotechnology. “The Swach water purifier is a good example where TCS, Tata Chemicals and Titan came together,” says Gopalakrishnan. “This is a far cry from the days of the satrapies.”

The unfinished task is to take innovation down the Tata Group. To do that, TGIF has come out with a web-based open innovation initiative called InnoVerse. Employees can post a problem on the intranet, to which anybody can provide a solution. People can bet on ideas with the 1,000 karma points they get. If the idea is accepted, your pile of points goes up. More than that, this will show which solutions are popular. A pilot is being run at the moment. Can all 300,000-odd Tata Group employees access it? “Not all, but most can,” says Tata Quality Management Services Vice-president Ravi Arora. “You must remember that a large chunk of these employees (almost 40 per cent) are from TCS, who are all net-savvy.”

So, has the Tata Group changed? It is, says Gopalakrishnan, still early days. “It’s not as if there is a storm gathering; it’s just some rain here and there.” But whatever change has happened makes him happy. An employee of Tata Chemicals, for example, has come out with microbes which help plants grow in saline soil. The company has run a pilot on 25 acres, and recently sent brinjal grown there to senior group functionaries in baskets. Mukundan says it could go commercial one day. “I don’t know the innovator’s name. And that is the ideal situation, a state of paradise for me,” says Gopalakrishnan.

MEDICINE MAN

Rashmi Barbhaiya“Advinus’ competencies in drug discovery and Tata Chemicals’ in nanotechnology can be used for unmet therapeutic needs”
Rashmi Barbhaiya
Managing Director & CEO, Advinus Therapeutics

Rashmi Barbhaiya had shocked the world when he announced at a press conference in Delhi some seven years ago that he could discover and develop a new drug from scratch for as little as $80 million. He was in charge of Ranbaxy’s research arm, and his bold claim was picked up by drug companies the world across. The budgets for new drugs had exceeded $1 billion and the pipeline had begun to run dry. Soon thereafter, Barbhaiya left Ranbaxy and floated Advinus (Advantage India, the US) which is now a Tata Group company. The claim remained unfulfilled.

Now you can sense that Barbhaiya is on to something significant. “If we are lucky, we will have some breakthroughs soon,” says he. Much of this is because of TGIF. It brought together the capabilities of Advinus and the Tata Chemicals Innovation Centre. “We realised that our competencies in drug discovery and theirs in nano-technology can be used for unmet therapeutic needs,” says Barbhaiya. The collaboration, which started a few months ago, focuses on how to improve oral absorption of drugs, and how to go for targeted drug delivery.

That’s not all. Barbhaiya’s scientists have started to use the super-computer Eka (owned by the Computational Research Laboratories of Tata Sons) for drug discovery — design and structure of drugs, targets, screening of known chemistry and so on. “Cost and time are the obvious benefits,” says Barbhaiya. “But it also compresses the iterations and reiterations that are required in drug discovery, and improves accuracy.” The Eka, mind you, is the only private sector super-computer in the world and was built for as little as $30 million in a time span of just six weeks.

More is in the works. Tata Tea has joined hands with Advinus for new products. Barbhaiya is tightlipped, but says it isn’t neutraceuticals. What he is effusive about is the role played by TGIF. “Innovation requires a vision for calculated risks and an appetite for long-gestation business,” says he. That TGIF head R Gopalakrishnan is the chairman of Advinus has obviously helped.

CHEMICAL TATA

Murali Sastry“Currently, Indian companies import prebiotics. Ours will not only be cheaper but also, in some cases, more productive”
Murali Sastry
Chief Scientific Officer, Tata Chemicals

Five years ago, Murali Sastry left the National Chemical Laboratory, Pune, and joined Tata Chemicals. The company was setting up its Innovation Centre in the city and had selected Sastry to run it. He was told that his job would be to research new opportunities like fine chemicals and advanced materials, and existing businesses — salt, fertilisers, soda ash et al — would take not more than 20 per cent of his attention.

Tata Chemicals has kept its word: Sastry and his team of 40 scientists indeed work on a string of projects which are unrelated to the company’s bread & butter products. Thus, his team of molecular biologists has developed a new range of prebiotics — molecules that boost the activity of the good bacteria in the intestines and kill the bad ones. Several companies have seen the molecules, and want to use them in their products. “At the moment, they have to import prebiotics. Ours will not only be cheaper but also, in some cases, more productive,” says Sastry who is the chief scientific officer of Tata Chemicals. These, he is convinced, could be the next big thing after probiotics.

Then there is the process to extract ethanol from sweet sorghum juice and bagasse (a byproduct when sugarcane is crushed), a solid catalyst for converting vegetable oil into biodiesel so that water usage is cut down, extraction of natural sugar from plants for diabetics — the list is long. In between, Sastry also collaborates with other group companies like Advinus for drug delivery research, and Tata Tea for packing micronutrients in drinks.

In fact, Tata Tea has begun to test market a green tea called Tion in Chennai, which it has developed along with the Tata Chemicals Innovation Centre. “Much of what we do is of huge relevance for other (Tata) Group companies,” says Sastry with quiet pride.

TECH REINVENTERS

Ananth Krishnan“I will be happy if one out of ten innovations reaches commercial fruition”
Ananth Krishnan
Vice-president & Chief Technology Officer, TCS

Gone are the days when the Indian farmer, emaciated and unlettered, looked always at the skies for succour. Today, he is hungry for information — when to sow the crop, how to sort out the weeds or pests, where to sell, when to harvest etc — and is willing to pay for it. mKrishi, a project initiated by TCS, seeks to bring together the farmer and those who can provide answers to his problems (government departments, non-governmental organisations, institutions and so on) through the mobile phone.

So far, TCS has built a database on five crops and pilots are being run in five states. Once rice and wheat, the largest crops grown in the country, get added, it could go for a national rollout. The collaborators here are TCS, Rallis and Tata Chemicals for their touch points with farmers and Tata Teleservices, the mobile services operator. “The commercial model is still being worked out. This is the kind of business that benefits from scale,” says TCS Vice-president & Chief Technology Officer Ananth Krishnan.

The average age of TCS employees is only 27 — the ideal situation to build a culture of creative dissatisfaction. TCS, in fact, was the first to work towards a culture of innovation. For almost five years now it has run an internet-based programme for open innovation. For the young workforce, popular social networking sites have been integrated into it. It has over 700 scientists in its laboratories and has given awards to young innovators for some years now. As a part of its co-invention network, TCS had reached out to about 1,000 companies; about 40 of them have agreed to participate. So, what is the success rate of innovation at TCS? “I will be happy if one out of ten innovations reaches commercial fruition,” says Krishnan.

One such innovation is in the field of wireless internet. Here, TCS and Tata Teleservices are working together. Krishnan is reluctant to give the details, though he indicates it could be a low-priced, mass-market product. Will it be a cheaper version of the Photon? You could call it the Nano effect at work.

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