Innovation for organisational growth

Friday, 30 November 2012 00:01 -     - {{hitsCtrl.values.hits}}

  •  Forget the fears, be innovative, challenge the unknown and be wonderfully weird, says industry at Employers' forum

By Cheranka Mendis

Definitions for innovation are varied. While some could say that invention refers to new concepts or products derived from individual ideas or from scientific research, innovation itself is the commercialisation of the invention for the benefit of the consumer. Some would just describe invention as something new – a new idea, method or device.

While the definition is left to the interpretations of an individual, both studies and practical application has shown that fostering innovation leads to multiple benefits for individuals, companies and invariably the country. Past experiences have shown that by allowing innovation to take place in a community, productivity levels increasing on a business platform and on a national scale resulting in an increase in the GDP.

To discuss the hows and whys of inculcating and innovation based culture in Sri Lanka, speakers of varied industries on Wednesday gathered at Waters Edge at the Employers’ Symposium on ‘Harnessing Innovation for Organisational Sustainability’ organised by The Employers’ Federation of Ceylon.

 Fostering an environment for innovation

For WNS Holdings Managing Director Dushan Soza innovation is all about the process. Diving deep in to the subjects of innovation involved in the process and nurturing an environment for people to innovate, Soza drew examples from the region to explain that, for the country to rise up from its present state; more time must be created for people to innovate.

Statistics show Japan, Korea and Singapore to have worked more than 2000 man hours per annum during the 1970s to 2010 which has resulted in the successful state, the countries are in today. “Without hard work you cannot do anything and this must be first put into perspective. If you do not work hard you cannot innovate.”

Soza noted that in Sri Lanka, approximately 1,796 man hours are put into work per year of which the productive hours are close to 1,680. The other countries are still putting in close to 2,000 hours which shows a significant difference between those nations and Sri Lanka.

“We need to put the hours in,” he said. A night shift culture must be brought in which would increase the productive hours of the people.

Soza expressed: “It is paramount that we as a nation look at putting the man hours in. That is innovation by itself – creating a second shift. Create the hours for people to work.” This would also increase GDP per capita of the nation. From US$ 5900 in 1960 Japan was able to come up to US$ 19,000 per capita – a 220% increase.

The ‘one country’ culture which has worked well for Japan should be replicated here creating an environment for people to work and innovate. “These countries have created a culture and working environment to innovate and that is how the GDPs have grown up.”

Japan brought in quality management systems such as lean methodology to capture the Western markets through a process change in the way they worked. After inventing products, the country deep-dived into the process and fine-tuned it which is what most companies are looking for and where Sri Lanka can get in. Six Sigma methodology was later used which is used globally today where it looks at variations and not the average. A combination of the two methodologies known as Lean Sigma is used today to drive forward businesses through innovation and quality management.

All this can also happen in Sri Lanka if a proper base is identified and developed. Standards must be brought in as, without proper compliance and regulations such as the ISO certifications in place, the country cannot go for innovation, Soza said.

At WNS using tools such as FUSION and Brainwave, the employees are encouraged to innovate and provide solutions and operational efficiencies for the company. “Do not throw away your ideas. Use them, get it Six Sigma certified and get ahead of the curve. Training is however needed to deep-dive and has innovation.”

Creating a platform for innovation, the company has introduced several programs such as ‘WiNCUBATE’ a first of its kind initiative that offers entrepreneurial opportunities to those working at WNS to start off viable ideas. A sum of US$ 275,000 is awarded to employees with viable new ideas to get started which helps in staff retention. Other similar programs are Value Innovative Program (VIP), Brainwave, FUSION where all programs are taken and replaced with active processes and verticals.

“All these are transitional tool kits. For real value we need to bring in technology. We need to enable with the right tools and solutions, re-engineer with Six Sigma and Lean, optimise with WNS tools, automate with in-house tools and control with a focus on business metrics and a tighter compliance regime,” Soza said.

Listing out metrics to measure organisations ability to foster innovation he listed the ability to conduct lean training, staff coverage, proof of success, effectiveness of implemented programs, and R&R.

To foster innovation, complete support from management must be given while incentives for innovation. No negativity on failed ideas, awareness, training, and a supportive middle management is essential for an organisation.

Rekindling the DNA of innovation

Heading Lanka Harness Pvt. Ltd., which manufacturers impact detecting sensor harness for automobile airbags and seat belts for exports, CEO Rohan Pallewatte acknowledged that his was the first Sri Lankan company to enter the international market with 1 PPM quality products. This means, when a million components are manufactured, only one will be tolerated as a reject.

“When I wanted to start many told me that with the present ethics of the country, the venture will not be a possibility. I was convinced of the contrary. I wanted to rekindle the DNA of a country that has reports of great inventors in history,” Pallewatte said.

“We must do something that others are not doing. That is innovation. We take the concept of innovation loosely and say ‘think differently.” While that is the starting point, an environment that allows free flow of ideas must also be created. “When you try to do something different, people will ridicule you or argue with you; but then in the end you win.”

Need for the correct mindset

Agreeing with Soza, 99X Technology CEO Mano Sekaram noted that innovation is not an instant thing, rather a process that businesses need to deliver faster, better and efficient services to customers. Innovation must be a strategic drive, he said; and to leapfrog, develop or survive it must be backed by a clear goal. Noting that he brought down the cycle time of sales in his company to three months through innovative thinking, Sekaram noted that for innovation to happen in an organisation, a culture of openness must be created which drives its staff to challenge everything and appreciate new thinking rather than being stuck in particular roles.

Bringing his expertise in to the conversation PIM Director Prof. Uditha Liyanage noted that innovation for his is in essence another psychic. “It is all about what happens in the mind.” Liyanage noted that there are four mindsets to a person, of which three are harmful for innovation which includes negative mindsets and zero mindset while the positive is the mindset that wants to do new things. “This is what you need to foster,” he said.

However, the question lies in the fact if innovation is urgent to a business. “It is important, yes, but is it urgent. If it isn’t seen as something urgent then it will not get done,” Liyanage said. “The right mindset and a sense of urgency are vital for innovation.”

Changing mindset from compliance to commitment

Speaking on harnessing innovation as a new HR capacity in changing mindsets, Management Wise (Pte) Ltd. Chairman Ong Teong Wan noted that a cascading innovative tone from the top is essential for an organisation.

For a macro organisation staying ahead of the S-Curve is important and for that a shifting paradigm in value in orientation, strategies, structure and systems is vital, he said. For micro operations staying ahead with productivity is key placing output over inputs with a shifting paradigm in man, methods, material and machines. On an individual level HR capability of managing for commitment not compliance, a business within a business and innovation is the way forward.

Taking the Dabbawallas of Mumbai who carry the Tiffin boxes for 175,000 people a day as an example, Wan noted that to evolve with time and to survive, the system should be utilised in a new and innovative manner.

“The dabbawallas have existed for 125 years growing at a 5-10% rate annually. There are some 5,000 dabbawallas in the system, delivering 175,000-200,000 meals a day within an hour. Will the business be sustainable when people increase consumption of fast food outlets? What can be done is change the content (currently food) and uses the system to be utilised for another cause.”

To sustain, an innovative thinking process, operational productivity and an ‘I can and I will’ attitude and commitment must be in place. The planning and controlling cycle of continuous improvement should include a plan, action, measurement to assess the work in progress and the evaluation in a company, Wan said. “There has to be a good appraisal to measure the work and employees should be paid for their performance and not for the number of years in service.”

To assess the competitive differentiation in a business operation, the organisation must look at its speed to market, product design and development, understanding of customers, competitive pricing and customer service. Business costs must also be identified along with customer satisfaction and problem areas. “An integrated management system is essential. The strategy execution is the differentiation factor for the business. Strategies needs to be implemented through policies, processes, structure functionaries and systems. Strategic focus, target setting, performance reviewing and annual performance appraisal will all have a role to play in employee performance.”On measuring and improving productivity Wan noted that factors to look out for is quantity, time taken, quality, cost incurred and human impact and reaction.

From circular driven to creativity driven

Speaking on empowerment as opposed to circular-led implementation, Moratuwa University Consultant Prof. Ajith De Alwis noted that Sri Lanka needs compliance to move forward. “Circulars are top driven directives that can kill creativity. There are 1.3 million Government workers and if all of them are following a single idea, it would kill creativity. This situation must change,” De Alwis said.

Noting that circulars to him, equals weapons of mass destruction he stated that organisations must enable creativity and encourage people to think. “Private companies can be flexible and nurture this.” While the country has the capacity, and education and knowledge level, what would work well is the right attitude, he said.

Cultural values for growth

Triad Ltd. Joint MD Varuni Amunugama acknowledged that the key asset that has driven her business to success is the ‘Api’ factor or the family/people culture in the organisation. Wanting to differentiate themselves from the others in the industry, the three who formed Triad looked in to the culture of the country and found the uniqueness lies with the family/extended family culture in the country.

“This is what is special about us. We wanted to grow so this is what we took into account and today everyone who works both in advertising and in the conglomerates have embraced the concept of ‘Api,’” Amunugama said. She noted that the company does not have a HR team as she believes it disrupts the concept of family.

Keeping your cool and leading a team

Captain Cool in the cricket field former Sri Lanka Cricket Captain now serving as a MP, Arjuna Ranatunga agreeing with Amunugama expressed that creating a sense of pride within a team is the best way to success. Noting that he wasn’t as ‘cool’ as everyone believed while playing, he explored the role of a leader stating that as a leader he did not want to show it to the team his distress and create panic within the group. Starting at a young age as a cricketer, he stated that he saw the attitude of his seniors who ignored the voices of the younger members, celebrated at a fail of another as it gave them an opportunity to play and played an individual game.

“I wanted to change this,” Ranatunga said. “You must understand your team and approach them in different ways. I got my team to talk, weighed their suggestions and remarks and got close to the team. You must give them chances to explore and if they fail, you must be there to protect them. Knowing that, the team will give you 101%.”

Ranatunga said: “The 13 that won the World Cup was not the best cricketers but they were the best for the win. They wanted to keep the flag going. You need to get the team right and make sure they all dive towards the same goal.”

Role of HR function in the innovation journey

With the importance of innovation for companies to grow and develop now established, Commercial Bank Chairman Dinesh Weerakkody noted that an organisation’s Human Resource (HR) team has a vital role to play in pushing forth innovation and new thinking within a company.

Taking athletes and Olympians as an example, he noted that HR needs to create a similar sense of pride and commitment to the organisation as an Olympian has. “Olympians invest over 10,000 hours in improving themselves. They have a sense of pride in the sport and of the country. This is what HR needs to create within the organisation,” Weerakkody said.

“Leaders learn by doing new things and by learning from others. Leadership research says learning agility is the largest predictor of long term success. Athletes are great learners. Innovation and improvement is about the smallest simple things. Great sprinters are highly analytical about all kinds of little things, their start, their strengths, their footwear, training and nutrition – this drives the transformation.”

He noted that many opine that HR has no role to play in innovation. Quoting statistics gathered at a management conference in Bangalore he noted that 42% said that HR has no role to play in innovation, 27% said not sure, 31% said they do. Reasons given explored areas of HR not understanding how the business makes money, inflexible compensation structures, no process to capture ideas, no clout with CEO, and technologically backwards, etc.

“For me, HR is the single most important ingredient in the innovation formula. The role of HR in innovation is a supportive role. HR should try to insert itself in to the space of defining or managing innovation activity and must look outside in.”

There are three key functions of HR in driving forward innovation, he asserted. First, is through creating events – hire people who have big plans, reward, celebrate, and train people to be inventors of new plans and ideas. HR must also ensure that events are turned into patterns and drive the DNA forward. Lastly, the section must create an identity – the innovative culture should be seen by key customers and stakeholders.

“HR needs to get good feedback from the outside and add value to stakeholders and organisational capabilities, he expressed. “In order to drive culture it must be made a team based concept and innovation must be accepted as part of the culture.”

The innovation culture must be driven by moving innovation across business units, having incentive schemes to help share information across units, adding multiple diversification into teams, and leaders rewarding those who share and voice ideas.

Weerakkody noted that innovation is multi pronged and that it is a protocol that is needed to drive it to the DNA of a company.

“Innovation culture occurs when it is ingrained in to the system. Technology is imperative for HR,” he commented. He noted that HR must utilise technology to drive forth innovation by way of empowering, encouraging, supporting, rewarding, and recognising.”

Be ‘wonderfully weird’

“I believe in HR,” John Keells Holdings Group Finance Director Ronnie Peiris said. “Sometimes I wonder why HR does not have a more prominence role to play.” Observing that in his view, HR should have a place in the strategy table and get more involved in the process of an organisation he noted that this was a dilemma faced by many units. HR, he said needs to be more inclusive and must separate itself from petty issues of the organisation and adapt a strategic role, playing a part of the strategic business plan. “It is HR’s fault for not making themselves heard,” he said. “It is important to get away from the sidelines and play its part.”

For this innovation must be made part of the organisation’s culture where failures of experiments are not reprimanded or ridiculed. There must also be a reward and recognition scheme while the HR must move away from the traditional method and recruit those who are “wonderfully weird or rebels.” Peiris said: “HR must create diversity within the organisation. They should not be too disciplined in recruiting people. This will allow more creativity and innovation.”

Take risks, be innovative

Stating that HR cannot play a lone role in pushing forward innovation, Standard Chartered Bank Head of HR Deshika Rodrigo listed ten key factors that helped the Bank successful. HR must paint a compelling picture for employees to aim, she said while they also must have the right kind of people who are freethinkers.

“Create informal networking groups giving people a chance to work outside the comfort zone. Diversity must be created, collaborations with stakeholders, customers and communities must also be there to promote innovation.”

Success stories must be shared and recognised, rewards must be given, and an environment that helps balance professional and personal life must be created. The CEO and senior management has a critical role to play, Rodrigo said.

Fear is the greatest enemy for inventors, Aiken Spence Director HR Rohan Pandithakoralage said. Agreeing to Rodrigo and Peiris, Pandithakoralage stated that in an organisation, people should not be scared to take risks and innovate. “The environment must be created for this internally. Reward and nor penalise. Make technology available for growth.”  The fear of the unknown must be eradicated and those in the HR must first unleash their own potential and then move on to helping others do the same.

Pix by Lasantha Kumara