Saturday, October 30, 2010

The Thought Leader Interview: Vineet Nayar
The CEO of HCL Technologies describes how he focused his company on growth by engaging staff in unprecedented ways.
by Art Kleiner and Vikas Sehgal

This is an exceptional article on how leadership focus can define the nature of a company to drive growth. I included a few abstracts to encourage you to go to the original article.

"The idea of putting employees first and customers second might seem counterintuitive, especially when it is advocated by the CEO of a large global high-tech enterprise. But to Vineet Nayar, customers and employees are more directly linked than conventional wisdom would suggest. Nayar is the chief executive of HCL Technologies, a US$2.6 billion business and information technology services company based near New Delhi, India, with operations in 26 countries. (HCL originally stood for Hindustan Computers Ltd.) He argues that the aptitude, ingenuity, and enthusiasm of HCL’s more than 65,000 employees leads directly to greater value for customers, and thus to better performance. This is, of course, common management rhetoric, but Nayar is one of the few chief executives who has built a major company by putting it into practice....
...For example, detailed financial performance data broken out by business unit is delivered regularly to employees’ desktops. This has stimulated employees to ask more questions, volunteer more ideas, and challenge their managers more often. In turn, everyone is making better decisions — the kind of decisions that directly affect the customer’s experience. Nayar calls the customer–employee interface the “value zone.” Similarly, in a bold twist on the 360-degree employee appraisal tool, all appraisals are posted on the company’s intranet, and anyone at any level can give feedback on anybody else, including the CEO. As Nayar says, “Good or bad, we all learn from the results.”...
...The idea of engaging employees resonates with the company’s innovation strategy as well. HCL is a behind-the-scenes technology-services company with a brand that appears on few nameplates, but it profits when its customers’ devices succeed. Thus, much of Nayar’s attention is focused on meeting the challenges of convergence: figuring out what types of innovation will be necessary as content producers, telecom companies, and device manufacturers move into their next phase of interdependent business models. HCL’s revenue-sharing approach, and its ongoing efforts to learn from customers and other outsiders as well as from employees, represents an ingrained awareness that the most important insights can come from anywhere — if you know how to recognize and absorb them....
....We also discovered that technology development needs intellect more than it needs investment in dollars. But marketing needs dollars more than intellect. We are a very engineering-oriented company; our core competence is on the technology side. We have never been good at marketing. We still aren’t today. That’s why being a product company was the wrong positioning for us.
So we developed a different business model, involving revenue sharing: We co-designed products with our customers, then shared the revenue with them. Over time, we used this approach more and more, instead of more conventional fee-based and cost-based contracts. In effect, just as our customers use our technological knowledge for their expansion, we use their marketing talent and branding to help fuel our growth. Everybody shares."

Wednesday, October 27, 2010

A Gandhian Approach to R&D
Scientist and scholar Raghunath Mashelkar explains a new model of innovation from India that benefits the world’s poor.
by Abhishek Malhotra, Art Kleiner, and Laura W. Geller

This article describes an approach for innovation that focuses on the ~4 billion poor in the world.

"When it comes to India’s future, Raghunath Mashelkar admits he’s an optimist. Although millions of Indians are still living below the poverty line and many will continue to do so for decades to come, Mashelkar, an accomplished polymer scientist who has held a wide variety of leadership positions at prominent research and scientific institutions, believes that India has the raw materials — the talent and drive — to overcome its challenges and become a nation of innovators.
These advances, Mashelkar argues, should be developed to help the poor at a price they can afford; not just in India, but in emerging nations around the world. He calls this concept Gandhian engineering, citing examples such as the Tata Nano, the cheapest car in the world at a cost of about US$2,200; a hepatitis B vaccine that is 1/40th the cost of traditional vaccines but meets UNICEF’s quality requirements; and Aravind Eye Care’s cataract surgeries, performed on 300,000 patients annually, which cost 1/100th the fee charged in other countries but meet global quality standards...
...It’s a term (Gandian) I coined for getting more from less for more people, a new way of expressing one of Gandhi’s teachings: “Earth provides enough to satisfy every man’s need, but not every man’s greed.” In other words, Gandhian engineering is inclusive innovation: developing products and services that improve life for everyone, innovation that doesn’t leave out the poor...
...(Another example)For the millions of people along India’s coastline who depend on fishing for their livelihood, a new system of satellite-based potential fishing zone (PFZ) forecasting has raised productivity levels and thus incomes. Before this technology was accessible, fishermen often returned home in the evening without any catch. Today, scientists can see the chlorophyll — the green coloration of water created by the activity of the fish — and can also measure the sea surface temperature, which changes due to the activity of the fish. The PFZ information is disseminated to the fishermen in two ways: first, through electronic message boards, where the information is posted. Second, some service providers are supplied with the information, which they then send by SMS text messages to the fishermen’s mobile phones, which can be purchased very inexpensively in India today. When the fisherman goes to these regions where the fish density is higher, his income level will rise. And, also significant, when he used to come back after catching the fish, the fisherman’s catch might rot because he wouldn’t be able to secure buyers quickly enough. Today, using his mobile phone even before he comes ashore, he has fixed where he’s going to sell.
So all of this technology is being developed and used to enhance prosperity, both for the provider of the low-cost product (in this case, for example, Bharti Airtel, one of Asia’s largest telecom service providers) and also for the user (in this case, the fisherman). Technology is going to be a game changer. If you provide people with high innovation at low cost, they will become more productive and efficient, and their earning potential will increase. We can keep improving lives in India and around the world just by making this technology affordable and accessible."

Monday, October 25, 2010

With Kinect, Microsoft Aims for a Game Changer
NTY, 10/24/2010

Sorry for the lapse in postings—things have been a b it hectic but all good stuff!

This is a fascinating story on many fronts:
• How to try to catch up to competition and then leverage the innovation beyond the current addressable marketspace
• The beaucracy and battles between large established business and new innovations
• How to expansively define a Business design and addressable marketspace to drive growth

"....The company’s blend of game developers, interface whizzes and artificial-intelligence experts has built Kinect, a $150 add-on for the popular Xbox 360 console that hits stores next month.

In fact, Kinect arrives with a healthy dose of sci-fi trappings. Microsoft has one-upped Sony and Nintendo by eliminating game controllers and their often nightmarish bounty of buttons. Kinect peers out into a room, locks onto people and follows their motions. Players activate it with a wave of a hand, navigate menus with an arm swoosh and then run, jump, swing, duck, lunge, lean and dance to direct their on-screen avatars in each game....
....The mass-market introduction of Kinect — with its almost magical gesture and voice-recognition technology — stands as Microsoft’s most ambitious, risky and innovative move in years. Company executives hope that Kinect will carry the Xbox beyond gamers to entire families....
...Where Apple popularized touch-screen technology, Microsoft intends to bombard the consumer market with its gesture and voice offerings. Kinect technology is intended to start in the living room, then creep over time throughout the home, office and garage into devices made by Microsoft and others. People will be able to wave at their computer and tell it to start a videoconference with Grandma or ask for a specific song on the home stereo....
....Critics knock Kinect games as too easy and say the gesture technology still has annoying kinks. They also say Microsoft has had a nasty habit of gumming up its creative engines with bureaucracy.

“They often got lost in fights between all their divisions,” Mr. Johnson says. “Anytime something becomes high-profile, middle management slows it down.”