Anand Khot in conversation with Satavisha Natu of MCCIA. Read on to get insights on areas like how organisational culture influences innovation, who wins in the debate between strategy and culture, how can employees contribute on-ground, when it comes to culture of innovation. Anand P Khot, General Manager GR, IBM India Pvt Ltd, Vice President - National HRD Network, Pune Chapter and Member of HR&IR Committee of MCCIA and CII Pune.

1. 35: OmZodmar 2019
Anand Khot
Innovation Culture in Business
Satavisha:
Anand while I was contemplating
about this topic I wanted to ask a very
fundamental question about influence of
organisation culture on innovation. To
what extent these two key ingredients of
organisation are interlinked.
Anand:
In my view there is very high
correlation between innovation and
culture of organisation. Before we speak
about the culture it is important to
understand the existential purpose of
the organisation. Cultural strands of the
organisation gets developed in the sub
sets of organisation to drive towards
achieving the purpose organisation has
set itself for.
Let us take example of two
organisations, First organisation we will
name it as I-1 wanting to bring in
services and products which change the
way world works now, in near future and
for the next few generations. This
organisation will strongly develop the
culture which will build practices backed
by innovation to bring in that positive
difference for near-term, short-term and
very long-term. In a process you could
also imagine that this origination's
evolution will be significantly dependant
on innovation.
The second organisation is our I-2,
here the focus is to develop products
and services which will give highest
gross profit in everything they do. Given
this purpose of existence in I-2 you will
observe the culture which is tilted
towards profitability which many a times
may remain relatively short-term. You
will also observe that the range of
products and service will keep coming
and going based on its profitability
potential. Such fast paced change in
offerings will not allow organisation to
develop long term culture of innovation
as profitability and investments in such
innovations may not give strong
conformance towards realizing gross
margin which is a significant driving
force at I-2.
These two example will help us
imagine as to how organisation culture,
innovation and purpose are inter-
connected in the organisation. From
these hypothetical examples if come to
real examples we can refer to the 2008
report published for organisations who
are in existence for more than 200
years. Out of the 5586 companies
56.31% organisations are from Japan,
14.98% from Germany and 4% from
Netherlands. Remaining ~24% are from
41 different countries. Needless to stress
that Japan, Germany and Netherlands
nurture culture of innovation. And it is
reflected in the organisations built in
these eco-systems.
Satavisha :
Got your perspectives of culture in
the organisation and its influence on
innovation. However many times we
come across challenges where what
seems to be the right thing to do from
culture perspective is not aligned with
business goals/strategy? In such
scenarios who should be the winner…
Anand Khot In conversation with Satavisha Natu, Deputy Director, MCCIA
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2. : OmZodmar 201936
Anand :
I would like to draw your attention to
the famous quote by Peter Drucker
“Culture eats Strategy for Breakfast”!!.
If we look at this question from the moral
compass our argument will be different.
However for our conversation we will not
look at it from moral compass and look
at it purely from business perspective.
During such dilemmas and conflicts you
will notice that leadership in the
organisation plays a crucial role. End of
the day organisations are built by the
people and great leaders enable
building lasting organizations. There are
multiple examples where cost of
correcting a specific business decision
is not as expensive as correcting the
organisation culture. At times
organisation may not remain in force if
the cultural mis-alignment is not taken
care off in a timely manner. According to
SHRM over 30% mergers fail due to
cultural compatibility. That is how
significant impact a conflict between
culture and business goals/strategy can
create. If leadership including CEO do
not exhibit in their behaviour “be the
change you want to see” then the
conflict can't be resolved constructively.
Here proactive and constructive
resolution of this conflict will ensure that
the organisation continues to stay on its
course for a long period of time.
McKinsey study suggests that 84% of
global executive consider innovation as
an important business imperative
however only 6% are satisfied about
their organisation's innovation
performance. Hence overall leadership
is a game changer when it comes to
driving culture of innovation.
Satavisha :
The stuff we spoke so far is at 30000
feet. In reality and on the ground how
employees can contribute to the culture
of innovation? Or do they remain only
executors? Is R&D responsible for
innovation? Many such questions
comes to mind when we continue to
think about culture of innovation.
Anand :
We will be fooling ourselves if we say
that culture and innovation are the prime
roles only for leadership in the
organisation. The results of innovative
culture will be evident only if there is a
grassroot level participation and
contribution in a systematic manner.
Innovation is hard and difficult even for
established organisation. As per my
earlier statement where only 6% global
executives are satisfied about
innovation performance in their
organisation. Lots is riding on the
shoulders of the employees and other
key stakeholders to bring this innovation
performance to significantly higher
level. McKinsey research on Eight
Essentials of Innovations calls out these
e i g h t k e y i n g r e d i e n t s w h i c h
differentiates organisations from top
quartile and bottom quartile when it
comes to developing innovative
products or services. These eight
ingredients are Aspire, Choose,
Discover, Evolve, Accelerate, Scale,
Extend and Mobilize. The study further
suggests that organisation performance
on each of the essentials can be
measured. It helps in prioritizing that
Aspire and Discover are the two most
critical ingredients. If organisations get
them right then it increases their
chances of being in the top quartile. You
will bet that no organisation can score
well on these essentials if there is no
large scale participation. And if the
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3. 37: OmZodmar 2019
organisation is not inclusive enough.
Hence the spirit of innovative culture is
as important at 30000 feet as it is on the
ground level. In more and more
connected as well as flat organisations
we can experience that there is huge
scope for driving innovation culture at a
fast pace.
Satavisha
That sounds interesting, however
the aspects we are talking are they
relevant only for large organised sectors
or they are applicable for MSME's,
NGO's and other unorganised sectors
includingAgriculture?
Anand :
I really admire your style of
questions it is so considerate and all
encompassing. Short answer is that
culture of innovation has no specific
binding for any particular sector or
segment or geography etc., it is
reasonably universal and equally
available who is keen to work towards it.
Innovation generally is in main three
areas products/services, process and in
business models. These aspects are
common from sole trader to multi-billion
dollar multi-nationals. More than ever
start-up eco-systems is growing very
fast and many such start-ups are giving
run for its money to the established
players on the back of innovation.
MSME's in India have already moved up
the value chain. They are contributing
over 8% to our GDP with a growth rate of
more than 10%and an export
contribution to the tune of 45%. These
contributions are commendable.
MSME's manufacturing complex
products as well as high end service is
becoming very common. Such a main
stream contribution can't be possible
without having innovative culture in
these organisations.
Similarly accessibility of technology
including the likes of AI, Machine
Learning and Cloud Platforms for all
sectors brings lots of things on a level
playing field. Such an equalizer was not
available in the history of business. We
can also very easily state that today's
MSME could be tomorrow's established
conglomerates as almost all of today's
conglomerates were MSME at some
point in time..!! Especially in the
technology field many corporates of
today have their origin in the garage or
college dormitory. And you will notice
that many large organisations are now
trying to create 'garage (innovation)
culture' to see if they can come up with
that next billion dollar idea!!. Hence all
organisations alike can continue to
strive in building and nurturing
innovation culture. In the long run this
will be the key differentiator.
Satavisha :
That is a commendable insights, the
world is truly becoming flatter by the
day!! What are those key words of
wisdom we can share with our readers'
chalte chalte?
Anand :
It has been a great fun talking to you
and we got to discuss a few interesting
aspects of innovation culture. Not sure if
I have any wisdom to share!! However I
would like to borrow an interesting quote
from Jason Calacanis an American
Businessman and Author, he states
“You have to have a big vision and take
very small steps to get there. You have
to be humble as you execute but
visionary and gigantic in terms of your
aspiration. In the Internet industry, it's
not about grand innovation, it's about a
lot of little innovations: every day, every
week, every month, making something
a little bit better.”
And one more quote from Punekar
women entrepreneur Pranoti Nagarkar
founder of Rotimatic, “Building a strong
culture of innovation with a passion to do
good work while bringing a family spirit
to the space is important to create a
world-first product.”
Hope our readers enjoyed our
conversation about innovation culture in
organisations. This is a very important
and extensive topic, looking forward to
our further interactions in due course.
----------------------------------------------------
Anand P. Khot, General Manager HR,
IBM India Pvt. Ltd,.
Vice President - National HRD
Network, Pune Chapter and Member
of HR&IR Committee of MCCIA and
CII, Pune. The views expressed in this
article are his personal and has not
related to his organisation in any
shape or form. He can be reached on
anandkhot12@yahoo.co.uk or on
9923075544.
www.youtube.com/user/punemccia