Azim H Premji - Structured Innovation

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The need today in the business world especially that in the technology area; is INNOVATION, which is fundamental for growth.

Excerpts of the talk by Azim H Premji, Chairman of Wipro, on this topic.....

azim-h-premjiThe India IT industry including exports and domestic market and the semiconductor industry is gaining traction despite challenges, he said. With the IT industry poised to grow at the rate of 35 per cent year over year and the semiconductor industry at the rate of 25 per cent. This brings us to the situation where we are living in exciting times. With specialized IP being developed in India, the growth rate would accelerate further. The key driver from the organization perspective to meet challenges that this growth rate would place, is innovation.

Creativity is about thinking new things, while innovation is about doing new things. It's about ideas vs. actions.

It is important for companies to gather all the technology developers and become more creative and innovative. The markets are now demanding value-for-money and expect mass production even in the new product areas. Industrial Innovation is the key. Many large companies have shut shop. In the last two decades alone, out of the top 500 companies, only 97 still exist. Analysis shows that they lacked innovation, were not flexible, and lacked the ability to change. No success can be taken for granted. Companies, especially the large and successful ones, appear to become invincible, but the world is changing too fast; and there is innovation at all levels, including Business Models, Technology, Supply Chain, Logistics, and Operational Processes. Many companies that brushed off the change as "a temporary phenomenon" have paid the ultimate price for this negligence, and have shut shop.

In the words of Azim Premji - "Innovation is implementing the creative thoughts. All employees including top management should embrace it. It should go much beyond just product innovation and R&D activities. One of the biggest challenges in the IT and semiconductor industry is the need to increase energy efficiency in all that we create. Apart from delivering product and services to the customers, what they demand is the key differentiator from the other organizations. The organization should have an open mindset to adapt to the changing needs, new technologies and innovate accordingly."

"An innovative environment and entrepreneur spirit, welcoming aggressive commitment, understanding customers and changing oneself are the key enablers of innovation," said Azim Premji.

In the semiconductor industry the driver is the changing customer needs, expectations for fast and complex devices and changing volatile taste of consumers and needs of the customers. Consumption of semiconductor has surpassed other markets. Thus, the technology innovation bar is rising faster and higher. People are demanding reliability, good quality, and an affordable price.

People are demanding products that are fast, affordable, and flexible

Product designers are challenged to come with faster development of new products. Expectations are higher than before. Shorter life cycles pose additional challenges. Uncertainty in the market place and creativity are not predictable. The time to market is becoming shorter. All these pose a challenge to companies, and these challenges force companies to see build mechanisms to be able to adapt to change, and adapt fast.

The organization should have an open mindset to adapt to the changing needs,

The five main points brought out by Azim Premji, about Innovation are:-

1. Innovation is not always big, not always causing transformation, nor always revolutionary. They could focus on business productivity and enable winning contracts, or reducing costs and making businesses competitive.

  • Innovation is not a board room policy or process. It needs to be embraced by all the employees in an organization. They need to be given the space and environment to innovate.
  • Innovation goes beyond product R&D. There is a big need to innovation on processes of doing business.
  • It is "Structured Innovation" that yields results. Companies must ensure that they align individual goals with the goals of the company. The zero defect policy of Freescale is a good example of this.
  • Innovation should be in line with the eco-system. The Global + Local models that are now becoming popular and provide a platform to implement best practices for faster development is a good example here. Often, new products from small companies, have pushed large companies out of business, and this trend will increase.

Mr. Azim Premji also shared his views on the important Four Point mantra which he felt could be looked upon as the lifeblood in the Knowledge Industry. He felt that companies would do well if they could:-

  • Create entrepreneurship in the organization and allow risk-taking.
  • Welcome aggressive comments from customers. Do not over-commit and / or under-deliver.
  • Understand your customers, since old practices may not work as you go ahead. The need to change is a must even to sustain.
  • Challenge yourself. Compete with yourself. This would give companies the quality advantage.

Mr. Azim H Premji was speaking at the inaugural session of the 3rd Freescale Technology Forum.  

Sanjay Dugar is a Corporate Trainer and a Management Consultant, with a focus on Business Analysis, Business Development, Strategic HR, and Project Management areas.

Issue BG81 Dec07