Reverse Innovation

Recently, while ordering a gift for my brother on Indian online shopping web portal, I surfed through several electronic gadgets. I was surprised to see the price range at which Android embedded tablets were being offered for sale. For mere 37 Euros, the product was offering 1.3MP camera, built-in microphone, Android 2.2 operating system, Wi-Fi, touch screen, or another product for just 51 Euros was offering 7" Android operating system mobile phone tablet with sim card slot. The price offering is equivalent to the monthly cost of coffee for an average household in Europe.

Some days after exploring the pricing of local product offerings in India, or I would say developing countries in broader sense, I came across an article on 'Reverse innovation' which is the theoretical name assigned to the real word scenario exemplified above. The concept emerged when Jeffrey Immelt, GE Chief Executive Officer suggested exporting US products to promote employment opportunities in US manufacturing industry.  

But will the developing countries like India, China, Brazil greet developed countries' highly priced products?

The above two paragraphs provided us sufficient evidences to answer this question. No, the developing countries has explicitly exemplified with several innovative low priced electronic gadgets providing similar features as any highly priced branded product which caters to the buying capacity of their maximum locals.

Prof. Vijay Govindarajan, GEs Chief Innovative Consultant, substantiated that 'Glocalization' will not work for developing markets due to the paying capacity of their masses. For instance, $20,000 electrocardiogram machine would not be able to grab an enormous developing market, rather an inexpensive substitute. GE, thus, invented a $500 electrocardiogram machine for such economies.

The phenomenon has been named as 'Reverse Innovation' which precisely means that the developed countries look for innovating in developing economies and then bring back that novelty in developed markets. The study provide guidelines to many developed countries' innovators aspiring to expand worldwide and probably add conceptual framework to the so called theory of 'Glocalization' that most exporters are following. The diagram in this blog is my effort to elucidate the phenomenon.

Learn, Unlearn and Relearn

Every time I ignored falling in a trap of new technology or any materialistic upgrade, I regret thereafter that something had been missing in my life. Before upgrading to Samsung Galaxy, I have been using my old mobile ‘Nokia’ with features life long life, durable, battery life and so on and I always assumed that the sole purpose of mobile was to talk which was solved. Technology did not fascinate me very easily, but the so called ‘status’ issue proliferated me for the upgrade. Experiencing the new technology dragged me from my conventional assessment towards ever changing world of technology.

The similar scenario applies to our Solar system studies. I have always learnt that Solar System consists of nine planets until I learnt recently that Pluto does not satisfy the criteria of being a planet. In twenty sixth International General Assembly of International Astronomical Union, the astronomers voted for aligning the definition of a ‘Planet’. Three criterias were shortlisted – 1. Planet need to be in orbit around the sun, 2. It needs to have enough gravitational force (It should be round), and 3. It has cleared the neighborhood around its orbit. Pluto, as a planet, satisfies first two criteria; however had a problem with the third one. Thus, Pluto along with other similar surrounding masses has been re-designated as dwarf planets. The idea behind explaining this example is the continuous process of learning, unlearning and relearning.

Alvin Toffler, thus, rightly explained that ‘The illiterate of the 21^st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.’ The 21^st century legion is more knowledge centric. One day my parents were wondering that my husband, me and my son all three of us were busy studying. Every profession calls for upgrading ones skills, and project modern state of the art with innovative ideas which is possible with amassing more knowledge, researching and staying contemporary.

But what to unlearn and how to unlearn is the relevant question here. Does it means forgetting everything, all concepts, conjectures, values that we learnt from our gurus, parents, and society? No, the researchers pronounced that it’s not about forgetting everything. Unlearning has more to do with challenging a formerly apprehended conviction and readiness to acknowledge new developments. Sometimes, we make an illusionary boundary and procrastinates any subsequent discoveries. The very typical examples are the generation gap, old management, and other scenarios where we use the word ‘traditional’. Thus, ‘unlearning’ projects and provides opportunities for an open exploration, research and innovation. Are you ready for learning, unlearning and relearning?

Credo : Financial Education!

Saving, investing and managing one's own treasure  is the key to long-term financial stability. A man lives in the social set-up where his financial decisions impact not only himself and but his family as well. Financial security in terms of investments for retirement, children education, insurance for health, mortgages and other needs set up the base for a merrier life.

A survey of US adults National Foundation for Credit Counseling depicted that 41%  population stood at or below 'C' with respect to their financial knowledge. Other researchers reported the increment of credit card debts and home foreclosures. Needless to substantiate, this was one of the major causes of the recession in 2008.

The recent report by Global Partnership for Financial Inclusion also made it mandatory to shift the drift of financial inclusion towards financial capability. This means that the lay man investor would be able to benefit from the financial services only if he is financially educated. For example, providing credit to innocent farmer with inadequate knowledge would even lead to further indebtedness .

Financial education depicts understanding of mortgages, savings, investments, banking services, mutual fund investments, credit cards, insurance, taxes, etc. The awareness of these aspects will help in understanding the risk involved and taking informed financial decisions.

Now the question arises what is the right age and strategy to offer financial training? At home by parents or at school by teachers? At secondary school level or before that or at higher education level?

According to my personal and professional experience, the seed of financial education should be propagated right at the initial stages of human life. For example, even a child of seven years could be taught about savings in his money bank and buying things out of his savings only, he could even be taught trading off for something to fulfill his unwarranted wishes. Similarly, school curriculum could engage students on financial topics when teaching time value of money, or interest rates, savings and investments. In many developed countries, the government has even announced to incorporate finance and investment topics in the curriculum.

The importance of financial education at school level can also be accentuated by the number of education loans floated by students enrolling for higher education. The students immediately after 18 years of age open their own bank accounts and possess personal credit/ debit cards. Sound financial decision making capability, thus, is necessitated at this stage.

Though financial curriculum would improve theoretical knowledge of students, imparting financial education should not be divorced from day today experience. The parents responsibility go hand in hand with the schools to help the young generation develop right aptitude for handling money related matters.

Irrefutably, in current economic scenario, it is indispensable to save and make right investments. The current Gen X has an onus to shape financially sound Gen Z.

I need new Glasses

Research and Innovation are the two key paradigms where every blue chip company is either investing or intending to invest. With consumer-centric market, every company tries to offer maximum value to their consumers. The markets are flooded with several innovative products in a row. 'Roomba' is the iRobot's innovation to provide self vacuuming services; 'Snuggie' rolled in market proposing coziness of blanket with the arms; 'Topsy Turvy Planters' offered an upside down planting pots that absorbs nutrients much faster and several similar innovations were in its row.

 

At the same time, cut-throat competition only allows survival of the fittest. For example, the internet bubble in 2000.How the companies can survive in the herd with several competitors in a row?

The answer is simple - 'New Glasses'. New glasses here refer to a unique idea or strategy or product offering that the company adopts to counter the competition. Or in other words 'Innovation.'  And every innovation is backed by an adequate research.

For example, MillerCoors innovative idea to introduce a coconut water based drink in June 2012 with the alcoholic content of around 4.2% by volume, especially targeting women. The consumers, especially millennials (born between 1977 and 1994) get easily bored with the old rather regular product offerings. The quench for variety necessitate the manufacturer to offer innovative products which is counter followed by their competitors. Another unique offering in UK beverage market claiming nutritional values as being high in fiber, calcium, protein and potassium was 'Terrafertil 100% Goldenberry Juice'. 'Bloody Mary' is one of the kind introduction in Japanease beverage segment with a mocktail of spicy ingradients with tomato Juice and Vodka. Herbal Teas is one more unique offerings in Beverage segment worldwide with  A unique range of 'Herbal Tea' has been introduced in the past year.

Even consumer needs 'New Glasses'. Every new product is introduced with unique prepositions, distinctive offerings, typical claims and with idiosyncratic nutritional values. How a consumer will judge which product offers maximum utility by spending his limited monetary resources?

Here actually applies the concepts of 'Diminishing marginal utility' and 'Irrational Decision making' as well in Behavioral Economics. Consumers may differ in their buying behavior as well depending upon their limits splurging in 'utility' or 'usefulness' which is subjective in nature. For example, 'Audi' in auto industry or 'Zara' in retail would not provide additional utility than 'Suzuki' or 'H&M'.

The disposable income, brand preferences, prices of new product definitely flicks at this juncture. The people with limited disposable income would stick to 'Nokia' that offers long life of mobile phones. The section preferring 'Nestle' brand would not dawdle to try a new Nestle entry.

Conclusively, 'New Glasses' term in this article is used to suggest how companies offer new products and how they are being judged by their consumers. The vogue of research and innovation in current scenario has been exemplified and the climax explained the factors modulating the buying behavior.

Train yourself to be a leader

The broadcast channels witness frequently many similar articles like "Can Nokia's new CEO revive the company"; "Can Twitter's new CEO turn the company into real business". Every time a leader changes, there are multiple impacts on the company, for example the stock prices fluctuations, change in companies' objectives, introduction of new processes, reorganization of company's processes.

For example, Intel new CEO Brian Krzanich introduced new devices business unit. Another move was to develop mobile chipsets that can be marketed faster, standing antagonism with the blue chips in the mobile market. Mark Thompson, new CEO of New York Times took over the position with the objective of going global online.

Leaders play an indispensible role in making or breaking an organization. Here are the key strategic suggestions to be effective leaders adapted from the book 'Leadership 101: What every leader needs to know' by John C. Maxwell.

Leaders as Learners - Learn, Unlearn, Relearn:

 "To be conscious that you are ignorant is a great step to knowledge" Benjamin Disraeli, Sybil, 1845, British politician (1804 - 1881).

If you assume that you have achieved highest level of agility, if you start living in your comfort zone, follow the instructions without asking the reason, fail to experiment and make minimal efforts to finish the task, on that day you would hold back your professional growth as a leader. Only one word I would like to add here that would stand out a leader 'Innovation'. You might have heard this world everywhere in recent years and the meaning of this word is exactly opposite to the dead end that was defined above.

Follow a leader, make him your role model:

The old saying "Champions don't become champions in the ring—they are merely recognized there" exemplifies that there are remarkable efforts behind every success story. Whether it's your teacher - finance teacher, a politician - US president, an actor - Hugh Grant, your parents, football player, tennis player or anyone in the world who inspired you. Follow his daily routine, his works and the efforts behind his successes,  his weaknesses, his strengths, his attitude and his perseverance. This would help synergize the discipline of your role model with your innate traits.

 

Be Visionary:

Vision comes from your past experiences, your understanding and the influence of the immediate team members. Identify your 'Higher Voice' - the voice of God because he knows your excusive potential. To ascertain your higher voice, reflect on your past experiences, learn from your mistakes, follow your gut feelings, your dreams, your energizer. If you are appointed as a leader for a company, work within their vision and follow their business models and try to improve upon the strategies.

Be Influential:

"The task of a leader is to get people from where they are to where they have not been"  Henry Kissinger.

The leader is a people's person who helps remove obstacles and guide his follower to achieve the objective. For example, my lecturer helped me to realize my research aptitude. She did not belong to my area of research, however her positive persuasion lead me to work towards my area and ameliorated my career.