Mega 'nano' - Innovation in India

Innovation in India is one of the hotly debated topics. While some strongly feel that India has not caught onto the bandwagon of Innovation; others feel that Innovation does happen in India. And at the end of the debate (even after hours of it), positions of either party hardly change. What is the truth? Can India become the hotbed of Innovation?

I believe the truth is in between. Indians have a high ability to innovate. We do it every day. Growing up in a developing country, we do not take anything for granted. Hence, whenever, we face a hurdle/challenge, we find creative ways of working around them. At the same time, we lack risk taking (which is critical for innovation). Our social world does not receive failure well and hence we abhor risk taking. There was a time, not too distant past, when an entrepreneur used to introduce himself/herself, many would believe that he/she failed to get a decent job and hence had to resort to starting their own company. Things are changing now but it is still a slow change. However, we still have many successful examples of Innovation in this country.

Today, I’d like to write about one such Innovation story. A story that busts two myths:

1.       India and Innovation cannot go together

2.       Innovation means big breakthrough – in technology, business model or any other aspect

Tata Nano story started more than a decade back when Ratan Tata announced the intent to build a small car under the price of Rs. 1 lakh. Mr. Tata was moved by the plight of lower middle class family who had to ride their family of four on a two wheeler, in all weather conditions. He was worried both about comfort and safety of such family and decided to make a small and cost effective car to meet their needs. When he announced his decision, whole world was shocked and many mocked at him as they did not believe that such a car could be a possibility. Even people who were sympathetic to his cause were worried about safety aspects of such a car and some even thought that it would be a glorified auto (three wheeler automotive driven in India to ferry passengers).

Mr. Tata asked his team at Tata Motors to work on the small car and set specific objectives. Its performance has to be comparable or better than Maruti 800/Alto and it should meet all safety standards as set by the regulators. The price of the car has to be under Rs. 1 lakh ($2,500). Under the leadership of Girish Wagh, leader of the small car team and guidance of Ravikant (MD of Tata Motors), the team decided to start building the car from scratch (as against re-engineering existing cars). They brought together Design, Engineering, Manufacturing, Sourcing, Customer experience teams and vendors to innovate on multiple aspects to deliver such a car. Here is a small snapshot of innovations in Tata Nano:

·         Collaborative approach: Early on, the team decided to pursue a collaborative approach. Hence, they had finalized on hundred vendors (unlike six hundred to seven hundred vendors used for small cars). Instead of choosing multiple vendors for each component, they partnered with single vendor, thus guaranteeing them volumes as car sales increase but asked them to invest and partner in the design, innovation and manufacturing to ensure that those components could be produced to meet the new specifications and in a cost effective manner

·         Modular design: Nano has been designed to be constructed in components that could be built and shipped separately. Thus, the car could be easily assembled from these components at variety of locations. This reduces significant upfront investment in manufacturing and helps tie up with various entrepreneurs who could share the success story of the car. This is what they termed as Distributed Manufacturing process. While this model exists, they have not yet capitalized on it, owing to possible quality concerns if the entrepreneurs do not follow the laid down procedures. Hence, they decided to defer the implementation of tying up with entrepreneurs. However, from a design perspective, the car is indeed of modular design.

·         Design innovations: To meet both the cost and space needs, many design innovations have been incorporated into Tata Nano. For example, the engine has been placed under the rear seat while the battery has been placed under the driver’s seat. Both the seats have been insulated to ensure that the heat and vibrations are not felt by the passengers. Similarly, a single wiper has been used to cut down costs while not compromising on safety needs; back wheels are larger than front wheels to provide stability to the car; spare wheel, fuel inlets are placed under the bonnet etc. are designs meant to cut down costs while providing stability and safety to the car.

Tata Nano has been launched in 2008, much to the fanfare and awe of the world. It has immediately placed India and Tata Motors on world map – both for the design of the car and audacious idea of producing it under $2,500. Tata Nano has not been delivered by a breakthrough technology or product innovation but by institutional innovation. Tata Motors has filed only 34 patents for Tata Nano (very small number compared to 280 patents awarded to GM every year). However, Tata Nano delivered on a promise that many felt was not possible.

I believe Tata Nano has not yet seen the success it deserves (due to the failure of their marketing team and its weak positioning). However, no one can take away the innovativeness of the product. Tata Nano is a classic example of an innovation that is targeted to the bottom of the pyramid through frugal engineering processes as against break-through technology. Tata Nano is an example of Blue Ocean strategy. It has changed the competitive dynamics and is helping to expand the market. Nano Europa is being launched to target European market and a small car targeting US is on the cards. Though the car now has global reach (which was not expected), it still remains an Indian car that equally caught the attention of western world and rural India.

Despite the small size (Nano) of the car, it is an outcome of a big (Mega) idea. Innovation can only be possible if we are willing to challenge status quo, be unconventional in our approach and willing to take risk. We all have in us to be Innovators. The question is, are we willing to Think BIG? Are you?