8 Steps to Building Innovating Organizations

Manu Parashar would have completed 37 years yesterday. His book, "8 Steps to Building Innovating Organizations," which made it to bestseller lists was to have been reviewed by me last year for informing a wider audience about the book – I had read the book, took notes and discussed my observations with Manu. He was positive about the points made by me despite several of my remarks pointing out the shortcomings of his book. Given that various reviewers had already reviewed the book in major media outlets, I had decided not to go ahead with writing the review and Manu said that he was looking forward to address some of my concerns in the next version of the book. Today, as a tribute to Manu, I present my review of his book "8 Steps to Building Innovating Organizations."

"8 Steps to Building Innovating Organizations" is an interestingly written book in the sense that it does not try to use esoteric language to impress practitioners; nor does it dumb down their intelligence by quoting a string of high-profile yet unrelated examples with no theoretical framework in place. Comprising 8 chapters (corresponding to the "8 steps" in the title), the book is written in a Conversational and "directly addressing the reader" style, making the book racy. The book starts with the chapter titled "What is innovation?" with several types of scenarios presented to the reader so as to illustrate the multi-faceted nature of innovation. In the second chapter, innovation is defined as a capability with three components, viz., knowledge capability, attitudinal capability and creative capability. The next three chapters deal with each of these capabilities in detail. Having established the nature and the composition of innovation, the book proceeds to talk about the various building blocks of innovation at the level of individual, team and organization in the sixth chapter. The last two chapters deal with the importance of staying the course (especially in terms of vision) and the need for renewal.

Unlike most books on business management where the first chapter covers everything in brief and the remaining chapters just keep expanding the ideas from first chapter, this book gives an enriching experience even while going through each of the chapters – a quality that I found mostly only in Peter Drucker’s books, despite presence of several other stalwart writers on business management. What is also refreshing in the book is the operationalisation of some of the terms; for example, attitude is operationalised as consisting openness, awareness, curiosity and playfulness – especially as the last factor is ignored by most organizations. Similarly, the book stresses on importance of measuring impact of innovation – a point ignored by many people. At the same time, the author avoids the pitfalls of sounding theoretical; for example, he does not define creativity. Probably, it is only in trying to define new terms that he falters – for instance, the definition of attitudinal capability is made unnecessarily complex (pg. 78). Some of the ideas, while pretty resonant with the Indian context, could have been developed further – a case in the point being the inadequate attention to India’s demographic diversity, despite the book placing a lot of stress on diversity.

When academicians write for practitioners, it may so happen that they may not want to sound pedantic and hence, may not want to elaborate on some finer points. However, it may be important to explain the reasons for some of the pronouncements so that practitioners can be more easily convinced; for instance, chapter 2 talks of the importance of replicating optimal processes – the need for the same could have been elaborated. It would have been of greater utility to the practitioner if the types of knowledge such as technical vs. managerial knowledge, knowledge process vs. content etc. were distinguished; it could also be the case that managerial knowledge is explicated in creative capability – If so, it needs to be clarified. After reading the introductory chapter, it appeared as if episodic & continuous innovation seemed to correspond to quantum jumps & baby steps – however, it need not be the case and the relation between these could have been dwelt upon. Chapter 3, which deals with knowledge capability, should have also dealt with the notion that knowledge could also be embedded in “routines.” Again, some discussion on the elements of knowledge capability (pg. 65) would have helped the reader in understanding if these were complete and reinforcing, i.e., mutually exclusive and collectively exhaustive. The chapter on creative capability makes several interesting points – the most important being the need for deliberateness in creativity; invoking the need for discipline would have further enriched the discussion and complemented the need for deliberateness.

The sort of command displayed by the author in crafting the book resembles that of someone who belongs and not a novice. For instance, having a lead case for each chapter helped a lot in establishing clarity – especially for the individual chapters on knowledge, attitudinal and creative capabilities. While the book has a wealth of examples, they sound repetitive after some time probably because they are drawn from a small number of companies. Also, while the book can be read by any practicing manager, the tenor of the book has been set primarily set for an Indian audience and as such, I was a bit surprised with the incomplete treatment of the well-documented e-choupal case in the first chapter; more surprising was that the book lacked classic examples of Indian cases of innovation, such as sachet packaging or design of toothpowder. At the same time, the author appears to be in awe of companies such as the DuPont – What is the great difference between 33% and 35% (pg. 59)? Again, I do understand that first time authors are under tremendous pressure trying to understand the publishing process and meeting the dead lines with little help as most of the publishers’ resources typically cater to established authors. Which is why, the appropriateness of the title to the contents of the book or the evidence of 8 steps is something that need not be questioned to be informed by the book; the same applies to the strange section title, “The Indian angle” for Indian case studies. The only serious of error of commission, if I may say so, is found on page 83 – “An aware organization is one that is always aware of its surroundings.” Huh?!

Despite minor limitations such as the above, Manu does quite well in ensuring that the structure and flow of the book are reader friendly – an impressive feat for a first time author. I am certain that the book would be of immense help to practicing managers for times to come.

Aside 1: After I first posted on this blog about Manu, I found other friends of Manu paying their tribute as well - here (two posts) and here. I also found a blog reviewing his book in a short yet succinct manner.
Aside 2: Due to a variety of reasons, I could not be active on the blogosphere. From now on, I hope to increase the frequency of my posts and probably reduce the length of posts.

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Super Crunchers

People say that I have a good analytical mind; while I was always afraid of numbers, these people claim that I only feign fear. As a researcher, my creed has been of a qualitative persuasion. Friends take a dig at me as I argue that reality is socially constructed; I typically return the favor by saying that such socially constructed reality is statistically validated by the likes of my friends. I had, in the process of working on my morbid fear of numbers, undergone an internship with the analytics center of excellence in GE (GE-ACOE), Bangalore which later became a part of GECIS and is now a part of GENPACT. While I appreciated the way analytics were used to harness the power of numbers, I never really understood the import. Later on, the analytics industry grew and many people, including one of my good friends did their bit in evangelizing the analytics industry. Despite this, I failed to fully grasp the increasing importance of numbers in our life, till I read Super Crunchers.

Super Crunchers: Why thinking-by-numbers is the new way to be smart is an interesting book because its author Ian Ayres is primarily a law professor, and as such, he makes the book engaging by dealing in the applications of number crunching while keeping the math light at the same time. The book has a wide variety of interesting & informative illustrations with jargon reduced to a minimum. The technique dealt with primarily is that of randomization – the most interesting was the (unintended) experiment of reserving one-third seats of Panchayat heads in India to women, which led to establishing the difference in priorities of men and women heading villages. Indeed, the title of the book itself is a product of randomization, as Ayres tested at least 2 titles and 2 sub-titles before zeroing down on the present combination – surely one of the rare cases where an academician practices what he preaches? What is interesting is how he establishes the increasing feasibility of super crunching – thanks to advances in ICTs, the cost of setting up, data collection & analysis of large-scale randomization experiments has become simpler, faster and cheaper, leading to what he calls, a tad dramatically, “the end of intuition.” However, he does not elaborate on the negative effects of randomization – for example, large sample testing can have destructive effects, akin to testing the matches in a match box which become useless once tested. Also, intuition is still needed to decide on what to randomize. While Ayres argues that randomization cannot be used on once-in-a-while events like space shuttle launches, I was wondering if simulation, in combination with randomization, can help solve such problems. He also looks at regression and its applications in some depth in earlier chapters before moving on to introduce Bayes’ theorem and the 2SD rule (I never realized that the error margin indicated in polls is equal to two standard deviations) in the last chapter in an insightful yet enchanting manner. He delves into esoteric stuff such as neural networks and the counterintuitive strategy of limiting their number for achieving better results – taking me back to the time I learnt on a different conception of bounded rationality. Ayres looks to pause at the flipside too – the problems of errors in super crunching and the problems of reporters not understanding statistics; on the latter, he gives the example of Lawrence Summers’ statements being perceived as gender-insensitive and politically incorrect despite being statistically correct (Summers had to step down as Harvard president after the furor on the media coverage).

What I liked about the book was the flow in terms of how each seemingly disparate example seamlessly led to another, helping build arguments. Given the focus of the book, Ian did not dwell much on peripheral themes that I could glean (the much bigger role of government vis-à-vis private interests in randomization experiments; the increasing importance of number crunching in medicine, a theme touched upon in Malcolm Gladwell’s delightful Blink as well). He also does not explore some of the issues that stare you in the face as you read the book. He does not talk about the possibility of gaming behavior possible due to the results obtained through super crunching – when everyone starts engaging in such behavior, super crunching becomes a hygiene factor (a la “Does IT matter?” by Nicholas Carr); to me, the advantages of super crunching clearly lie in understanding (natural) systems that cannot be gamed. Despite these minor oversights on the part of the author, I really loved the book because it not only made me think but also made me feel as if I was in love with numbers!

Aside 1: I’d love to test which of these phrases is more effective using randomization: "100% improvement" or "increased by 2 times ."
Aside 2: I’d also like to write a sci-fi story on Super Crunching producing conformists.

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Games Indians Play

As I see my blog evolving, I am beginning to believe that a majority of my posts would comprise book reviews and the like. And when I visit many Indian blogs, I find that most of the blogs let out a collective groan on why we are the way we are. So, I thought I should kick off my book review posts with the review of a book that carries the tag "Why we are the way we are" as the subtitle. Yup, I am refering to the book "Games Indians Play: Why we are the way we are" authored by Prof. V. Raghunathan, former professor of IIM Ahmedabad, who headed ING Vysya for sometime and who is now a part of the top management team of the fast-growing GMR group. Those of you who are into off-the-track hobbies may also be interested in knowing that he has the largest collection of antique locks.

Ok, coming to the book - while the title of the book succinctly captures what the author wishes to express, I am afraid that the book in its final form does not do justice to the title. The book was a racy read but not fully satisfying. I don't think most of the Indians would have any problem in recognising and probably identifying with the situations that the author talks of; however, we may have a problem in the way it is written, that is in employing game theory. At one level, it appears as if the author makes observations about game theory and behavioral finance on one hand and observations about Indians in general on another hand but does not try to connect them. While the application of game theory is very very interesting, I would have also loved to see the concept of "bounded rationality" being applied to analyse why we are the way we are. Also, the application of game theory itself is inadequate - the concepts like Prisoner's dilemma etc. are all fine but why do they apply to the mindsets of Indians alone? A huge let-down was the incomplete treatment of pseudo prisoner's dilemma, relegated to the appendix; I would have liked to see and know if the pay-offs in the Indian context are akin to pseudo prisoner's dilemma when compared to pay-offs in the context of other developed economies. If so, what is the cause and what is the solution - is it liberal institutional reform by the government or does it have to do with inculcation of value systems through education? I thought of several such questions while reading the book but sadly, it did not proffer any answers. I did enjoy one part of the book immensely and that was the parallels that game theory seemed to have with Bhagavad Gita - especially the "do the right thing" part. I am always amazed by the ways and means through which people use the versatility of Gita to make their point. Of course, the best example in my mind would forever be the way Mahatma Gandhi utilized Gita, what was essentially a call to arms, for propagating non-violence.

All in all, "Games Indians Play" is an interesting read, especially if you do not have too many expectations to start with. Unfortunately, I had lot of expectations as I still remember fondly a book written by Raghunathan many years back - it was on the Indian economy and capital markets and was one of the first books I read as I was plodding myself deep into management education. What I liked about that book was its witty style, with pot shots at the controller of capital issues (now replaced by SEBI) and cheeky references to famous quotes from "Alice in wonderland" as applied to Indian economy invariably followed by obligatory yet humorous apologies to Lewis Carroll. "Games Indians Play" lacked that witticism. Or it is possible that I am being unfair about the book - I had read it sometime back and luckily took some random notes on a scrap of paper; luckier still, I could find that scrap of paper without much drama as I was trying to post it as a blog. So, while I may be using the words on that scrap of paper, I may not fully be capturing the exact feelings I had when I was reading "Games Indians Play."


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