Conversation with India - Tata's Gopalakrishnan on how culture, collaboration and sharing underpin innovation

Mr Gopalakrishnan speaking at the Imperial College event

A report of the latest Conversations with India seminar, hosted by the Rajiv Gandhi Centre for Innovation and Entrepreneurship

By Elliott White

Another two eminent discussants joined the Conversation with India series at Imperial College Business School last night. R Gopalakrishnan, executive director, Tata Sons Ltd, joined Peter Marsh, manufacturing editor for the Financial Times to consider how mergers and acquisitions inspire innovation.

Mr Marsh’s position was simple, sceptical and provocative. He defined innovation as being either incremental or discontinuous improvements in products. He explained that over the past 200 years most disruptive innovation had taken place in small groups of people yet have disproportionate positive effect.

He also said that large companies may actually hinder this type of breakthrough development. Large companies do provide other important functions Mr Marsh said. These are focused on incrementally improving products and services. Mr Marsh gave microchips as an example of this point. The real breakthroughs and the birth of the chips took place in small research labs, often in start-ups or universities.

However, the progress since these discoveries is the result of large companies. They have the scale and culture that encourages predictable and steady improvements in price and performance over time but are unlikely to radically redefine a product or service.

In articulating his response Mr Gopalakrishnan began by unpicking the terminology of management literature and the business media. Mr Gopalakrishnan carefully reasserted an alternative view of innovation, which he developed within an organisation that has made 35 overseas acquisitions, totalling US$17.79 billion, in the last 8 years. 

Mr Gopalakrishnan explained that it is innovation in the design of business models and those ideas which have social application that matter more than product or process innovation.  He dispelled the myth that innovation is about discovery, rather, he noted, that innovation is “new to the context” rather than “new to the world”. Highlighting micro-finance in Bangladesh as well as the founding of Tata Steel in the late 1800s, he countered that new business models and socially applicable ideas are the “unsung heroes of innovation” said Mr Gopalakrishnan, as they have the greatest impact on the world.

Mr Gopalakrishnan also raised the issue of cultural interaction between two organisations after they merge.  He explained that companies able to interact and create a culture of shared learning will inevitably generate new and improved ways of working.  Periodically this process will lead to highly valuable forms of innovation and value creation. The Tata Group, Mr Gopalakrishnan noted, adopts a partnership model based on sharing (rather than telling) and a mindset of an expander (rather than conqueror) in the Group’s approach to acquisitions.

Using the example of British birds, Mr Gopalakrishnan explained how, in the 1960s, the Blue Tit learnt to open milk bottles and shared the knowledge with its own group.  Unlike the Robin, a territorial, solitary and aggressive bird which failed to develop the skill of stealing cream and so fared less well in the cold British winter.  He emphasized the importance of sharing, learning together and engaging the society in which the business is located as core values that have helped the Tatas in their global growth strategy.

After the discussion, Professor Gerry George, the Centre’s director, signed a memorandum of understanding with the London Chapter of the Indian Institute of Technology. 

Shyamal Desai and Prof Gerry George sign a memorandum of understanding

This agreement paves the way for closer collaboration between the College, the Institute and its alumni in India and the UK. Professor George said: “We’re delighted to now be working with IIT alumni and their faculty.  The Rajiv Gandhi Centre is keen to encourage greater student intake from the IITs and strengthen the research and collaborative links between the IITs and the College’s Faculties.”

IIT London chapter joins a growing list of institutional partners in India which the Centre and Imperial College have formed.  These include the All India Institute for Medical Sciences, Confederation of Indian Industry, Indian Institute of Science, Tata Institute of Fundamental Research and Indian Institute of Management. 

Ends

About the speakers

R Gopalakrishnan is Executive Director at Tata Sons Ltd, India. He is also the Chairman of Rallis India Limited and Advinus Therapeutics Private Ltd, vice Chairman of Tata Chemicals, and a Director of several Tata companies such as Tata Motors, Tata Power and Tata Teleservices.

Peter Marsh is currently the Manufacturing Editor, Financial Times where he has worked since 1983.  Prior to this he worked for New Scientist and Building Design magazine.  He holds a degree in chemistry from Nottingham University.