+ All Categories
Home > Documents > Mahindra & Mahindra

Mahindra & Mahindra

Date post: 09-Feb-2016
Category:
Upload: paco
View: 79 times
Download: 3 times
Share this document with a friend
Description:
Mahindra & Mahindra. Innovation in the Agricultural Industry. AGENDA. Mahindra & Mahindra Interpreting the data Understanding innovation at M&M Comparing innovation processes Making the decision What happened Key lessons Putting culture in Cross-Border Innovation - PowerPoint PPT Presentation
Popular Tags:

of 21

Click here to load reader

Transcript

Mahindra & Mahindra

Innovation in the Agricultural IndustryMahindra & Mahindra

AGENDAMahindra & MahindraInterpreting the dataUnderstanding innovation at M&MComparing innovation processesMaking the decisionWhat happenedKey lessonsPutting culture in Cross-Border InnovationBut first Understanding the Innovation ChallengeINTERPRETING THE DATAWhat do we learn from the history of M&M that is important to understanding their capacity to innovate?Skilled at partneringCultural awareness and effectivenessDiverse resources (38,000 employees worldwide) Family pride and involvementInnovation in product, process & service is keyWorld class manufacturing and product development capabilitiesExplain the impact of the reorganization in the mid 90sFunctional organization creates silosBusiness Sector organization requires integration of perspectivesFunctional Form

Business Sector FormINNOVATION STRATEGY AT M&MWhat were the key characteristics of innovation at M&M?Across the board innovation product, process, serviceFollow model that 1/5 of revenues come from products/services introduced in past 4 yearsFrugal engineering innovate on minimal budgetIDEO model observation leads to ideationCustomer/Product focusIDEAS InsightDesignExperimentAdded valueSales planINNOVATION PROCESSESR&D ExplorationNPD ExploitationMaverics, DaVinci like thinkers, little respect for functional boundariesNayak, hired in 1974, knows farmers, tractors and frugal engineering, likes to work on his own with no constraints.Work to create new ideas.No formal design, ad hoc.Lab technicians, highly specialized and disciplined engineersWork to minimize risk and maximize customer satisfaction, value added and learningFormal design based on research in other companies and McKinsey support.LEARNING FROM INNOVATIONNew knowledge may not be translated into consistent action unless the organization (i.e., its structure, systems, processes, leadership, talents) and its culture (the collectively held values, assumptions and belief systems, coupled with behavioral practices and physical artifacts) can support new behaviors. (Jassawalla and Sashittal, 2003: 4)

CHALLENGEHow do you create a supportive environment for both?How do you motivate, evaluate and reward both?When do new ideas move into the development process?Both processes have to support objectives (in some way):Make products suitable to customer needsEnable learningCreate value

Motivating Innovative BehaviorRewards and IncentivesRamamoorthy, Flood, Slattery & Sardessai (2005): employees perceived obligation to innovate, job autonomy, and pay has a direct effect on their innovative work behavior.MotivationManagement Systems

CultureIncentive Systems DESIGNING INCENTIVE SYSTEMSInnovation StrategyInnovation ResultsSetting GoalsSpecific versus broad goalsQuantitative versus qualitative goalsStretch versus realistic goalsSuccess-driven versus loss-avoidanceChoosing GoalsEvaluating OutcomesBalance between team and individual performance measuresI did We didSubjective versus objective performance evaluationJudged ObservedRelative versus absolute performance evaluationBetter than 10% betterSummary of DifferencesMAKING THE DECISIONShould Davasia allow the Sactor project to continue?How do you decide?IDEASInsight = combined tractor and transport affordable to lower-income Indian farmersDesign = futuristic, smaller tires, functional, stops trafficExperiment = multiple prototypes, radical designs, extensive testing, but technical problemsAdded value = ??Sales plan = involved late, little market research, little consumer testing; then Goyle & Nagwekar get excited, take Sactor to farmers.CALCULATING VALUEPrice = 1.9 lakhs ($3,958)Cost = 1.45 lakhs ($3,021)Profit = .45 lakhs ($937)Sales = 3,000/year = 1.350 lakhs ($2.8 million)Investment required = 7-8 crore ($1.45 1.67 million)KEY LESSONSExploration versus exploitationWhich yields higher profits IF successful?When do you integrate?How do you manage both and allocate resources?Both processes have to have effective governance.What happened?

MORE LESSONSMarket the product to find the qualified buyer and an uncontested market spaceEven if you have a great product, you still function in the context of industry, economy, government regulations, etc.The pay for performance conundrum


Recommended