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DevelopingLeadersExecutive Education in Practice

Issue 9: 2012

Leadership + Strategy Lonza and St. Gallen Find the Formula

Choosing the Right CEOHay Group

All Change at VlerickDean Philip Haspeslagh Interviewed

VG’s Innovation Imperativefor IndiaTuck at Dartmouth

IEDP Ideas for LeadersBridging the Academic Corporate Gap

Building Towers of

Babel?Roland Deiser Considers

Corporate University Structures

Executive Development

26 | Developing Leaders Issue 9: 2012

Vijay Govindarajan (VG), a professor of global strategy and innovation at the Tuck school of Business at Dartmouth, has a way of distilling complex narratives and principles into bite-size, easy-to-remember chunks. Take, for example, the economic history of modern India. For Govindarajan, it has three distinct phases: before 1990, 1990 to 2010, and 2010 to the foreseeable future.

Prior to 1990, India’s economy followed the soviet planning model. Companies were protected, so they did not need to be efficient. Growth was pegged at one percent per year. By most economic metrics, this phase was a disaster. Then the sleeping giant yawned and lumbered to life, embracing free markets, opening the borders to foreign companies and welcoming that agent of fitness: competition. The Indian economy grew aggressively for the next 20 years, mostly by providing outsourcing and cost control. But the rules of the game have now changed. “I think the efficiency game is over,” Govindarajan says. “If Indian companies want to be really competitive globally, they have to innovate.”

Govindarajan happens to know a thing or two about innovation. It has been the subject of his research for decades, he has written best-selling books on the topic, and he was the first Professor in Residence and Chief Innovation Consultant at General electric. Govindarajan also divides innovation into three phases. Actually, he calls them “boxes.” In the first box are all the activities a company must do to manage the present. The second box is about selectively forgetting the past to make room for new growth. And the third box is about “creating the future.” He has also coined the concept of “reverse innovation,” a new strategy where companies from developing countries innovate for their own population and then take those innovations to the high-income economies.

These principles might sound like the usual lofty abstractions of academia, but they are not. If you talk to executives at Indian companies, you learn that Govindarajan’s innovation imperative for India is spot-on. These executives know their companies will need to make dramatic shifts in their thinking and culture to be competitive in the economy of the future, and they are using expertise from Govindarajan and other top professors at Tuck to get them there.

Tata Consultancy services (TCs), a 10 billion dollar company that provides IT consulting and business process outsourcing for clients around the world, has recognized the need to transform the way it thinks about helping clients. success is not just about cost arbitrage anymore, but value creation. Himanshu saxena, head of strategic alignment and leadership management at TCs says, “We realized that some of our leaders were struggling with the mindset that was required to innovate, the culture required to innovate, and even a lack of understanding of certain tools and frameworks that would help them.”

HsBC, the multinational bank, has been running into a similar challenge in India. The Indian government has passed a resolution, effective March 2013, increasing the percentage lending to ‘priority sectors’—engines of growth such as agriculture, small

A Larger AmbitionVG’s Innovation Imperative for India

By Kirk Kardashian

Executive Development

Developing Leaders Issue 9: 2012 | 27

“I think the efficiency game is over. If Indian companies want to be really competitive globally, they have to innovate.”

enterprise, education, micro credit and housing—from 32 % to 40%. shortfall in meeting these targets results in high penalty. “It may look like an easy goal,” says Vijaya Kumar, head of learning, talent, resourcing and organization development for the company’s Indian business, “but it is very difficult because most of the lending is expected to be in the form of small, unsecured loans and in this climate, unsecured lending is not something that any bank wants to take a risk on. On top of that, HsBC is competing with Indian banks with more branches and greater penetration in rural markets. so the challenge, as Kumar describes it, is “to come up with innovative products and ways of servicing customers in remote locations so as to meet the priority sector lending targets, while getting the different businesses of the bank to work together.”

To address the innovation needs of companies like TCs and HsBC, Tuck created the Innovation Leadership Consortium program for a select number of non-competing companies, integrating the best qualities of open-enrollment and custom executive education models. By offering the benefits of engaging with executives from other companies, along with the chance to collaborate on the design, content and location of the program, a consortium model of executive education is a highly effective way to inject fresh ideas, skills, and perspectives into executives in a wide range of areas.

Tuck has experience with this sort of learning. For over a decade, the school has run the Global Leadership 2030 consortium program to prepare high-potential executives for trans-national leadership assignments. Current consortium members include Cigna, Colgate-Palmolive, Corning, Deere and Company, and Rolls-Royce.

Executive Development

28 | Developing Leaders Issue 9: 2012

Deere, which has been part of the consortium since its inception in 1999, sees a strong impact from its participation. Thanks to the interaction with executives from other firms during Global Leadership 2030, the company has been able to compare its business practices with other companies and forge a network of contacts around the world. A key metric for Deere is how many positions of major responsibility are filled by Global Leadership 2030 alumni: 70 to 75 percent are in the global officer group. At Colgate-Palmolive, the program is an important part of the company’s retention strategy, sending a signal to key high potentials and used as a stepping-stone to the global assignments necessary for advancement to the highest levels. From 1999 to 2009, the retention rate of program alumni was 91 percent, with 72 out of the 79 participating executives still with their organizations.

To recruit firms for the Innovation Leadership Consortium, Tuck worked with the executive education consulting firm Eruditus, which is based in Mumbai. Once a set of companies expressed interest in the program, Tuck and eruditus organized a workshop in Mumbai with Govindarajan to explore a prototype design with senior HR representatives and executive sponsors for action learning projects— the experiential components that spur the attendees to work on real-world business challenges under the mentorship of Tuck faculty. The session was a model of cooperative creation. “We put a ‘strawman’ proposal on the table for discussion,” says Phil Barta, Associate Director of executive education at Tuck, “and the companies came back and asked, ‘How can we best integrate additional faculty and executive perspectives?’ We iterated with them to revise the program design. That’s something we’d regularly do in a custom program. We partner with the client very closely to shape the learning initiative.”

Four companies that attended the workshop agreed to take part in the consortium: HsBC, TCs, Johnson & Johnson India, and Mahindra & Mahindra. The companies selected executives from a range of functions to participate, including insurance, branding, strategic planning, client management, R&D, and compliance. The program would take place over the course of three one-week modules during 2012 and 2013.

Preprogram Virtual Launch

MODuLe 1

Strategy Is InnovationHanover, NH (Tuck Campus)

MODuLe 2

Customer-Centric InnovationHyderabad

MODuLe 3

Leading Innovation into ActionMumbai

Post-Program Follow-up

Action-Learning Projects

Three-Module Consortium Model

Open Enrollment Program:Curriculum and learning methods designed to meet individual development needs

Custom Program:Curriculum and learning

methods customized to the needs of the organization

Consortium Program:Blends the benefits of

cross-company learning and individual company project

Types of Executives Education Programs

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Developing Leaders Issue 9: 2012 | 29

Professor Govindarajan is the founding faculty director of the Innovation Leadership Consortium. The program also includes sessions taught by Tuck innovation and leadership experts such as Chris Trimble, Alva Taylor, Pino Audia, Ron Adner, Praveen Kopalle, Anant sundaram—plus other distinguished guest faculty speakers.

The first module, which took place on the Tuck campus in April of 2012, gave participants the important innovation concepts and frameworks that would be the foundation for future learning. It included sessions such as “strategy Is Innovation,” “strategy under uncertainty,” “Organizing and Planning for Disciplined Innovation,” “Innovation ecosystems,” and “Reverse Innovation,” among others. “The team came back very, very impressed,” says Tushar Murdeshwar, the head of marketing for Johnson & Johnson’s Indian consumer products division. “The feedback was so positive that the management board was able to identify broad projects we can begin working on right away.”

Module 2, to be held in Hyderabad in October, will shift the focus from the classroom to the field, with its theme of “Consumer-Centric Innovation.” Praveen Kopalle is the lead faculty for this block of learning, and he is joined by Indian innovation leaders. Kopalle spent the first half of his life in India and has been returning to the country for the past five years as a visiting scholar at the Indian school of Business at Hyderabad, working with faculty and writing research papers. Consumer-centric innovation “is another term for what I call empathetic design,” he says. “It’s how to design products and services by examining the customer first.” The process is more than asking what the customer wants, Kopalle notes: “You very much put on the hat of the anthropologist and watch the consumers in their natural habitat and try to understand their pain points.”

Customer-centric innovation... empathetic design. It’s how to design products and services by examining the customer first

Professor Govindarajan discusses innovation with India’s Prime Minister

Dr Manmohan Singh

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30 | Developing Leaders Issue 9: 2012

This concept is brought to life in module 2 with the beginning of the action learning projects; where each company team delves into an innovation challenge the firm wants to surmount, and then fleshes out the solution with faculty and their peers. Mahindra & Mahindra offers a good example. Although it is best known as an automobile manufacturer, it operates in every sphere of the Indian economy, from agriculture, leisure and health to defense, power and aerospace. One of the main reasons the company joined the consortium is because it has made innovation one of its strategic imperatives and wants to see how it can fit that imperative with its leadership capabilities. One part of its action learning project is to design a scooter for Indian women. Prince Augustin, executive Vice President, Human Capital says, “Our aspiration is to be a top-fifty global brand by 2021. This is a big challenge for us, and we therefore must innovate disruptively.” During the course of the project, the Mahindra & Mahindra executives will identify members of the target market and spend time with them in their home and work environments.

For its part, the Johnson & Johnson team has been doing ‘consumer connects’ around India—travelling out into rural areas to understand consumers’ insights and lifestyles. “We’re not looking at these visits only from a marketing perspective,” Murdeshwar says, “but from an organizational perspective.”

Kopalle stresses that the action learning projects—indeed, the entire consortium—is about more than making a better widget. “We can move the needle on the country as a whole, make it more innovative,” he says. For Kopalle, who received full scholarships from the Indian government for all of his higher education, and was then allowed to work in the united states, the opportunity to work in India is very rewarding. “I think of it as giving back to the country that has poured a lot of resources into me,” he explains.

The third module—“Leading Innovation Into Action”—wraps up the action learning projects and offers participants the chance to interact with supremely successful Indian innovators. Govindarajan will moderate a panel of innovators that includes a lead developer of the Tata Nano (the $2,000 car), a health care entrepreneur, and an executive from the Mumbai Tiffin Box suppliers Association, which delivers millions of hot lunches every day in Mumbai with almost zero mistakes. Govindarajan will also moderate a panel of CeOs from the four consortium companies.

even though the participants have only completed one module, at the time of writing, the impacts of the consortium are becoming clear. Yes, the action learning projects are giving the companies dynamic information to put into use immediately—witness Johnson & Johnson—but the program as a whole is teaching something more lasting and resilient: the habits of conceptualizing, testing and tinkering. And it is giving companies insights into the organizational structures that will foster creativity and execution of those ideas.

At TCs, “what has dawned is the realization that the innovation engine and the current performance engine need to be driven by two different sets of people,” says saxena. “That was a powerful lesson.” For Johnson & Johnson, the exposure to different companies

“If this program can influence hundreds of executives over a ten-year period to make good decisions and innovate, that will contribute to India’s growth. That is my larger ambition.”

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Developing Leaders Issue 9: 2012 | 31

and the principles of innovation has broadened the participants’ idea of what is possible. “People who would have been more risk-averse in smaller units are now more open to risk taking,” says Murdeshwar. “And I expect they will get into a space where they can think big and get out of their comfort zone. Without this program, it would have been very difficult to get them to think this way.” Ravi Menon, Managing Director and Head of strategy at HsBC India says, “For organizations like HsBC spanning multiple geographies and diverse cultures, development programs like this can help bring focus and consistency as well as a global perspective across our own talent and leadership management agenda.”

ultimately, the impact will not be felt in these companies alone. At least that is Govindarajan’s hope. For someone who grew up in close proximity to an Indian slum, any work in India must also be for India: so that businesses not only serve the ‘bottom of the pyramid’ but also help the less fortunate move up. “If this program can influence hundreds of executives over a ten-year period to make good decisions and innovate, that will contribute to India’s growth,” Govindarajan says. “That’s my larger ambition.”

For more information, visit Innovation Leadership Consortium

Kirk Kardashian is a senior writer at the Tuck School of Business at Dartmouth. His book ‘Milk Money: Cash, Cows and the Death of the American Dairy Farm’ was published earlier this fall by the University of New Hampshire Press, www.upne.com

Field Visit with the Tata Consultancy Services team to Uppariguda near

Hyderabad, Andhra Pradesh, India, to understand the low cost eye care

business model in a region where 85% live below poverty

Despite much discussion about the need for leadership development in corporate and public organizations, and

the considerable industry that surrounds it, this is the first authoritative periodical focused entirely on this area.

Developing Leaders looks at the critical confluence between the provision of executive education and the real everyday

needs of organizations to strengthen their management teams, their corporate performance, and their leadership.

The publication presents the latest thinking and most recent developments in both academic and commercial executive

education provision worldwide, what it is achieving and which are the best models for success, sharing the experience and

expertise of top leaders and world class educators.

Developing Leaders is published in both hardcopy and online “page turning” format. The quarterly magazine

complements the IEDP website - the definitive resource for executive developers worldwide.

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