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IDEAS AND NOT SOLUTIONS: ENABLING INNOVATION

THROUGH INTERNAL CROWDSOURCING IN THE TATA GROUP
In the Tata Group, we prefer to crowdsource ideas because we don’t have a formal mechanism
to allow staff to take time off their regular roles to turn all their ideas meant for other Tata
companies into full-fledged solutions.
- Ravi Arora, Vice President (Group Innovation), Tata Sons Private Limited

It was already December and the year 2022 was drawing to a close. Seven years earlier, India’s well-
known conglomerate, the Tata Group, had embarked on its open innovation1 journey. It started an
open innovation programme in which innovation challenges were posted to all employees around the
globe to seek their solutions. With almost a million employees in over 100 countries in a range of
industries including consumer durables, automotive, consulting, hospitality, steel, and salt, the Tata
Group companies hosted an enviable human resource talent pool. Would it not be beneficial to ask
these employees for suggestions on how to tackle the innovation challenges their managers faced?
This idea took shape after a presentation was made at the Tata Group by Professor Henry Chesbrough,
who had championed the open innovation paradigm. Ravi Arora, Vice President (Group Innovation)
at Tata Sons Private Limited, subsequently took on the charge to develop an open innovation
programme at the Tata Group. The programme had many elements, including the external sourcing of
solutions through the Tata InnoVerse platform, as well as the celebration of successful innovations,
and even audacious attempts at innovation that did not take off.

The internal crowdsourcing of innovative ideas, known within the Tata Group as eHackathons and
accessed via the Tata Ideas platform, was geared at breaking down silos within and among the Tata
Group companies, and building a culture of creative problem-solving. In the three years since internal
crowdsourcing through the Tata Ideas platform started in 2019, Ravi and his team had had to convince
the senior leadership and all Group employees about the benefits of open innovation, cajole managers
with unsolved problems to put out challenges, encourage employees to submit ideas (ideators), and
work with challenge-owners (seekers) to better articulate their problems, so that the problem
statements could be easily understood and high-quality submissions could be received.

In addition, to make the platform fun and interactive, employees could not only submit ideas, but
also cast a vote, place bets on ideas they felt were better than others, and help ideators fine-tune their
ideas, winning reward points for doing so and receiving a bonus for placing the right bets. This would
spur them to visit the platform regularly and review other ideas listed there, enabling them to learn
from others. Ravi and his team also introduced many process innovations to refine the system. Ravi
was also in talks with the Group’s various human resource managers to allow secondment or time off
for the selected ideators to collaborate with seekers to convert their ideas into solutions.

1
“Open innovation” was defined as a situation in which an organisation did not depend only on its own internal knowledge, sources,
and resources to develop new ideas or ways of doing something, but also a range of sources outside that organisation.

This case was written by Professor Reddi Rayalu Kotha, Dr Chon Phung Lim, and Thomas Lim at the Singapore Management
University. The case was prepared solely to provide material for class discussion. The authors do not intend to illustrate either
effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying
information to protect confidentiality.

Copyright © 2023, Singapore Management University Version: 2023-05-05

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SMU-23-0006 Enabling Innovation through Internal Crowdsourcing in the Tata Group

By the third quarter of 2022, Group Innovation had received over 280 challenges from 201 leaders
belonging to 36 Group and affiliated companies, and over 8,000 ideas had been submitted by more
than 6,000 employees from 55 Group and affiliated companies (refer to Exhibit 1 for a snapshot of
Group eHackathon participation rates). Over 400 ideas had won prizes, and an overwhelming
majority (82 percent) were from a fellow Group or affiliated company (i.e., not the company that had
posted the challenge in the first place). Despite the impressive progress made by the Tata Group on
eHackathons, Ravi could not help wondering how he could build a better ecosystem that would
facilitate the posting of more interesting problem statements and foster greater participation among
the Tata Group employees.

Tata Group

Headquartered in Mumbai (Bombay), India, the Tata Group consisted of 30 firms spread across 10
verticals, including information technology (IT), steel, and automotive. It was led by Natarajan
Chandrasekaran, Executive Chairman, who had previously been the Chief Executive Officer of Tata
Consultancy Services (TCS). The 154-year-old conglomerate, which had started off as a trading
company in 1868, was founded by Jamsetji Tata, who had been dubbed ‘the father of Indian industry’.
It had a presence in over 100 countries across six continents. Tata Sons was the principal investment
holding company and promoter of all the Group’s firms. Philanthropic trusts that supported education,
health, livelihood generation, and arts and culture held the majority (66 percent) of Tata Sons’ equity
share capital. For the period 2021-22, the Group took in US$128 billion in revenue and had more
than 935,000 people in its headcount.

All the Tata firms operated independently under the guidance and supervision of their own board of
directors. Save for Tata Sons, many of the other Tata companies were public-listed and had a
combined market capitalisation of US$311 billion as at March 31, 2022. The Group’s shareholding
percentage of the various companies varied – the three firms where its shareholding was highest were
Tata Investment Corporation (73 percent), TCS (72 percent), and Tata Communications (49 percent).
In the earlier part of the 21st century, the conglomerate had made a number of acquisitions involving
several marquee names like tea company Tetley, steel company Corus (itself a merger of British
Steel plc and Dutch steel producer Koninklijke Hoogovens), and automotive manufacturers Jaguar
and Land Rover. Explaining the organisation structure of the Tata Group, Ravi said,

Unlike most conglomerates like General Electric Company (GE), the Tata Group comprises
multiple independent companies. In most conglomerates, the corporate is listed, and key
programmes and processes trickle top-down, but in the Tata Group, the corporate is not listed
whereas most companies are separately listed on stock exchanges. The listing of these individual
companies underscores their independence from one another. In fact, the Tata Group’s equity stake
in some of these companies is in the range of 25 to 33 percent.

Boosting Innovation across the Group

Although every individual Tata company was making attempts to innovate within, it was not until
the first decade of the 21st century that the conglomerate began to realise that innovation had to be
supported by a Group-wide effort to make it effective. Three Innomissions (Innovation Missions)
were conducted from 2006 onwards. Involving several Tata Group CEOs, the Innomissions took the
CEOs to the US and Japan, where they observed how prominent companies in these two countries,
such as 3M, Microsoft, Toshiba, and Nissan, carried out their innovation initiatives. The CEOs next
visited Cambridge University in the UK to study its innovation ecosystem, followed by a visit to

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Israel where the team met more than 50 start-ups. This laid the ground for the formation of the Tata
Group Innovation Forum (TGIF), which consisted of CEOs/CxOs and ‘innovation leads’ from the
various Tata firms, in 2007. TGIF members met on a quarterly basis to devise and implement Group-
level programmes and measures to boost innovation.2

In 2008, Professor Chesbrough from the University of California, Berkeley, who had coined the term
“open innovation”, conducted a series of three open innovation workshops for Tata leadership teams
to introduce them to the concept.3

Commenting on the early days, Ravi shared,

After Chesbrough’s workshop in 2008, I was given the charge of finding out the problems which we
could present to external people to call for solutions. I worked for approximately 12 months with
different companies, but I did not get a single problem statement. Nobody was ready to share a
problem statement.

There were primarily two reasons for this. One obvious reason was that the managers don't share
their problems unless the problem becomes a roadblock in achieving an important annual key
performance indicator (KPI). Interestingly, the stakes are so high for achieving annual KPIs that
they are decided on the assumption that all problems are solvable. The second reason was that
sharing problems for some managers was a blow to their self-esteem, because they were handpicked
from the best colleges to solve problems! Considering the Group structure, there was always a
danger in forcing managers to share problems – they would have shared problems that were not
critical or would not have made any meaningful impact if solved.

Ravi and his team debated how they could break the impasse. They eventually decided to ease the
Tata staff into the process of adopting open innovation through three steps. First, they had to get the
individual Tata companies to become comfortable with sharing their problem statements across
business units, geographies, and functions. Second, after the firms had succeeded at doing so, Group
Innovation organised workshops involving Tata and other companies known for their open
innovation efforts such as Procter & Gamble (P&G). During the workshop, both sides would
exchange and discuss the other side’s problem statements and opportunities. Explaining the rationale,
Ravi said,

We picked P&G because they were used to sharing their problem statements with the outside world,
given their “Connect + Develop” programme in which they collaborate with individuals and
companies, laboratories, research institutes, financial institutions, suppliers, academia, and R&D
networks.

The third and final step was to establish InnoClusters among the Tata companies. These were groups
of companies that could collaborate in different areas such as Nanotechnology, Plastics & Composites,
Information Technology, and Water. The clusters operated for about 18 months after which Ravi and
his team felt that a decent-sized group of leaders in the Group was comfortable with sharing their
problems and had learnt the art of writing problem statements without worrying that their strategy
would be revealed to outsiders. Thus, it took nearly seven years for Ravi and his team to create a
culture for managers to identify, articulate, and share their problems that would attract solutions from
external sources.

Tata’s eHackathons
2
Sunil Mithas and Ravi Arora, “Lessons from Tata’s Corporate Innovation Strategy”, IT Professional 17(2), March-April 2015.
3
Ravi Arora, “Igniting Innovation: The Tata Way”, New York: Harper Business, 2019.

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Starting from October 2019, the conglomerate also began organising monthly thematic eHackathons,
accessed via the Tata Ideas platform (www.tataideas.com/TI/index) to attract mavericks from within
the Tata Group to propose ideas for business challenges (refer to Exhibit 2 for a sample of an actual
problem statement) on given themes. Some of the themes featured in financial year 2020/21 included
Innovating for Social Prosperity, Redefining the Supply Chain, Reimagining Health & Safety, and
Enhancing Customer Service.

To provide a more conducive environment for staff to devise and submit their ideas (refer to Exhibit
3 for a sample of the ideas submitted in response to the problem in Exhibit 2), a number of creative
measures were introduced. First, there were no losers in Tata’s eHackathons. Participants remained
perpetually anonymous. Names were revealed only for those who had their ideas shortlisted. Second,
in addition to getting monetary rewards, winners received certificates and LinkedIn posts written on
their winning submissions were published. Their respective managers and human resource
departments would also be informed of their successes in the eHackathons (all these helped to
enhance their social capital).

While some seekers discovered that their initial crowdsourcing efforts were fruitful, others felt the
process was less rewarding.

Tata AIA Life Insurance Senior Vice President (Operations) Chhaya Bajpai was one of those who
found her experience of posting a challenge rewarding. She had wanted to obtain ideas on how to
improve her company’s insurance policy documents, because, in her own words, “no one ever reads
them”. She thought that she could get some fresh inputs from people outside the insurance industry,
since many people were themselves insurance policyholders. However, what she found was that after
posting the challenge, she received 25 ideas, such as one about developing a consumer app, but many
were irrelevant. Of the five ideas that Chhaya shortlisted, only one was unique and it was eventually
selected. It proposed the use of a readability score tool to evaluate whether the policy document was
readable and fit for use for her customers. The other four were marginally useful but not
comprehensive enough to be developed as standalone solutions.

As for Somesh Biswas, Corporate Strategy Chief, Tata Steel, who was responsible for the
conceptualisation of techno-economically feasible sustainability initiatives for the company, his
challenge called for ideas on how to better quantify Tata Steel’s carbon dioxide emissions throughout
its entire value chain. Out of the ideas submitted, two were chosen as they appeared to demonstrate
some understanding of the problem statement. However, after the ideators had presented their ideas,
Somesh and his team decided that the submissions did not satisfy their requirements, so the ideas were
rejected.

Challenges to be Addressed

Before the introduction of the Passing the Best Baton (PBB) stage, during which ideators had to
present their ideas before the relevant seekers, the quality and depth of the ideas submitted for a
considerable number of challenges posted in the eHackathons were not as ideal as the seekers had
expected.

In addition, eHackathon users, comprising both seekers and ideators, at times faced system-related
issues which needed to be addressed. Among these were administrative difficulties and mismatched
expectations.

Administrative Difficulties

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SMU-23-0006 Enabling Innovation through Internal Crowdsourcing in the Tata Group

Chhaya found the process of posting challenges and then reviewing the submissions via the platform
was “too elaborate”. She was of the opinion that the platform had too many complex processes, which
would likely discourage more people from using Tata Ideas.

Ganesh Dahibhate, Senior Design Engineer, Tata Technologies, related that from the ideator
perspective, the restrictions placed on them made the process less ideal than it could have been. He
expressed the view that after ideas were selected, ideators were not informed about how the
implementation of their ideas was progressing.

Mismatched Expectations

Meanwhile, Somesh had expected that people with industry experience would respond to the
challenge he had posted. However, it turned out that many of the ideators responding to the challenge
had little to no domain experience. He was also of the view that it would have been more helpful if
the platform could specify the kind of domain knowledge required to solve the challenge. In this way,
generalists would know that the challenge was beyond them and only domain experts with the
appropriate profile, knowledge, and experience would respond to the problem statement he had
posted.

Maansi Singh, Jewellery Designer and Trend Researcher, Titan Company Limited, added that
challenges were rolled out too frequently on the platform. She thought that because of the frequency
at which challenges were being posted, they “sometimes felt like spam mail”. Additionally, since
ideators could only work on these challenges in their free time, she was of the opinion that providing
them more time to think and develop their ideas would enable them to devise better and more ideas.

In view of the feedback, Ravi wondered how he could address these challenges.

Fine-Tuning the eHackathons

Passing the Best Baton

In 2021, Ravi introduced a new phase called PBB. It required shortlisted ideators to present their ideas
to seekers and their senior colleagues (also collectively known as the ‘shark-cum-dolphin tank’), and
try to convince them that their ideas were worth investing in. This was a good learning experience for
the ideators as it helped them build their confidence. The pitch format also compelled ideators to
develop a more comprehensive presentation than the brief text they typically submitted via the
platform. However, given the more demanding requirements of PBB, the overall number of ideas
selected fell slightly from then on.

PBB required more time and effort from ideators, and it raised the expectations of seekers to the
extent that their desired ideators were to be given a few days off their regular work schedule to
enhance the ideas they had proposed with sufficient implementation details. A large number of
ideators (82 percent) worked for another Tata company. This expectation of seekers created a
dilemma in the minds of managers – encourage participation in eHackathons for the benefit of Tata
group or discourage the release of their staff to take part in PBB? What if doing so would affect the
output of their department or their ability to meet department deadlines? The issue was compounded
by the fact that many of these ideators tended to be the top performers and key personnel of their
respective departments from various Tata companies. Ravi and his team were also at a loss as to how
to better balance the interests of PBB participants, Tata companies and Group Innovation.

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Finding Pathways

To address the mismatched expectations specifically for deep technical challenges, Ravi and his team
introduced a new type of eHackathon called Discovering Pathways. Through this programme, the
ideators were invited to go beyond just stating the idea and providing details about the pathway that
needed to be taken to convert the idea into a feasible solution. They had to identify either a suitable
external partner or a Tata unit/team for whom the idea was aligned to their current/future plan. They
also had the option to work on the idea either in their personal time or as part of their day job, if the
idea was aligned to their goals.

Another option of allowing interested Tata ideators to be released from their current responsibilities
for a specified duration (e.g., three months) to work on the idea was also being explored. This entailed
the ideators collaborating with students, such as those pursuing PhDs, to co-develop solutions or a
proof of concept. But the challenge remained: would companies be willing to release their best people
to work on ideas that would benefit another company? According to Ravi, it was difficult for the
initiative to take root, but it might yield encouraging results. This could then be the beginning of the
Group’s approach to merging its crowdsourcing efforts from within and outside the conglomerate.

Implementing Rewards and Recognition

From 2019 to 2020, Group Innovation had focused on raising participation rates within the Group to
build a community of creative ideators. This was followed by developing mechanisms like PBB to
get ideators to provide more details about their ideas. Thereafter, the team had been focusing its
efforts on the implementation of selected ideas. As for the issue of recognition, while Ravi had been
working on getting the Group’s various human resource managers to recognise the contributions of
ideators, there was no proper system as yet to acknowledge the efforts of seekers and ideators.

By 2022, there were various kinds of recognition and rewards for participation in the eHackathons.
For instance, Group Innovation had created a virtual currency called ‘Karma points’. These points
were awarded to users for various activities – submitting ideas, voting on ideas, winning bets placed
on ideas, and helping ideators to refine their ideas. Additional Karma points were awarded if the idea
was selected for the PBB round and even more points would be given, should the idea be selected as
a PBB winner. Participants also earned Karma points for referring new ideators.

To drive thoughtful engagement, Silver and Gold badges were awarded to participants who put in
the time and effort to devise ideas of their own or go through the ideas proposed by others. The
objective was to reward quality, not only quantity. What this meant was that ideators who had more
of their ideas selected would earn such badges, while voters who supported more of the ideas that
eventually got selected would also obtain these badges. Additionally, these badge winners obtained
bonus Karma points, and could be invited to innovation conferences and workshops.

Furthermore, winning ideators would each get a cash reward ranging between INR 2,000 and INR
3,000 (US$24.20 to US$36.404), while top management in their companies would be informed of
their achievement. Those with the highest number of Karma points, and who had put in greater effort
in more difficult tasks like devising winning ideas, also stood the chance of getting recognised at the
annual Tata InnoVista event, which was held to celebrate innovations at the Group level.

Building on Gains to Seek New Heights

4
US$1 = INR 82.50 as at March 2023.

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SMU-23-0006 Enabling Innovation through Internal Crowdsourcing in the Tata Group

As Ravi and his team kicked off a brainstorming session to gather ideas for next year’s road shows
to promote Tata’s eHackathons, he was struck by the drive his staff showed as they bounced ideas
off one another. Yes, what the Group needed was this kind of enthusiasm, which had to percolate
from the management down to the rank and file. Then and only then could open innovation truly take
root and become second nature to every Tata staff.

Furthermore, the perennial debate on the quantity of submissions or quality of submissions mattered,
with the implication being whether the goal of the eHackathon programme was to seed a corporate
culture for innovation or seek solutions for the Group. Could the momentum gathered for open
innovation, especially the eHackathons held over the past few years, be turned into a crescendo that
unleashed the power of open innovation to the fullest in the Tata Group?

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SMU-23-0006 Enabling Innovation through Internal Crowdsourcing in the Tata Group

EXHIBIT 1: SNAPSHOT OF TATA GROUP EHACKATHON

PARTICIPATION RATES (OCT 2019 – DEC 2022)

Source: Tata Group

EXHIBIT 2: EXAMPLE OF AN ACTUAL PROBLEM STATEMENT

At present, an airline has been observing the following patterns concerning service time for
different activities:

• The average queueing time for the check-in or baggage drop counter for major metros is
between 10 and 15 minutes, and that for non-metros is between eight and 10 minutes.

• The average time for check-in without baggage is approximately one to two minutes
(excluding the queueing time) depending on whether the passengers are taking metros or
non-metros.

• The average time for check-in with baggage is approximately three minutes (excluding
the queueing time) depending on whether the passengers are taking metros or non-metros.

Due to the longer queueing time, the counter staff have less time to sell ancillary products like
meals, extra seating space, lounge service, etc., leading to a potential revenue loss. Such a loss
may also arise when customers opt for another airline for their subsequent travels, leading to a
loss of repeat customers.

The airline is seeking innovative solutions or ideas from Tata colleagues to reduce the queueing
time for the check-in counters and/or keep customers engaged while waiting in the queue.

Source: Tata Group

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SMU-23-0006 Enabling Innovation through Internal Crowdsourcing in the Tata Group

EXHIBIT 3: PROPOSED SOLUTIONS TO THE PROBLEM FEATURED IN EXHIBIT 2

We can link up the kiosk to an intelligent robot which can assist passengers in various ways:

1. Passengers will place their baggage on the robot. If the baggage weight exceeds the
permissible limit, the passengers will be given the option to pay for the excess baggage or
return with baggage within the acceptable limit.

2. The robot will be equipped with computer vision and Artificial Intelligence/machine
learning to detect items prohibited by the airline, and it will provide passengers with an
opportunity to remove them from their baggage beforehand. It will also help improve
airport security by helping to detect illegal/prohibited items, passengers with false
identities, etc. If illegal/prohibited items or passengers with false identities are detected,
the boarding pass/baggage tag will not be issued.

3. The kiosk will offer passengers options for other ancillary products such as lounge access,
meals, and seats.

4. Once the check-in has been completed, baggage requirements have been met, and the
required payments have been done, then the boarding pass and the baggage tags will be
printed at the kiosk. The baggage tags will enable the tracking of baggage while the
passengers are in transit.
Source: Tata Group

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