Cultivation for Innovation
Uday Dandavate

The recent draught of consumer confidence has had an impact not only on the bottom lines of organizations but also on the spirit of innovation and collaboration in their daily operations. Cost-cutting measures across different sectors of the economy, has made employees insecure in their jobs, and averse to long term visioning and risk taking in pursuing new directions. This impact is felt in every sector of the society- Business, Public Administration, and Not for profit sector. For the past three years we are faced with recession of creativity. However, we are now witnessing a slow change in the climate. Many established businesses have found their market share slipping away and start-ups are firing the imagination of the marketplace. Established political parties are beginning to find their traditional vote banks are being threatened by independents and new activist groups such as Tea Party and Occupy Wall street groups in the US and Anna Hazare movement in India. NGO’s are beginning to occupy greater relevance in national and international development. The concept of micro financing pioneered by Mohammad Yunus of Grameen Bank of Bangladesh, is only an example. While companies like Nokia, RIM, Yahoo! are struggling to redefine their survival strategies in the new climate, the news of Instagram’s recent acquisition by Facebook for US $1BN and continued surge of apple, indicate that the climate is ripe for future focused organizations to start plowing the barren space of people’s imagination and planting seeds of ventures that will serve real needs of people with fresh approaches.

The US Automotive industry, for example, should not take comfort in recent financial success achieved through restructuring, signing competitive labor agreements and shedding of legacy costs. Cost competiveness will not serve in the long term, unless US automotive industry begins to invest in redefining the automotive experience at the same scale as apple has redefined their customers’ experience. The pharmaceutical industry, similarly is faced with the challenge of business growth due shortage of diseases to fight, and the loss of revenues with expiry of patents that guaranteed steady cash flow for a long time. A shift in focus from fighting diseases to developing solutions for wellness, a shift from insurance company or doctor centric care giving to new approaches for participatory healthcare where patients and their families play a role in managing wellness, could open up new opportunities for innovation in healthcare sector. Rather than aspiring to bring back production of commoditized products to more expensive US factories, encouraging building of new production lines based on leading edge inventions would bring pride and profit back to the US manufacturing sector. Through this article I suggest that a timely response to gradually changing socioeconomic and psychological climate is required to ensure sustainable productivity, profitability and growth. A timely response in today’s context means recognizing that rather than marketing the same old products and services and risking going back to the days of rampant consumerism. It is necessary to explore opportunities for meaningful innovation. We are into the season of cultivation and during this season organizations need to cultivate the minds of people who have a stake in their future (both internal and external stakeholders) and re-energize them to envision ways of transforming life with innovation. Business models and product categories need to be re-invented in order to align with the needs of the market. In anticipation of a season of reaping, companies are beginning to gear up production, commission new product development and rave up the engine of sales and marketing. Political parties too are hoping to cash in on their opponents’ weaknesses rather than exploring new ideas and programs inspired

by the dream of a better future. The primary focus of this article is to bring focus on the season of cultivating. There is a season for reaping and a season for cultivating. We are into a season for cultivating. The model of cultivation I propose here is envisioned for the benefit of individuals who will be the drivers of change in the future. Collectively they would lead the discovery, shared vision, inspiration and action aimed at a more sustainable enterprise of the future.

Figure: Driving Action through cultivation Cultivating responsiveness to Conscience In an earlier article, I had introduced the idea of Innovation sparked by human conscience (not conscious). I consider Conscience a sensibility, or metaphorically- a light in human sub-conscious, that illuminates our path, and acts independent of free will. German philosopher, poet, composer and classical philologist Friedrich Wilhelm Nietzsche believes that Conscience has arisen through evolution. According to him the central stimuli in the formation of conscience are a sense of responsibility and a trained memory. He suggests that

Conscience is an introspective phenomenon brought about by a feeling of responsibility, in which one analyzes their own morality due to the internalization of the values of society. I believe Cultivating responsiveness to Conscience will help develop autonomous agent of change driven by a sense of responsibility. It is important to keep workforce from turning into slaves of an industrial complex that gradually pushes the organization to extinction due to misalignment with societal values and aspirations. Those who are in the thick of managing a business driven by capitalistic ideology, the suggestion of a business concept or business model sparked by the call of the conscience will seem like an impractical idea or a utopian concept. However, in support of this suggestion I would like to give the example of Varghese Kurien, the father of India’s milk revolution. He dedicated 35 years of his life to organize poor farmers in the Gujrat into a milk producers’ co-operative and built the popular brand of dairy products, “Amul” which has remained a formidable brand in India and abroad. Through this organization, Dr. Kurien helped the needy create wealth. Amul transformed the life of humble cattle farmers throughout the country. His vision and effort has made India the world's largest producer of milk today, and Amul its biggest brand name. The real contribution of India's white revolution's is in empowering the poor and initiating constructive social change in rural areas—the Amul revolution directly benefits about 10 million dairy farmers. In the 1980s, he repeated what he did for milk in edible oils, with Operation Golden Flow. Another example in the social sector is the story of Baba Amte, who built an institution for rehabilitation of people suffering from leprosy. As a child I heard Baba Amte narrating the story of what ignited the spark in him. During his daily walk, he came across a person suffering from Leprosy and his immediate reaction was fear combined with repulsion. However, his conscience prevailed and he realized the irrationality and unfairness of his reaction towards the man. At that moment he decided to dedicate the rest of his life in service of people suffering from leprosy. These examples lead me to believe those who build an

institution sparked by their conscience inspire a sense of purpose in all their stakeholders. Cultivating a sense of purpose:

Driven by a sense of purpose: Southwest airlines employees (Left) funny steward southwest airlines rapping safety information (Right) To watch the video click on http://www.youtube.com/watch?v=pvdCFYLf_JI )

Not all businesses can be built in response to the calling of the conscience. However, there is clear evidence that most companies that have consistent record of innovation and sustained record of customer loyalty have cultivated in their employees a sense of purpose for what they deliver to the market. Apple Employees and customers are inspired to “Think Different” at every stage of the value chain, from design to use. Employees of Southwest Airlines take pride in the company’s dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. In the wake of September 11th, airlines suffered a major setback. Even after a $15 dollar attempt by the government to save airlines, American Airlines, Delta, and United collectively lost $4 billion; the major airlines laid off 16% of their workforce. Southwest managed to make $151 million in profit, but with an entirely different approach: they didn't lay off any employees and offered customers full

refunds on their flights. Southwest's maintenance of financial reserves to counter major setbacks allowed them to focus on what really matters: the employees and the customers. The employees and the customers were both grateful: Southwest employees donated $1.3 million to help the airline and customers began sending in donations and sending back gift cards to help with the financial struggle. The turmoil in the world economy triggered by the subprime mortgage blow out has revealed the ugly side of the market driven economy. Unabashed greed for maximizing profits has led to subjugation of consumer interest in favor of a focus on feeding the insatiable appetite of the shareholders for quarterly growth. As a result US economy has turned away from its historical leadership in innovation and manufacturing, clearing the field for opportunist money-spinners. George Soros, the Hungarian-American businessman who is known for playing a big role in the peaceful transition from communism to capitalism in Hungary, admits, ”Markets are designed to allow individuals to look after their private needs and to pursue profit. It's really a great invention and I wouldn't under-estimate the value of that, but they (the markets)'re not designed to take care of social needs”. When businesses focus only on profit as opposed to being driven by larger humanitarian purpose, the rationale for their very existence must be questioned. On the other hand, when the leadership helps cultivate a sense of purpose and aligns its business with a larger framework of service to the society, the spirit of innovation grows within the work force. Often companies hire outside consultants to design and deliver a breakthrough innovative product or services to gain recognition as an innovative company. However, products do not make a company innovative, company culture does. In order to achieve reputation as an innovative company, a company must direct the imagination of its workforce by cultivating in them them a sense of purpose. Cultivating a culture of discovery: It is important to cultivate a pervasive culture of discovery within an organization. Many companies spend large market research budgets without establishing a

process for socializing the insights and for translating insights into action. An overload of information from previous research has reached such a scale that some companies commission consultants to develop knowledge maps of “What they know and where the knowledge gaps are” after synthesizing hordes of research reports. It is obvious that these companies have not found enough time to process the research reports, and are looking for external agencies to summarize the insights and provide direction. Approach to research in many companies is driven by a need to finding readymade answers, rather than going through the rigor of learning. Most executives are fighting against attention deficit and consider time spent in the field connecting with their customers, an exhausting process, which they would rather delegate, and concentrate on strategic planning. On the other hand, many future focused leaders invest in cultivating a culture of learning within their organization. Jack Welch, former Chairman and CEO of GE, who is credited with 4000% growth of GE during his 20 year long tenure at GE, believes, “An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage”. Leaders who cultivate a culture of learning within their teams go home every evening with a sense of discovery and wake up in the morning with an epiphany. In Leonardo da Vinci’s words, “Learning never exhausts the mind”. Rather it reinvigorates it”. In conclusion, cultivating a sense of “creative curiosity” within a organization leads to a record of innovations. On the other hand, delegating and commoditizing research generates “Garbage” of PowerPoint decks. Cultivating empathy Empathy fuels Imagination. Innovation fueled by empathic imagination has greater chances of success because the product of empathic imagination has greater resonance with the people it is supposed to serve. Organizations that aspire to serve the aspirations of masses, as opposed to niches, must cultivate in their teams capacity for vicariously experiencing moments from everyday life of

their target audience- the moments in which their product, service or value proposition will find a fit. Gaining access to the emotions and imagination of your target audience helps develop intuition for success. Oprah Winfrey’s greatest quality is her ability to empathize with her audience. She built a business empire, a strong brand and a loyal audience through the power of empathy. She believes, “Leadership is about empathy. It is about having the ability to relate to and connect with people for the purpose of inspiring and empowering their lives”. Helping leadership cultivate empathy for its customers can lead to meaningful innovation. For example, a technology company that has built its business through years of service to the economically weaker sections of the society recently commissioned Lunar Design and SonicRim to identify opportunities for disruptive innovation in service design. The project involved the client teams participating in ethnographic exploration of the emotions and imaginations of their customers. The client team was able to gain empathy for distinct unmet needs of their niche market. Especially since the executive leadership belongs to a social and economic class that is different from their customers’, they were able to discover opportunities for meaningful service innovation by gaining empathy. An honest process of empathy generation leads to mutual empathy between an organization and its customers. Employees and Customers of an empathic organization feel a greater stake in a company’s success- more so in difficult times as the employees and customers of Southwest airlines did during recession. On the other hand, companies that are known to be apathetic to the pain and aspirations of the main street (such as the Wall Street, Automotive companies and Insurance industry) will find customer empathy towards them missing when they need it the most. According to Huffington Post, in 2009, 65 percent of Americans opposed bank bailout, 69 percent opposed car bailout and 77 percent opposed insurance bailout. Through their lack of empathy for their customers these sectors of the economy squandered away customer empathy.

Empathic organizations earn customer loyalty. The top ten US companies ranked in 2011 Temkin Loyalty ratings have empathic relationship with their customers. The companies are Amazon.com, Kohl’s, Costco, Lowes, Sam’s club, USAA, BJ’s wholesale Club, Target, JC Penny, and Walgreens. They have maintained a consistent record of taking responsibility for serving communities vs. being obsessed with the profits. Mahatma Gandhi explained empathy through his concept of trusteeship,. In his words, “Supposing I have come by a fair amount of wealth – either by way of legacy, or by means of trade and industry – I must know that all that wealth does not belong to me; what belongs to me is the right to an honorable livelihood, no better than that enjoyed by millions of others. The rest of my wealth belongs to the community and must be used for the welfare of the community." Warren Buffet pledging 85% of his Berkshire stock to five foundations is an illustration of Gandhi’s philosophy of trusteeship being put in action. Call for Action In conclusion I would like to quote American statesman and senator from Massachusetts, Daniel Webster, “Let us not forget that the cultivation of the earth is the most important labor of man. When tillage begins, other arts will follow. The farmers, therefore, are the founders of civilization”. Cultivation of the collective imagination is the most important labor of a society. Regardless of its motive- profit, social justice or charity- an organization can follow the path of cultivating conscience, purpose, discovery and empathy to inspire all its stakeholders to collaboratively build a thriving and sustainable economy.