Last week, I had the pleasure of participating as a judge in the Tata Group’s global innovation challenge, Innovista. This was my second year as a judge for the North American finals, held in Washington DC, and it gave me a great look into the way large, global conglomerates think about innovation and disruption.
In this day and age, many companies have business plan contests. They do it for many reasons – to identify innovation or potential improvements in products and processes, to identify talented employees and get their organizations to think about disruption and where it will come from. For conglomerates, this is often difficult because they have a very diverse group of companies. Indeed, Tata & Sons, as the parent of the Tata Group, oversees everything from Tetley Tea to chemicals to TCS, one of the largest IT consultants in the world.
The Tata Group has over 100 companies and over 450,000 employees worldwide, and it invites employee teams from around the world to compete. Five regions held their own Innovista competitions, and the global winner is chosen in India by the Tata Group’s senior leadership. The contestants enjoyed meeting and competing against colleagues and for a short time, feeling like they were part of something much bigger than their own division, factory or product line.
For companies that do these contests, they are an “out-of-the-box” way to learn much about their employees, technology and the marketplace. All large organizations have processes for product development, process improvement, employee review and market research. While these processes are always well-intentioned, and for the best companies, very effective, they are often time consuming and rigid in nature. Contests like Innovista allow companies to quickly understand trends, technologies and market forces in parallel.
Tata’s Innovista was similar to many of the other contests I have seen. Employee teams presented new business opportunities derived from customer feedback, or showcased new technologies they had developed for customers and clients that may become independent lines of business. The competition allows employees to showcase things that they have been tinkering with on their own time – ideas that might be scalable or solve a critical challenge the company is facing, without a significant commitment from the company in time or resources.
Most importantly, it puts a spotlight on the company’s most creative, innovative and dedicated employees. The Innovista contestants used their own time and resources to build out their ideas and prototypes. Their participation was not part of their annual performance review. But their willingness to spend extra time identifying and nurturing projects that could have great potential benefit for the company represents exactly what managers everywhere are looking for. And without the inherent biases of a review process.
What we don’t see a lot of at these competitions, however, is disruptive innovation. There is no doubt that company’s use contests like Innovista to find disruptive innovation, but they rarely do. Most of what we see are small improvements to products and services. This is not necessarily a bad thing – often those improvements translate to millions of dollars in revenue and market share. But companies are having a hard time finding disruptive innovation in their ranks.
This is probably because there is nothing disruptive about the environment. The passion and hunger of the entrepreneur who has a brilliant technology, but no money or infrastructure, seems better suited to create disruptive innovation than the well-resourced, well-compensated corporate employee, even though that individual theoretically has more time and support for innovating.
If companies want to truly leverage their internal business plan contests to find new products and services, they will have to start acting more like (gasp!) the universities and accelerators that they often criticize. These institutions now have business plan contests that are often stage-gated, require the involvement of mentors and sector experts, provide significant capital and focus on execution and not presentation. Corporate business plan contests often look like the university contests did in 2005, when a strong presentation and a baseline analysis was a formula to win. That is rarely where disruption can be found. The good news is that companies can improve their contests fairly quickly to integrate these best practices if they choose to.
Congratulations to all the teams that will compete in Tata's Innovista Global Finals. This is no small feat.
