World Is Getting Stuck On Big-Bang Innovation Part 1

Pravir Vohra, Group CTO - ICICI Bank in an exclusive interview to Biztech2.com speaks about how CIOs should manage innovation and clarifies the fundamental difference between ‘Innovation’ and ‘Invention’.

How do CIOs define and institutionalise innovation?

‘Innovation’ has to be treated quite differently from ‘Invention’. Many a times these words are used loosely and interchangeably.

‘Innovation’ doesn’t mean an event of inventing something. It really means the process of finding a repurpose to what has already happened or a new way of doing things - it’s different from ‘Invention’.

Having kept that in mind, one has to be a little careful about innovation. And, that is to have a mindset that allows enough room for failure. A company cannot term itself as an innovative organisation if it expects every bet to be a successful bet. There should be preparedness to lose some bets.

So, what would help institutionalise innovation? I think the top leadership in the organisation should keep an open mind and have some boldness in the ability to go where other people may not have gone. This is because innovation is finding new ways of either doing the same things or new ways of doing different things, and you can trip up on some of these. The organisation should also make affordable investments in these initiatives.

While the world is getting stuck on big bang innovation, it is actually the small and minute things that add up and create the DNA of the organisation. Along with that it’s good to recognise, again in a formal or informal way, the ideators in an organisation. They can be from across functions - from business, service, operations, technology, human resource, etc.

These are broadly the essential ingredients for institutionalising innovation, which has to flow up from below but has to be embraced from above.

How do you manage innovation at ICICI Bank?

We have ensured that the performance metrics of our senior leadership are linked to, among other things, what new ideas they have brought to fruition. Just new ideas are not good enough. Going further, they should add value to the business. The introduction of new ideas followed by a proper follow-up action is considered in every performance review.

Perhaps, natively as a group, we have the ability of borrowing an idea from a particular country where we operate and replicating it in another location. A sustainable innovation process demands some kind of a formal or informal innovation structure. It can’t just be one central department. At ICICI, we have iLab where every employee is free to contribute ideas. Now, these could be - how could we straight through process something better, how can we eliminate processing steps out of a back-office, how can we improve a form design, etc.

Is it fair to drive every employee to practice innovation?

While organisations should create an embracing atmosphere for innovation, it really doesn’t matter how many employees are ideating. Ideas have to finally add value to either of the stakeholders of the company. Everyone is encouraged but you don’t have to reward or penalise people simply because they have or haven’t ideated.

As a mentor, at times one has to deal with the employees sympathetically. If an idea is not workable for whatever reason, for instance if it is against a regulatory charter, then the employee should be properly explained about why the idea is non-workable and at the same time should be encouraged and motivated.

How do you react to people who come with wacky ideas is very critical, because if the management frowns when there is a wacky idea, it is quite likely that the next idea might not come up.

How do you manage an idea that looks workable at the outset?

In case the idea is good and there is an obvious benefit to the business or the customer, the only consideration is how soon it can be implemented. It doesn’t really matter if it requires a lot of resources or a few resources. Overall, the ROI should be loosely associated, but it doesn’t have to be fully tagged. The core ingredients of the idea should be right and logically they must appear correct.

An idea that sounds too wacky may be tested with a pilot project, where again one should be cautious of the fact that sometimes an idea that doesn’t work in a pilot may really work in full bloom.

Typically, my role (of the CIO) would be ensuring that multi-functional, cross functional teams are all pulled together to make it happen because usually in a large organisation, any new idea could impact multiple stake holders which would trigger wide ranging changes, may be relating to processes, people, technology, etc.

Please share ICICI Bank’s culture of embracing ideas

Of all the technologies and products that ICICI Bank has launched the first time in this market, fifty percent of them started in the above manner.

The Cash Deposit machine launched by ICICI bank is an apt example. This machine is basically an ATM that instead of giving you money takes in money and credits the account immediately. During that period, nowhere in India was there a Cash Deposit machine available. This is not an invention as the machine exists in other countries like Japan, US, Mexico, etc. The point to be considered was whether the Indian market was ready for it. In two to three months of taking the decision, we got the manufacturers in the country and deployed these machines.

The decision in 2000 to go whole hog with deploying ATMs is another case where the then CEO thought that it was the right time and ICICI Bank redefined the market. We had just 85 ATMs in 2000. Again, in early 2000, we bet on centralisation, popularly known as Core Banking Solution (CBS).

These are typical examples where traditional business wisdom would have advised a ‘Go slow’ strategy because of the large investment. They are also big ideas where the organisation (in this case ICICI) is bucking headwinds and predicting that the future is in this direction. However, innovations remain innovations for three to six months, as they soon get replicated.

ICICI Bank welcomes ideas from customers too. As suggested by one of the ICICI Bank customers, the bank will soon be giving tax credits to their customers through the internet banking platform.