From Left to Right: Ravi Kant, C K Prahalad, B. Muthuram and S Ramadorai

C K Prahalad in conversation with TATA CEO's

How and where do you picture India in the next 15 years ? Read on to see what visionaries like C K Prahalad, Prof. University of Michigan, B Muthuraman, CEO Tata Steel, Ravi Kant, MD Tata Motors and S Ramadorai, CEO and MD, TCS have to say about India's role and place in the future........

C K Prahalad, asked the Panel Members to focus on 3 main themes,

1   What India can be and not what it is. The India that can be created in collaboration.

2   India as a Laboratory for Innovation.  Not just based on cost arbitrage.

3   Can India give the world moral leadership. A leadership not just based on Military or Technology leadership. Because as we have learned from Nazi Germany and the Soviet Union, Leadership based on Military and Technology fails and is short lived. We now have the the opportunity to show moral leadership.

India today has a long litany of problems, but we also have weak signals to show what is possible in 10yrs.

Getting Tata Steel right is one thing, but globalizing it is another. We are today at an inflection point, for instance in the Detroit Auto Show the only discussion was on Tata Nano. From the experiences of Tata Motors, we see how to create a Global Company which is very different from what MNCs from the west have done. In this context, of Globalization, we need to explore, What is the opportunity for India and The Social Legitimacy of the Large Corporation?

This is  also a good time to reflect, on how India can take Advantage of the current economic crisis, whether it is a good time, to respond like in 1991, and gain leadership. Can we create a new India vibrant and responsive to change?

Muthuraman: Tata Steel, always believed in four philosophies,

1.       Oneness with society.

2.       Adaptability ( To any environment)

3.       Empowered Workforce.

4.       Financial Prudence.

The purpose of an Industrial Enterprise is to improve the quality of life of society. So run it well and profitably so that the profits can be given back to society. This philosophy actually  helps in business as well. When we bid for Corus, Employees, Management, and Citizens preferred Tata Steel, because TATAs are socially responsible, and they will look at the long term benefits of the society as a whole. Every place we have gone our first actions have always been to help the local society. This is the reason why we will Globalise faster.

Regarding Innovation, we believe that every product, process should be improved upon, and also be innovated upon.  Tata Steel made many Social Innovations decades ahead of even the developed world; these include 8 hour work day, Maternity Benefits, etc.

Steel in that sense is not glamorous which makes it difficult for showcasing innovation. However we started this branding process around 10 years back. Now we have many branded products each of which adds quantifiable value to customers. Another innovation was in the supply chain where we have brought down the inventory, with us and our customers by half.

There needs to be a framework for innovation. We involve the workers. In Tata Steel we have an initiative called Manthan, where 30-40 workers assemble and spend time discussing one aspect of the plant. Amazing ideas have come from this initiative. It is important to empower and enthuse people to become champions of innovation. This is our (India's) strength, we need passion to perform, which is what is required beyond processes.

The Indian mind is also very creative.

The other strength is Adaptability, we have this ability to adapt to different languages and cultures, this is unique to us and you see this in no other country. This is amply demonstrated in our process of integration with other cultures. When we acquire a company abroad, we do not stamp out the local way of doing things, instead we facilitate the process of their own creativity.

Ravi Kant: There is a huge opportunity. There is a big change which has happened in terms of the "Urbanization of the mind" Due to cell phone, TV etc. the urban attitude in not confined just to the urban areas. Rural people, also want the same lifestyle and improve their quality of life.

Add to this, that India will have the largest number of people in the age group of less than 35 years age, for the next 25 years. An age group which is impatient to increase the quality of life. There is increasing income, and increasing credit. All this is leading to a paradigm shift. I am very bullish on India.

Now, this knowledge connectivity, between urban and rural India, needs to be changed to Physical Connectivity, with roads. The good intentions of the Government in making this happen hopefully will not slow down. Once this happens, and villages are well connected physically; then goods & Services will travel to the villager or he will go to it.

TATA Motors has a 60% share of the Commercial Vehicles market in India, so there was a need to go out of India to grow. Further with Indian markets opening up, we had to compete with others anyway, so why not go to other markets. This was the reason for making the big buck mergers and acquisitions, including Daewoo, Jaguar and Land Rover.  In Daewoo, since the acquisition, the company has increased it's market share in Korea by 5% and is today the largest exporter of trucks from Korea. We have grown by two and a half times in four years.

Regarding Social Responsibility: There were 10 bidders for Daewoo in Korea, we were the last in the beginning. I asked a person there, "Who will you go with" The Korean said he would go with a European brand because then the future will be secure. So we worked on the soft issues; while we met the Mayor, the President, the workers etc.  When we began the bidding process, there was antipathy towards us. But when we shared the Tata way of doing things-the concept of Trusteeship, the transperancy and the corporate governance of Tatas; people warmed up to us, and we became the preferred bidder.

A similar thing happened in the case of Land Rover and Jaguar. Once we talked to the unions, the whole ball game changed.

Indians have a knack for innovation, there are so many opportunities. We need to keep doing experiments, and look at things with a clean sheet of paper. This is what happened with Nano. There are 8 million people who buy two wheelers, the cheapest car 3yrs back was Rs.2 Lakh. So the opportunity and the need was there for a Rs. 1 Lakh car. All the industry peers said that it was not possible. We just set the price, and worked backwards. In creating Nano we got a lot of support from our suppliers, including MNCs. The suppliers used to think of costs in hundreds, we forced them to think in ones and twos. Nano is a fantastic car.

The Indian Advantage, is its people, and a holistic way of thinking. We use analog or fuzzy logic. We know this is the solution, but may not explain it logically. This is the reason we can operate in less predictable environments. This is an advantage. You find entrepreneurship everywhere in India, in terms of Small and medium enterprises, and they need to be unleashed.

We have a low cost advantage, in R&D for instance, we can create at 35-40% of the cost of others.

India does have disadvantages as well. We lack discipline. Look at our shops, streets; as a race we need to get disciplined, also get some discipline in thinking.

We accept bad quality very easily. We should demand good quality. We also lack concern for fellow human beings, and we lack a killer instinct, and we often lose in the last mile, the last 10%. We see this in sports and business. As we overcome some of these disadvantages, we will be a great nation again. India accounted for 15-20% of the world trade 300 years ago. We need to attain the same greatness.

Ramadorai: Indian minds are good at working under constraints. For instance, we when we looked at what were the enablers in the IT industry and India as a critical market there were a lot of constraints, including very high import duties on computers. We had to think disruptive. We made the IT budget a variable through outsourcing. We set up the IT system for the National Stock Exchange and in the process changed the face of the capital markets in India.

When it comes to innovation, we need to connect with Educational Institutions, and with start ups. Research for research sake will not take us far. It was this process which helped us imagine and build a super computer at a fraction of the cost it would have taken others.

C.K. Prahalad: Closing comments:-

Three issues which came out from the Panel:-

1.  Sheer size and young population is an opportunity.

2.  India needs to focus on constraint innovation. The example being the Nano one lakh car, which complies with the stringent European norms.

3.  Tatas have good Corporate Social Responsibility. The way they do business is an onus to society.

We see a different type of globalising, different from the IBMs and GMs. Like how Daewoo is a roaring business success 4 yrs later.

The question to ask is How do we allow innovation to be inclusive? If we do not include others in prosperity then we will have a problem.

Muthuraman: Innovation is often considered elitist, it is actually not so. It has nothing to do with education. Innovation need not always be big, Nano is a huge innovation, but our experience with Manthan shows that every single employee can innovate. Innovation is a process and should not have a R&D only colour.

For instance Toyota is a company that I greatly admire, does not have the word innovation anywhere. Innovation should become part of the bloodstream, the way we work. So we need to make it part of the process. We need to create the ambiance for freedom and experimentation, failure too should be given a pat of the back. We need to shed the elitist tag on Innovation.

Ramadorai: One way to increase quality is to to connect with good partners.

CKP: Regarding Ecosystems. We see something unique happening in India. India has built a software Eco-system, the same has happened in Automobiles, in Delhi, Pune and Chennai. There is an Eco-system for high value Electronics in Chennai. One thing unique about India is we can scale rapidly. When it comes to competition, it will be: How does the Tata Motors eco-system compete with GM.?

When it comes to Ecological Issues, we need to ask: Is there a different way to do this, without using too many resources.?

Ravi Kant: This question on Nano and its impact on the ecology is often asked. The fact is that Nano is the most fuel efficient car. In terms of the amount of Co2 emissions, one Nano can replace 3-4 cars. So Nano is not polluting. Of course what would be ideal is that India moves over to Electric Cars, in large numbers. We need an eco-system for electric cars. So the challenge is can India make electric cars at 1/5th the Global Prices, this could be a National Objective.

CKP: A Nano type car which runs on electricity would be a game changer.

Muthuraman:  Mankind cannot live without steel. In the US, per capita steel consumption is greater than the per capita consumption of food in terms of weight. India will soon reach that stage. Every ton of steel, produces 2 tons of Co2 so this is a very important aspect of climate change.  Because of this we have a Climate Change Programme. Essentially we are seeing what can we do more than what various protocols on climate change speak about. We are exploring alternate steel making processes.

CKP:  Regarding the steel plants, in a way each steel plant has a cement plant embedded in it. There is a need to explore how Co2 can be converted to cement. These sustainability issues force us to think, specially in the context of India. This also relates to The Gandhian view, more for less for more people. For instance why not have a Kindle like device (electronic book) and use this to download textbooks, and make education that much more affordable. There is a market for 500 million such devices. Not only will this help education, it saves trees as well.

These were excerpts from a panel discussion at the PAN IIT meet held recently at Chennai.

The Panel discussion was captured by reputed journalist Mr.Balaji Pasumarthy