Innovation From the Inception to the Market for Shaan, Essay Example

“Challenges associated with taking the innovation from the inception to the market.”

Introduction

Mahindra Tractors, an Indian premier manufacturer of tractors, saw an opportunity to come up with a new archetype of a tractor that could haul products as well as be used for the cultivation of farms. The conception of this innovative idea emanated from an observation of new trends in the market whereby many Indian farmers could modify their tractors to haul their farm produce. Full-sized tractors were also expensive for smallscale farmers. The company’s managers thought that the market needed smaller tractors that are more affordable and maneuverable. It is against this backdrop that the R&D manager, called Nayak, came up with a prototype for a tractor, which he dubbed the “Sactor.” As it later turned out, Nayak’s Innovation faced a number of challenges that hindered its progress. Innovation was clearly at the heart of Mahindra Tractor’s success. For this reason, the company had tended to focus on the cultivation of Innovation as part of its critical expansion strategy. On the other hand, the company faced a number of challenges in bringing up its Innovation for Shaan, from conception to production, to the market. Innovation is essentially the practice of transforming ideas into new products or improving certain products to meet new demands. Innovations may either be disruptive or incremental (LI, & Huang, 2019). It may either displace existing ones or create new markets (Richardson, 2010). In light of the facts drawn from Mahindra Tractor’s case, this paper discusses some of the challenges associated with such innovations, from ideation and concept development to product development in the market.

The main challenge that Mahindra Tractors’ R&D department faced was a lack of innovation strategy. Essentially, an innovation strategy defines the pathway that Innovation should take from inception to the market. It is clear that Mahindra and Mahindra lacked this strategy, hence exposing the Sactor innovative idea to risks of misalignment as the company’s management seems to have failed to understand the type of innovation theory to employ. In effect, the Sactor was basically a “disruptive innovation,” but it was treated as a “sustaining” technology that was targeted at farmers. Ultimately, the largest share of the market turned out to be those in the brick kiln industry rather than the agricultural industry. Indian farmers, in spite of looking for low-cost alternatives to M&M traditional and costly tractors, were less willing to try the “Sactor.” This trend could be explained by the disruption theory, which attempts to distinguish between “sustaining innovations” and “disruptive innovations.” In essence, “sustaining innovations” are quality products that appeal to a company’s existing customers (Christensen et al., 2015; Zentner, 2012). They consist of incremental improvements intended to facilitate more sales from mainstream customers. In fact, this explains why Goyle, the new R&D manager, made an observation that Sactor’s Innovation was too incremental and could only appeal to old customers – tractor farmers. In effect, Goyle came up with an innovation strategy that was basically anchored in disruptions innovation theory. In contrast, disruptive innovations are products that customers view to be inferior at the outset. Hence, customers are often less inclined to switch to the Innovation just because it is low-priced, and would rather wait until the quality of the product has increased to be more appealing (Christensen et al., 2015). This seems to have been what happened with Sactor. Goyle realized from his prototypes that customers were dissatisfied with the quality of the aesthetics. This explains why Sactor was redesigned to take up a Jeep-like look. He also redesigned it to make it more maneuverable at a small turning radius of 3.2 meters. This prototype became more successful for mobility – other than farm cultivation – purposes. It seemed to have become perfect for use across the year without regard for the seasonality of the rain. Because of the seasonal nature of the rainfall, it was impracticable for farmers to use tractors to cultivate the farms all through the year. However, because farmers [the target customers] could still need equipment for purposes of mobility, they could modify their tractors to make them appropriate for human and commodity transportation.

This indicates that having a precise innovation strategy could be critical to the overall conception of an innovative idea to its eventual implementation.

Low investment in incentives for Innovation could mean that innovators become less motivated to develop innovative ideas into conceptual products. It is clear that the Mahindra Tractor was indisposed to empower employees to spend most of their time on Innovation. This may explain why Nayak felt that he was working alone on his Sactor prototypes. Incidentally, the slow progress of the project because of a low buy-in from the managers and other departments may have made it easy for Nayak to quit (Tidd, 2006; Keeley et al., (2013). For instance, the Sales department may have been concerned that concentrating on Sactor could distract employees from selling the M&M tractors – due to “excess tractor inventory.” However, such behaviors may influence innovators to discontinue their innovative projects – as was the case with Nayak. Critically, internal motivations demand the overall support of the management. As Ding et al. (2013) explain, firms that focus on incremental Innovation (sustaining Innovation) tend to invest in higher incentives for innovators to enable them to develop complex projects. On the other hand, firms that focus on radical Innovation tend to invest in lower incentives despite the fact that the projects are complex. However, this could lower the morale of an innovator, particularly when it slows an innovation’s progress (Ding, 2013). This explains why Nayak decided to quit after observing that his project was rather slow. When coming up with an innovation, a firm should make full use of its resources, including financial and human resources (Zhu, 2018).

Centralizing Innovation in the R&D department could have hindered the continuation of the Sactor project. It also appears to have triggered other departments to demonstrate resistance to change. It appears that the centralization of Innovation to a single functional group at Mahindra and Mahindra also hindered the successful implementation of the Sactor innovative idea. In the organization’s structure, it is likely that Innovation was a designated responsibility of the R&D department. For instance, Nayak’s, the M&M’s R&D manager, main blunder was his reluctance to invite the involvement of other departments or even stakeholders. He believed that customer’s needs could be understood through insight and observation, instead of technical and financial analysis. He believed that too much analysis could slow or suppress Innovation. Incidentally, engaging technical and financial analysis would have demanded the participation of other departments (Ismail et al, 2014; Rexhepi, 2010). Ultimately, it turned out that Nayak was wrong, as he had misinterpreted the needs of the Indian farmers. Besides, the technical failures of his 15 prototypes slowed the progress of the Innovation, leading him to resign. Centralization of Innovation in the R&D department is possibly the reason why the Sales team felt that they had not been engaged to carry out market analysis (Chakravarty, 2000). Indeed, it appears that the ingrained belief in the organization that only a single functional unit in the company was well-positioned to innovate hindered the pace of developing the Sactor idea. While it could be appreciated that each department in the organization could have provided a distinctive perspective on customer’s needs, this was evidently not the case. In fact, this could force the company to spend time surveying Indian farmers, which slowed the pace of the Innovation. This also demonstrates the lack of diversity at Mahindra and Mahindra. Creating a diverse team beyond the R&D department could have played a role in diversifying the company’s innovation initiatives. In practice, the company would have benefitted from a wealth of ideas that originated from diverse perspectives or points of reference.

An apparent lack of collaboration also slows the pace of Innovation. A prominent feature of Innovation is that they are highly collaborative because of their tendency to be multidisciplinary (Teece, 2010; Welsch et al., 2013). At Mahindra Tractors, poor collaboration meant a lack of buy-in to Nayak’s innovative idea. Given that the sales team felt that they were not involved in carrying out marketing studies, they became less reluctant to support the conception of the “Sactor.” Although it appears that the management at Mahindra and Mahindra acknowledged the significance of internal collaboration, it failed to appreciate the significance of external collaboration. Indeed, it is very likely that an external innovation system could have enabled the company to engage industry experts and other stakeholders like farmers or customers to understand their perspectives on the aesthetics of the Shaan. Unfortunately, this was not the case. Indeed, Mahindra and Mahindra only learned about the significance of making the Sactor more aesthetically appealing after the American Society of Agricultural and Biological Engineers endorsed it as one of the leading innovations of 2006.

Another crucial challenge that seems to have delayed the progress of the innovative development of Sactor is a poor connection with customers. In the case study, it appears that the R&D department was unaware of what smallscale Indian farmers wanted from a tractor. The company had assumed that since smallscale farmers could not afford to buy full-scale tractors, fairly small tractors could satisfy their farmland cultivation needs. This inspired the idea of developing the Sactor. In reality, however, smallscale farmers wanted a small tractor that could help them haul their farm produce. Nayak seems to have been less in touch with what customers really wanted than Goyle. Nayak came up with a prototype of a futuristic tractor that had smaller parts than traditional M&M tractors. However, he was actually unsure of what customers expected from the design. He was uncertain of how his target market would react to the idea of a fairly smaller tractor. He was also uncertain of whether their loyal M&M Tractor customers would welcome the disruptive technology, while they expected a sustaining technology. In brief, Nayak had poor connection with their customers. While he expected that new customers would favour fairly low-priced hybrid Sactor that allows them to haul their produce and to cultivate their farms, he was uncertain of how customers’ would react to the product. This is because he expected the product to have a lower performance rating than the conventional M&M Tractors. On the other hand, Goyle seems to have been more in touch with what customers really wanted. This explains why he concentrated on developing a disruptive technology that became more successful outside the agricultural industry. It also explains why he changed the aesthetics of the Sactor. These events clearly indicate that understanding customers’ needs should be at the core of any innovation (Chakravarty & Eliashberg, 2005; Ding, 2013). The needs of the customers and the trends in the market could have provided Mahindra’s R&D department with clearer roadmaps for problem-solving.

It is also possible that the character traits of innovators could have a strong influence in enabling conception of ideas, conversion of the ideas into Innovation, and ultimately product development. However, Nayak’s character traits could also be regarded as a factor that hindered the progress of the Slactor project. Evidence from the case study indicates that Nayak was renowned in the company for always trying to go against the norms. While this quality was healthy for the company as it exposed him more as a risk-taking, entrepreneurial, and innovative person, it appears that he was not a team player. Research has shown that people who are risk-taking are most likely to be innovative and entrepreneurial (Antoncic et al., 2018; Kozubíková et al., 2017). Clearly, risks and uncertainty have been numerously indicated in research to be among the most influential dimensions of entrepreneurship and innovativeness (Antoncic et al., 2018). Indeed, in comparison to non-entrepreneurs or people who are less innovative, it is normal for entrepreneurs or innovators to be more disposed to risks or try uncertain ventures. The innovative personality trait is clearly what made him develop a prototype of a tractor, an innovative idea that was at the time viewed to be highly radical, and whose sale in the market was considered to be highly uncertain. He also had a deep insight into customer problems. In fact, Nayak is described in the case study as a person who had a strong belief in the conception that an innovator should have a strong knowledge of what customers want. Therefore, while Nayak had clearly demonstrated the quality of being innovative, forward-looking, and entrepreneurial, he came out as less of a team player. This explains why he had tended to thwart the idea of undertaking multidisciplinary research in market analysis, which would clearly have been beneficial to the project. For instance, it is claimed in the case study that he was not a person who believed in technical or financial analysis as much as he believed in having a personal insight. He also believed that “too much analysis would stifle innovation.” Goyle, on the other hand, comes out as a character who was innovative, entrepreneurial, collaborative, and forward-looking.  This explains why Goyle managed the Sactor project to its ultimate success.

Conclusion

As established in the case study, the main challenge that hindered the progress of the Sactor innovative project at Mahindra Tractors was a lack of innovation strategy. Apparently, failure of Nayak’s 15 Sactor prototypes indicates that having a precise innovation strategy could have helped the overall conception of the innovative idea to its eventual implementation. Low investment in incentives for Innovation could also mean that innovators become less motivated to develop innovative ideas into conceptual products. Nayak may have been demotivated by a lack of support from the management and other departments. Critically, internal motivations demand that overall support of the management. In addition, centralizing Innovation in the R&D department could have hindered continuation as well as led to resistance from other departments. This could have hindered interdepartmental collaboration to facilitate the progress of the Sactor project. Another crucial challenge that seems to have delayed the progress of the innovative development of Sactor is a poor connection with customers.

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