A recent article in The Economic Times profiled the work of Japanese Professor, Shoji Shiba, who has started the Visionary Leaders for Manufacturing programme (VLFM). Through VLFM, which is a collaboration between industry, academia, and the government, Shiba promotes the practice of ‘breakthrough mangement’, which says that when a company is faced with change, it has to find a new way to survive and grow, and in doing so, be sensitive to all stakeholders, particulary those at the bottom of the pyramid. As part of the program, Shiba recently took a group of managers to Dhobi Ghat (i.e. washerman’s hub in Mumbai), and asked them to think through ideas for implementing a viable business model for the washermen. His sustainability and BOP work has also been applied to Godrej’s portable refigerator and a sumersible pump for agricuilture, among other innovative products.
Dhobi Ghat, the washermen’s hub in Mumbai, is a dingy neighbourhood of clotheslines, discoloured pools of water and rows upon rows of wash pens. But it presents an array of socio-economic groups among the 10,000-odd washermen who live and work here-from smaller washermen thrashing clothes on flogging stones to better-off cleaners who run Laundromats.
It’s a thriving ecosystem and a perfect case study for how people at the bottom of the pyramid impact an economy. Few know this better than Professor Shoji Shiba, the Japan-born educator and proponent of the theory of ‘breakthrough management’ , who was, last month, conferred a Padma Shri for his work with Indian trade and industry.
On his last visit to India in February, Shiba took a group of senior- and middle-managers to Dhobi Ghat, and asked them to create a viable business (and living) model for the washermen. Suggestions ranged from verticalising Dhobi Ghat in high-rises to creating tourism opportunities , and will be passed on to the Dhobi Ghat Washermen’s Association.
“The idea was to give us the ability to see people at the bottom of the pyramid and innovate accordingly ,” says Zurvan H Marolia, head of the marine accommodation business at Godrej Interio. In the last four years, Shiba has imparted that ability to over 500 managers from Indian manufacturing companies.
It is integral to the approach to breakthrough management that the septuagenarian professor formulated while teaching at MIT in the mid-90s, which says that when a company is faced with inevitable and drastic change, it has to find a new way to survive. “Things change drastically in India,” says Shiba.
“When that happens , a company needs to kill its old business and create a new business, to survive in a constantly-changing environment. This is called a breakthrough .” During implementation, a company must consider all stakeholders . It must be particularly customer-facing towards users at the bottom of the pyramid who, because of their peripheral presence, become invisible to big business.
NEW AND IMPROVED
Since 2006, Shiba has been spearheading the Visionary Leaders For Manufacturing (VLFM) programme in India, a collaboration between industry, academia and the government. The programme trains managers on breakthrough management , and Shiba mentors them to become “real change leaders” who can initiate breakthroughs in their organisations to increase their global competitiveness.
It is via these change leaders that Shiba has worked with several Indian companies to create products and new markets for those products; make some businesses more green and sustainable; and even turned around projects by presenting a fresh look at things. For instance, he worked with Godrej to design and launch its portable refrigerator, Chotukool, for a largely rural market.
“The original market envisaged for Chotukool was users who are currently not using any cooling solution,” says G Sunderraman, executive VP (corporate development) at Godrej & Boyce. Mostly urban users, that is. Shiba showed that Chotukool might be suited to a rural market as well. “Every time we discussed Chotukool with him, he reduced the complexity through his focus on the essence,” adds Sunderraman.
“Over time, people began calling this a product that addresses the needs of the bottom of the pyramid.” Shiba has collaborated with 40-odd Indian companies on various projects (See graphic). “Shiba is a man with 35-40 years of deep insight into management techniques around the world,” says Sarita Nagpal, deputy director of CII. “Indian companies are lucky to have him.”
ESSENTIALS FOR A BREAKTHROUGH
As are many global ones. For three years from 1994, Shiba taught managers at Bose to listen to the invisible voice of the customer. “They were making products that were more dependent on technology rather than provide what customers wanted,” says Shiba. While Shiba was teaching at MIT, he started a programme similar to VLFM in the US, called Leaders for Manufacturing, in 1988. By the first seven years, he had trained over 700 managers in breakthrough management.
“You need that kind of critical mass to transform manufacturing in India,” adds Shiba. He says there are a few things Indian companies can start with to facilitate breakthrough. First, a “visionary leader” with a “noble mind” -who innovates top-down , takes ownership for the ideas of his/ her team and never loses sight of the greater good. This leader needs to have the top leadership on his/ her side. “Chotukool would not have succeeded if Mr Jamshyd Godrej had not backed Mr Sunderraman and his team,” says Shiba.
Second, companies must provide the necessary tools (and training) to unlock the minds of their innovative managers and employees. Shiba recommends his five-step discovery process as a starting point. And last, companies must provide ample skill-building opportunities. Indian managers need to learn to talk less and listen more, be more customerfocused and not pass the buck, says Shiba.
“Ethics are key, especially with the top management, more so in India, where organisations tend to create their own system of ethics ,” he says, with a laugh.
‘JUMP INTO THE FISHBOWL’
Alongside this, companies also need three kinds of vision: a bird’s eye view, to see the big picture; a worm view, to see the tiniest details on the ground; and a piscine view which will, like fish, help perceive a change in current in the water and swim in the other direction. In other words, change according to invisible environmental stimuli and doing course correction on the run.
There’s a joke among Shiba’s students that piscine references come easily to him because he graduated in fishery studies from Tokyo University. He loves India, and has an impressive Ganesha idol collection . “I’ve jumped into the Indian fishbowl,” Shiba often says. When he is not travelling, Shiba stays in his hometown of Tsukuba, near Tokyo, where he is also chairman emeritus at the local university.
He is on the road a lot. Besides taking classes at MIT for a month, he also teaches breakthrough management for a fortnight every year each at IIM Calcutta, IIT Kanpur and IIT Madras. And then there are his sessions (he refuses to call it ‘teaching’ ) with Indian companies. When it comes to breakthrough moments, every sector differs. In India, electronics or computer goods companies must initiate a breakthrough every two years; the auto industry in five or six years, while power stations can have them three or four decades apart.
“If we unlearn what we have internalised for so long, breakthroughs become obvious and thinking innovatively becomes natural,” says Sunderraman of Godrej. Taking Shiba’s much-quoted analogy forward , he adds that it is all about “jumping into the fish bowl, seeing through our own eyes. According to CII’s Nagpal, he’s doing more than that. Shiba is thinking of a bottom of the pyramid institute to lead more companies in that direction.
“Now, more than ever, Indian companies need to see the invisible customer and create a market for people at the bottom of the pyramid,” says Shiba. “When you develop the ability to see the invisible market in society, you would have achieved truly inclusive growth.”
His Work in India…
GODREJ & BOYCE
Designed and repositioned its portable refrigerator, Chotukool, for a largely rural market
Redesigned a submersible pump for better irrigation of agricultural land
Developed an electronic steering column for off-road vehicles
Advised the printing company to create high-quality printing machines that even small-scale printers could afford
Worked with its managers and workers to turn its foundry into a zero-waste one
His five-step discovery process advocates switching between thought and experience:
1. See the invisible ‘signals’ in the environment, or think about things that could affect your business
2. Look for facts and evidence to support this
3. Go back to the thought process to see if there are other factors that may affect business. Try to look for new ideas/concepts to deal with these
4. Once you have the new concept, test it out on a small group of potential customers to see if it is worth pursuing. If it is then:
5. Scale up to a pilot project, and following the ‘snowball principle’ , expand the pilot group to make it bigger and bigger