An Emerging Market Firm's Successful Tactics for Innovation

India's Tata Group presents a most striking case study of how an emerging market company can both do well and do good. IFC's blog has carried several stories highlighting its track record as a socially responsible investor. In the latest issue of McKinsey Quarterly, we learn how Tata's car manufacturing arm, Tata Motors, fostered innovation within its ranks as it engineered a successful comeback from a severe sales slump a little over five years ago.

So what tactics did Tata Motors employ?

Speaking about staff, Tata Motors Managing Director Ravi Kant told McKinsey Quarterly, "The trick was how to expose people to the outside world to allow them to see what is happening there rather than drilling change into them through speeches and letters." He went on to say:

We had our people listen to customers talk about the problems they were facing and the suggestions they had for product improvement. We exposed our people to products of competitors by tearing those products apart and analyzing the good and bad and comparing them with our own, thereby making people see why customers buy someone else’s products rather than ours.

Innovative leadership and perhaps a "higher objective" may also have been at play. The interview with Kant closes with a revealing comment on the motivations behind an emerging market company's drive to succeed and innovate.

"We want to achieve [success]," Kant says, "the Tata way -- transparently, ethically, and meeting our corporate social responsibility. We want to make India proud."

Comments

[Busk]

It is refreshing, but this is a rather typical pattern of large corporations in emerging markets. It is evidence also of development of Tata's home market.

[Development Crossing]

It is refreshing to see a company of its size recognize that its future success relies on empowering and involving those within, as well as having a positive impact on those communities where it operates.