Globetrot with soul-sisters

If you are an experienced woman traveller who knows how to traipse around the world like a pro but yet there are moments when you just don’t want to be around members of the opposite sex because you are recovering from a broken heart or some illness, then there is another opportunity for you.

Ofcourse, first-time solo female travellers would jump at the idea of the WOW Club, The word ‘Wow’ standing for Women on Wanderlust. This Club conducts women-only tours and was started in 2005 by an intrepid globetrotter, Sumitra Senapathy. She’s bitten by the travel bug and has been to most places on the world map as she points out on her website http://www.wowsumitra.com/ She’s written about her sojourns as well in many publications.

She realized that women were looking to expand their horizons and were willing to step outdoors without spouses/boyfriends/part-time lovers dogging their shadow. So, that’s just what she gives them. Foreign jaunts with the least amount of male interference!

This year she’s is doing trips to Egypt, Ladakh, Italy, Turkey, The Czech Republic, Hungary, Budapest and Poland. In the past, she’s taken people to South Africa and Egypt as well and in the future she may include China on her itinerary. So, far her ‘travellers’ congregate at meeting points like Mumbai and Delhi and then fly out together. She’s going to add Bangalore to this list soon.

But her tours are not cheap because as she says, her club is “situated between the Fiat and Mercedes price points”. So, she may not be as expensive as Cox and King and Thomas Cook but she doesn’t do bare-bones budget tours either because she admits “Indians are not ready for backpacking kind of trips.”

So, a trip to Egypt which has already taken off on February 14 this year costs around Rs 1,35,000 not including the costs of domestic flying or hotel expenses (if they have to stay overnight for any reason) that people will have to do if they are coming in from other parts of India to the point of embarkation – either Delhi or Mumbai. All in all, these trips will come out to cost almost as much as bigger travel agencies charge.

The difference being that the big tour operators factor in all these costs into their packages and take care of everything for you. All you have to do is show up on the appointed day! The WOW Club, on the other hand has to differentiate in some way from the more established names so Sumitra has plans to introduce memberships to her club.

She told me that it would cost each member Rs 3,500 and it will be valid for 3 years. Members will get a 2% cash discount and will enjoy preferred pricing on select lifestyle products/services. She’s also going to organize discounted trips of a shorter duration (2-3 days) for her members. There are also plans for her club members to enjoy, for instance, six wine evenings in three months and other such events in various cities. She says this would be a great way for her regulars to bond and meet, after having met up on her tours for the first time. She also added that the WOW Club is popular with a lot of NRIs, who have taken her tours with their relatives.

So, if you are interested in hotstepping abroad with some soul-sisters, then join this club at http://www.wowsumitra.com/contact_us.htm and enjoy a rollicking time.

Caffeine addiction will soon be the new high

Coffee bars will soon be the hot new dating spots, what with international chains like Costa and Starbucks gearing to come into India. UK's Costa will be the first one in, and is going to open its first store in New Delhi. While Starbucks is finalising a franchisee partner.
Thailand-based Coffee World owned by GFA is also set to tantalise tastebuds. So, homegrown brands like Barista, Qwiky's and Cafe Coffee Day have perked up and are on an expansion drive.

A private study says there is potential for five-fold growth in coffee outlets over the next two years. CEO of Barista, Partha Dattagupta told CNBC-TV18, "Maybe 60% of the outlets that we plan to start this year would go into saturation in existing markets. The balance 40% will necessarily take us into new grounds. Gor example, in the West (India), today we are not present in markets like Goa, Surat, Indore or Bhopal, which are on our radar."

Each chain is looking at anything between 30 to 300 outlets across the country and are going to adopt different retail, marketing and positioning strategies. Starbucks expects to hardsell its brand of coffees at a slight premium, while Costa plans to play on price points - taking the competition straight into Barista and Cafe Coffee Day's turf. A franchisee for Costa Coffee, Ravi Jalpuria explains, "Price-wise we are lookng at what's affordable and what people in India can afford."

But most chains still don't have enough of a national presence or high enough margins to justify mass media advertising. Instead, they are relying on in-store cross-brand promotions, film tie-ups, merchandising and live bands that have helped spread the word.

Some like Coffee World has even signed on a brand ambassador. CEO of Coffee World, Anoop Sequeira, "Considering the fact that we are late entrants in India, we certainly had to speak out and to a large extent, the brand, the product and the quality of your service will speak out to the consumer. But, at times, you want to pick up a faster pace of communication, that's where an endorsement fits in and that's why we looked at Esha Deol."

Meanwhile, local players don't want to be caught napping, so, Barista has launched a lounge under a sub-brand called Barista Creme that targets premium customers. Others, like Mocha and Cafe Coffee Day have also introduced coffee lounge formats. Barista is also said to be working on a takeaway model called 'Coffee on Wheels'. The increased competition could also see some local players sell out to larger, global entrants.

Both, Starbucks and Costa have deep pockets and are already on a poaching spree, with Barista's marketing head moving to Costa. This will also ensure better levels of service because Starbucks spends almost 2% of its revenue on employee training. So, Indian coffee chains will need to put similar training models in place to keep customers coming back for more.

Written for moneycontrol.com

PS: When this story was written, none of the foreign brands were in the country yet. Since then, Costa has opened shop at Juhu, Mumbai. Here's looking forward to the rest coming in and preferably in locations across South Mumbai as well. After all, I'm all in favour of gourmet coffees but not at the expense of sitting in traffic for 2 hours to get to enjoy it...all the way in the suburbs!

Innovation: Do it alone or with a team?

Innovation in business can be learned everywhere and from anyone. Even well known sportspeople have innovated and re-invented themselves into some big-time brand names. Skateboarder and founder, Birdhouse Skateboards, Tony Hawk is one such person.

He's built a huge business and made his fan base into his very own customer base. The people who used to look up to him as a champion skateboarder, now buy his line of skateboards and other skating related merchandise and he credits his team for this. He says they understand the skateborading culture and come up with ideas that enhance his business.

There are ofcourse, businesses which need to hire the right kind of people who can see eye to eye and this is something that CEO of Socratic Arts, Roger Schank endorses, that people should be allowed to work from wherever they feel most comfortable and if that is from home or a coffeeshop, then so be it. He told CNBC, "Sometimes, the best innovation happens over lunch."

This man's business idea may literally have popped up in his mind over just such a lunch! He was so frustrated over the huge margins that office supplies retailers charged that he decided to go into business for himself. Founder, Staples, Tom Stemberg says, "One of the things when we talk about innovation is that you kind of get the idea that innovation is about a bunch os people sitting in a room and thinking of ideas in a padded cell. In reality, most great ideas actually come from your customer."

"It's not just people sitting around but your people on the frontline, talking to your customer and in great organisations, that kind of feedback gets back to the core, and you get great new ideas and form great new businesses." He feels the real challenge is to make keep people motivated and retain them.

Schank feels that the big problem today, in large businesses is, when people making decisions are not aware of other people in the same organisation, making similar decisions. So, this lack of coordination results in what he calls "loss of corporate memory", in big organisations.

He also asks a vital question, that of "are we capturing the experience of the baby boomers who are being phased out?" These are the very people who may have a memory of a deal being made and they could pass on their experience and knowledge to the younger lot of workers coming in.

Stemberg also feels that people should not go into other countries assuming that theirs is the only way to go about innovation and that people other countries should just follow the same steps, because what works in the US may not work in England or Canada. Stemberg recalls that his store, Staples, took off in Europe, only when they were headed by Europeans, who obviously understood their core customers.

The real reason for innovation is the desire for growth and most companies have realised that, looking beyond their own walls (and sometimes beyond geographical boundaries) is necessary because usually if there is a problem, then it has been noticed that someone across the world had already spotted it and found a way to solve the problem, but the rest of the world is unaware about it!

So, some experts feel that innovation is really a collaborative sport. But Schank, ever the contrarian feels that it's not a team sport but "it's a sport driven by a common need to solve a problem and that's the only real issue you need to bond on."

He adds, "Innovation comes with experience. You need a guy with a big ego because he's the one who will come up with the big, new idea and then fight for it. The rest of the team should buy into the idea, so they can help him build on the idea."

Written for moneycontrol.com

How technology makes life simple & fun

Do you like being confused? Ofcourse not, but scientists like being confused because it makes them think about things but businesses run a mile away from the very idea of confusion because it upsets the applecart for them. So, what do they do? Socratic Arts, CEO, Roger Schank feels businesses should appreciate confusion because it leads to new ideas. He told CNBC, "When everyone in your company agrees on the question, innovation is possible."

Some businesses have changed the way we live and Illy Coffee is one of them. CEO, Illy Coffee, Andrea Illy comes from a illustrious family with coffee running in his veins. His grandfather, Francesco Illy was the first person to invent the espresso machine and at one time, the company held 17 patents. For more than 70 years, Illy Coffee has been at the forefront of innovation.

And then there is CEO, On Demand Books, Dane Neller who has made it possible to print, trim and bind paperback books at a penny a page, with the help of his espresso book machine. This has made it possible for him to print only a single copy of any book. He has plans to use the vast reservoir of written content available, that can be printed anywhere in the world.

Both these men have made consumers their focal point and made sure that their respective businesses keep that in mind. Neller says, "In our case, the consumer wants the product cheaply and immediately. And that's what we are delivering with our book machine. You can get any book now, at any time at a fraction of the time. So, in the end, the consumer is king and that determines what your technology is going to do."

Window-shopping at Ralph Lauren

Just how much more fun shopping can be made is proved by Ralph Lauren. The ace designer's 25,000 sqft Manhattan store has put up an innovative touchscreen on its store window. So, as people walk by, the touchscreen grabs their attention and they can touch and call up merchandise. Right now, they have only their range of tennis clothing up but this is going to expand to their casual wear as well.

The screen is a transparent sheet right on their huge store window and people can browse as well as buy the clothes standing right there, without even having to step into the store at all! With a credit card swipe machine also fixed onto the window just beside the touchscreen, this use of technology has given window shopping a whole new twist!

Senior Vice President at Ralph Lauren, David Lauren is impressed with the way people have taken to this concept, that he plans to extend to all the other stores.

Schank feels the same way about Illy developing better and better espresso machines, so, that people can enjoy the same great cup of coffee at home, as they would do in Italy! And this is a espresso fan expressing his desire. So, this is the kind of consumer feedback that makes technology get user-friendly, so that eventually, everybody has access to it and can learn how to use it.

Similarly, there are other inventions in the works that could prove revolutionary, and one of them is RFIDs, which is chip that carries information about each and every product it can be embedded into. It has no battery or keyboard. When it hears a radio signal, it lights up and sends out a serial number. So, if accepted by everyone, it could do away with barcodes and barcode scanners for good. It will become the easiest way for packages to say 'who' they are and 'where' they are! Ultimately, this could lead to change in supply chain, supermarkets and payroll processes.

This is a way of using technology to enhance our own efficiency. But Schank also sees this as something that will build communities and it is something that will help with education. He feels that a virtual world like Second Life, that was created by the CEO, Linden Lab, Philip Rosedale has the potential to teach students about entrepreneurship while they are still studying in school. It can help a law student practice law before he/she even hits the street, looking for their first job.

So, in the sense of defining what innovation truly means, then creating a memorable experience as well as changing the way the world interacts, this invention - a virtual world - is truly going to be the way forward for the way people and technology interact.

Written for moneycontrol.com

Read more stories here:
Watch what customers do
Innovating to stay in the fast lane
Do you have to fail to innovate

Shahrukh Khan portrayed him in Swades

CEO and Founder, SKS Microfinance, Vikram Akula believes that business should always have a soul and should make a real difference to the life of people and not just its shareholders. Let's catch up with Vikram Akula, who made it to the Time magazine's list of people who will shape our future.

Reel life does sometimes imitate real life. Remember Shahrukh Khan's character in Swades? He does what Vikram Akula did with his life - give back to the country and make opportunities available to the last man or woman - often the most-neglected.

Vikram Akula decided to make his matrabhoomi his karmabhoomi, which may sound like pop-patriotism. After all, how often does one see a graduate from Yale, a scholar who gave up on the American dream for an Indian one. But that's exactly what Vikram did; he first came to India in the early 1990s and worked with an NGO and finally in 1998 launched Swayam Krishi Sangam or SKS - an NGO to provide economically underprivileged women in the Telangana region an entrepreneurial opportunity.

So, how did his NGO really start and what gave him the impetus to do something in India. He told CNBC-TV18, "There are images from my experience in India that will forever stay with me and there is one story in particular, I was about seven years old at that time, visiting my aunt and my aunt bought pots from a woman. She was dressed in a torn sari and she had a child of about my age."

"So, as children we did make a connection, while this sale was going on and after my aunt bought the pots, she then gave rice to this woman and the woman put out her sari and my aunt poured the rice into it and then my aunt left. About 20-30 grains of rice fell on the floor and then she pressed her fingers on the floor and literally picked up each grain and for me that was the first time in my life, that I really understood what it means to be hungry. For them 20 grains of rice really made a difference. Although, that was at a particular moment but images like that stayed with me and somehow said to me, that at a certain point I need to go back."

That's when he realized that something needed to be done for Indians. He says, that charity is not what people want but an opportunity to make things happen for themselves, and that has been his career's work. So that is really how is started his micro-finance business.

He explains, "My first experience with a traditional NGO was one that was doing a number of different activities - education, health, environmental work. So, I had enough to do – it was a kind of a learning in different aspects of the work and after that experience, the key takeaway for me was that economic development was the single most important thing needed. Not that it is the end of development, but it was the anchor on which everything else hinged. So, that was when I decided after that first year and a half, that this is the piece that I like to focus on."

"Then I came back again and this time I was working in micro-finance and the key takeaway from that experience was that micro-finance is important, but the way the NGOs were doing micro-finance was incredibly slow and inefficient and that is when I said, that there is got to be a better way to do micro-financing, and then I founded SKS in 1998."

Then in 2005, he converted it from an NGO into an NBFC. But how was his first sales pitch, when he had to get bankers on board, to participate in his vision? He says, he was rejected by many as no one would give them the time of the day. And these were the very same regional rural banks, who were in business to lend money to the rural people.

Akula says he was laughed at and these bankers called him a foolish American and this was not how business was done. But, today he has 2, 30,000 lakh clients and Rs 50 crore has been disbursed so far and he's looking to scale this up to 7 lakh clients and give away Rs 700 crore across 10 states, in 2007.

Vikram's dream is ambitious but he is confident because he believes in what he's doing, which is empowering women – he is not lending to men – because "women tend to invest profit back into their households. So, if you are looking to make an impact on a household, they are the ones who bring money back, invest it in their household and women atleast in rural areas, tend to be better entrepreneurs. They are slightly more risk averse than men are, they are slightly more careful with how they manage money. So, their projects tend to succeed more often than not."

"We have disbursed about Rs 436 crore in the last year. We have got about 163 different activities that women are involved with. One popular one is lifestock - selling milk at the weekly market and repaying a loan at the end of it – so, having a buffalo is an asset. Other activities are small kirana stores - they will buy stock from the local town and sell it at fairly high margins – so, they can earn a significant return on their investment."

Akula's policy of only lending to women also works out in another way, as SKS has seen a 98% repayment rate. He claims that SKS provides the lowest cost financing to the poor, with the exception of a subsidized government loan. For a loan of Rs 10,000 the borrower will end up paying Rs 200 a week on the principle and Rs 25 as the interest.

He's on the Time magazine list and he sees it as an affirmation of his work and says, "This is the right way to help our country get out of poverty. I very much feel in the end that I love this country and love the work that I do. This country has tremendous potential and this is one way to release that potential."

Written for moneycontrol.com

Watch what customers do: Schank

Are customers really aware of what they want and should businesses be listening to them at all? CEO, Socratic Arts, Roger Schank told CNBC that this management concept is overhyped far too much. He feels people are so confused about what they want in a girlfriend, or what kind of home they want or even what they want from their life, why would they be so clear about other things! He emphasizes, "Don't listen to what your customers say, watch what they do. See what they do in real life. Observation is everything.

He adds, "Experiences are about learning and people love to learn because they are growing and changing. Customers don't know what they need. It's important to know what the real issues are and asking your customer may not be the right way to do it."

People didn't know they needed a cellphone or a computer, but now it's part of everyone's lives. This goes for all the gadgets that today makes our lives so much simpler (or complicated, as some people believe). So, asking a person 20 years ago, if he wanted a PC would have led to a simple "No" or "What for?" But the PC is here today. The thing is to ask new questions or put questions in a different manner, so you get different answers.

CEO, Moen, Richard Posey is heading a company that produces fashionable plumbing products. From the ultra-sleek faucets to shower heads..Moen's got all that and more. His is such a research focused company that he admist to watching people shower or generally use their products, so that they can get some good feedback!

He says, "We use this information and see how people interact with our products, and use this insight to develop our products. But we look at other information - our own knowledge of the market, our own instincts and then say, this is what we should do."

But CEO & Founder, SKS Microfinance, Vikrum Akula agrees with Schank and says, that even he finds that people don't say actually say what they want. Though CEO ebay, Meg Whitman, says that a lot of ebay customers tend to be entrepreneurs thenselves and ebay keeps an eye on them. (Read a complete profile on him here: Shahrukh Khan portrayed him in Swades)

For instance in 1999, her colleagues suddenly noticed a lot of demand for die-cast car models and brought it to her notice. Then suddenly, real cars soon started listing. And now ebay Motors is the biggest revenue earner for ebay.

Schank feels ebay is still evolving, so no one knows where it's headed, while Moen, is in the business of showerheads, which have been around for a long while now. So, what is new, that is going to come out from this company...that is something, that is not going to come from customers.

Grameen Gives!

The Grameen Bank is a co-operative bank which is an example of what one man's vision can accomplish. Mohammed Yunus is the only economist to have won a Nobel Peace prize but then he deserves it for the immense social responsibility movement, he has single-handedly started in Bangladesh. He saw that pithy economic concepts were not making a difference in the lives of his poor countrymen What they wanted was hard cash to tide them over. So, he started handing money out from his own pocket to people to start their own businesses and this included women entrepreneurs as well.

Women are considered by most banks as being high risk borrowers, so they didn't loan money to them. But Yunus's own experience is that women make for better borrowers, as they have consistently repaid Grameen Bank. Also, he knows that money in a woman's hand is channeled into her household, and more importantly, her children's education and future.

So, in making a difference in so many people's lives, Yunus has a social revolution in the making that will, hopefully, lift his countrymen out of the clutches of stark poverty. Yunus admits that in the future he wants Grameen Bank to be known as the 'bank of the former poor.'

This is his dream for Bangladesh but it's a dream that Vikram Akula also has for poor Indian women, who struggle for a living in rural India as well. Well, more power to such social entrepreneurs!

Posey did see what his customers wanted and came out with a line of safety, bath products. So, his company designed a shower seat for elderly or injured people, where the soap, the wash cloth were easily handy and the hand shower could also be kept where it could be reached easily.

So, his company does watch customers...literally! And, the fact is that customers can not be discounted completely and there are some customers who are trendsetters and they should be observed to see how soon they are copied by the mainstream.

This is happening more quickly than ever because of the smaller time lag involved and also because of the new media like the internet, which is making trends available to a larger audience, much sooner.

Written for moneycontrol.com

Read more stories here:
Innovating to stay in the fast lane

Do you have to fail to innovate

Innovating to stay in the fast lane

How are big, monolith companies gearing up for life in the corporate fast lane? Companies like P&G, Toyota, Dell and Apple are either innovating and fast at that or just stagnating and losing pole position to their closest rivals - like Ford, which has been overtaken by Toyota in the US because it's not giving customers what they want, while Toyota is doing just that.

At Procter & Gamble, innovation is a bit of an obsession and Larry Houston is the man in charge. As Vice President of Innovation, he was in charge of generating ideas outside the company. A testimony to how well he does his job, P&G has been called the 'World's No.1 Brand Company'.

Then there is Travelocity that has revolutionised the travel industry. Terry Jones is the man behind the success of this travel portal. He's worked with American Airlines and then moved to American Airlines-owned Sabre - the world's first computerised reservation system. From there, he launched Travelocity - the world's first consumer direct travel services. Today, he gives his expertise to other companies making their transition to the digital economy.

Jones says that there were a lot of obstacles, in terms of inertia that needed to be overcome and there were people getting in the way. So, he told CNBC's Maria Bartiromo, "It's was really important that I was high up in the organisation, who had some clout, who reported to the CEO, so we were able to move them out of the headquarters and move them somewhere else."

Houston recalls that P&G's CEO AG Lafley told him to get innovative ideas from outside the company because most companies try to invent everything themselves, when there is tremendous talent all over the world. What's more is that P&G is willing to put money where the idea is.

But most large businesses seem stymied by the New Age technology revolution and can not seem to put their businesses on the fast-track to growth, despite being in the forefront. And that's partly because of traditions, which, the CEO of Socratic Arts, Robert Schank, feels is a not a good thing because then a company feels bound by its rules and traditions.

Traditionally, the big three car companies in the US have been General Motors, DaimlerChrysler and Ford. But now, Japanese carmaker Toyota has zoomed past Ford and is snapping at General Motors' heels. This year, almost 70 million cars, SUVs and trucks are going to be built around the world - almost 8,000 every hour - and Toyota is expected to build the most.

The secret to Toyota's success is its production system, which is also called TPS. It was created decades ago, and calls for constan improvement from planning, to assembling to sales. What they have going for them is that they are very creative, they also have a very educated workforce and great engineers.

Other companies who are learning from Toyota are Boeing, Ford, Caterpillar and even Nike. Consultant, Bill Schwartz says, "The real success of the Toyota production success is that it can be applied to any company because at its core, it's about eliminating waste. Eliminating waste in production or business process."

One of the latest innovations in the Toyota production system is that, at the end of the assembly line, when all the cars are built, they are taken to a sound booth so that the cars actually 'sound' the way they are supposed to!

Experts in the know, feel that even established companies can innovate if they get their hide-bound processes and decisions out of the way and became agile and nimble. But a leading expert in business strategy, Gary Hamel feels that large corporations do not have the "innovation DNA" but they can be taught the skills - the way Apple or Dell does it. Seconding him, Schank says that, CEOs don't have the motivation to innovate and don't want to innovate.

Hamel adds, "One of the things we know about innovators is that they are contrarians - that's the reason why so often the industry gets changed by outsiders. The real thing that inhibits innovation is the top management's prejudices, biases and assumptions about how to run the business."

"Innovation is like everything else in business - you have to be able to do it efficiently and cheaply - and that means borrowing ideas from outside." He does feel that old dogs can be taught new tricks, if they are willing to learn from their mistakes and make the necessary changes required.

Written for moneycontrol.com

Read more stories in the series here:
Do you have to fail to innovate

Fancy a sail on the Arabian sea?

Aashim Mongia loves to ride the waves and this 37 year old was all set to live his dreams when he joined the National Defence Academy, NDA. But just three months before he could complete his course, he was diagnosed with a rare blood disorder. He ploughed on nonetheless and completed his course until the disorder resurfaced and he was downgraded.

He had been downgraded to 'unable to serve at sea' and he had joined the NDA to be able to do just that. So, he had to switch his career path and he did it with the right attitude. He believes that whatever occurs, happens for the best. Though he acknowledges that there were tough times when he first started his business, West Coast Marine. But since 1997-98, there was a buoyant feeling in the air and by then, the economy had started to move.

He got help from his wife to make his dream come true, as it was her salary that paid his workers back then. She also shaped his business and today the company has clocked revenues of Rs 4 crore. And with her business acumen and his sailing skills, they expect the business to touch the Rs 50 crore mark in the next five years. Also, in that much time, he wants to make the sailboat market as common as the car market.

Today some of his clients are the 'Who's Who' of multimillionaires who come to India on a one-stop shop trip and he puts together everything for them, cars, yacht rides including personalised fashion shows and art shows. He says these are the kind of people who have no qualms about spending USD 100,000 on just one shopping spree.

He says that it's easy (though expensive) to buy a boat but it's the maintenance that will kill owners because there is no infrastructure to talk about to maintain sailboats, which is what makes it so expensive. He would like the 6,000 nautical miles of coastline to be developed into a major waterway as it will help the congested commuting scenario in Mumbai. He would also like a marina to come up where boats could be anchored.

What's more, he's geared up for just such a future, when the blue Arabian sea beckons atleast more of Mumbai's residents to go out and ride her waves.

Written for moneycontrol.com

Do you have to fail to innovate?

Experts on the subject of innovation say that ‘failure is good’ and that fear of failure often leads people to strive for creativity. CNBC's expert on learning and innovation and CEO of Socratic Arts, Roger Schank feels that innovation is something that should be freely forthcoming, like how children innovate spontaneously all the time, but there are others who feel that everyone should be given the space to innovate - from the executive down to the security guard.

This is ofcourse what the ideal workplace would do but that kind of Utopia rarely exists because in reality, the boss would rather listen to that expensive, Harvard dolt than the brimming-with-enthusiasm lift operator, who just may have some great ideas. As Schank puts it "Harvard graduates are good at being....Harvard graduates!" He also advises that employers should look at hiring the bottom 10% of the class at Harvard because these kids were smart enough to get in but then quickly felt disillusioned and he wanted to know what their reasons were for not doing well in class.

But he does give former CEO, SouthWest Airlines, Howard Putnam a pat on his shoulder for thinking about offering a low-cost airline with great service before the big giants of the US aviation industry, like United Airlines, understood the concept. Former CEO, SouthWest Airlines, Howard Putnam told CNBC's Maria Bartiromo, "One key thing we did was, we said we'd hire attitude and we will teach them the skills. So, we hired attitudes, we teach the skills and then you get the people who fit the culture that you are trying to build and the opportunity for innovation increases and the opportunity for failure decreases." And ofcourse, the reason SouthWest succeeded was because the bigger airlines managed to make their customers feel miserable.

Then there is the saying that a part of the success of innovating is a willingness to fail. So, do bosses agree with that? Do they hire people and allow them to fail? Putnam says, "You got to say if you do fail, I am not going to slap your hands and throw you out of the door. If you do that, then innovations will go away."

President of Hearst Magazines, Cathleen Black says, "I am not sure that if you are thinking about hiring somebody who has had any number of different failures but I think it depends to some extent, on the scale of those failures but what we are all saying is, we want a culture that encourages risk and innovation and I think that’s the most important thing."

Founder of Khosla Ventures (a venture capital), Vinod Khosla adds, "There are two kinds of failure. There is failure because you fail to change and failure because you try something new. I look on the upside not on the downside and that’s the asset of succeeding in the new world. In fact in our business the biggest risk is not taking any risk."

How do you stay innovative? Today everyone says that Google is an amazingly innovative company but the key question is can it keep that innovation mojo. Google is taking on ebay, PayPal, it is killing Mapquest and it’s changing the advertising game by selling directly to newspapers and small businesses. But Google whose global search market share reached nearly 73% in October 2006 but still trails Yahoo in total traffic and Google’s biggest challenge maybe inside the company rather than outside.

One of Google’s core strengths is hiring the best and the brightest. The biggest brains in America and the world could be a headache. Google knows the value of innovation, now it's a challenge to retain the right employees and using their creativity.

Schank agrees, "Google is being particularly innovative company. Search engines have been around for a really long time and they had a little bit better one than other people. I am willing to believe that Google employees are happy employees. They have a lot of money so they should be innovating a lot more."

Schank adds, 'I think if you want to keep your people, you better make sure that there are really good ideas being percolated all the time. That will keep your people.'

The Rite Way To Innovate

Rite Solutions is software company that twists the stock market to let the creamy stocks rise to the top of the heap. It builds advanced — and highly classified — command-and-control systems for the Navy, and innovation is built into the fabric of the company.
“We wanted to start an experiment to see if it was possible to innovate and if a pyramid organization could be replaced by a community of employees that could be part of that innovation,” says Chief Executive Officer, Rite Solutions, Jim Lavoie whose main responsibility is charting the course for Rite-Solutions and create the culture that separates Rite Solutions from a typical IT firm.

Lavoie’s came up with an innovative in-house stock or internal market game, called Mutual Fun, where any company employee could propose either the acquisition of a new technology, a new business idea, a new service or product launch and make efficiency improvements in the company.

Each idea or proposal in the highly popular market game becomes a stock and comes complete with ticker symbols, discussion lists and e-mail alerts. Each stock comes with a detailed description — called an 'expectus', as opposed to a prospectus — and begins trading at a price of $10. Every employee gets $10,000 in 'opinion money' to allocate among the offerings, and employees signal their enthusiasm by investing in a stock and, better yet, volunteering to work on the project.

Employees buy or sell these stocks, and prices change to reflect the sentiments of the company's engineers, computer scientists and project managers — as well as its marketers, accountants and even the receptionist. Volunteers share in the proceeds, in the form of real money, if the stock becomes a product or delivers savings.

The other popular software from the company is called the 3-D Data Visualization software, which was created by four technologists in the firm and is currently licensed to the US Navy. This software alone accounts for up to 30% of the company’s annual growth. “We’re trying to take advantage of those quiet geniuses in the company,” says Lavoie. So, while it’s all right to have community and employee participation, it often boils down to sound business practice.

“We were able to experiment with the notion of community as opposed to corporation, and participation instead of hierarchy. It has been a lot of fun,” concludes Lavoie

Khosla says, 'Let me disagree, Apple is a great example, they had a lot of innovation, then they introduced a lot of process and killed all the innovations. When Steve Jobs came back, he re-introduced a passion and a vision and innovation.'

He adds, 'You cannot have innovation in a command and controlled environment. If you encourage risk-taking, you encourage experimentation and if you allow and reward failure, you will see innovation in the corporation.'

In fact, during the 12 years Jobs was gone, Apple stocks rose 120%, in 10 years and since he came back, it has risen more than 2260% - barely blinking even when he left for a short time in 2004 - to battle pancreatic cancer. What would the Wall Street do, if Jobs was out of his job? Apple without Jobs would lose 20% of its market value, which is USD 60 billion. But in a company filled with talented people, it's hard to name a single other executive. One has to wonder what’s next, after all nothing and no one can last forever.

Another maverick entrepreneur who has built a brand from scratch with Virigin Records and now has 200 businesses flaunting that Virgin brand name, is Richard Branson. He personifies his brand - it's fun, puts its customers first over shareholders (as anyone who has flown Virgin Atlantic will testify to this), and was the small competitor who stood up to big-time bully and monopolist British Airways.

Branson says as much in his autobiography 'Losing my Virginity', that for him, his employees matter the most. If they are happy, they provide good service to his customers who come back again and again for that fabled service, thus keeping shareholders happy. His penchant for making business seem like a lighthearted affair has won him kudos....as well as brickbats. But ultimately, Virgin's many businesses are bringing in the money.

His entrepreneurship and his ability to build an empire with a single brand and make it an unbelievable adventure along the way, has made him the success story he is today.

Written for moneycontrol.com