Danny Feld
Karl Moore: This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail. Today, I'm delighted to speak to Tarun Khanna, who's a professor at the Harvard Business School.
Good evening Tarun.
Tarun Khanna: Good evening Karl.
KM: You've looked at a lot about innovation and, specifically, in the context of South Asia and India, particularly. What are some of the things you've learned about innovation?
TK: So, I guess the thing I've learned the most about innovation is that it is very context-dependent. What I mean by that is that it has to be – you know the old saw, "Necessity is the mother of invention," applies in a very prosaic sense. In other words, most people are in the business of solving problems – in their daily lives, in their corporate lives, in their social lives – what have you.
I'll give you a simple example. I'm Indian, as you can see. It turns out that Indians, genetically, are predisposed to heart disease. In other words, we have genetically compromised heart muscle – not bad hearts – no pun intended. But what that means is that, with a large number of Indians with heart disease, we've had to come up with extraordinary new research and techniques to deal with many of the heart problems that you see all around the world.
It turns out that some of these – when applied on scale and done through a lot of learning and so on and so forth – are putting the western world to shame in terms of cost – even after you account for mortality rates and risk profiles of patients and so on and so forth.
The surgery that might cost – and these are directionally correct numbers – $100,000 in a fancy hospital on the east coast of the United States, in some of the better hospitals in India are being done for $2,000. That's a 98 percent difference.
Now, some of it may be the usual suspects that you would point to – litigation and this and that and insurance and so on and so forth – various forms of corporate interventions that we may not think desirable today – but the vast majority is just much more practice, better techniques that are oriented to dealing with certain kinds of heart tissue muscles and, it turns out that those are applicable elsewhere.
Now, these numbers are not moving in the direction to favour the West. In other words, a $100,000 probably be a $110,000 the way things are going and the $2,000 will probably be $1,500 or $1,000 soon.
So, we're talking extraordinary amounts and, I would say that, here, the thing to focus on is that it's the problem with the heart muscle that's triggered the innovation and the scale at which the problem needs to be solved. Those are the two things that need to be focused on.
KM: What is the action a global multinational should take, then? Is it to scour the world looking for the most demanding customers, in this case, heart conditions in India?
TK: I would say that it's fantastic if you are bombarded – as my colleague, Mike Porter, has frequently said - by demanding customers forcing you to up your game. But, remember that most of the rest of the world isn't, necessarily, beating a path to your door.
So this heart example – it's not that people with heart disease are pounding on the door of the hospitals and saying, "Fix my heart, fix my heart." Far from it – they're actually mostly fairly poverty stricken and indigent and unable to even fathom the idea that the heart could be repaired, let alone, even know to interpret it as a problem of the heart and, let alone, even know what a heart is.
The last may be a bit facetious but – so yes, there is a sense in which, being in the milieu is certainly very helpful and the question, I guess – as a global multinational – that I would ask is, "What's the best way for your rank and file to expose themselves to the ideas that are popping up in different parts of the world?" And, obviously, there is a limit to how much someone could do, but I think there's considerably more room, in almost every global multinational that I've encountered, for judicious experimentation than I've been privileged to see so far.
So, yes, get out there and keep your eyes wide open and find ways to mix and match and benefit from the innovation that's popping up.
KM: This has been Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail.