Those who have read one or more of Vijay Govindarajan and Chris Trimble's previously published books (notably Ten Rules for Strategic Innovators and, more recently, The Other Side of Innovation) already know that they share a unique talent for recognizing and then explaining previously unrecognized - or under-appreciated -- business trends and their implications. In this instance, the fact that the dynamics of global innovation are not only changing, they are [begin italics] shifting [end italics] from rich countries with incumbent economies to meeting unmet needs in developing countries.
Leaders in companies that aspire to accommodate those needs must develop a mindset that is radically different, one whose core concept is reverse innovation. That is, "any innovation that is adopted first in the developing world." To develop that mindset, leaders must understand the significant differences between rich-country and poor-country needs. "Reverse innovation does not begin with inventing, but with forgetting. You must let go of what you've learned, what you've seen, and what has brought you your greatest successes. You must let go of the dominant logic that has served you well in rich countries. If you want to use today's science and technology to address unmet needs in the developing world, then you must start with humility and curiosity."
In short, think "far from home" before attempting to do business there.
Govindarajan and Trimble identify and explore five need gaps that can serve as paths to success with reverse innovation in macro markets of micro consumers. Understanding the nature, extent, and perils as well as opportunities of these need gaps will serve as the foundation of the radically different mindset to which I referred earlier. With both uncommon rigor and precision, Govindarajan and Chris Trimble explain
o What the reverse innovation challenge requires o How to develop the reverse innovation mindset o How to formulate an appropriate strategy based the five paths o How to create "clean slate" innovation in emerging markets o "The Reverse Innovation Playbook" (Nine rules to guide and inform strategy, global organization, and project organization
In Part 2, Reverse Innovation in Action," Govindarajan and Trimble shift their attention to mini-case studies of eight major companies (Chapters 5-12, Pages 75-188), citing real-world situations that demonstrate an abundance of do's and don'ts during initiatives to develop macromarkets with products that appeal to microconsumers. For example, in Chapter Six, Govindarajan and Trimble explain how Procter & Gamble realized that its success in emerging markets required it to innovate the "Un-P&G Way" because unfamiliar customer needs "trump" leading-edge technology. In Chapter Eleven, "PepsiCo's Brand-New Bag," this major multi-national company had to learn how to "think globally but snack locally"
Readers will also appreciate the provision of a "Reverse Innovation Toolkit" in Appendix A. Govindarajan and Trimble include several practical diagnostics and templates that will help business leaders expedite their reverse innovation efforts. In fact, they make brilliant use of reader-friendly devices throughout the book, notably "Playbook Lessons" and "Questions for Reflection. Here in a single volume is probably about as much as any business leader needs to help her or his global company to use reverse innovation to avoid or reverse the negative trends and tendencies that can weaken an organization when it attempts to do business in emerging markets.
"Therefore those who were scattered went everywhere preaching the word." -- Acts 8:4 (NKJV)
The modern corporation began with a structure that followed the traditional organizational principles of military organizations: rank matters; processes are rigid; control is central; the boss is always right (even when she or he is wrong). In the last sixty years, there have been mighty efforts to soften and adjust that structure so that local knowledge and autonomy can have full sway. Despite well-meaning efforts to create global structures that work, greater decentralization and looseness of authority, and an interest in creating more disruptive innovation, the process of developing and expanding technology, marketing approaches, and sales efforts continues to begin from the home market and extend slowly out to poorer and smaller countries . . . not dissimilar to the ways that kingdoms used to use the colonies to "impose" the home country culture and extract low-cost labor and raw materials. In a way, it's just human nature. That's not to defend it, but to simply understand the phenomenon.
Reverse Innovation looks at a handful of cases (mostly involving American multinationals) that show the potential benefits of starting market, business model, offering, and technology development from the largest underdeveloped countries. In doing so, the case for such innovation proceeds well beyond The Fortune at the Bottom of the Pyramid argument to also identify that:
1. Such innovations develop improvements that can be extended to large numbers of customers. 2. The innovations eventually can become sources of major growth in advanced countries by opening new ways to use offerings. 3. The multinational has substantial advantages in doing this in terms of being able to draw on worldwide talent to solve difficult problems and the infrastructure in place to expand useful innovations from poorer countries and poorer people into new markets and new applications. 4. In an open source world, this can be a good way to break down the preference for "not invented here" being rejected in capable companies.
I found the case histories to be more revealing than the more general text. The cases were well chosen and well documented. I felt I learned more about underdeveloped country issues for poor people than I knew before. That was a blessing.
I was surprised to see how many companies had been taking a technology first approach to producing lots of bells and whistles rather than beginning with studying potential user needs. Those parts of the book suggest a lot of managers fell asleep during their marketing 101 classes.
The most intriguing part of the book for me came in the subtle observations about how to accomplish such changes organizationally. I wondered if there might not be alternative ways to do this that would work even better, such as having venture funding for partially owned entities staffed with long-time company employees with an entrepreneurial flair and bent.
The book contains many helpful lists and questions that make it much easier to apply what is described.
You may find Part 1 to be a little repetitive and oversimplified. You'll be relieved when you get to Part 2 where the writing is more varied and interesting, filled with more interesting details. Don't miss the appendices. They provide good guides to implementation and future research. Nicely done!
If you don't work for a multinational, you may be a little puzzled by how to use the book. The key lesson here is that you should learn from successful models in underdeveloped countries to deal with issues affected poorer people in the more developed countries. Chapter Twelve provides a modest example that will probably intrigue you.
The book could have been improved by also looking at what multinationals based in other countries have been doing in this regard. Some of them were originally based in what were then underdeveloped countries. Much of the text reminded me of descriptions of Korean and Taiwanese companies moving beyond Asia in the 1950s and 1960s.
This is the first book I have read by Vijay Govindarajan and Chris Trimble, and I've been missing out! Besides the great content, I wanted to send my appreciations to both authors who wrote a hugely valuable business book and still clearly communicated the core ideas in simple language. I believe they want to engage the whole market.
This book focuses on any organisations who wants to operate and grow in the global market. The key to longevity is shifting their mindset from doing b2b with developed countries (the norm) to emerging countries (entrepreneurial). Understanding what the mass market needs (innovating for emerging market) rather than just supplying what they think the 1% want (modifying existing product). The needs and expectations of the emerging mass market are similar to those in developed countries, perhaps even higher, and they want it at the fraction of the cost, and they are willing to lower their expectations on quality. Adjusting to these new requirements from this market, 'special units of local growth teams' with support from their organisation including resources and talent, and with the advances in technology, allows radically innovations to be created. Even more compelling is how these products can be brought back to the host country and serve a previously unprofitable market. There are a lot of extensive case studies showing how this has already been done.
I found 'Reverse Innovation' to be an extremely stimulating read, and it has inspired me to use and apply some of the concepts into the third sector. I'm hoping that they will speak at my next conference!
This lovely, persuasive work couples the focused repetition of a good textbook with the lively style of an entertaining article. Academics and authors Vijay Govindarajan and Chris Trimble show how to harness "reverse innovation," in which firms create products for and in emerging economies that lead to innovative goods for the developed world. The authors provide enticing data about the quick growth of developing economies compared to slower growth in developed economies. getAbstract recommends this accessible treatise to executives at companies with a global presence and to those interested in cultural differences, creativity and diversity.
I was interested in reading this book (Reverses Innovation) from the moment I listened to the interview on the BBC's Peter Day's World of Business.
Putting theory on the side Vijay Govindarajan goes deeper with practical ways of making things happen. His book gives the most needed ingredient for things to happen, the courage to do it. It is no longer about dreaming or wishing. It is all about rolling up one sleeves and do it.
I recommend this book particularly to all entrepreneurs in developing markets.