What It Takes To Build An Innovative Business Model Apart from having a strong foundation, there are certain traits that an entrepreneur should try to develop, like applying creativity and out-ofthe-box thinking.
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Why is the US or Israel so innovative? Why a state like California is really making the difference? Innovation is a combination of five different aspects - regulation, training, ecosystem, culture and incentives. In this cycle, all components are equally important. If you focus more on three and neglect the other two, the entire wheel will crumble. So we need to take a broad perspective and need to understand the entire system to fully acknowledge it.
BREAKING DOWN THE WHEEL REGULATIONS: It is about setting the right laws so that people can take their risks without the fear of going to jail. The law should not be limiting the potentials of an entrepreneur.
TRAINING: Apart from having a strong foundation, there are certain traits that an entrepreneur should try to develop, like applying creativity and out-ofthe-box thinking. Secondly, resilience is one such character which distinguishes an entrepreneur from an average individual. He needs to learn how to cope with different situations.
ECOSYSTEM: Even if the right kind of innovation and training is in place, you need to ensure that you have a pull of services and stakeholders and suppliers to support these entrepreneurs when they fail. You need to make sure that supply chain management is going to be there.
CULTURE: I think what is great about the US as compared to Europe or India is that they are ready to accept failure. Innovation is related to exploration and it does not mean getting things right at the first go. In Europe and India, the training is about how to get things right from the beginning or take measured risks but in a sense it is killing innovation. Some companies claim that they have the right culture set but if you get it wrong, you are done. We must understand that innovation starts with leadership.
INCENTIVES: In India, the culture is - if you fail for the first time, no one is going to let you explore and hence, entrepreneurs are to ensure that at the corporate level and also at the entrepreneur level, the incentives are right. We need to enable people to take risk and also control risks. There are few companies, especially finance companies, that are creating start-ups and the only incentives they provide is that they let you learn very quickly. They want you to come up with something very quickly, within five months or so, try it out, spend around $100,000. See the results and then you abandon or you refine. Those are the kind of things we need to consider. The key is to get balance with different components.
THE INDIAN PERSPECTIVE Firstly, the regulations need to improve and that is something that can't change radically. You don't need to be like the US but you need to ensure that the minimum is there. Secondly, at the educational level, things need to change, especially the way entrepreneurship is taught. Apart from the intellectual side, the college and the universities need to work on the skill set and also it needs to be very experiential.
Thirdly, of course, the prime minister is very supportive towards developing a very business-friendly environment but people need to embrace it. Pick up a company like 3M (American multinational conglomerate), they bonus their people depending on the number of products they are launching. Changing the culture in a country is very hard but in a corporation, it can be done if the CEO or the top management is supportive towards it. And through this, within years, you can make a great impact to the society.
We must understand that innovation starts with leadership. The strength India has is its knowledge base. But, the area where Indians need to explore more is creativity and out-of-the-box thinking. However, it is also about finding the right balance. Let's pick up a country like Brazil, which is another extreme. It is a country which is very flexible, open and ready to experiment but their foundation is weak. A utopian situation would be a mix of both.
(This article was first published in the May issue of Entrepreneur Magazine. To subscribe, click here)
