When it comes to achieving innovation and excelling in it, Bajaj Auto stands out from the rest in the country’s highly competitive auto market. From creating different brands to shipping bikes in more than 60 countries, the level of innovation at Bajaj Auto is always applauded by industry and experts, and the man in the centre of all these changes is its Managing Director Rajiv Bajaj.
Bajaj while a delivering a lecture on ‘Fuelling the Economy Through Science, Technology and Innovation’ at the All India Management Association in New Delhi on Thursday (January 13) said that from his experience in the company for 20 years, he feels that innovations are indispensable but they are also over whelming. He said that there are two other ‘I’ which are equally important. They are- invention and improvement.
“Invention is something which is valued once in a while. Something that really shifts,” said Bajaj.
He added that with time, concepts in production keeps on changing and it is difficult to deploy them.
“As time passes, the ball keeps on changing. As managers, we have to keep juggling and we are not allowed to drop any. Every six months something new comes up and we have to tell the workers to follow the new concept and the poor people keeps on running.”
He said that the new concepts are not the ends, but they are only means to the ends.
“My customers will not but my motorcycles if they produced by six sigma, IoT etc. I need to have a good reason why the costumer will buy my product and in the process of delivering that product, I may deploy these ideas,” said Bajaj.
He adds, “In my experience I have found that most of this knowledge that you need to do a work effectively in an organisation is already in place and all we need is to implement it better and not create so many ripples of change continuously.”
On the second I which is improvement, he said people sitting at the top of an organisation don’t do anything with their hand. They should work on improving the environment, where people actually work and compliment it with action.
“We should go to the workplace with a mind-set to improve things,” said Bajaj.
Giving an example of how his company made the best three wheeler buy adding an extra wheel in it and putting individual parts in a new form, he said that there are many attributes to the third I, which is innovation.
He said that you need to have a high level of innovation when you are competing in a competitive environment.
“If your innovation is under 10 per cent whatever attribute you target, your business will always fail if you are a challenger and there is already a market leader. 10-20 per cent is called the strategy of doing better. It works, but only for the leader.”
“But if your innovation is between 20-33 per cent, it is not only better, it becomes different. At 33-50 per cent people will start noticing you even if they can’t afford the product and at 50-100 per cent it becomes niche,” added Bajaj.
At the end, he said, that even in an established industry, it is possible to create new stuffs and be successful in sales. But creating a new product and being successful in sales is not the end. The most important thing in the market is pricing power.
“We sell bikes all around the world and we can proudly say that no other company has a higher operating margin at 20 per cent in the last 5 years. And this is only possible because of the outstanding pricing policy we have.”
BW Reporters
The author is Senior Correspondent with BW Businessworld
