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1 episodes · 13 quoted claims
Vijay Govindarajan says he pioneered reverse innovation about fifteen years before this episode, mainly as a business-strategy idea.
“I would call it reverse innovation 2.0 because the reverse innovation that I pioneered fifteen years ago, it was really looking at it from a business strategy point of view.”
Vijay Govindarajan says that almost 60% of Indians lacked access to the healthcare devices available in the US when he worked for GE Healthcare in India.
“there was almost 60% of Indians who did not have access to healthcare devices that we have in the US.”
Govindarajan says most deaths in India come from heart attacks, which is why GE Healthcare chose to focus on EKG machines.
“Because as it turns out, the bulk of the people who die in India, they because of heart attack.”
GE Healthcare aimed to build an EKG machine with the features of a $20,000 US machine at a price of $400 for Indian customers.
“create an EKG machine which has got the features of the 20,000 dollar EKG machine we have in the US, but at a price point Indians can afford, which is $400.”
Part of GE Healthcare's innovation team lived in rural India for two months to study villagers' needs before designing the EKG device.
“a small portion of innovation team went and lived in rural India for two months.”
The GE team's field research set a maximum price of $400 for the EKG machine as the first of four requirements.
“One is affordability, the machine can't cost more than $400.”
The GE team found the EKG device had to run without mains electricity because most villagers lacked power.
“Third, it has to work not out of house electricity, because most of these villagers didn't have electricity.”
Govindarajan says the GE EKG project took eighteen months from start to finish and was hugely commercially successful.
“this project, EKG project, took us eighteen months from beginning to the end until we came up with the solution, which was hugely commercially successful.”
Govindarajan says defining design requirements took about three months of the eighteen-month EKG project.
“So the design requirements took us three months, but it's not a black and white.”
Govindarajan names slowing growth in rich countries as one of three forces, alongside emerging-market rivals and affordability pressure, pushing firms toward reverse innovation.
“The three forces that are coming together is the rich country, the growth has slowed down.”
Govindarajan says multinationals fear that a $400 ECG machine sold in the US would replace $20,000 machines and erase their profit margins.
“Because if you're going to bring 400 dollar ECG machine into the US, where you're currently selling 20,000 dollar ECG machine, if the 400 start replacing the 20,000, your profit margin disappears.”
Govindarajan advises CEOs to give innovation teams fewer resources because constraints push people toward more creative thinking.
“In fact, I would say to the CEOs that I work with, give your innovation team less resources. When you give people less money, they actually do out-of-the-box thinking.”
Govindarajan names education, healthcare and energy as the three sectors most in need of the ideas in Global by Design.
“there are three sectors which are absolutely craving for the ideas that we have in the book: education, healthcare, and energy.”