The chairman and founder of the Warwick Manufacturing Group on Jaguar Land Rover,
the Indian auto sector, and why innovation matters. An interview with Brian de Souza.
You played a key behind–the-scenes role in encouraging Tata Motors’ takeover of Jaguar Land Rover. Given that the 2008 meltdown happened within months of that acquisition, how do you look back on JLR’s super performance since then?
One of the most important qualities in business is thinking for the long term. When the global financial crisis hit, obviously there were many pressures but Tata Motors kept its nerve, was able to raise funds thanks to the strength of its reputation and overall business performance, and maintained, and even accelerated, its investment in the future of JLR.
Tata did this because it knew Jaguar Land Rover had good managers, technology and an emerging stream of innovative products. Tata’s financial backing and Ratan Tata’s personal commitment to product excellence meant JLR could focus on quality in product design and in people, shown for example in the appointment of Ralf Speth as chief executive.
This positioned JLR well for growing demand by developing cars that excited consumers in expanding developing markets and recovering established markets. Today, Cyrus Mistry is continuing this dynamic leadership and taking a detailed interest in product engineering, which bodes well for the future.
India’s auto sector has been credited with low cost and frugal engineering strategies. But as the industry develops and matures, can we just be a frugal-engineering base?
It comes down to asking ‘what does frugal engineering mean today?’ India is now effectively an open market, and Indian consumers will see what global competition can offer them. As a result, they will become more and more demanding about product quality.
In a world where China is developing products that leapfrog the best Western technologies, and where massive innovation is meeting consumer needs in new ways, then I doubt that a purely minimalist approach is right for consumers, as it can too often look like an excuse to give them second best.
People will always desire quality, robustness and good design. Take a sector like tractors. At WMG, we’re working with TAFE to apply the lessons of premium automotive fit-and-finish in the Indian tractor market. A few years ago that would have been unheard of.
However, there are qualities to frugality that are always very important. For example, how do you minimise complexity, expense, get rid of unnecessary and redundant features? For me, the answer is to set your sights as very high in product quality and technological breakthroughs, and then apply yourself to the challenge of delivering this in the most effective, least wasteful way possible.
You founded the WMG over 30 years ago. What, in your view, are its key achievements in these years and especially in the context of the interface between academia and industry?
I like to think that at WMG we have helped make manufacturing respected again. For a long time, especially in the west, the attitude to manufacturing was it was just an industry in decay, companies would shift production to wherever was cheapest and that would be that.
By focussing on innovation and academia’s role in developing new solutions and products, we’ve shown that manufacturers everywhere can have a bright future. For example, a lot of the lightweighting work in automotive started with WMG, and that has been spread right around the world. Today, we work with over 500 companies from all over the world, from whom we learn about the idiosyncrasies of individual sectors, cultures and markets.
This has shown us that many barriers are collapsing, whether between markets or between business sectors. Tomorrow, manufacturing innovation will be multi-disciplinary. So at WMG we have research partnerships in many new fields, like processes and systems, simulation and visualisation, new materials, consumer feedback and novel energy sources. That has led us to fascinating possibilities in areas such as digital health, nanocomposites, cyber-security and sustainability, all of which are multi-disciplinary and have exciting potential for modern manufacturers.
Tell us about the National Automotive Innovation Campus and what do you expect this to do for both UK and global industry? Can India draw inspiration from such an initiative?
The National Automotive Innovation Campus (NAIC) at WMG represents an initial investment of over £100 million pounds (Rs 1,004 crore) in the future of the automotive sector, with a 1,000 people working at the site.
When you’re looking at the future of automotive research, what’s exciting is how wide-ranging the opportunities are – from skills development to cybersecurity. There’s huge potential for change on so many fronts. Sadly, often people work in silos and don’t see the links between their emerging research and consumer needs, and don’t take advantage of emerging technologies. That’s why the NAIC will link private companies throughout the supply chain with academic researchers to address these shared challenges.
As for lessons for India, in the ’70s in the UK, we saw what happens to firms if they don’t innovate. Unless you are at the cutting edge of research and development, you won’t have the basis to grow for the future.
To avoid that mistake, NAIC will research everything from chemistry of batteries to different aspects of propulsion to design visualisation. Indian firms also need to be innovators, which is why I’m pleased that, alongside Jaguar Land Rover, NAIC will be the home of the Tata Motors European Technical Centre.
India’s auto sector wants a stimulus package as it goes through the current slowdown. Is this justified?
Stimulus packages are fine for the very short term, especially in moments of crisis. But unless stimulus is used to develop the products needed to create future growth, it can only ever be a short-term solution. Otherwise, state help can be addictive, and you stop searching for a better way to do things, stop trying to innovate and make things better yourselves.
In the end, government should provide a framework to support stronger, more innovative industries but the private sector must take responsibility for being competitive in the global market.
India has one of the world’s largest engineering talent but its quality is questioned many a times. How can India improve this talent and if it doesn’t, how would it affect our manufacturing particularly in the auto?
India has never had any shortage of top-class people, and if you look in the US and Europe, a lot of Indians have done extremely well. India is very good at academic research, but when it comes to implementation and application, things are much weaker.
The challenge isn’t simply ensuring top-class engineers graduate from universities; it’s about having a culture of research and development in industry. That’s something companies have to fix. They get used to a bureaucratic culture, or buy technology from abroad and so don’t develop the people who can produce innovative products for the global market.
A trading mentality, constantly worrying about the quarter's bottom line, leads to a culture of short- termism that can stifle innovation. The easiest thing to do is to just call consultants, who have a one-size-fits-all approach. However, consultants tend not to understand technology, which you must do if you are going to develop innovative products.
Of course, India has produced some really excellent home-designed products such as the Tata Indica and Nano, the Mahindra XUV500 or TVS’s range of two-wheelers but we need many more like these.
Creating a culture of innovation is a long-term commitment. It means businesses thinking a lot about the capabilities of their workers, building research and development partnerships, investing in lifelong learning throughout the workforce and freeing their engineers to create.
You began your career as a Lucas apprentice. What was it like in those days as a young engineer and what advice would you give India’s young talent today?
One good thing was that I learned how business really worked from the shopfloor rather than going to a business school and learning a set of mantras that don’t give you the rigour and the detailed knowledge needed to develop new products.
Apprenticeship is now very much in vogue. It’s strong in Germany, coming back in the UK. It’s where you learn your discipline. You get confidence from finding real solutions and seeing the end result of your work, which gives you a real sense of achievement, as well as a desire to develop further. I think that’s one of the reasons why Germany succeeds, because German companies have always understood that mindset.
My apprenticeship has always stood me in good stead. Business isn’t rocket science after all, it just requires you to really know how things work, and what the triggers are for changing things, so you can improve step by step. Innovation is usually about determination, showing some true grit and knowing the business from the bottom up.
I’d tell people to avoid the short term, management and consultancy mantra mentality, and get into the nuts and bolts of an industry, then constantly look for ways to do things differently, and better.
India’s only just at the beginning of her growth, so if you do that, there are so many opportunities out there to do something really exciting and new.
(This interview was published in Autocar Professional’s December 15, 2013, 9th Anniversary issue)