Marico's Harsh Mariwala has a radical advice for entrepreneurs: 'An opportunistic mindset is important,' he says

Marico chairman, Harsh Mariwala’s Marico Innovation Foundation (MIF) is over two decades old, where he has nurtured and incubated several socially impactful innovations. Among his favourites is Ishitva Robotics, an Ahmedabad-based start-up which makes high-powered, AI-enabled garbage recycling machines. In fact, MIF’s annual Indian Innovation Icons event this year had a host of innovative and impactful start-ups - Astrome Technologies (which is advancing wireless telecommunication services in rural and remote areas using India’s first commercial product in E-band spectrum), Chara Technologies (which is developing rare-earth magnet-free electric motor systems for EVs and industrial machinery), Indra Water (a decentralised and modular water treatment system to recycle sewage/industrial wastewater) and Skyroot Aerospace (a cost-effective and on-demand access to space for global satellite operators).

In a conversation with Fortune India, Mariwala talks about the evolution of innovation in India Inc.

Excerpts:

Q. How has innovation evolved over the years?

HM: When we started in 2003 (Marico Innovation Foundation) innovation was not on top of the agenda of any CEO. However, we realised that innovation would play an important role in India’s growth story. Innovation is now on the top of the agenda of every corporate CEO, which is heartening. Organisations are looking at leveraging discontinuities in the environment and finding lot of opportunities. But there is still lot to be done. One of the biggest deterrents for innovation is fear of failure. If you are not willing to experiment or take risks, you won’t be able to innovate. It is ok to fail. Most organisations don’t reward failures, they punish failures. That kind of environment will not make innovations thrive.

On the other hand, we are seeing entrepreneurs emerging from smaller towns, without any business family background, without capital are setting up businesses because the ecosystem of funding has evolved over a period of time. They are taking risks, leveraging technological disruptions to launch new businesses. You see so many unicorns coming to the forefront. Even shows such as Shark Tank add to the overall entrepreneurship noise. But as I said, there is still lots to be done. Our issues are complex and we need to do much more, especially in the field of social innovation. Whether it is healthcare, education or agriculture, innovation can play a crucial role in driving these sectors.

Q: You talked about importance to fail. How does one deal with failure?

HM: Leaders have to encourage people to take risks and say that it is okay to fail. There will be resistance to take risks if the employee thinks my boss will not be forgiving and I will be paying a price for trying. Failures are a crucial part of innovation, especially intelligent failures where somebody has taken a certain risk. It could be an intelligent move which didn’t resonate with the consumer. It is difficult to identify what will resonate with the consumer. There are limitations to market research and the only way one can test this out would be to launch a product. One can derisk it by launching in a much smaller scale, so that the risk to the organisation is limited.

Q. We are living in an uncertain world where disruptions such as climate change have become a way of life. There is frequent geo-political crisis which has led to supply chain disruptions and inflation. How can the entrepreneurial ecosystem benefit out of this and come up with suitable solutions?

HM: This is a phenomenal challenge and entrepreneurs as well as technology can play a huge role in resolving climate change challenges. So, starting with whatever is the impact, be it weather or water, we have seen entrepreneurs are doing credible work and leveraged innovations in the area of climate change. We are seeing entrepreneurs taking initiatives and viewing climate change as a way to innovate and launch businesses.

Q. Can I get some examples of climate-specific/sustainable entrepreneurial ventures?

HM: There is an enterprise called Ishitva, which makes high-speed recycling machines, they are AI-enabled. My family office has invested in a business called ReSustainability which is a company based in Hyderabad, Telangana. It’s a project to do high-speed recycling of household waste which will start with collecting the waste in the right manner, putting it though those machines and most likely they are going to use the Ishitva machines.  They are high-speed, AI-enabled. They will be able to segregate different types of plastics and identify brand-wise. If through the wastage I am going to get bottles of Parachute, then it is easier for me to do a circular economy and use the same bottles. The biggest challenge for the manufacturers of FMCG companies in using recycling plastics is not being able to get good quality plastics. Through this process, the quality of plastics which will get generated will be of high quality. This will help us use recycled plastics in increasing percentage. Currently, the prices of reused plastics are higher than virgin plastics. Government has mandated that brands need to put in certain percentage of plastics for reuse. This a prototype project, but on the face of it, it looks viable and would serve the purpose of improving the quality of recycled materials coming out.

We had done a study on plastics two years back and we had identified 15 innovators in plastics where they are either replacing plastic, reusing plastic, or reducing plastic usage. We also helped them in scaling up, but we felt at the end of it that we had to do much more. There was Ishitva and we said can we make Ishitva operational, and the team was able identify the sustainability and work with them to do this project with ReSustainability. This will be a big project and if we are successful, we can rope in many more corporates.

Q. What kind of mindset do entrepreneurs need to set up such impact-led enterprises?

HM: In today’s environment technology is the biggest disruptor. Be it technology, geopolitical crisis, climate change or COVID, these are fertile opportunities for innovation. Converting these disruptions into an opportunity is the greatest quality of an innovator. Also, it may not work out at the first go, you have to continuously work. So, having a consumer mindset is important, how do you work on the idea as a consumer-facing innovation, how do you work with the consumer and ensure that it is cutting ice with him/her. The initiative may fail, so, what are the learnings from the failures, what will you re-launch? It is a continuous process of identifying, working with consumers, getting the outside in, leveraging what is happening across the globe. Some of the innovations could also come from foreign countries and many people just copy them, which is fine. The key thing is to continuously look out for opportunities. An opportunistic mindset is important for an entrepreneur or innovator to succeed.

Q. Every company is talking about investing in sustainable practices, are they walking the talk?

HM: There is a pressure from investors. Most companies do it as a cost incurring initiative that will impact the cost structure. My viewpoint is very different. Sustainability has a clear financial payback. But while calculating payback you just don’t look at the financials, you also look at the other benefits. If you are a thought leader in the area of sustainability, you will be able to attract good talent. These days youngsters on campuses look at what kind of sustainability initiatives organisations are doing; they want to work for organisations which are doing impactful work. Be it attracting talent or board members or building the required image to attract foreign capital (many investors are extremely sensitive of sustainability and purpose), if you put all of that in terms of paybacks, then virtually every capital expenditure you undertake for sustainability, there will be a payback.