Game Changer Profile

Gautam Mahajan, President of Inter-Link; Founding Editor of Journal of Creating Value at Inter-Link Read insights

Look at almost any plastic soda bottle, and you will find that it stands on five ribs that are integral to the walls. The invention of the “petaloid base” in the 1970s offers crucial insight into an innovation process that is highly relevant to business today, and to the growing movement away from functional roles and toward value creation. Because pressurized plastic expands like a balloon under pressure, bottles at the time were two-piece products that stood on a rigid cup – and efforts to create a one-piece bottle had cost tens of millions, without success.

Gautam Mahajan—the co-inventor of the petaloid base, then head of research and engineering at Continental Can— told BPI that his team solved the problem by reframing it in this way: where does the bottle want to go when under pressure, and using the concept of entropy, where everyone including the bottle resists being forced into an ordered state? It had been assumed in the industry that the bottle would need an incremental innovation, and that the machines that make them would require an expensive disruptive innovation—since they would have to create far more pressure to force out those five bulges. Mahajan proved the opposite: the disruptive petaloid solution changed the entire industry, while the machines needed only affordable shock-absorbing improvements, and timing changes.

Now a leading author and thought leader, Mahajan moves executives and academics globally to his belief that the purpose of companies is not to generate profit, but to create value—where profit and competitiveness are by-products. “We all know the purpose of attending college is education, not grades. Grades are a measure of how well you have studied,” he says. “Why then do business leaders still insist that the purpose of a business is profits? Indeed, why do we study for a Masters of Business Administration when it should be a Masters in Value Creation? Everything is process-driven at present, but we want the mind-set to be changed.”

Mahajan’s new book, “Value Creation: The Definitive Guide for Business Leaders”, was introduced this month by the Director of the Indian Institute of Management in Bangalore, and received high praise at a recent business literary festival. Gautam is setting up Value Creation Forums around the world and catalyzing colleges to conduct research on Value Creation. He believes values create value, and that efforts beyond formal job descriptions—efforts as small as a smile— generate brand equity for both the employee and the company.

Mahajan is now the Founding Editor of the Journal of Creating Value, which enables academic research become more responsive and relevant to business practitioners, while promoting value creation as the new “true north” compass heading for executives. This approach echoes recent findings at Harvard Business School, in which Michael W. Toffel noted that, “The lack of practical relevance of much of our research might suggest that few of us also have the ambition to improve the decisions of the managers and policymakers whose actions we study.” The business leader who Harvard quoted on the issue—Donovan Neale-May, executive director of the Chief Marketing Officer (CMO) Council—also noted that, “There is often a disconnect between practitioners and academics, who tend to be far removed from operational complexities and market dynamics”.

“I see myself as a generalist, as someone who has created and who thinks differently, who doesn’t get stuck with the run of the mill thinking,” says Mahajan. Previously, he was President of the Indo-American Chamber of Commerce, which is the only bilateral chamber between the US and India, and includes 14 offices between the two countries. He is also President of Inter-Link India and Customer Value Foundation and went on to become a leading consultant to top Indian companies, as well as the author of three seminal books on value. Mahajan told BPI that his consistent advice to innovators is to ban any concerns about cost when at the early, explorative end of the innovation process. Conversely, he also advises executives to free themselves from the fear of making incremental increases on the prices of their products, since customers will pay for value.

Mahajan poses a fundamental thought challenge to companies innovating in areas like customer experience and “customer journey”—where customers are provided ever-better experiences when returning defecting products. “They forget that customers do not want that journey in the first place,” he says. “Why not rather innovate toward zero complaints, and zero product returns?”