Jugaad is a word most commonly heard in India. It implies quick fix solution to any problem. It is a common phenomenon observe on the streets of India in small ways like fixing things with safety pins, turning cycles into a mobile shop of necessities, selling clothes by displaying it on the trees and many more..
A new book on the block ‘ Jugaad Innovation’ talks about how jugaad can help you find great solution to problems and can turn any adversity into an opportunity.
The 3 authors, Navi Radjou, Jaideep Prabhu, Simone Ahuja, talk about this phenomena that is helping MNC’s to develop breakthrough paths to grow in this competitive market.
A little more on about this dynamic trio:
Navi Radjou is an innovation and leadership strategist based in Silicon Valley. He is also a World Economic Forum faculty member. He advises C-level executives worldwide on breakthrough growth strategies. Navi is also writing a book on new models of leadership.
Jaideep Prabhu is the Jawaharlal Nehru Professor of Indian Business and Enterprise at Judge Business School, University of Cambridge. He has taught executives from ABN Amro, Bertelsmann, BP, BT, IBM, ING Bank, Nokia, Philips, Roche, Shell, Vodafone, and Xerox.
Simone Ahuja is the founder and principal of Blood Orange, a marketing and strategy consultancy with expertise in innovation and emerging markets. She regularly presents and consults to Fortune 500 companies across sectors, and contributes to a Harvard Business Review blog.
We got chatty with the trio and they had a lot to say to us on this topic which is widely growing and sweeping through companies. Here’s a look at what they had to say.
Today, global companies are talking about Jugaad as an effective approach to innovation. Meanwhile, jugaad is practiced in all Indian homes on a daily Basis, without giving it a second thought. What are some of the lessons that multinationals can learn from simple Indian households?
This is a great question. It is exactly because jugaad and the jugaad mindset is so inherent in Indians that Indians are well poised to apply the principles of jugaad to business practices. While jugaad can refer to quick fixes and low cost solutions, such as using a 2L Pepsi bottle to store pulses, use as a planter, a showerhead or even as chappals, it’s also a very important mindset. The frugality and the flexible rather than linear approach to problem solving exhibited in many Indian households is a highly effective one that companies can and must learn to augment structured innovation processes and to grow, particularly in times of economic volatility. Moreover, jugaad innovation is a great complement to more structured innovation processes, which leads to the creation of scale.
One of your favorite stories or ideas that you came across while writing this book?
There are so many outstanding and inspiring stories of jugaad innovation, particularly grassroots examples. One of those SELCO, founded by Harish Hande, a company that destroyed the myth, that the poor cannot afford and maintain clean technology. SELCO distributes solar energy to more than 200,000 rural households across India. For us he epitomizes the frugal, flexible and inclusive mindset of a jugaad innovator. First, he bootstrapped his venture with very limited resources and iterated on his model until he found one that works for him – ultimately, a highly innovative system of grassroots entrepreneurs who buy solar light and rent and distribute them on a daily basis. He added tremendous value not only for the communities he served, but also for the micro-entrepreneurs with whom he partnered which in turn sustained his own business model.
Another important finding that emerged while researching for and writing this book is that jugaad is not unique to India. In fact, similar approaches to innovation exist in many emerging markets including Brazil where it’s called jeitinho and China, where it’s called zizhu xuangxin – and even in the US, particularly among Generation Y and entrepreneurs, where there’s a growing DIY or do-it-yourself movement building that also calls for a frugal, flexbile and inclusive approach to problem solving.
Name 2 good companies practicing jugaad and how?
The Tata group is an example of an Indian company that practices jugaad. The Tata Nano is an outstanding example of the application of the principles of flexibility, frugality and inclusivity that are the hallmark of the jugaad mindset. So too with the Tata Swach. GE Healthcare is an example of a Western multinational that practices jugaad in India and elsewhere. The company used jugaad principles to develop a range of low cost ECG machines in India that it has also sold in other emerging markets as well as the West.
Before writing this book did you read any books on jugaad?
While we hadn’t read other books on jugaad, we conducted interviews with hundreds of grassroots entrepreneurs, corporate leaders and others in India to really understand the essence of jugaad. Interestingly, we found it means different things to different people depending on geographic region and socio-economic status, etc. We took all of these insights and distilled them into a definition of jugaad that underlines the best of it – a frugal, flexible and inclusive approach to problem solving and innovation. In a sense, it is an amelioration like “hacking”, which at one time had a negative connotation and now has found its way into the business lexicon with many corporations conducting hackathons to find solutions to problems. In this same way, we have extracted the best of jugaad since so many principles of jugaad innovation can benefit society at large.
Any tips on how can a startup company initiate and practice jugaad right from day one?
Startup companies (and the entrepreneurs that lead them) are the very epitome of jugaad. Our book and its principles are inspired by such companies and individuals. So for us to be telling startups how to apply jugaad would be a bit like us teaching fish how to swim! That said: two main principles of jugaad that are useful to startups are: 1) always look to get more with less (i.e., be frugal) and 2) always look to challenge conventional wisdom and look for non-linear solutions to problems (i.e., be flexible).
What made the 3 of you collaborate on such a project?
All three of us have unique perspectives that complemented our background and academic research for this book. It began with ethnographic research for a film series that Simone’s company, Blood Orange, was creating for a corporate client who wanted to better understand innovation in emerging markets and how it may be relevant in the West. For the series, Simone brought in Navi, then an analyst at Forrester whose focus was innovation and emerging markets, as an innovation consultant for the series. Ultimately, Navi left Forrester to work with Jaideep, a marketing professor at the University of Cambridge’s Judge Business School, who was heading the Centre for India & Global Business there. Navi later brought Simone in as a consultant for the Centre. Much of our respective work was done separately, but with common themes particularly around innovation and emerging markets so it made sense for us to bring our interests and information together in a book like Jugaad Innovation.
Would the 3 of you be collaborating in the future also?
Absolutely. The three of us continue to write articles on the subject of jugaad innovation and frugal innovation for the Harvard Business Review blog and publications like Fast Company, BusinessWeek as well as many newspapers in India and the US. We also pursue individual study of jugaad based on our professional backgrounds, and share these learnings with each other. We won’t say yet whether a Jugaad Innovation sequel is in the works, but there certainly is a lot more ground to cover around this subject!
Jugaad innovation, also known as frugal innovation, is the flexible mindset that embraces the idea of doing more with less. Most prevalent in the developing markets of China and India, Jugaad innovation is becoming more and more popular in the West, where economic conditions are forcing companies to find more affordable solutions to the problems they face.
Navi Radjou, a Silicon Valley-based innovation and leadership strategist and co-author of Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth, spoke to us about this new innovation trend and how we can begin to embrace it more fully in the West.
Imaginatik: Do you think that Jugaad leads to “better” innovation in terms of tech advances? Can you still get the same results with Jugaad innovation as you would with traditional R&D ventures, even with the resource limitations?
Radjou: Yes, Jugaad can be applied anywhere; it is really a unique mindset that has an application that cuts across industries and geographies. Your second question is important. Consumers are put off by complexity and are embracing “good enough” solutions. There is a famous Stanford study conducted by Professor Jonathan Berger that shows that students preferred mp3 quality songs over .wav files (mp3 files are more condensed and compressed versions of .wav files).
So sometimes “good enough” quality is actually what consumers prefer!
In the West, we often push technology boundaries for their own sake, which makes us lose track of why we are innovating in the first place. Jugaad is not about inventing the Next Big Thing, but rather improving—and making the most out of—The Last Big Thing. It is about improvement rather than newness. It saves money on R&D while still improving technology and adding value to customers.
Is the resulting solution sophisticated? Who cares! Does it get the job done? Yes—and that’s all that matters.
There is also a Western idea that innovation is only good if it can scale. I prefer to think of “scaling out” rather than “scaling up.” In emerging markets such as India, China and Brazil, economies of scale don’t matter. What matter are economies of scope. The socio-cultural and economic diversity is so huge in emerging markets that a product that sells well in one segment may not be successful in another segment. This is what makes Jugaad innovation more customer-centric, more personalized, and more specialized. It allows you to get really close to a particular market or segment and find out what users in that particular segment really want and need, which is a far more effective approach than mass-producing something and then hoping that marketing will pull some magic and sell it successfully.
Imaginatik: How do you build Jugaad skills to develop a career?
Radjou: Look at kids! Children are great at coming up with magical ideas and improvising solutions with very limited resources. And, the key is, they operate in unstructured environments. But as these kids evolve into adults, they become more and more structured, and when they join the workforce, they struggle to break out of the corporate box. In many companies, I hear employees complain about not being given the time and space to play around with their ideas. That’s very sad. My counter-intuitive suggestion to corporate leaders is that rather than investing in R&D and structured processes, they must vive people limited resources combined with an unstructured environment. In doing so, they will create an environment conducive to improvisational Jugaad innovation.
Also, Jugaad is all about allowing people to have the courage and freedom to express themselves in an authentic way. It is important to create an environment where people feel that their ideas are respected, and don’t get punished if some ideas fail. In India, Ratan Tata (the visionary behind the $2,000 Nano car) gives the “Innovation Failure Award” to the employees who failed in their attempts to innovate but learned a great deal from that experience that could benefit the Tata Group. Such an open mindset creates the right incentives for trying and failing.
Thirdly, if you’re stuck in a company and don’t know how you might introduce Jugaad into your organization, then find partners who embody the Jugaad spirit better than you do. Network with them, co-create and test new ideas with them; in the process, you will get better exposed to their Jugaad mindset before you introduce that mindset into your own company. For instance, GE Healthcare has partnered with Embrace, a startup co-founded by Jane Chen, which has invented a $200 portable infant warmer (see previous blog post).
Imaginatik: Can you elaborate a bit further on how we can break out of this Western mindset? How would you begin?
Radjou: When facing harsh constraints, most people tend to easily give up. But the Jugaad mindset consists of turning adversity into an opportunity. All the Jugaad innovators profiled in my book have a “growth mindset” (to borrow a term from Stanford Professor Carol Dweck). They are able to challenge their own assumptions and reexamine problems through multiple new lenses. This ability to “reframe” problems allows them to come up with really creative solutions, something that people with a “fixed mindset” can’t easily do. So, the key message here is that in today’s increasingly complex environment, you must e willing to shift and broaden your mindset, letting go of old perspectives that are holding you back.
Imaginatik: Navi, thank you so much for taking this time to talk with us. Do you have any final thoughts to add before we say goodbye?
Radjou: I want to mention that, if you want to put Jugaad into practice, there are some very specific recommendations in the book.
A key takeaway from the book is that the notion of “Innovation Management” is an oxymoron. In other words, you can’t “manage” innovation. Companies have over-invested in structured tools and techniques to “manage” innovation. That has taken us to a very process-centric approach to innovation. Jugaad is less about process and more about people. Jugaad is about unleashing the ingenuity of people in a bottom-up fashion. It requires more facilitation than management. It is also about celebrating and embracing improvised creativity. This means dialing down the precise management of innovation. Jugaad innovation is more an art than a science.
At the same time, we need to be careful. It is not about having no leadership and letting chaos reign. Leaders need to be able to discern when to manage and when not to manage, and how to find the right balance!
Think about it this way: Jugaad is another tool in your toolkit and you need to know when to apply which tool, depending on the context.
The next generations of workers—Gen Y and Z—are really predisposed for Jugaad. Traditional leaders are used to “managing” baby boomers and Gen X workers, but not Gen Y and Z. To avoid a generational clash, managers must learn to act and lead wisely (which is the topic of my next book), and learn to cater to the needs of Gen Y and Z employees.
Dr. Ahuja in a village near Wankaner, Gujarat with MittiCool innovator Mansukh Prajapati.
(Photo Courtesy of subject)
A new book titled Jugaad Innovation looks at lessons from emerging markets in frugal innovation for multinational corporations. Here’s our chat with co-author, Simone Ahuja, one of the three authors on this project (along with Navi Radjou and Jaideep Prabhu).
For readers who aren’t familiar with jugaad, could you please briefly describe it?
Jugaad is a Hindi word meaning an innovative fix. It’s an improvised solution using ingenuity and resourcefulness, often due to very limited resources.
When we talk about jugaad innovation, we are referring to the mindset and principles that are used to make this happen. Jugaad innovation is frugal, flexible and inclusive. It’s also called gambiarra in Brazil, zizhu chuangxin in China and is most like DIY in the US.
I think the biggest question for alot of readers is – this looks great on paper. But how do we make this happen in the US where there’s an onslaught of regulations?
I think we have to shift our mindset around this issue. Absolutely regulations can add a challenging dimension to innovation, but the jugaad mindset can actually help address these.
Embrace, a low cost, portable infant warmer is one example. The creators of Embrace used all of these principles to find a solution that would address the needs of emerging markets. The device is now being tested at the Lucille Packard hospital at Stanford right here in the US where medical devices are highly regulated.
Another example is the Nano, the $2,000 car created by Tata Group in India. The car was made first for Indian markets, but with some limited additional cost is being adapted for Europe and even the US – markets with strict regulations, and setting new industry benchmarks.
Another example is GE Health’s Mac 800 – a portable, low cost ECG unit first developed for emerging markets that has received FDA approval and will make a big impact on our highly strained healthcare system right here in the US. All of these products utilized several principles of jugaad innovation – and all of them are finding a place in highly regulated markets like the US and Europe.
Reducing the bells and whistles on many of these products is in a way about going backward – going back to a simpler existence? Mitticool, for example, is about using basics and natural products.
Jugaad innovation goes far beyond simple de-featuring, but having a deep understanding of consumer needs and recognizing that certain features just don’t provide value for money is a part of jugaad innovation.
It’s interesting to think about whether removing bells and whistles is going backward, or is actually an advancement from the complexity we face today…too many software programs on your laptop, too many buttons on your remote control – it’s overwhelming and counterproductive.
That’s the beauty of many Apple products – in a way Steve Jobs created value by reducing bells and whistles – he took away the keyboard, the mouse, and gave us greater value.
MittiCool, the low cost, biodegradable refrigerator made out of clay is a great example of jugaad innovation – creating a product and a new industrial process with very limited education and capital, flexible thinking that allowed the innovator to use a millennia old material like clay to create a fridge out of it, and yes, simplicity that allowed his community to have refrigerated produce and dairy for the first time ever – and in an environmentally friendly fashion. Interestingly, many users of the MittiCool say that food actually tastes better when stored in it as compared to a regular fridge, because it provides moisture to the food rather than drying it out.
There’s been some debate about how successful are some of these low-cost products. Tata Nano is a low-cost product but had trouble with quality control and didn’t really reach as many consumers as they had hoped. Can you address the “success” element here?
I think the Tata Nano is a huge success. While they’ve had some challenges with safety and sales have been disappointing, the Nano has created a whole new benchmark in the global auto industry. Every car company today wants to create their own version of the Nano. The car isn’t just stripped down, there were many new innovations that were developed resulting in tens of technology and design patents. It also provides an alternative to families who previously could only travel on a motorcycle – sometimes with 4 – 5 passengers. The Nano provides a much better option. They’ve also demonstrated tremendous flexibility in their sales models and even the location of their factories quickly – no easy feat for a large corporation.
You refer to a Booz & CO report that has a CEO wearing a shirt, “Spent $2 billion on R&D and all we got was this lousy t-shirt.” For companies in the West to get smarter about innovation, what do they need to do?
Companies in the West would benefit from using jugaad innovation to augment their current innovation practices, which tend to be more expensive, structured and insular.
Typically innovation occurs in big R & D labs, with planned approaches to innovation done by those whose job it is to innovate. What we’re suggesting is that rigid processes like Six Sigma can be highly effective where sameness is desired, such as manufacturing. But innovation takes place in a less linear fashion.
As George Buckley, former CEO of 3M said, “Invention by its very nature is a disorderly process. You can’t put a Six Sigma process into that area and say, Well, I’m getting behind on invention, so I’m going to schedule myself for three good ideas on Wednesday and two on Friday. That’s not how creativity works.” And that’s exactly why he rolled back Six Sigma initiatives at 3M.
Companies will need to imbue frugality, flexibility and inclusiveness into their culture to drive sustainable growth in a global economy that is more diverse, interconnected, volatile, global and resource scarce.
Western companies traditionally have large overhead costs- complex corporate structures, large staff, etc. Are they ready to get rid of some of this? What do you find in your conversations with these companies?
There is a huge trend emerging around frugal innovation – and companies are now understanding the urgency of why they must be more frugal, flexible and inclusive in order to succeed in today’s volatile economy. This is a big shift from 3 – 4 years ago when we first started writing about jugaad innovation when there was a lot of pushback around making these kinds of changes.
Having said that, the changes will come slowly. Typically, we see this style of innovation occurring on the edges, and through partnerships and even acquisitions. It will take some time before we see radical changes across large organizations, but it’s starting to happen.
One of the ways we’re helping corporations deeply understand how to do this is through workshops and interactive, hands on innovation labs that dig deep into the principles of jugaad innovation. In our book, my co-authors and I share several examples of large companies like 3M, Google, Facebook, Renault-Nissan and GE are already using the principles of jugaad innovation to create sustainable growth in a very challenging economic climate.
There’s a saying, “Keep it simple, stupid.” Is that fundamentally at the core of frugal innovation – keep it simple?
Yes, simplicity is a key principle of jugaad innovation, and one of my favorites. Simplicity requires a deep understanding of consumers, their needs and their habits. Simplicity and “good enough” products deliver higher value because they are designed to do one thing exceptionally well (functional specialization), rather than doing multiple things in a mediocre fashion.
The MittiCool mentioned above is an outstanding example of simple, focused design as is the Mac 800. John Maeda, president of the Rhode Island School of Design, points out “It’s not necessarily beneficial to add more technology features just because we can. R & D engineers must make frugal simplicity the core tenet of their design philosophy.” I couldn’t agree more.
Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, famously coined the term “frugal engineering” in 2006. He was impressed by Indian engineers’ ability to innovate cost-effectively and quickly under severe resource constraints. And under Ghosn’s leadership , Renault-Nissan has proactively embraced frugal engineering and become one of the world’s leading producers of both electric cars as well as low-cost vehicles — two of the fastest growing and most promising market segments in the global automotive sector.
Recently, in New York, we participated in a panel discussion organized by the Asia Society called “Jugaad Innovation: Reigniting American Ingenuity” (you can watch a video here). We were honored to have Ghosn as our key panelist. During the panel discussion, Ghosn explained that Western automakers must sacrifice the “bigger is better” R&D model and adapt to frugal engineering.
In today’s resource-constrained environment, Western firms are feeling the growing pressure to “do more with less” — that is, deliver more value to customers at less cost. CEOs of these firms can emulate four best practices initiated by Carlos Ghosn at Renault-Nissan:
1) Create “good enough” products that deliver high value for money: Over-engineering products is no longer sustainable — both for economical and environmental reasons. Rather, Western firms need to make simplicity a key tenet of their innovation process by developing “good enough” offerings that deliver significant value for money to cost-conscious consumers. For example, in 2004, Renault launched Logan, a small, no-frills family car. At a starting price of $10,000, the car is built with drastically simplified product architecture and minimal components. In addition to a stripped-down, modern design, Logan is reliable and energy efficient. As a result, it has become Renault’s best-selling car across recession-weary European markets as well as in many emerging markets. Building on Logan’s success, Renault has now developed an entire line of low-cost vehicles (under the brand Dacia) all modeled after Logan’s technology platform.
2) Foster healthy rivalry among global R&D teams: CEOs may find it difficult to persuade R&D teams in the US and Europe — used to abundant resources and pushing the technology frontier for its own sake — to embrace frugal innovation. Yet engineers and scientists love challenges. Western CEOs can create challenges for global R&D teams by introducing artificial constraints that foster a sense of urgency and healthy rivalry that can lead to frugal solutions. In one instance, Ghosn requested three different R&D teams — one each from Japan, France, and India — to come up an engineering solution for the same technical problem. The teams came up with solutions of equal quality — yet the Indian engineers’ solution cost only one-fifth of what the French and Japanese engineers’ solutions cost.
3) Tap partners in emerging markets who excel at innovating more with less. Rather than relying exclusively on in-house R&D teams to develop frugal solutions, companies in developed economies need to connect with entrepreneurial organizations in emerging markets that have a knack for innovating on a shoestring. Recognizing that even its least-expensive pickup truck was five times costlier than the Indian market could afford, Nissan established an R&D and manufacturing joint venture with Ashok Leyland, an Indian commercial vehicle manufacturer. Ghosn recounts with humor how Dr. V. Sumantran, Non-Executive Vice-Chairman of Ashok Leyland, paid a visit to the basement of Nissan’s technical center in Atsugi, Japan and pointed to a four-generation old Nissan pick-up truck. He told Nissan’s baffled head of product planning: “Give us the design specs of this vehicle and our Indian engineers will use it as baseline to develop a great-looking yet affordable and robust pick-up truck fit for the tough Indian roads.” And they did it. The result is DOST, an entry-level pick-up truck with a starting price of Rs 3.7 lakhs ($6,600). Since its launch in September 2011, DOST has garnered more than a third of India’s hypercompetitive light commercial vehicles market. The Ashok Leyland-Nissan joint venture now plans to introduce DOST in other emerging markets in Southeast Asia and the Middle East.
4) Send your top executives to emerging markets to cultivate the jugaad mindset: Ultimately frugal innovation is not just about doing more with less. It’s about learning how to innovate under severe constraints and turn extreme adversity into an opportunity for growth. But it’s hard for Western executives to cultivate this frugal, flexible and inclusive mindset — which we call jugaad — in resource-rich and relatively stable Western economies. That’s why Ghosn dispatched Gérard Detourbet, a senior executive in Paris who was in charge of Renault-Nissan’s entry-level cars, to India. From his new base in Chennai, Detourbet will be leading the development of a “global small car” — an entry-level car priced at around Rs 3 lakhs ($5,200) that will first be commercialized in India and then introduced in other emerging markets like Brazil, Indonesia, and South Africa. When Detourbet returns to Renault-Nissan’s headquarters in Paris, he is poised to bring with him the jugaad mindset he honed in India. As Ghosn, a Brazilian-born French national of Lebanese descent, explains: “We don’t go to emerging markets to just bring back a product, but to learn something — like new processes or a whole new mindset.”
To win in today’s resource-constrained global economy, Western CEOs must follow Ghosn’s lead in embracing frugal innovation. By inculcating the jugaad mindset within their enterprise, Western CEOs will be able to build a resilient organization that can deliver significantly more value to customers using fewer resources.
NEW YORK, June 8, 2012 — Carlos Ghosn, CEO, Renault-Nissan and Navi Radjou and Dr. Simone Ahuja, co-authors of Jugaad Innovation, explored how Western companies and societies can accelerate growth by embracing the art of frugal innovation that is being pioneered in emerging economies. Read the program summary.
Video highlights and the complete panel discussion:
More pics from a wonderful book launch of our Indian edition of Jugaad Innovation. Such an honor:
(Click each for larger pop-up with caption.)