Innovation Management is an Oxymoron

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.