Jugaad Innovation

“Deep scarcity, major demographic shifts, rapid technological change and accelerating globalisation are creating the most complex business environment since the Industrial Revolution.”  Meanwhile, Western organizations have been “institutionalizing” innovation (think R&D processes) that has led to a “structured” approach to innovation which has “three clear limitations: it is too expensive and resource consuming, it lacks flexibility and it is elitist and insular.” This from Radjou et al., in their 2012 book “Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth” (Jossey-Bass).

The authors’ proposed solution for Western organizations to innovate “faster, better, cheaper” in the contemporary environment is “Jugaad” innovation. Jugaad is “a Hindi word meaning an innovative fix; an improvised solution born from ingenuity and cleverness; resourceful.” (It can be loosely equated with “D-I-Y” in America and “Système D” in France.)  Based on extensive research both in emerging economies and elsewhere, the authors identified the “universal” principles of Jugaad so that this “improvisional and frugal art of responding to complexity” can be applied anywhere.

Here are the principles of Jugaad innovation followed by further considerations (“et alors”)

Jugaad Innovation

The authors found that “Jugaad can be distilled into six guiding principles, which anchor the six practices of highly effective innovators in complex settings…” The six principles are:

Seek Opportunity in Adversity

If there is a harsh constraint, it can be looked on as an “invitation to innovate.” It is reframing the perspective to redesign, re-engineer or rethink the business model.

Do More with Less

Work with what you have; do not try to work with what you do not yet have. The essence of frugality is to be “highly resourceful in the face of scarcity.” 

Think and Act Flexibly

The mindset required is that of one who “constantly questions the status quo, keeps all options open, and transforms existing products, services and business models.”

Keep it Simple

It isn’t about “seeking sophistication or perfection by over-engineering products, but rather about developing a ‘good enough’ solution that gets the job done.”

Include the Margin

Hitherto, the focus has been on “mainstream” customers; now “jugaad entrepreneurs intentionally seek out marginal, underserved customers…” Solutions have to be affordable by the target.

Follow Your Heart

Knowing your customers and your product intimately, market research and focus groups might not be necessary: the mindset required is that of those who “trust and follow their hearts.”

Et alors

The above is only the headlines; the book then elaborates with many excellent examples of how these principles have been and can be achieved. Principally however, in an organizational context (rather than an environment as large as a market itself) the key drivers appear to be autonomy and delegation. The authors cite Haier whose CEO has made the “organizational structures flat, thus empowering frontline employees to swiftly sense and respond to changes in customer demand…” Most directors of centrally-controlled large Fortune 500 companies would love their staff to do “more with less” and perhaps “seek opportunity in adversity”; but who amongst those in power actually give “space” to others in the organization to just do a ‘good enough’ job, to “think and act flexibly” and to “follow your heart”? If the leaders want their corporation to survive and even flourish in the “most complex business environment since the Industrial Revolution”, it might be prudent to consider more delegation and more autonomy!