 "Jugaad is both a necessity and a hobby: Navi Radjou & Jaideep Prabhu")
Frugal innovation has been adopted in the West effectively but it is defined differently, Navi Radjou and Jaideep Prabhu tell Rohit Nautiyal
Your first book, Jugaad Innovation, was launched four years ago. How has the business community warmed up to the main idea of the book 'doing more with less' in these years?
Radjou: Jugaad Innovation was all about finding cost-effective solutions. One must understand that frugal ingenuity is universal. For some reason, people decided to understand the idea of jugaad as the opposite of the Western way of creating innovation that is structured and expensive.
Now we have reached a point where the jugaad mindset is helping create commercially viable products. GE is one multinational actively involved in collaborating with jugaad innovators to create commercially viable solutions for its customers. While jugaad thinking was born as a result of limited resources in developing nations, it started as a hobby in the West.
Please share some examples of jugaad innovators doing scalable work.
Prabhu: I don't think it will be right for us to take credit for the movement Navi talked about. Still, some companies I work with as consultant in the UK did take cognizance of our first book. A few years back, Pearson, one of the leading players in education, overturned its business model - publishing expensive textbooks - to become a digital company. This happened because students, parents and the government were not sure about the learning outcomes of textbooks. Pearson moved fast by creating a small, high-power jugaad team that worked closely with the chairman. In three years, this team was able to prove the efficacy of its new digital model.
The other example is that of Barclays Bank, which pushed financially frugal behaviour among its customers in the UK where consumer debt levels are on the rise. Since the bank understood that many retail consumers are living beyond their means, they instituted a programme on financial health. This had to be done frugally. Barclays began by engaging with visiting customers in all its branches. Simple financial planning tools were given to people that could be pasted on refrigerator doors to keep them abreast with their liabilities.
The company also realised that it can create fintech (financial technology) faster outside the organisation. This is because in any established company internal processes and bureaucracy delay the speed of innovation. Barclays has created an accelerator in Manchester where select fintech companies from around the world are invited to incubate new ideas. These companies are mentored and supported by the employees of Barclays. While the technology companies learned about banking regulations and customer behaviour, Barclays was influenced by the entrepreneurial enthusiasm of the partner companies.
Over a period of time, based on the output of each company, the bank takes a call on whether to integrate that company in the Barclays system, to invest in it or to pass on the idea to venture capitalists. Both these companies were inspired by frugal principles.
Some industries such as media and education are finding it difficult to adapt to the changing consumption patterns of the digital age. Other than making companies leaner, what can these industries do to stay relevant?
Radjou: No business in this world can escape digital disruption. BBC is now crowdsourcing stories from its viewers. Recently Twitter acquired live-video streaming start-up Periscope that allows users to stream any event in real time. Both these companies are great examples of citizen journalism. The problem is that, so far, most media companies have applied the fundamentals of frugality from the inside out, meaning they have focused on cost-cutting. This approach has to be junked in favour of an outside-to- inside approach. For example, very few media companies are proactive in forming alliances with digital-first start-ups for content partnerships.
In our latest book, Frugal Innovation, one of the chapters is, 'Co-create value with prosumers'. It has an in depth analysis of this approach. If a product can fulfil up to 80 per cent of consumer expectations, it will have a future. Young consumers want to co-create value along with companies. Today, social media platforms are aggregating information for their users. So no journalist or a professor can say "I know best".
At the same time there are companies that can manage to deliver unique content. US-based Fast Company, a magazine focusing on technology and design innovations, has become a go-to publication for breakthrough ideas. Honestly, some of the examples in our book were first published in Fast Company. The magazine works mostly with freelancers. Another leading design magazine in France is able to publish high-quality pages by using cheap Italian printers and a staff of three people. Interestingly they use open source images to cut costs. The magazine (as thick as a coffee-table book) became successful in less than two years without an online presence. This is how you just don't do good, but better with less.
Prabhu: In journalism, content curation will always be a differentiator. The Economist introduced Espresso, a morning briefing from the editors of the publication. Delivered to your smartphone or inbox before breakfast, it tells you what's on the global agenda in the coming day, what to look out for in business, finance and politics. It has the same signature concise format of The Economist. After spending a couple of minutes going through the content, the reader is sure of knowing the most important details on a given topic. Frugal innovation is not just about cutting cost, but adding value.
Your first book, Jugaad Innovation, was launched four years ago. How has the business community warmed up to the main idea of the book 'doing more with less' in these years?
Radjou: Jugaad Innovation was all about finding cost-effective solutions. One must understand that frugal ingenuity is universal. For some reason, people decided to understand the idea of jugaad as the opposite of the Western way of creating innovation that is structured and expensive.
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Over the last few years, we, along with our readers, discovered that jugaad has been adopted in the West effectively as well. The only difference is that it is defined differently there. The Maker Movement, a trend in which individuals or groups of individuals create and market products that are recreated and assembled using unused, discarded or broken materials is one example of jugaad innovation. It is all about people employing do-it-yourself (DIY) and do-it-with-others (DIWO) techniques and processes to develop unique technology products. The Maker Movement started as a festival where all the jugaados assembled to come up with cost-effective solutions to their day to day problems.
Now we have reached a point where the jugaad mindset is helping create commercially viable products. GE is one multinational actively involved in collaborating with jugaad innovators to create commercially viable solutions for its customers. While jugaad thinking was born as a result of limited resources in developing nations, it started as a hobby in the West.
Please share some examples of jugaad innovators doing scalable work.
Prabhu: I don't think it will be right for us to take credit for the movement Navi talked about. Still, some companies I work with as consultant in the UK did take cognizance of our first book. A few years back, Pearson, one of the leading players in education, overturned its business model - publishing expensive textbooks - to become a digital company. This happened because students, parents and the government were not sure about the learning outcomes of textbooks. Pearson moved fast by creating a small, high-power jugaad team that worked closely with the chairman. In three years, this team was able to prove the efficacy of its new digital model.
The other example is that of Barclays Bank, which pushed financially frugal behaviour among its customers in the UK where consumer debt levels are on the rise. Since the bank understood that many retail consumers are living beyond their means, they instituted a programme on financial health. This had to be done frugally. Barclays began by engaging with visiting customers in all its branches. Simple financial planning tools were given to people that could be pasted on refrigerator doors to keep them abreast with their liabilities.
The company also realised that it can create fintech (financial technology) faster outside the organisation. This is because in any established company internal processes and bureaucracy delay the speed of innovation. Barclays has created an accelerator in Manchester where select fintech companies from around the world are invited to incubate new ideas. These companies are mentored and supported by the employees of Barclays. While the technology companies learned about banking regulations and customer behaviour, Barclays was influenced by the entrepreneurial enthusiasm of the partner companies.
Over a period of time, based on the output of each company, the bank takes a call on whether to integrate that company in the Barclays system, to invest in it or to pass on the idea to venture capitalists. Both these companies were inspired by frugal principles.
Some industries such as media and education are finding it difficult to adapt to the changing consumption patterns of the digital age. Other than making companies leaner, what can these industries do to stay relevant?
Radjou: No business in this world can escape digital disruption. BBC is now crowdsourcing stories from its viewers. Recently Twitter acquired live-video streaming start-up Periscope that allows users to stream any event in real time. Both these companies are great examples of citizen journalism. The problem is that, so far, most media companies have applied the fundamentals of frugality from the inside out, meaning they have focused on cost-cutting. This approach has to be junked in favour of an outside-to- inside approach. For example, very few media companies are proactive in forming alliances with digital-first start-ups for content partnerships.
In our latest book, Frugal Innovation, one of the chapters is, 'Co-create value with prosumers'. It has an in depth analysis of this approach. If a product can fulfil up to 80 per cent of consumer expectations, it will have a future. Young consumers want to co-create value along with companies. Today, social media platforms are aggregating information for their users. So no journalist or a professor can say "I know best".
At the same time there are companies that can manage to deliver unique content. US-based Fast Company, a magazine focusing on technology and design innovations, has become a go-to publication for breakthrough ideas. Honestly, some of the examples in our book were first published in Fast Company. The magazine works mostly with freelancers. Another leading design magazine in France is able to publish high-quality pages by using cheap Italian printers and a staff of three people. Interestingly they use open source images to cut costs. The magazine (as thick as a coffee-table book) became successful in less than two years without an online presence. This is how you just don't do good, but better with less.
Prabhu: In journalism, content curation will always be a differentiator. The Economist introduced Espresso, a morning briefing from the editors of the publication. Delivered to your smartphone or inbox before breakfast, it tells you what's on the global agenda in the coming day, what to look out for in business, finance and politics. It has the same signature concise format of The Economist. After spending a couple of minutes going through the content, the reader is sure of knowing the most important details on a given topic. Frugal innovation is not just about cutting cost, but adding value.