FRUGAL INNOVATION
How To Do Better With Less
Navi Radjou and Jaideep Prabhu
Hachette India;
252 pages; Rs 599
Ron Adner's Wide Lens (2012) looked at innovations, why they succeed and why successful innovations could be business failures. He used a series of cases to build a story that was coherent and consistent. Theory-building, like innovation, is a difficult area. Innovation by definition should break the status quo and the existing understanding. Therefore, an attempt to find the "principles" of innovative business should be lauded for its courage.
In doing so, the authors usually expect to decipher a pattern that can be applied on an untested area. Based on the principles, we should be able to predict success. An easier path, however, would be to put the principles upfront, or develop principles from a handful of instances and then populate each principle with multiple examples, even if the example that illustrates principle one contradicts principle six. Navi Radjou and Jaideep Prabhu have written another book, Frugal Innovation, that follows their highly successful first book, Jugaad Innovation. Both these try to retrofit a series of real-life examples into pre-canned principles.
"Jugaad" was meant to be innovation carried out by untrained people finding a localised solution from available resources - possibly meant for a different purpose, but innovatively fitted to the purpose that the innovator had to use at a given point in time. Mitticool - a refrigerator based on locally available resources to cool vegetables - or using a washing machine for churning lassi could be examples of jugaad. But could a car like the Tata Nano, based on a conviction that there was a market at the right price and on the principle of target pricing, be called jugaad? Or frugal innovation? The objective might be to make a frugal product, but is the innovation frugal in itself? Much of the way products delight customers on some attributes, the pricing could be a delight, but the innovation was not jugaad - given the serious engineering and design that went into the Nano.
There is a problem in how Mr Radjou and Mr Prabhu look at frugality. Whatever they see, they have to see from the perspective of a frugal innovation. This is the easy way out, because then you have millions of examples. That is what they do in Frugal Innovation. They advocate six principles of frugal innovation: (1) engage and iterate; (2) flex your assets; (3) create sustainable solutions; (4) shape consumer behaviour (5); co-create value with prosumers; and (6) make innovative friends.
In several parts of this book and the previous one, the authors admiringly talk of Apple and Steve Jobs, without realising that Jobs blatantly and consistently violated the first principle. One of the principles of frugal innovation (as described on page 28) is to involve customers from the outset. But by the time we move to the sixth principle we see a quote that has got nothing to do with co-creating value with customers - "[entrepreneurs] create breakthrough solutions out of sheer necessity" (page 163).
For a person with a hammer everything looks like a nail. We have two here. A lot of space is devoted to Unilever's sustainable living plan: doubling the company's revenue by 2020 and cutting its environment footprint by half. I will not argue on whether this is frugal innovation, let that pass. But the gem is on page 204: "It is important to convince employees, but it is equally important (and possibly harder) to convince shareholders and analysts of the need for change. In some cases, board members may worry that shareholders will punish the company for focusing on frugal products. To make a strategic shift, CEOs will need to take on hard-headed analysts."
This is followed by a quote from Paul Polman, chief executive officer (CEO) of Unilever: "I don't think our fiduciary duty is to put shareholders first. I say the opposite ... . Most CEOs go to visit their existing shareholders; we go to visit the ones we don't yet have."
Aren't we happy that this is not a book on corporate governance?
Or let us try to understand what the authors are advocating through this quote on page 172: "After spending millions on developing its Android operating system, Google gave away the technology so it could be incorporated into the maximum number of devices, thus securing a vast market for its search engine and other digital services. Google's open source strategy paid off: Android is now available in over 1 billion devices, overtaking Apple's iOS as the world-leading mobile operating system."
What is frugal about this? Who was the innovator, Google or Apple? And what was the innovation - an operating system or putting it on open source after spending millions? The sentence does not make sense for the overall argument of the book, but if the chapter title is "Make Innovative Friends", then it is justified.
One thing that is not frugal is the endorsements - six pages for the current book and four pages for the previous one. The authors need it when the product does not speak for itself.
The reviewer is visiting faculty at the Centre for Public Policy, Indian Institute of Management-Bangalore
