Jugaad Innovation

Think Frugal, Be Flexible,

Generate Breakthrough Growth
by Navi Radjou, Jaideep Prabhu and Simone Ahuja
Copyright 2012 Jossey-Bass,
an imprint of John Wiley & Sons
getAbstract 2013
Rating (10 is best)
Overall: 8
Applicability: 7
Innovation: 8
Style: 8
Take-Aways
Jugaad is the Hindi term for a clever solution in the
face of adversity.
Jugaad is the attitude that with determination and
ingenuity, you can do almost anything with almost
nothing.
This tactic is based on six principles: seek
opportunity in adversity, do more with less, think
and act flexibly, keep it simple, include the margin
and follow your heart.
Bottom-up Jugaad innovation stands in contrast to
the Wests structured, top-down R&D approach.
Jugaad is neither a commercial methodology nor a
specialized business process.
Jugaad deals well with scarcity, rapid change and
other contemporary challenges.
Western companies can adopt the jugaad R&D
approach as a useful supplement to traditional
corporate innovation.
Introducing jugaad in your company requires full
support from the CEO.
Like jugaad developers, Western companies should
focus more on quickly monetizing new inventions
and less on protecting their patents in the long
term.
Many countries now promote jugaad to move
innovations quickly to market.
Relevance
What You Will Learn
In this summary, you will learn:
1.) How jugaad innovation deals with scarcity and
rapid change,
2.) Why the Wests R&D system is poorly suited to
meet these challenges, and
3.) How to implement jugaad in your organization.
Recommendation
Decentralized, nonhierarchal management has been
replacing musty command-and-control management
style for some time. One name for R&Ds new bottom-up
approach is jugaad, a colloquial Hindi word that roughly
translates as an innovative fix; an improvised solution
born from ingenuity and cleverness. This tactic enables
inventors to develop innovative products and services
faster, better and cheaper. Professors and consultants
Navi Radjou, Jaideep Prabhu and Simone Ahuja examine
jugaad innovation worldwide, present inspiring case
studies and explain why Western companies should
supplement top-down, traditional R&D with bottom-up
jugaad. getAbstract recommends this revelatory, inspiring
exploration to business leaders who seek to innovate by
achieving more with less.
Summary
Mitticool
Mansukh Prajapati an Indian living in the scorching
desert village of Ramakrishna Nagar in the western state
of Gujarat is a trained potter who never finished high
school. He also is a brilliant inventor who created a simple
clay refrigerator that keeps foods cold without electricity
in the hottest climates. Prajapati calls his invention the
Mitticool mitti means earth in Hindi. Water in the
Mitticools top chamber moves through the units walls and
creates an evaporation effect that cools food in the bottom
chamber.
In 2001, an earthquake struck Prajapatis village. The
local newspaper featured a story about the devastation
with this headline: Poor mans fridge broken. The story
included a photo showing an earthen pot smashed into
pieces. The villagers used clay pots to keep water cool.
The headline, though meant as a joke, sparked Prajapatis
thinking. His eureka idea: Why not use clay to make a
real fridge for villagers one that looks like a typical fridge,
but is more affordable and doesnt need electricity? Such
an appliance would be a godsend to the poor.
After experimenting for a couple of months, Prajapati
developed a Mitticool prototype. The ingenious potter
sold his Mitticool to local villagers for about $50. They
loved it. Before long, Prajapatis refrigerator became a hit
throughout India and around the world.
When he saw how poor people embraced his clay
refrigerators, Prajapati had another eureka idea: Take
the artisanal craft of pottery and transform it into a mass
manufacturing method. He created a new way to work with
clay and taught his techniques to women in his village.
Over time, Prajapati sparked a mini Industrial Revolution
in pottery. His next clay product was a frying pan that
holds heat superbly and costs only $2. Today, Prajapati
is the guiding light for an entire industry with numerous
employees that develops useful, affordable products for
poor people worldwide. The Mitticool, and Prajapatis other
inventions, demonstrate what ingenuity and willpower can
accomplish in the face of adversity and scarcity. Prajapati
is the living embodiment of what Indians refer to as jugaad
the attitude that with determination and ingenuity, you
can achieve almost anything with almost nothing.
Jugaad
Jugaad is an innovative fix; an improvised solution
born from ingenuity and cleverness; it means being
resourceful. In Brazil, people call it gambiarra; in China,
zizhu chuangxin; in Kenya, jua kali. The French know it
as Systme D; New Zealanders, the #8 wire. Americans
once labeled it Yankee ingenuity but now call it DIY, for
do it yourself.
Think of jugaad as a fluid art and culture. Jugaad is
neither a commercial methodology nor a specialized
business process. It is not a tool. Jugaad is not something
organizations do. No matter what the language or the
country, jugaad has universal application. Resourceful and
creative individuals practice jugaad intuitively to improve
their lives.
Western Jugaad
While many people associate jugaad with Indian
entrepreneurs, the concept has a distinguished tradition
in the West. Benjamin Franklin, one of the United States
founding fathers, was a jugaad-prototype inventor. He
worked hard to make things better for others. He invented
the Franklin stove, the lightning rod, bifocals and a
carriage odometer, among other things. Franklin did not
apply for a patent for his stove. Helping others was his
only goal. This fits in with the classic Indian jugaad spirit.
The Indian innovators who exemplify jugaad work hard to
attain their personal dharma that is, the responsibilities
they must assume to live properly fulfilled and meaningful
lives.
Cyrus McCormick, a 19th-century American, used meager
resources his lab was his familys barn to develop
the mechanized reaper that automated grain harvesting.
McCormicks invention changed the world, making life
better for farm workers everywhere and increasing food
supplies for everyone. McCormick also developed new,
improved plows. During McCormicks time, America
was filled with jugaad inventors who worked with almost
nothing to devise new, beneficial products and processes.
Top-Down R&D
While the West was once a great proving ground for the
jugaad sensibility, industrial development supplanted this
bottom-up, improvisational style with a top-down, highly
structured approach to innovation. Companies established
R&D departments to manage innovation. This tactic has
three defining characteristics: large budgets, structured
business methods and tight control of knowledge.
Instead of following the jugaad ethos of more with less,
Western companies seem to prefer to do more with
more. This results in overengineered products that are
costly to manufacture. The structured R&D approach is
inflexible, elitist and insular. Jugaad allows developers to
create new products faster, better and cheaper.
New Challenges
Product developers everywhere face new challenges:
Scarcity The global recession has reduced
the financial capital available to small and midsize
firms. The middle class is shrinking; people have
less money and natural resources are becoming
increasingly scarce. The result is lower sales and
profits for many companies. They must learn to get
by with less.
Diversity Markets and workforces are more
varied demographically than ever. Highly structured
approaches to innovation do not align with the
diverse nature of modern-day society.
Interconnectivity Social media, mobile
devices and cloud computing breed universal
connection between disparate people. Corporate
regimented innovation processes must contend
with current expectations of inclusivity and
interconnectivity.
Velocity Business events and developments
move at blinding speed. Standardized innovation
systems cannot keep pace.
Breakneck globalization Bloated innovation
engines put Western companies in a weakened
competitive position in the face of business
developments worldwide.
The Six Principles of Jugaad
Jugaad thrives on scarcity, rapid change, diverse
populations and challenging circumstances. Six basic
principles distinguish the jugaad mind-set:
1. Seek Opportunity in Adversity
People who start businesses in developing nations must
deal with adversity, including poor infrastructure, crippling
bureaucracy and regulations, uncertain property rights,
shaky local politics, and poor populations that cannot
afford to buy their products. But jugaad innovators see
these difficulties as opportunities.
2. Do More with Less
Gustavo Grobocopatel is an Argentinian farmer, born
of generations of subsistence farmers. He wanted to
expand the familys operations, but arable land is scarce
in Argentina. Farm labor is equally scarce. Lacking the
financial resources to expand, Grobocopatel leased land
instead of buying it. He subcontracted for labor and rented
farm equipment. By 2010, his company, Los Grobo, had
become Latin Americas second-largest grain producer.
The proper jugaad attitude can help you accomplish a
great deal with very little money.
3. Think and Act Flexibly
After China, India has more diabetics estimated at
62 million than any other nation. To help diabetes
patients, Dr. V. Mohan runs a mobile telemedicine clinic to
serve distant villages throughout India. Like other jugaad
innovators, Mohan is a flexible thinker who figured out how
to put his ideas into practice. He explains, I asked myself:
What if I can come up with a service that allows physicians
to remotely consult patients without either group having to
travel? After Mohan established mechanisms for remote
diagnoses, he couldnt afford to pay technicians to follow
up with patients. He persuaded them to work for free. At
his urging, Indias government space agency provided a
free satellite hookup for his telemedicine service.
4. Keep It Simple
Approximately 26 million children are born each year in
India. Of those, 1.2 million do not survive beyond their first
28 days. Proper incubators can reduce infant mortality,
but Western incubators are too expensive for most Indian
hospitals and rural Indian health care workers lack the
training or skill to maintain such units. Indian pediatrician
Dr. Sathya Jeganathan designed a wooden incubator
heated only by a 100-watt lightbulb. Her incubator is
inexpensive and needs little maintenance. Jeganathans
simple unit halved infant mortality at her hospital.
5. Include the Margin
Large corporations infrequently design and market
products and services to citizens on the margins of
society, including the poor. Therefore, enormous markets
of potential new consumers go untapped. Smart jugaad
innovators often move into these markets and score big.
For instance, Dr. Rana Kapoor set up YES BANK with the
specific aim of serving the 600 million Indians without bank
access. In business since 2004, the bank earns 2% above
its lending costs. This is much better than the average
bank. We serve the marginal segments of our society...as
a core component of our inclusive business model, says
Kapoor. I dont see any contradiction between doing good
for my society and doing well for my shareholders.
6. Follow Your Heart
Jugaad entrepreneurs seldom use focus groups to
decide what products to introduce or which features to
include. They tend to rely on their intuition to develop
their products. Steve Jobs thought this way. The visionary
Apple CEO was the guiding light for such popular products
and services as the iPhone, iTunes, the iPod and the iPad.
Jobs relied on his own judgment about which products
to develop and did not turn to his customers or Apple
investors for their approval. Instead, Jobs believed in
customer-minded innovation, which relies on intuition,
instead of customer-driven innovation.
Make Jugaad Part of Your Organization
Your CEO must fully support any implementation of jugaad
principles. With that backing, execute jugaad in a bottom-
up, not top-down, fashion. Showcase the employees
within your company who already demonstrate a jugaad
mind-set. Dont worry about scrambling for patents for
your jugaad developments. Instead, monetize your
inventions quickly. Use Internet collaboration tools to ally
with creative individuals and other jugaad innovators.
National Jugaad
Many nations now promote the jugaad concept. The
United States helps to promote bottom-up, jugaad-
type innovation through the White House Office of
Social Innovation and Civic Participation (SICP). This
organization provides $50 million in seed capital for
community programs set up by individuals with jugaad
mind-sets. Prominent educational institutions such as
Stanford University (business course: Entrepreneurial
Design for Extreme Affordability), Santa Clara University
(Frugal Innovation Labs) and the University of
Cambridge (Inclusive Design Program) are developing
leaders with jugaad mind-sets. Britain and France have
their own jugaad programs, as well.
About the Authors
Navi Radjou is a strategy consultant and a fellow at
Judge Business School, University of Cambridge, where
Jaideep Prabhu is Jawaharlal Nehru Professor of Indian
Business and Enterprise. Simone Ahuja is the founder of
Blood Orange, a strategy consultancy.