Navi Radjou, co-author of Jugaad Innovation started his talk with why we need frugal innovation. His premise was that the amount of money spent on R&D is not correlated to making the list of the most innovative companies. While Apple spends less on R&D than Microsoft, Apple consistently makes the list of most innovative companies while Microsoft does not. This helps prove out Radjou's theory that money can't buy innovation.
Interestingly, the more money you pour into innovation, the less risk averse you become. Why? Because companies become focused on protecting their investment rather than driving originality. And if you think buttoned up efficiency and a focus on protecting investments helps innovation and creativity, here's a poignant quote from George Buckley, CEO, 3M:
"You can't put a Six Sigma process into that area and say, well, I'm getting behind on invention, so I'm going to schedule myself for three good ideas on Wednesday and two on Friday. That's not how creativity works."
So what is frugal innovation?
If you believe necessity is the mother of invention, then you've captured the essence of frugal innovation. Examples of frugal innovation abound in emerging markets. But, did you know large, commercial companies like the Tata Group, Unilever, Siemens, and PepsiCo are innovating frugally?
What do these companies have in common? They have "jugaad" or "the gutsy ability to improve and effect a solution with limited resources using ingenuity and resilience."
Go forth and live frugally!