Wednesday, May 8, 2013

Live from FEI 2013: Frugal Innovation

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?

Frugal Innovation = Increasing value (customers, shareholders, society)
                                 Lowering resources (time, money, etc.)

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!



Alicia Arnold holds a Master of Science in Creativity, Innovation and Change Leadership from the International Center for Studies in Creativity at Buffalo State College and an M.B.A in Marketing from Bentley University. She enjoys writing about creativity and innovation and is published with Bloomberg Businessweek, the Huffington Post, The National Association of Gifted Children, and iMedia Connection. In her role as an award winning, digital marketer, she uses her passion for creativity and innovation to develop breakthrough digital and social experiences. You can connect with Alicia on Twitter @alicarnold.

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