Tuesday, June 11, 2013

Navi Radjou on Jugaad Innovation

Money does not buy innovation...there is no correlation between R&D spend and innovativeness -- Navi Radjou

One of the most notable aspects of Jugaad Innovation[1] is that it continually beats conventional wisdom.  Think a car fit for everyday use could be sold for less than $3000?  Meet the Nano![2] How about a fridge that can keep fruits and vegetables fresh for 5 days, milk for 2 days, uses no electricity, is 100% biodegradable, and costs less than $30?  Sounds impossible, but Mitticool did it.  With a host of stories like these, Navi Radjou told a stunned audience at FEI about the many ways in which people and companies all over the world are engaging in frugal innovation. They are maximizing value for customers, shareholders, and the world around them, with minimal resources (financial, natural, and temporal).

And, as Radjou pointed out, it makes sense that there is a need for Jugaad Innovation:

* Demographic shifts are leading to new consumers.
* Technology is evolving rapidly, especially in terms of mobility and social media
* Regulations are getting tighter
* Competition is now global
* Purchasing power is decreasing, especially in the West, and doubly so in the "middle class"

Moreover, there is a trend of increasing spending on R&D, and this is plainly unsustainable; all the more so because throwing money into R&D does not automatically lead to innovations.  For example, despite all of the resources thrown at the education system, a previously-unknown MIT alum with a degree in computer science started a quiet and very inexpensive revolution with Khan Academy in a classic example of disruptive innovation.  The problem, especially with high spend in R&D, is that when people invest money, they want predictability.  To accomplish this, companies start investing heavily in structured processes like six-sigma and TQM, but these promote sameness and consistency and are rooted in reducing mistakes[3].  As Sir George Buckley, the former CEO of 3M, pointed out:

You can't put in place a Six Sigma process and say: "I'm going to schedule myself for three good ideas on Wednesday and two on Friday."  That's not how creativity works.

Thus, firms are being forced to innovate faster, better, and cheaper than ever, and Jugaad Innovation is all about doing that.  And, while there is no secret formula, Radjou did outline the philosophy and best practices of Jugaad Innovation:

Jugaad: The gutsy ability to improvise an effective solution with limited resources...using ingenuity and resilience.

Frugal Innovation Best Practices
-Deliver greater value to customers -- gives people what they want
-Leverage existing resources and assets
-Keep it simple -- simplicity requires more innovation than keeping it complex
-Adopt a frugal mindset[4]

In the West, when we face huge problems and we lack resources, we tend to give up [too] easily...Jugaad is about never giving up. -- Carlos Ghosn, CEO of Renault-Nissan

To that end, Jugaad Innovation[5] is taking a bit of the world to innovate the whole planet into a better place.  For each one of us, it is an inspiration to take what we have and make a change.

Orin's Asides

1) Jugaad Innovation is sometimes called Gandhian Innovation/Engineering.
2) See the TED Talk on this.
3) The whole point of six-sigma is that the error rate is six standard deviations (represented by the Greek letter sigma) from the mean, which is a mere 3.4 defects per million products.  (Technically, it's not six standard deviations away from the mean, and here's why.)
4) This is similar to the notion of lazy programming.
5) For those who want to study frugal innovation formally, MIT has a new center.

Orin C. Davis is a positive psychology researcher and organizational consultant who focuses on enabling people to do and be their best.  His consulting work focuses on maximizing human capital and making workplaces great places to work, and his research focuses on self-actualization, flow, creativity, hypnosis, and mentoring. Dr. Davis is the principal investigator of the Quality of Life Laboratory and the Chief Science Officer of Self Spark. (@DrOrinDavis)

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