Jugaad: Lessons in Frugal Innovation

By: Mitali Sharma

Resourcefulness amid serious constraints is known in India as ‘Jugaad.’ In this article, Accenture’s Mitali Sharma suggests this simple concept — which gave birth to a $2,500 car, a $12 solar lamp, and a life-saving incubator made from car parts — might be the antidote to the complexity plaguing your innovation process.

What can companies in the developed world learn from innovators who make irrigation pumps from bicycles or solar ovens from old suitcases?

Quite a bit, as it turns out.

Jugaad is a Hindi colloquialism that refers to constraint-based innovation. While it may also be a way of life in India, where “inventing what you need by using only what you have” is an imperative, it also has been the source of breakthroughs that have improved the lives of millions beyond India in the developing world.

In business, Jugaad (pronounced “joo-gaardh”) suggests an openness to improvisation and outside ideas in a search for the simplest route to solving a complex problem. Jugaad is often mentioned in tandem with “frugal innovation,” which involves the delivery of exceptional customer value to low-income customers.

Increasingly, however, businesses oriented toward mature economies are using principles of Jugaad/frugal innovation to foster a creative tension they feel will lead to game-changing innovations.

More than cutting costs

Jugaad has been the source of breakthroughs that have improved the lives of millions in the developing world.

Perhaps the most illustrative of these offerings is the “Car Parts Infant Incubator,” which takes advantage of locally available replacement car parts, familiar automobile design, and globe-spanning automotive supply chains to create a life-altering medical device. The baby warmer sells for 5% of the cost of a traditional incubator, and might save as many as 2.4 million infants per year in the developing world.

The creators of these products shared an ambition beyond merely slashing costs and features. They sought to make high-value products that solved fundamental customer needs, while working with local economic realities and constraints.

Creating a clean slate

Frugal innovation and Jugaad principles are especially important in today’s economy, for two reasons.

First, corporations adversely affected by the slow economy lack resources for R&D. They need an alternate approach and Jugaad inspires offerings that are economical for the consumer and the supplier, without having to sacrifice margin.

Second, the practice has long been considered an “antidote” to the complexity of India, a country of perpetually shifting cultures and profound scarcity. Now the same principles can help address issues faced by multinationals whose capacity for breakthroughs has been stifled by rigid internal processes, long R&D cycles, and above all else, multiple layers of complexity.

This alternate approach to innovation is an excellent disruptor of rigid legacy processes because it democratizes innovation, stripping away extraneous features and processes, while opening the door to ideas from unconventional sources. The result is a clean slate, and a chance to re-orient innovation around the customer.

With increased frequency, major corporations are embracing these approaches and self-imposing constraints around innovation. They might restrict R&D funds or artificially compress a window of opportunity — regardless, the goal is to foster creative solutions, quick experimentation and flexible processes that revolve around the end user.

Putting Jugaad into practice

Arriving at this “clean slate” involves the following:

• Making customers the North Star. Staying close to and understanding customers is the first step in designing viable projects. Just as it is not about being cheapest, the fastest or most glamorous technologically advanced products, Jugaad is about creating value in the eyes of the customer which may be based on factors beyond price.
• Introducing Constraints: Whether it’s a resource or time constraint, the truism that “necessity is the mother of invention” is constant.
• Coming to grips with open sourcing. There are many smart people out there. Most of them don’t work for you. Winning in the future requires acknowledging great ideas will come from outside the company.
• Valuing flexibility and agility over structure. If a process is focused internally and not on the customer, Jugaad practitioners innovate around it.  Companies that follow this approach are highly adaptable, and willing to rethink their business model to pursue options that add value for customers.  The value is derived from experimentation, and the feedback gathered as a result of staying close to customers.  Also, frugal thinking permeates these companies’ processes.  Consequently, they tend to innovate around internally focused processes to maintain the customer focus.  For example:  Review boards in large corporations often result in the death of an idea by “a hundred reviews,” with each management layer adding its own interpretation and changes to an idea until the outcome is a diluted incremental change.
• Emphasizing commercialization:  Entrepreneurs can’t wait for full-blown market strategies to reveal themselves, so they rely on partners to achieve faster commercialization. Instead of focus groups, they experiment and pilot in a small shop or market. Large corporations should be similarly agile.

Abundant resources might change how a company goes about its business, but not necessarily its chances of success.

The bottom line is that in a hypercompetitive world, social media and other tech have raised expectations for agility.  If companies are to experiment with the principles of Jugaad, business leaders will have to step forward, clearly authorize a break with tradition, rethink processes and explicitly allow for more creative independence from corporate control to achieve commercial success.

How can your organization increase its R&D ROI from adopting such clean slate approaches that challenge the status quo?