Jugaad Innovation…Think Frugal, Be Flexible, Drive Growth: India Gutsy Art of Improvising Ingenious Solutions…

Jugaad Innovation is about: Less, but better… it concentrates on the essential aspects and not burdened with non-essentials… back to purity, back to simplicity.

Jugaad is a colloquial Hindi word that roughly translates as ‘an innovative fix; an improvised solution born from ingenuity and cleverness’. Jugaad innovation is, quite simply, a unique way of thinking and acting in response to challenges; it is the gutsy art of spotting opportunities in the most adverse circumstances and resourcefully improvising solutions using simple means.

Jugaad is about doing more with less.  The entrepreneurial spirit of Jugaad is not limited to India. It is widely practiced in other emerging economies such as China and Brazil, where entrepreneurs are also pursuing growth in difficult circumstances. Brazilians have their own word for this approach ‘gambiarra’, and Chinese call it ‘zizhu chuangxin’, and Kenyans refer to it as ‘jua kali’. The French have the term ‘Systeme D’, and the U.S. has  ‘yankee ingenuity’.  

Jugaad was once a big part of Western innovation and it was the flexible mindset of innovators that catalyzed growth during the Industrial Revolution. In the twentieth century, as North American and European economies expanded, large corporations began to institutionalize their innovation capabilities, creating dedicated R&D departments and standardizing the business processes needed to take their ideas to market.

They focused on managing innovation, just as they managed any other business activity. This industrialization of the creative process led to a structured approach to innovation with the following key characteristics: big budgets, standardized business processes, and controlled access to knowledge. This approach delivers ‘more with more’.

According to Booz & Company, the three industries that spend the most on R&D; computing and electronics, healthcare, and automotive, struggle to generate a steady stream of ground breaking inventions, despite their hefty R&D investments. Hence there is a weak correlation between how much money a firm spends on R&D and how well it performs in terms of developing and marketing products that generate a significant financial return. To put it bluntly, money can’t buy innovation. Jugaad is a wake-up call for mature companies with over-developed processes for innovation…

In the articleJugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth” by Navi Radjou, Jaideep Prabhu, & Simone Ahuja write:  The processes, systems, and mindsets that underpin the structured approach to innovation in most Western firms are now failing. Today’s highly complex and turbulent business environment demands a new approach to innovation and growth– one that is frugal, flexible, and participative.

Many Western firms’ structured approach to innovation is ill-equipped to help them innovate faster, better, and cheaper as they seek to cope with five major components of complexity; scarcity, diversity, interconnectivity, velocity, and breakneck globalization. The basic principles of Jugaad can be distilled into six guiding principles, which anchor the six practices of highly effective innovators in complex settings like emerging economies.

Collectively, these six principles of Jugaad help drive resilience, frugality, adaptability, simplicity, inclusively, empathy, and passion, all of which are essential to compete and win in a complex world. Adopting these principles could also help Western firms innovate and grow in a highly volatile, hypercompetitive environment. The six principles are:

  • Seek opportunity in adversity.
  • Do more with less.
  • Think and act flexibly.
  • Keep it simple.
  • Include the margin.
  • Follow your heart.

In the article “India’s Next Global Export: Innovation” by Reena Jana writes: Jugaad, India’s improvisational style of invention focuses on being fast and cheap– attributes just right for these times. A Hindi slang word, Jugaad (pronounced ‘joo-gaardh’) translates to an improvisational style of innovation that’s driven by scarce resources and attention to a customer’s immediate needs, not their lifestyle wants.

Like previous management concepts, Indian-style innovation could be a fad. Moreover, because Jugaad essentially means inexpensive invention on the fly, it can imply cutting corners, disregarding safety, or providing shoddy service. Jugaad means; ‘somehow get it done, even if it involves corruption’, cautions M.S. Krishnan, a Ross business school professor. ‘Companies have to be careful. They must pursue Jugaad with regulations and ethics in mind’. Nonetheless, Jugaad seems aligned with the times. Recession-slammed corporations no longer have money to burn on R&D.

Likewise, consumers are trading down to good-enough products and services. Meantime, the Indian economy continues to plow ahead despite the global recession suggesting its executives have a winning strategy.  Indian engineers have long known how to invent with a whole alphabet soup of options that work, are cheap, and can be rolled out instantly… Jugaad.

In the article “Jugaad: Lessons in Frugal Innovation” by Mitali Sharma writes: 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. 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.

In the article “Jugaad – A Model for Innovation” by Vijay Govindarajan writes:  There is always a danger when you come up with concepts like Jugaad. It could be mistaken as ‘chalta hai’ or ‘everything goes’. But Jugaad, at the heart, is about a new model of innovation, which is based on constraints. Jugaad really means solving a customer problem in the most innovative way when your resources are constrained.

There are three keys to Jugaad: One, for jugaad to really work, start by understanding the customer problem. Talk to customers, understand what they really want.

Two, for a zero-based solution approach, forget about what exists now. Take a clean sheet of paper; start with the customer’s problem, and ask, ‘How do I solve it?’

Three, focus on execution. Innovation is not creativity. Creativity is about the big idea. Innovation is about executing it, and making money out of your idea. It’s about making the right resource allocations, building the right team, and getting the product to the market.

In the article “Monday Morning Motivation: Jugaad – Art of Frugal Innovation by Cherian Joseph writes: Adjustment is a way of life in India. Systems are broken and they do not, for the most part, get fixed. Instead, ingenious attempts are made to circumvent the broken system, for two reasons: the painful ordeal of battling government bureaucracy, and the frugalness that is in the DNA of most Indians.

Everyone is scrambling to live the best possible life with the least possible resources. Life seems like a constant compromise. Interestingly, this situation has resulted in a new class of innovation– a class not led by scientists using expensive resources, but one led by every housewife, street hawker, farmer, transporter or trader. Here innovation is led by creativity, common sense and, more importantly, the need to survive.

There is even a colloquial name for this class of innovation for adjustment– Jugaad… Jugaad means a workaround solution with limited resources. Management gurus now call this ‘frugal innovation.’ The power of Jugaad is amplified in the rural areas where resources are scarcer and the needs more pressing.

The concept of Jugaad is finding its way into large-scale industries in India as well. Despite the positives, I am still wary. I noticed how all these innovations are in some way a result of the need to circumvent the core issue of lack of access to basic amenities like electricity, water, transportation and agricultural tools. The art of Jugaad is well placed for an India where there is so much hardship in securing daily needs for so many.

The overwhelming force of life here that drives people to create their own solutions to intractable problems is inspiring. This is evidence of the resiliency of the human spirit, and if there is anywhere that can come up with its own innovative solutions, it is India. What will be truly ingenious is to see is how we leverage our frugal innovation strength to attack core issues and not circumvent them.

Jugaad is a ‘bottom up’ innovation approach that provides organizations in both emerging and developed economies the key capabilities they need to succeed in a hypercompetitive and fast-moving world: frugality, inclusivity, collaboration, and adaptability. Highly resource-constrained and chaotic environment inspires Jugaad innovators; i.e., entrepreneurs and corporations who practice Jugaad to develop market-relevant products and services that are inherently affordable and sustainable.

Rather than reinventing the wheel or splurging on expensive R&D projects, they develop new solutions by building upon existing infrastructure and assets, as well as by recombining existing solutions.  

Jugaad innovators recognize that consumers in emerging markets are low earners, but high yearners. As such, Jugaad innovators attempt to meet customers’ high aspirations by developing solutions that are not only affordable, but that also deliver superior value. In summary, they strive to deliver more (value) for less (cost)…

The traditional approach (structured R&D projects) to innovation has become too rigid, insular, and bloated… it consumes a lot of resources and makes a lot of noise but produces little of significance.