As the global economic squeeze continues, major corporations are looking East — not just for new markets, but new inspiration. Enter jugaad: A ‘frugal’ form of innovation developed in India that is beginning to make its mark in companies like Philips and GE.

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Context: India

Back in 2012 me and my wife Giulia booked a trip to India (it was a Groupon deal, but that’s a whole other story…). We spent 8 days in the golden triangle (Delhi, Jaipur and Agra) and managed to spend much time in the crowded and colorful streets. The thing that struck us the most was the energy and vibe people had together with the overarching feeling of resilience and willingness to push through even in the harshest economical conditions (I believe it’s the third poorest country in south-east Asia today). This is when I first encountered the term “Jugaad” and experienced it first hand by observing how peddlers and beggars where finding creative ways to work with less resources and make a living.

Smart life hack to mix hot and cold water when the two taps are separate

The Hindi word “Jugaad” describes an improvised or makeshift solution using scarce resources. It’s a way of life in India, where washing machines are used for whipping up yogurt drinks, but it’s also an innovation theory that’s proving to be increasingly influential in the marketing departments of Western corporations.

Jugaad for solving problems at work

In a business context, jugaad is a “frugal, flexible, and inclusive approach to problem solving and innovation.” So says Professor Jaideep Prabhu, author of Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth.

In the West, with the global economy set for a long period of austerity, jugaad is a welcome item on boardroom agendas. “Jugaad is a clever, unconventional, quick way to solve a problem,” says Wido Menhardt, CEO of the Philips Innovation Center in Bangalore. “It is always out-of-the-box, and it is typically very focused. These are exactly the kinds of innovations Philips needs to develop products for emerging markets, but ultimately also for increasingly competitive developed markets.”

“There is sometimes a tendency for Western companies to over-engineer products – to make them perfect, account for all possible use cases, and make them last forever,” he continues. “Jugaad thinking helps us focus on the essence, the real requirements, and often leads to taking the mental leap that is required for a disruptive new design or product.”

So how is Philips using jugaad? “We challenge ourselves with seemingly unattainable goals in cost, delivery time, or function, and as we focus intensely on that goal, it forces us to come up with unconventional solutions,” explains Menhardt. “Often, these seem impossible or unrealistic at first, but they can lead to incredible and disruptive solutions.”

But isn’t jugaad just another iteration of the various agile methodologies already doing the rounds?

No, agile or lean are process frameworks, whereas jugaad is void of process. Jugaad is a culture, an attitude, an outcome of circumstance, but definitely not something planned. The challenge is to tap into it and channel it.”

According to Prabhu, lean and agile are internally or supply-side focused; they pursue cost efficiencies or responsiveness as an end goal. “Jugaad, in contrast, is primarily externally or demand-side focused. It uses cost efficiency as a means to achieve a larger goal of delivering higher value to customers,” he says. “Jugaad innovators strive to create products and services that score high on three attributes increasingly valued by customers: Affordability, quality, and sustainability.”

For marketers, understanding the challenges and requirements of jugaad is therefore imperative.

There has to be a certain element of craziness, uncertainty, and space for serendipitous learning.

The DIY generations’ minds are wired with Jugaad

Modern day’s life hack

In Western markets, there has been a mindset shift among young consumers who are now seeking more sustainable solutions. In his book, Professor Prabhu tells the story of Yuri Malina and Mert Iseri, two young American entrepreneurs who co-founded SwipeSense, a portable hand-sanitizing device that doctors can clip to their scrubs. “They did this partly out of social conscience, but also because they relished the challenge of doing it in a skunkworks way,” he says.

Younger people in the West have moved towards a post-materialistic mindset. They are more interested in the environment, in experience rather than acquisition. They have grown up in a world of open innovation where consumers are involved in co-production, empowered with computing tools and social media. This generation shift is going to be a long-term driver of frugal innovation.

The hell of the living is not something that will be. If there is one, it is what is already here, the hell we live in every day, that we make by being together. There are two ways to escape suffering it. The first is easy for many: accept the hell, and become such a part of it that you can no longer see it. The second is risky and demands constant vigilance and apprehension: seek and learn to recognize who and what, in the midst of hell, are not hell, then make them endure, give them space

Italo Calvino – Invisible cities

Protect the Jugaad Spirit

You can’t import jugaad into your organization and then just carry on as if it’s business as usual.
It’s about employing people who have a jugaad mindset, then increasing the empowerment of small teams at every level of the organization, consistent with bottom-up innovation. There has to be a certain element of craziness, uncertainty, and space for serendipitous learning. Too much process will kill that creative spark.
Or, as Intel founder Andy Groves once put it: “Let chaos reign, then rein in chaos.”

By Duderinaldi

I'm an all-rounded digital strategist, currently heading Digital Innovation at the iconic luxury brand Versace. Since 2018 I've extended my scope beyond Marketing supporting both Industrial Operations and Corporate in complex digital transformation projects with a strong track record of efficient, sustainable and business value-increasing initiatives.
My background includes over 12 years in globally-renowned integrated agencies with focus on planning, strategic execution, digital communication and consumer experience for a wide range of brands and product categories such as Ford Motor Company, Toyota, Adidas, Jaguar & Land Rover, Mattel, Sony Playstation, Vodafone, Sky, Procter & Gamble and Microsoft.

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