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Reporting on innovative ideas in business.

Navi Radjou: What CEOs Can Learn from Rural Indian Entrepreneurs (and MacGyver and the Maker's Movement)

Even a brief conversation with Navi Radjou, a co-author of the new book Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth will take you all over the world in only a few minutes. He speaks in an energetic voice that's brimming with enthusiasm and his thoughts reflect vast knowledge. One moment, he'll be talking about how management lessons learned in rural diabetes clinics in Chennai, India, can be adapted by executives in sleek open-plan offices in Silicon Valley. A few seconds later, he'll discuss how everyday citizens in the favelas of Brazil who "hack" buildings and objects can inspire the C-suite in Fortune 500 companies.


The thread that underlies Radjou's research is that in the not-so-distant past, business gurus spoke of innovation and design moving in the opposite directions. Big, profitable ideas were believed to originate from global corporations headquartered in the West, later to be tweaked for other, less wealthy nations and sold at lower prices.

But the world's economic forces have been shifting, obviously toward China and India, as well as Latin America and Africa. It's not only the financial growth in these regions that the world is watching; it's also their management and product-development strategies. One of the most talked about terms in this sphere is one called jugaad. It’s Hindi slang that can best be understood as "an innovative fix; an improvised solution born from ingenuity and cleverness." So Radjou writes -- with co-authors Jaideep Prabhu and Simone Ahuja in Jugaad Innovation.

Radjou, a former analyst at tech research and advisory firm Forrester and more recently the executive director at the Center for India and Global Business at the Judge Business School at Cambridge, is now one of the world's most visible proponents of the concept. Having interviewed Navi in the past--including for a BusinessWeek feature on jugaad innovation as the Next Big Thing--I was excited to learn more about his deep research into the origins and practice of jugaad. His book, to be released in mid-April, has already received glowing endorsements from business leaders such as Carlos Ghosn, CEO of Renault -Nissan, Marc Benioff, chairman and CEO of Salesforce.com, and our own Doreen Lorenzo, frog's president. So I called Navi up, and asked him to elaborate more on jugaad. Our conversation touched on some of the book's main points, and also took us in directions beyond what's included in its chapters.

Here's our exchange, only lightly edited and condensed.

Why is jugaad in the collective conscious in the international business world today?

Looking at what's happening in today’s global business environment, executives are facing more complexity than ever before. There are a variety of factors. One is the growing acceleration of technology's velocity. Another is growing interconnectivity, via social media. And then there is more diversity in the work sphere: there are multiple generations in the workforce. Also, we must consider the issue of scarcity, which is not only an issue in the "East," but also is a reality in the U.S. Statistics have shown there is a shrinking middle class in America. Occupy Wall Street is just the tip of iceberg.

Within this complex environment, Western firms are pressured to innovate faster, better, and cheaper. The biggest challenge is that the innovation tools they have used in the past are not working. Why? Current approaches are too expensive, too rigid, too elitist, and insular.

Can you elaborate on what these tools and approaches are, and why they don't work today? Western economies are still obviously very strong and influential globally.

Well, look at big pharma. Pharmaceutical companies are known to spend billions in R&D, yet many are in trouble. Money doesn’t buy creativity.

Western innovation practices tend to be rigid, or at least more so than in fast-moving places. Nokia is learning this the hard way in Africa; their competitor Huawei can crank out new phones in 3-5 weeks. And then think of Six Sigma. It's a nice method to use when the world is stable. But what about when all is haywire...such tools are a handicap when you want to move quickly and fast.

My point is that the need for flexibility is growing within Western companies.

In terms of current innovation tools being elitist and insular, it's believed by many that innovation is only what a few scientists do. But why not be more democratic? To me, there seems to be a disconnect between the need to innovate faster and cheaper, and companies' capabilities to innovate. Executives will say there needs to be bottom up innovation that's frugal, flexible, and inclusive, meaning it needs to be about serving larger segments of society, to be profitable.

These are all issues that emerging markets have been grappling with for many years. Western companies want to find new approaches--and they can find them already in use in emerging markets. They can see case studies of Indian ingenuity in action. In a way, it's similar to Yankee ingenuity in the States. But what's happened in corporate America is that this sense of fast, improvisational innovation got bogged down.

Being half-Indian myself, I've seen jugaad in action in India, and even among Indians living and working in the U.S. and abroad. Can you give us a brief history of the concept?

While jugaad is gaining traction in the Western world, the current approaches I talk about have worked for 100 years or more. Jugaad really first was practiced in a widespread way in the 19th and 20th centuries, and really a lot more after World War Two. That's when the nation was all about scale, scale, scale. We became a democracy. A large and diverse one.

As a word, it really refers to the act of resourcefully improvising solutions using simple means in daily life. But what happens in this context is that it can also mean gaming the system. Sometimes jugaad can involve danger and illegal hacks, or corruption. But in the context of its everyday practice, a sense of jugaad is primarily used to deal with adversity

In business, jugaad is really about the mindset of innovators in emerging markets.

In your book, you and your co-authors talk about examples of jugaad outside of India. It seems like a pretty global concept already.

Yes, it's important to realize that jugaad-style thinking isn't only practiced in India.

In Africa, for instance, there are many communities dealing with constraints. And scarcity is a lot more pronounced, more prevalent there than in India. But there is also an entrepreneurial zeal throughout Africa, where people are coming up with new ways of using their mobile phones to build their businesses, because they don't have PCs or offices. There, jugaad essentially is a leapfrogging platform. It's not about product.

In China, there is a rampant sense of bottom up, interactive, reactive innovation. It’s about quick prototyping, which is essentially about design thinking.

In Brazil, people improvise solutions using limited means. There is a  floating bank there, which its founders set up on boat to reach Amazonian tribes who otherwise wouldn’t travel to cities. So they go to them.

But there are also jugaad traditions in the West. In France, there’s a term, systeme d. Essentially, it’s the French version of coming up with makeshift products, using whatever you have at hand.

And in the U.S., there has been a long sense of jugaad. Think of MacGyver. Or "Yankee ingenuity." Today, there's a strong DIY movement, the Maker's Movement, in America and throughout the world. These are all examples of jugaad.

And I also think jugaad in the U.S. is more about next big social app, rather than the big tech stuff. That start-up sense of lean innovation is definitely jugaad.

You and your co-authors Simone Ahuja and Jaideep Prabhu talk about the 6 principles of jugaad. What are they?

One, seek opportunity in adversity. Never look at a glass as half empty, but as half full. Reframe every challenge.

Two, do more with less. That’s about both reducing costs and raw materials, also adding more value. It’s not just about cheaper products, but also adding tremendous value. It’s not about poor quality.

Three,  think and act flexibly. Do not be attached to any business model. Think like IBM, which redid its values.

Four, keep it simple. Sometimes, companies lose touch with this idea, and tend to over-engineer products. Simplicity also applies to customer interactions, and of course product and organizational goals.

Five, include the margin. Often times, in the West, companies look at marginal segments as  low income and not not profitable. Think of Walmart, now innovating by setting up money centers in stores, servive households are underbanked. They can cash checks in stores and transfer money. This is the “bottom of the pyramid” as C.K. Prahalad said, but in the United States.

Six, follow your heart
. This is where you'll find empathy, passion, intuition, all important qualities. Yes, they’re less about “knowledge.” But now we’re entering a correction era after the Great Recession. By following your heart, you’ll find a larger purpose for your company and products, more employee engagement, more loyalty to your brand.

Images: author portraits, courtesy Navi Radjou; man on improvised vehicle in India: Etan Doronne/Wikimedia Commons

 

Reena Jana is frog's Executive Editor. Based in New York, Reena is the former innovation department editor at BusinessWeek, and has contributed to a variety of publications including Wired, the New York Times, Harvard Business Review online, Fortune.com, and numerous others.