Jugaad Innovation

Think Frugal, Be Flexible, Generate Breakthrough Growth

Navi Radjou, Jaideep Prabhu, Simone Ahuja

• Publisher: Jossey-Bass
• Year: 2012
• Print ISBN: 9781118249741
• eBook ISBN: 9781118283233
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

"Jugaad Innovation is the most comprehensive book yet to appear on the subject [of frugal innovation]."
— The Economist

A frugal and flexible approach to innovation for the 21st century

Innovation is a key directive at companies worldwide. But in these tough times, we can't rely on the old formula that has sustained innovation efforts for decades—expensive R&D projects and highly-structured innovation processes. Jugaad Innovation argues the West must look to places like India, Brazil, and China for a new approach to frugal and flexible innovation. The authors show how in these emerging markets, jugaad (a Hindi word meaning an improvised solution born from ingenuity and cleverness) is leading to dramatic growth and how Western companies can adopt jugaad innovation to succeed in our hypercompetitive world.

• Outlines the six principles of jugaad innovation: Seek opportunity in adversity, do more with less, think and act flexibly, keep it simple, include the margin, and follow your heart
• Features twenty case studies on large corporations from around the world—Google, Facebook, 3M, Apple, Best Buy, GE, IBM, Nokia, Procter & Gamble, PepsiCo, Tata Group, and more—that are actively practicing jugaad innovation
• The authors blog regularly at Harvard Business Review; their work has been profiled in BusinessWeek, MIT Sloan Management Review, The Financial Times, The Economist, and more
• Filled with previously untold and engaging stories of resourceful jugaad innovators and entrepreneurs in emerging markets and the United States

This groundbreaking book shows leaders everywhere why the time is right for jugaad to emerge as a powerful business tool in the West—and how to bring jugaad practices to their organizations.

Chapter One

Jugaad

A Breakthrough Growth Strategy

We reached Ramakrishna Nagar, a village in the desert of Gujarat, a state in Western India, after travelling 250 miles from Ahmedabad, the state's capital. Our team—a Silicon Valley management consultant, a business school professor from the University of Cambridge, and the founder of a Minneapolis advisory boutique and media firm—had set out a few months earlier on an extensive research and travel project. Our mission: to discover new approaches to innovation in emerging markets such as India that could help Western firms take on the complexity of our tough and turbulent times.

We came to Gujarat to meet with Professor Anil Gupta at the Indian Institute of Management (IIM) in Ahmedabad.¹ Professor Gupta runs Honeybee Network, a non-profit organization that identifies and cross-pollinates grassroots innovation all across India. Over more than two decades, Honeybee had populated a database with over ten thousand inventions of grassroots entrepreneurs who have created ingenious solutions for pressing socioeconomic problems in their local communities. Professor Gupta suggested we meet with one of these rural entrepreneurs.

As we left an arrow-straight concrete highway to follow narrower and increasingly cratered gravel roads, the temperature rose to a debilitating 120 degrees. Stepping out of our air-conditioned jeep, we could feel the weight of the desert's oppressive heat.

Mansukh Prajapati greeted us warmly outside his workshop.² A potter by trade, Prajapati had for years been experimenting with clay to produce a variety of durable goods, many of which were on display in the office outside his “lab.” We were parched—and grateful when he asked us if we wanted water. We had run out, and there wasn't any sign of a store or kiosk nearby to restock. He reached around to a faucet, handed us cups, and, beaming with pride, said, “Please, have this cold water—from my fridge.”

Baffled, we looked more closely at the terra-cotta box in front of us. It was made entirely of clay, except for a glass door and a plastic faucet at the bottom. While sipping the refreshingly cool water, we looked around and found no electrical cord, no battery—just clay. Amused by our expressions, Prajapati explained how this clay fridge—the Mitticool (mitti means “earth” in Hindi)—works: water from an upper chamber seeps through the side walls, cooling the lower food chamber through evaporation. The fridge consumes no electricity, is 100-percent biodegradable, and produces zero waste during its lifetime. An ingenious invention!

But this inventor and his personal story are even more impressive. Prajapati doesn't work for NASA or Whirlpool, and he doesn't have a Ph.D. in quantum physics or an MBA from Stanford. In fact, he didn't even finish high school. His R&D lab—a simple open-air room with clay in various shapes and forms arrayed on the floor and an oven tucked away in the corner—is a far cry from the sprawling campuses of GE and Whirlpool, which swarm with hundreds of engineers and scientists.

In 2001, an earthquake had devastated Prajapati's village and the surrounding area. Reading a report of the devastation in the local newspaper, he noticed a photo caption: “Poor man's fridge broken!” The photo featured a smashed earthen pot commonly used by villagers to fetch water and keep it cool. And though the newspaper had called it a fridge in jest, it triggered Prajapati's first eureka moment. Why not use clay, he thought, to make a real fridge for villagers—one that looks like a typical fridge, but is more affordable and doesn't need electricity? Over five hundred million Indians live without reliable electricity, including most of the people in Prajapati's village.³ The positive health and lifestyle benefits of owning a fridge in a desert village where fruit, vegetables, and dairy are available only intermittently would be tremendous.

Prajapati's training as a potter, coupled with his intuition, told him that he was on to something. He experimented for several months and eventually had a viable version of the Mitticool that he began selling to people in his own village. The fridge—which costs around US$50—was a hit. Prajapati worked tirelessly on design improvements, and began selling Mitticools across India, and then internationally. He couldn't keep up with the rising demand and had to find ways to scale up—fast.

Then he had a second eureka moment. Why not transform pottery from an artisanal craft into an industrial process? He could leverage his traditional knowledge of pottery to mass-produce goods that met modern consumer needs. So Prajapati first developed an entirely new and more efficient method of working with clay. Then he began training women in his village in these industrial pottery techniques and finally hired them to work in his new factory. Soon a “mini” Industrial Revolution in pottery was launched in this remote Indian village.

Mitticool was the first product that Prajapati mass-produced in his factory. He soon built other products from clay, such as a nonstick frying pan that retains heat longer than other frying pans and costs a mere US$2. From one man and one idea has grown a frugal yet fruitful industry, one that employs large numbers of people in his own community and serves consumers in India and abroad. Prajapati's groundbreaking inventions, which deliver more value at less cost, have earned him accolades from all over the world—including from the president of India. And Forbes magazine recently named him among the most influential rural Indian entrepreneurs, one of few to have made an impact on the lives of so many.⁴

Jugaad: The Gutsy Art of Improvising an Ingenious Solution

The Mitticool, an idea born out of adverse circumstances, shows how a resilient mindset can transform scarcity into opportunity. Combining limited resources and a never-say-die attitude, Prajapati tapped into his empathy and passion for his fellow community members to conjure up an ingenious solution that improved lives in Gujarat and beyond. Not only did he produce a cheap and effective cooling device, but he also created jobs for dozens of undereducated women. In doing so, Prajapati is both driving environmental and socioeconomic sustainability in his community and ensuring the financial sustainability of his own business. Prajapati embodies the true spirit of jugaad.

Jugaad is a colloquial Hindi word that roughly translates as “an innovative fix; an improvised solution born from ingenuity and cleverness.” Jugaad 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. (We feature articles and videos on jugaad on our companion website, JugaadInnovation.com.)

Jugaad is practiced by almost all Indians in their daily lives to make the most of what they have. Jugaad applications include finding new uses for everyday objects—Indian kitchens are replete with empty Coke or Pepsi bottles reused as ad-hoc containers for dried legumes or condiments—or inventing new utilitarian tools using everyday objects, like a makeshift truck cobbled together with a diesel engine slapped onto a cart (interestingly, the origin of the word jugaad, in Punjabi, literally describes such makeshift vehicles).

The word jugaad is also applied to any use of an ingenious way to “game the system.” For instance, millions of cellphone users in India rely on “missed calls” to communicate messages to each other using a prearranged protocol between the caller and receiver: think of this as free textless text messaging. For example, your carpooling partner may give you a “missed call” in the morning indicating he has just left his house and is on his way to pick you up.⁵ Hence, the word jugaad carries a slightly negative connotation for some. But by and large, the entrepreneurial spirit of jugaad is practiced by millions in India simply to improvise clever—and completely legitimate—solutions to everyday problems.

In this book, we delve into the frugal and flexible mindset of thousands of ingenious entrepreneurs and enterprises practicing jugaad to creatively address critical socioeconomic issues in their communities. Jugaad innovators like Mansukh Prajapati view severe constraints, such as a lack of electricity, not as a debilitating challenge but as an opportunity to innovate and overcome these very constraints.

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.⁶ The Chinese call it zizhu chuangxin.⁷ The Kenyans refer to it as jua kali.⁸ The French have a term too—Système D.⁹ Throughout this book we profile jugaad entrepreneurs from Argentina, Brazil, China, Costa Rica, India, Kenya, Mexico, the Philippines, and elsewhere who have created simple yet effective solutions to address vexing problems that their fellow citizens face. We hope to shed light on how these jugaad innovators think and act—and identify the valuable lessons we in the West can learn from them.

Jugaad in the West

While jugaad is currently the dominant form of innovation in emerging markets, in the West it is practiced only in isolated instances. And although the 1980s TV series MacGyver popularized the American jugaad spirit—also known as Yankee ingenuity—very few Western corporations actually practice jugaad today.¹⁰ Yet jugaad was once a big part of Western innovation too. It was the flexible mindset of jugaad-style innovators that catalyzed growth in Western economies like that of the United States during the Industrial Revolution.

For instance, in 1831 a self-educated Virginian farmer named Cyrus McCormick introduced his newly invented mechanical grain reaper. The reaper promised to free farm workers from back-breaking labor and address the problem of scarce food supplies that plagued his community. When McCormick was born in 1809, over 80 percent of Americans were dependent on agriculture for their livelihood (by 1970 that figure had dwindled to just 4 percent).¹¹ In early nineteenth-century America, farmers harvested grain crops by hand, requiring many laborers to complete the task. Cyrus McCormick's father had wanted to make life easier for his fellow farmers. He spent twenty-eight years trying to develop a machine that could automate grain harvesting, but he gave up after multiple unsuccessful attempts. When his son Cyrus was barely twenty-two, he took over his father's invention and tinkered with the machine to make it work. In his family barn, which served as a makeshift workshop, he spent many months tweaking the design for an automated grain-harvesting machine, using limited resources and hand-made components. Finally, in 1831, he came up with a workable and elegant version of the mechanized reaper, capable of harvesting more grain than five men could gather using the earlier cradles.¹²

The reaper wasn't even Cyrus McCormick's first invention. Despite little education, at age fifteen he had invented a lightweight grain cradle that could cut and stack grain more efficiently. A few years later he developed two new types of plow. Nineteenth-century America—struggling with a scarcity of resources, yet fertile with opportunities—teemed with jugaad entrepreneurs like Cyrus McCormick whose clever inventions brought great benefits to the society at large.¹³

Yet Cyrus McCormick's most famous jugaad invention—the mechanized reaper—wasn't an instant commercial success. His fellow farmers, accustomed to manual methods of harvesting, were initially skeptical about the usefulness of this unfamiliar machine. McCormick struggled for years to sell his machines. He found success through further flexible jugaad thinking: pioneering the practice of word-of-mouth marketing, he got his first few customers to recommend his reaper to other potential customers. Eventually, sales of his reapers picked up, and McCormick shifted production to a factory in Chicago. His machines started selling well and dramatically improved agricultural practices across the country. In the process, McCormick also laid the groundwork for many innovative sales and marketing practices—like assessing customers' credit-worthiness and offering a “money-back guarantee”—that are now standard practices of Western businesses across industries. McCormick proved to be not only an ingenious technical inventor but also a great business model innovator. And although McCormick's life was filled with adversity—from factory fires to patent disputes—he always bounced back with resilience. McCormick's jugaad inventions enabled scores of American workers to shift from farming to factory work—thus accelerating the Industrial Revolution.¹⁴

Among the many early American jugaad innovators, the best-known may well be Benjamin Franklin. Franklin experienced scarcity and learned about the virtue of frugality firsthand, growing up in a large Puritan family of nine brothers and seven sisters.¹⁵ When he was just ten years old, Franklin left school and started working in his father's candle and soap shop to help support his family. Early on, Franklin developed a knack for using limited resources to devise ingenious and frugal solutions to tackle the everyday problems of his contemporaries. Franklin's legendary ingenuity was fueled by his genuine empathy for his fellow citizens. One of his most practical inventions was the Franklin stove.¹⁶ During the eighteenth century, homes in the United States were primarily heated by inefficient fireplaces that spewed smoke while much of the heat they generated escaped up the chimney. They were also hazardous, as their sparks could trigger fires that quickly devoured wood-built homes.

Franklin's jugaad innovation to tackle this problem was a new type of stove with a simple hooded enclosure in the front and an air box in the rear. The new stove and its reconfiguration of the flues enabled a more efficient fire, one that consumed 75 percent less wood and generated twice as much heat.¹⁷ The Franklin stove delivered “more with less.” An early advocate of open source technology, Franklin turned down the patent offered for his original design, stating that altruism rather than profit was his driving motive for developing the efficient stove. He wanted all Americans to benefit from his invention. In fact, Franklin patented none of his inventions. In his autobiography, he wrote that “as we enjoy great advantages from the inventions of others...

Table of contents

• Cover
• Title Page
• Praise for Jugaad Innovation
• Copyright
• Dedication
• Foreword
• Chapter One: Jugaad: A Breakthrough Growth Strategy
• Chapter Two: Principle One: Seek Opportunity in Adversity
• Chapter Three: Principle Two: Do More with Less
• Chapter Four: Principle Three: Think and Act Flexibly
• Chapter Five: Principle Four: Keep It Simple
• Chapter Six: Principle Five: Include the Margin
• Chapter Seven: Principle Six: Follow Your Heart
• Chapter Eight: Integrating Jugaad into Your Organization:
• Chapter Nine: Building Jugaad Nations:
• Notes
• Acknowledgments
• About the Authors
• Index
• Bring Jugaad to Your Organization