Presentation was delivered by Navi Radjou at the Indian Innovation Journey on May 3, 2013

1. Frugal
Innova,on:
A
New
Disrup,ve
Business
Paradigm
Navi
Radjou
Co-­‐author,
Jugaad
Innova+on
Co-­‐author,
From
Smart
To
Wise
World
Economic
Forum
Faculty
member
Fellow,
Judge
Business
School,
University
of
Cambridge
An
India
Innova+on
Journey
Ins,tute
for
Compe,,veness
Gurgaon—May
3,
2013

2. What
is
frugal
innova,on?
FRUGAL
INNOVATION
IS:
A
flexible
and
inclusive
approach
to
innova+on
that
maximizes
value
for
customers,
shareholders,
and
society—while
minimizing
use
of
financial
and
natural
resources
2
Copyright © Navi Radjou

3. Innova,ng
faster,
beUer,
cheaper
FI
=
RESOURCES
VALUE
-­‐ Customers
-­‐ Shareholders
-­‐ Society
-­‐ Financial
resources
-­‐ Natural
resources
-­‐ Time
3
Copyright © Navi Radjou

4. Agenda
• Why do firms need frugal innovation now?
• How emerging markets like India are
driving frugal innovation?
• Which companies are pioneering frugal
innovation?
• What lessons can we learn from them?
4
Copyright © Navi Radjou

5. “Bigger
is
beUer”
innova,on
model
$603
billion
spent
in
R&D
in
2011
5
Copyright © Navi Radjou

6. ong been a faith-based initiative: Spend more, and pro
to nimbler competitors? On the high-cost end of glob6
Copyright © Navi Radjou
Source:
Strategy
&
Business

7. Structured
processes
s,fle
crea,vity
and
reduce
agility
7
Copyright © Navi Radjou

8. 99.999%
sameness...
0.001%
originality
“You
can’t
put
in
place
a
Six
Sigma
process
and
say:
‘I’m
going
to
schedule
myself
for
three
good
ideas
on
Wednesday
and
two
on
Friday.’
That’s
not
how
crea+vity
works”
Sir
George
Buckley
Former
CEO,
3M
8
Copyright © Navi Radjou

9. Firms
are
being
forced
to
innovate
faster,
beUer,
cheaper
• Demographic shifts
• Rapid technology changes
• New regulations
• Global competition
• Dwindling purchasing power (West)
9
Copyright © Navi Radjou

10. Firms
need
a
new
innova,on
model
10
Copyright © Navi Radjou

11. 11
Copyright © Navi Radjou
Scarcity
is
mother
of
inven,on

12. Source: gcstz.com/products
African ingenuity
Source: www.quotednews.com
Filipino ingenuity
12
Copyright © Navi Radjou
Brazilian ingenuity
Source:http://expatbrazil.wordpress.com/page/9/
Frugal
ingenuity

13. Ratan
Tata,
Chairman,
Tata
Group
13
Copyright © Navi Radjou
Frugal
ingenuity

14. Frugal
products &
business models
from emerging
markets
SECRET
FORMULA?
JUGAAD
14
Copyright © Navi Radjou
x

15. JUGAAD
The gutsy ability to improvise an effective
solution with limited resources…
…using ingenuity & resilience
Also known as:
Jeitinho or Gambiarra in Brazil
Zizhu Chuangxin in China
Système D in France
Do It Yourself (DIY) in USA
15
Copyright © Navi Radjou

16. Frugal
innova,on
pioneer:
Unilever
Paul
Polman,
CEO,
Unilever
“I
want
to
double
Unilever’s
revenues
by
2020
while
cudng
our
environmental
impact
by
50%”
Source:
upload.wikimedia.org
16
Copyright © Navi Radjou

17. 17
Copyright © Navi Radjou
Source:
Siemens
Frugal
innova,on
pioneer:
Siemens

18. Frugal
innova,on
pioneer:
Siemens
18
Copyright © Navi Radjou
Simple
Maintenance-­‐friendly
Affordable
Reliable
Timely-­‐to-­‐market

19. 19
Copyright © Navi Radjou
Frugal
innova,on
best
prac,ce
#1:
Leverage
exis,ng
resources
and
assets

20. Frugal
innova,on
best
prac,ce
#2:
Keep
it
simple
20
Copyright © Navi Radjou
Christophe
de
Maistre
CEO,
Siemens
France
«
The
complexity
of
our
products
and
processes
is
hampering
our
commercial
success
both
in
emerging
markets
as
well
as
in
developed
economies
»

21. FRUGAL
PRODUCTS
Frugal
Mindset
21
Copyright © Navi Radjou
Frugal
innova,on
best
prac,ce
#3:
Adopt
frugal
mindset

22. Carlos
Ghosn
CEO,
Renault-­‐Nissan
“(These
partnerships)
allowed
us
to
learn
a
lot
more
on…
FRUGAL
ENGINEERING”
22
Copyright © Navi Radjou
Adop,ng
the
frugal
innova,on
mindset:
Renault-­‐Nissan

23. Do
More
with
Less:
Renault-­‐Nissan
23
Copyright © Navi Radjou

24. Carlos
Ghosn
CEO,
Renault-­‐Nissan
“In
the
West,
when
we
face
huge
problems
and
we
lack
resources,
we
tend
to
give
up
(too)
easily…
Jugaad
is
about
never
giving
up!”
24
Copyright © Navi Radjou
Adop,ng
the
frugal
innova,on
mindset:
Renault-­‐Nissan

25. Gérard
Detourbet
Renault’s
head
of
entry-­‐level
vehicles
www.youtube.com/watch?v=iEIk3RpV6RA
25
Copyright © Navi Radjou
Adop,ng
the
frugal
innova,on
mindset:
Renault-­‐Nissan

26. 26
Copyright © Navi Radjou
MIT-­‐TATA
Center
for
Frugal
Engineering
hUp://educa,oninbrazil.mit.edu
Western
universi,es
are
now
teaching
frugal
innova,on

27. 27
Copyright © Navi Radjou
Western
governments
are
now
adop,ng
frugal
innova,on

28. 28
Copyright © Navi Radjou
“Jugaad
Innova+on…is
the
most
comprehensive
book
yet
to
appear
on
the
subject
[of
frugal
innova,on]”—The
Economist
To
learn
more…

29. 29
Copyright © Navi Radjou
Thank
you
Navi
Radjou
navi@naviradjou.com
jugaadinnova,on.com
TwiUer
@JugaadAtWork
Facebook.com/jugaadinnova,on