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Frugal Innovation: A New Disruptive Business Paradigm


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

Published in: Business, Technology
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Frugal Innovation: A New Disruptive Business Paradigm

  1. 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. 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. 3. Innova,ng  faster,  beUer,  cheaper  FI  =  RESOURCES  VALUE  -­‐  Customers  -­‐  Shareholders  -­‐  Society  -­‐  Financial  resources  -­‐  Natural  resources  -­‐  Time  3  Copyright © Navi Radjou
  4. 4. Agenda  •  Why do firms need frugal innovation now?•  How emerging markets like India aredriving frugal innovation?•  Which companies are pioneering frugalinnovation?•  What lessons can we learn from them?4  Copyright © Navi Radjou
  5. 5. “Bigger  is  beUer”  innova,on  model  $603  billion  spent  in  R&D  in  2011  5  Copyright © Navi Radjou
  6. 6. ong been a faith-based initiative: Spend more, and proto nimbler competitors? On the high-cost end of glob6  Copyright © Navi RadjouSource:  Strategy  &  Business  
  7. 7. Structured  processes  s,fle  crea,vity  and  reduce  agility  7  Copyright © Navi Radjou
  8. 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. 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. 10. Firms  need  a  new  innova,on  model  10  Copyright © Navi Radjou
  11. 11. 11  Copyright © Navi RadjouScarcity  is  mother  of  inven,on  
  12. 12. Source: ingenuitySource: www.quotednews.comFilipino ingenuity12  Copyright © Navi RadjouBrazilian ingenuitySource:  ingenuity  
  13. 13. Ratan  Tata,  Chairman,  Tata  Group  13  Copyright © Navi RadjouFrugal  ingenuity  
  14. 14. Frugalproducts &business modelsfrom emergingmarketsSECRETFORMULA?JUGAAD  14  Copyright © Navi Radjoux  
  15. 15. JUGAAD  The gutsy ability to improvise an effectivesolution with limited resources……using ingenuity & resilienceAlso known as:Jeitinho or Gambiarra in BrazilZizhu Chuangxin in ChinaSystème D in FranceDo It Yourself (DIY) in USA15  Copyright © Navi Radjou
  16. 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:    16  Copyright © Navi Radjou
  17. 17. 17  Copyright © Navi RadjouSource:  Siemens  Frugal  innova,on  pioneer:  Siemens  
  18. 18. Frugal  innova,on  pioneer:  Siemens  18  Copyright © Navi Radjou  Simple  Maintenance-­‐friendly    Affordable    Reliable    Timely-­‐to-­‐market  
  19. 19. 19  Copyright © Navi RadjouFrugal  innova,on  best  prac,ce  #1:    Leverage  exis,ng  resources  and  assets  
  20. 20. Frugal  innova,on  best  prac,ce  #2:    Keep  it  simple  20  Copyright © Navi RadjouChristophe  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. 21. FRUGALPRODUCTSFrugal  Mindset  21  Copyright © Navi RadjouFrugal  innova,on  best  prac,ce  #3:    Adopt  frugal  mindset  
  22. 22. Carlos  Ghosn    CEO,  Renault-­‐Nissan  “(These  partnerships)  allowed  us  to  learn    a  lot  more  on…  FRUGAL  ENGINEERING”  22  Copyright © Navi RadjouAdop,ng  the  frugal  innova,on  mindset:    Renault-­‐Nissan  
  23. 23. Do  More  with  Less:  Renault-­‐Nissan  23  Copyright © Navi Radjou
  24. 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 RadjouAdop,ng  the  frugal  innova,on  mindset:    Renault-­‐Nissan  
  25. 25. Gérard  Detourbet    Renault’s  head  of    entry-­‐level  vehicles  25  Copyright © Navi RadjouAdop,ng  the  frugal  innova,on  mindset:    Renault-­‐Nissan  
  26. 26. 26  Copyright © Navi RadjouMIT-­‐TATA  Center  for  Frugal  Engineering  hUp://educa,  Western  universi,es  are  now  teaching  frugal  innova,on  
  27. 27. 27  Copyright © Navi RadjouWestern  governments  are  now    adop,ng  frugal  innova,on  
  28. 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. 29  Copyright © Navi RadjouThank  you  Navi  Radjou        jugaadinnova,  TwiUer  @JugaadAtWork,on