Monday, July 30, 2012

"Jugaad Innovation": A New Concept?

It’s difficult to be objective about a book that has a title similar to your own, and that reaches a completely opposite conclusion. But, in this review of Jugaad Innovation by Navi Radjou, Jaideep Prabhu and Simone Ahuja (Wiley/Random House India, 2012), I’ll try my best!

This book certainly engages the reader’s attention. It’s written well, with a typical business reader in mind, and makes its points forcefully. The broad theme is that the innovation process in multinational corporations (MNCs) has become too rigid and complex leading to huge costs of innovation and long delays in introducing new products and services. Given this, it’s no surprise that innovation has low success rates. Further, the large and growing demand is for low-priced, “value” products in emerging markets. Even customers in developed markets no longer want over-engineered, high price products because of prolonged economic downturns or a greater focus on sustainability.

So what should MNCs do? According to the authors, they should learn from the flexible and frugal innovators of the world (many of whom are from “emerging markets”). The authors propose six principles that would allow MNCs to embrace this (or, what the authors call “Jugaad innovation”): (1) seek opportunity in adversity; (2) do more with less; (3) think and act flexibly; (4) keep it simple; (5) include the margin; and (6) follow your heart.

Is this a New Problem?

It’s well established that as companies get larger, they become more structured and process-driven. In many companies, this results in bureaucratization and slow decision-making. As opposed to the nimbleness and agility of a typical start-up, a large corporation tends to look stodgy and slow. Routines that enhance predictability and efficiency become more important than change and innovation. Management scholars have been trying to address this problem for years!

The recognition of the need (and desire) of MNCs to be more flexible and adaptable is not new. Its more than 20 years since Sumantra Ghoshal and Christopher Bartlett did their pioneering work on Managing the Transnational. In this they pointed out that one of the key challenges before the MNC is balancing the needs of integration (for economies of scale and scope) with the needs of responsiveness (to local needs). Their solution to the problem was organizational in terms of complex, “transnational” matrix structures.

Another popular stream of work addressing a similar issue was Gary Hamel’s idea of “Bringing Silicon Valley Inside”: he proposed that large corporations make their innovation process more dynamic and responsive by simulating Silicon Valley within their organizations. Arguing that Silicon Valley’s success was due to the free flow of ideas, capital and talent, he called for democratizing innovation, providing multiple sources of capital, and removing constraints to the movement of people within large companies.

Several management trends over the years – reengineering, delayering, intrapreneurship, “lean thinking – all tried to address this problem in their own way. “Jugaad innovation” is the latest mantra in this quest!

What’s in a name?

My biggest problem with this book is not so much with the ideas, but with the name. To many of us in India, Jugaad is not a positive term (in fairness to the authors, they do mention this, but only in passing!). While it does represent ingenuity and frugality, it also represents a quick fix, crudeness, and getting around regulations and standards. Jugaad is usually not the romantic concept envisioned by Radjou, Prabhu and Ahuja. And Jugaad is not driven only by the ingenuity of those who practice it, but also by their lack of knowledge and expertise to do things differently.

To make Jugaad a positive term, the authors have had to enlarge its scope to include much more than the word normally represents, and ignore most of its negative connotations. In the process, “Jugaad innovation” embraces many of the contemporary ideas of innovation management including co-creation and open innovation. I am tempted to think that this is almost like the way Hinduism has sustained itself over centuries – by taking over challenging ideas and including them in its own fold (witness statues of Buddha as avatars of Vishnu in many Hindu temples!).

In their zeal to make “Jugaad innovation” all-encompassing, the authors have made some intriguing judgements. For example, in last week’s Economic Times, there was a graphic of “Jugaad Innovation” listing Indian innovations that symbolized the concept. Among these was the Tata Swach. While the Tata Swach had its origins in water filters rigged up to provide clean drinking water to people affected by the Bhuj earthquake, the final commercial version of the Swach is an elegant, well-engineered product that incorporates excellent design inputs, sustainability (rice husk is the raw material used for the filter) and modern technology (a nano-silver coating of the rice husk to enhance purity of the water). Yes, the Swach does have characteristics of frugality (though only to some extent – it’s still too expensive for many poor Indians!), and inclusiveness, but I would see it as an excellent example of how high quality engineering and design can transform an idea into a good consumer product. This is a far cry from what we conventionally see as Jugaad!

Clever Marketing

So, in effect, the Radjou, Prabhu & Ahuja idea of “Jugaad innovation” is a new concept. It includes some of the traditional notions of Jugaad as we know it, but has some additional attributes thrown in. This has made it a very marketable concept, and you have to hand it to the authors for a very successful introduction and launch. Starting with a series of blogposts on the HBR blogs site, over the last year there has been an effective build-up leading to the actual launch a few months ago.

While the book itself says that there are Jugaad innovators all over the world with their own local names, in India the authors have tended to refer to it as an Indian concept. In fact, in their recent article in the Economic Times, they write: “Jugaad offers a powerful way to solve not only India's major problems but also the world's. One might even argue that Jugaad will come to be seen as India's unique and enduring contribution to the world.” With our hunger for international recognition and acclaim, this makes the book and its ideas of greater interest to Indian policy-makers and the media!

I’ll return to a more detailed discussion of the book’s content in a subsequent post. Watch this space!

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