It means “frugal innovation” and it will enable Minnesota manufacturers to win in global markets
To win in global markets, Minnesota manufacturers should focus closely on Jugaad (frugal) innovation.
Over the last 10 years, increasing volatility, globalization, connectivity and changing consumer needs have created urgency for global companies to innovate faster, better and cheaper. Enter jugaad, also known as “frugal” innovation. Jugaad is a colloquial Hindi word that means “an innovative fix; an improvised solution born from ingenuity and resourcefulness”. This simple approach that uses resource constraints as a catalyst for problem-solving is commonplace in India, and other emerging markets — even in the most adverse circumstances. Similar to the approach of American small farmers years ago (and quite a bit like “MacGyver-ing”), jugaad leverages improvisation and resourcefulness to solve even complex and pressing problems. An extension of jugaad is “jugaad innovation” a frugal, flexible and inclusive approach to innovation that allows large organizations to innovate better, faster and cheaper.
Large and small organizations alike are beginning to understand that this approach can lead to expanded markets in rapidly growing emerging economies, as well as deeper connections with cash-strapped consumers right here in the U.S.
How manufacturers can do more with less
Take GE Healthcare, our neighbors in Waukesha, Wisc. The company has a long history of creating high-caliber medical devices. A few years ago, the company recognized that its big, expensive ECG units, used for measuring heart rhythm, simply weren’t accessible for many clinics across emerging markets such as India and China. They were both too expensive and impractical for several reasons including their weight — large, heavy units must stay fixed and creates challenges for those who cannot visit a clinic. They were also far too complex, containing bells and whistles that not only made the units difficult to use, but were unnecessary and confusing even to highly trained personnel.
Keeping this in mind, GE Healthcare assembled a small, nimble team of product engineers, nine in Bangalore and one in Waukesha. Based on empathy for the needs of end users (in this case, health care providers as well as patients), they created the Mac 400 — a portable ECG machine that costs one tenth of the larger unit, and is merely one-fifth of the weight of existing products for the US. This allowed the machine to be not only more financially accessible, but flipped the model of patients going to doctors and allowed the lightweight machine to be carried to a patient’s home, for example. Simplicity, a key principle of the focused design applied by jugaad innovators, brought the engineers to create a device that was “as easy to use as a cell phone.” Now, even auxiliary health care workers with modest training can visit a patient to secure an ECG reading, and bring it back to a doctor to evaluate.
Finally, in order to reduce not only cost to the end user, but also cost of product development, GE Healthcare engineers did more with less by using off-the-shelf parts. For example, rather than develop a printer for the ECG unit’s output, they integrated rugged printers used at bus and train stations across India, already able to withstand dust and monsoon rains.
While GE Healthcare first developed this product for emerging economies, the company later replicated the device, gained FDA approval and a massive market right here in the U.S., where our highly strained healthcare system also benefits from high-value, low-cost medical devices such as the Mac400.
From low cost ECG units to $2,000 cars that have upended the entire auto industry, it’s clear that the principles of jugaad innovation are highly relevant in both developed and developing contexts.
What does it take to apply frugal innovation principles? Below are some quick insights to help fast and frugal innovators in your organization.
The frugal innovation approach
1. Start with your end user and empathy. Leave your local assumptions at the door and approach learning with an “empty your cup” mindset.
2. Generate ideas and hypotheses.
3. Design experiments and define metrics that will help measure your success.
4. Run experiments quickly and get into the market ASAP.
5. Analyze data, reflect and iterate as needed.
6. Iterate, pivot (or capture learnings and test a new hypothesis)
7. When experiments lead to proof of concept, begin to scale up and integrate into larger business
Dr. Simone Ahuja is co-author of international bestseller Jugaad Innovation — Think Frugal, Be Flexible, Generate Breakthrough Growth, and author of Disrupt-It-Yourself (forthcoming) — a book about corporate intrapreneurship (Harper Collins, 2018). She is a Harvard Business Review columnist, advisor to MIT’s Practical Impact Alliance, and founder of Minneapolis-based innovation strategy firm Blood Orange.