Frugal Innovation by Navi Radjou and Jaideep Prabhu
Frugal Innovation is a logical sequel to Jugaad Innovation, which both the authors had earlier co-authored along with Simone Ahuja. In Jugaad Innovation they had tried to learn from the developing countries – how they innovate with least of resources at their disposal. How the perfect solution is not always required. And sometimes good enough is enough as a solution.
In Frugal Innovation, Navi Radjou and Jaideep Prabhu look at the developed world. They see how these countries are adopting some of the principles of Jugaad Innovation. And how they are changing their organizations and their customers. I like their highlighting the sharing economy – the need to share resources on a need basis. Utilizing the resources to the maximum while reducing the need to produce too many of them. They quote examples of sharing taxis or homes, but I hope this extends to every walk of life.
Though I wonder how the traditional businesses would reshape their businesses to deal with this low growth scenario. I also see co-creation emerging as a huge concept – organizations are engaging with customers/consumers to gain insights to lock them in. The sharing platforms are still opening up. People are still warming up to these ideas. I think next few years will be interesting to observe this phenomenon. The question that this leads to is – are we going back to custom solutions after a long age of mass or standardized products? At this point in time custom solutions work out costlier than the standard products, would we see a reversal there.
Authors mention six principles that organizations need to follow to make their organization ready for frugal innovation. I agree with most of what they say though I do not agree with many of the examples they quote. They sometimes sound like the Press Releases of these companies. The toughest part is to, create a mindset for frugal innovation in cultures that are used to living in abundance. They have no regard for wastage they create and with no focus on sustainability. No, getting a Green Certification is still a green wash, as most practitioners would tell you. In developing world, where the culture itself was frugal till the western world came and told us to consume as much as possible, it may be easier to go back to those principles.
In my view point, these changes are irreversible for the foreseeable future. But is not explicitly mentioned in the book. There is the need to learn to live with lesser resources. Or with solutions that are not as sophisticated is going to last at least our lifetime. In the older cultures, this was inbuilt in the way of life – both as consumers as well as businesses. It was only in the mass production and large-scale industrialization that we saw so many wastages creep up. The business became the center of the world for people who were running it. Rather than the customer needs, which businesses thought they could create as per the products they want to sell.
Coca-Cola and Pepsi are perfect examples of such products. They replaced the drinking water in certain countries. Even though people did not require them but the companies marketed them well. A reason these products never did very well in old cultures is because, people still understand the needs of the body. They value it more than the marketing gimmicks of big companies. In fact, Frugal Innovation talks about many initiatives of Pepsi. And I really want them to explore the relevance of businesses in a societal context. Pepsi can create statistics of how they have reduced consumption on various parameters. But are they really being justified in taking ground water? Adding additives to it and selling it back to the people who had first right on the water. Or depleting water tables wherever they exist.
It is an important book as it talks about a trend that is more or less irreversible. So organizations would gain by getting insights into how they can become more frugal in their fiber. For the students of business like me, it gives many more parameters to observe – both for organizations and for consumers.