What the West Can Learn from Jugaad | Navi Radjou, Jaideep Prabhu, Simone Ahuja | Feburary 26, 2013 | strategy + business

Has the west fallen into a mental trap of innovation as overly structured and capital-intensive, losing the pioneering spirit? Jugaad, says Navi Radjou, Jaideep Prabhu and Simone Ahuja of U. Cambridge Centre for India and Global Business, comes from India, but may have also been present in the innovation in pre-industrial America before 1900.

This approach—whether it is aimed at creating a product, service, or business model—is what we call jugaad innovation. Jugaad is a colloquial Hindi word that roughly translates as “an innovative fix for your business; an improvised solution born from ingenuity and cleverness.” It is based on six operating principles: seek opportunity in adversity, do more with less, think and act flexibly, keep everything about the business simple, tap the margins of society for employees and customers, and follow your heart.

The extreme conditions that make jugaad innovation worthwhile have typically been more prevalent in emerging markets such as India, China, and Brazil than in the United States or Europe. But in recent years, developed economies have begun to exhibit many of the same aspects of scarcity, diversity, unpredictability, and interconnectivity, making these principles relevant to companies around the world.

Jugaad Lost

The jugaad spirit, also known as the “pioneer spirit,” was once common in North America and Europe as well—at least until their economies matured. During the 20th century, Western companies built up dedicated research and development departments aimed at institutionalizing and managing their innovation capabilities. This industrialization of the creative process led to a structured approach to innovation that spawned big budgets, standardized business processes, and controlled access to knowledge.

Most Western firms have assimilated the idea that an innovation system—like any other industrial system—will generate more output inventions if fed more input resources. As a result, the structured innovation engine in most companies is capital intensive, requiring an abundant supply of financial and natural resources at a time when both are scarce. [….]

The size of their R&D investments caused many Western firms to become risk averse, and led them to implement standardized business processes such as Six Sigma and stage-gate analysis to manage their innovation projects. [….]

Jugaad Regained
Instead of always using a hammer to deal with their problems, companies might find it helpful to use a screwdriver from time to time. In other words, we are not proposing that companies abandon their traditional structures and processes for innovation. Rather, they should expand their innovation tool kit.

Jugaad can bring value to conventional companies in a number of ways. They deliver economies of scope when companies need to tailor solutions to the specific needs of multiple customer segments in heterogeneous markets. They provide “soft” capital by unleashing the passion of employees, business partners, and existing and potential customers. And they enhance flexibility to better manage unexpected challenges and harsh constraints through the improvisational use of limited resources.

What the West Can Learn from Jugaad | Navi Radjou, Jaideep Prabhu, Simone Ahuja | Feburary 26, 2013 | strategy + business at http://www.strategy-business.com/article/00143?pg=all.

What the West Can Learn from Jugaad

See also podcasts from the University of Cambridge, Judge Business School, Centre for India and Global Business at http://www.india.jbs.cam.ac.uk/opinion/podcasts/