Yi in partnership with CII and Hachette organized the 1st national learning series for the year 2015-16 on the topic, 'Frugal Innovation'. Wiki tells us that Frugal Innovation or Frugal Engineering is the process of reducing the complexity and cost of a good and its production. Usually this refers to removing nonessential features from a durable good, such as a car or phone, in order to sell it in developing countries. Designing products for such countries may also call for an increase in durability and, when selling the products, reliance on unconventional distribution channels.
In the global business landscape, increasingly dened by trends such as the sharing economy and the maker movement, companies the world over are facing pressure from consumers, employees, and governments to create and deliver rst-rate, affordable and sustainable products and services using less energy, less capital and less time. This has led to the development of a new model for business success: FRUGAL INNOVATION or the ability to do more and better with less.
Navi Radjou and Jaideep Prabhu, Authors of the book 'FRUGAL INNOVATION – HOW TO DO BETTER WITH LESS' were the main speakers in this national learning series which also had senior industrialists and thought leaders join with them for panel discussion across the cities of New Delhi, Chennai, Bengaluru, Hyderabad and Coimbatore.
In this seminal book on a revolutionary worldwide phenomenon, innovation experts Navi Radjou and Jaideep Prabhu chronicle the rise of a frugal economy in the US, Europe and Japan and show how the world's top companies across sectors; American Express, Ford, GE, IBM, Levi Strauss, Marks & Spencer, Novartis, Pearson, PepsiCo, Renault-Nissan, Siemens and Unilever – are achieving great success by embedding frugality into their business models and corporate culture. By doing business faster, better and cheaper, these frugal pioneers have demonstrated how to tap into a trillion-dollar global market for sustainable products while realizing huge cost savings.
Featuring over 50 case studies and identifying, for the rst time, the principles, perspectives and techniques behind frugal innovation, this inspiring and signicant book is Corporate India's guide to reclaiming global leadership in frugal innovation by generating greater economic and social value while minimizing the use of resources.
1 About the Authors
Navi Radjou is an innovation and leadership strategist based in Silicon Valley. He is also a Fellow at Judge Business School, University of Cambridge, and a World Economic Forum (WEF) faculty member. He is a member of WEF’s Global Agenda Council on Design Innovation and a regular columnist on Harvard Business Review. Navi is co-author of the international best-seller Jugaad Innovation. The Economist calls it “the most comprehensive book yet to appear on the subject” of frugal innovation. Navi is also co-author of From Smart To Wise,a book on next generation leadership.
In 2013, Navi received the Thinkers50 Innovation Award — given to a management thinker who are re-shaping the way we think about and practice innovation. In addition, his book Jugaad Innovation was shortlisted for the 2013 Thinkers50 CK Prahalad Breakthrough Idea Award.
Till 2011, Navi served as the Executive Director of the Centre for India & Global Business at Judge Business School at the University of Cambridge, where Jaideep Prabhu was the Director. Prior to Cambridge, Radjou spent ten years in the US, primarily as Vice-President at Forrester Research, a leading US-based technology research and consulting rm. At Forrester, he investigated how globalised innovation – with the rise of India and China as both a source and market for innovations – is driving new market structures and organizational models called “Global Innovation Networks”. During his tenure at Forrester, he advised senior executives around the world on technology enabled best practices to drive collaborative innovation, global supply chain integration and proactive customer service. At Forrester, he published more than a hundred thought leadership reports on business topics related to innovation and emerging markets. Based on his extensive eld research in India, he published in 2008 a ten-part report series titled “India: The Innovation Giant (Re)Awakens”, which explores the innovative business models pioneered by large corporations and grassroots entrepreneurs in India.
Radjou has had wide exposure in national and international media, including The Wall Street Journal, The Economist, Bloomberg Businessweek, Financial Times, Le Monde, and Nikkei Shimbun. He is a frequent speaker to senior executive groups and has spoken on the topics of innovation and globalisation at leading conferences organised by the World Economic Forum, Council on Foreign Relations, The Conference Board, TiE (Indus Entrepreneurs), Milken Institute, Asia Society, Harvard University, and MIT. For several consecutive years, he has served on the international panel of judges for The Economist’s Innovation Awards. In addition to regularly writing columns in Bloomberg Businessweekand The Wall Street Journal, Navi also blogs on HarvardBusinessReview.org.
Named by BusinessWeek as an “expert in corporate innovation,” he was also honoured by the Financial Times, which called his co-authored work on National Innovation Networks – the rst- ever ranking of countries by their collaborative aptitude to integrate innovation capabilities across multiple regions – as ambitious and sophisticated. His concept of “indovation” —the unique process by which innovations are developed in India to serve a large number of people sustainably — has been featured in The Financial Times and in several conferences organised by Asia Society. An Indian-born French national, he earned his MS degree in information systems from EcoleCentrale Paris, and also attended the Yale School of Management
2 About the Authors
Jaideep Prabhu is the Jawaharlal Nehru Professor of Business and Enterprise at the Judge Business School at the University of Cambridge, England. The Professorship was established by the Government of India with an endowment of £3.2 million. Professor Prabhu is also the Director of the Centre for India & Global Business (CIGB), whose Executive Director was Navi Radjou. He is the co-author of Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth, described by The Economist as “the most comprehensive book” on the subject of frugal innovation. Jaideep Prabhu holds a BTech degree from the Indian Institute of Technology, Delhi and a PhD from the University of Southern California. He was Visiting Assistant Professor at the University of California from 1995–96, Assistant Professor and Fellow at the Centre for Economic Research, Tilburg University from 1996–99 . He was Director of Studies at Fitzwilliam College and Clare College from 1999–2004 and University Lecturer, then University Senior Lecturer in Marketing at the then Judge Institute of Management, University of Cambridge from 2002–04.
He was Innovation Fellow of the Advanced Institute of Management (AIM) from 2007–09. He was Professor of Marketing, Tanaka Business School, Imperial College London from 2004, becoming Director of Research 2007–08. He has been a Fellow of Clare College since 2009. His research interest in marketing strategy is specically related to innovation, organizational learning and competitive interaction. He teaches marketing strategy, marketing management, international marketing, brand management and high technology marketing.
Jaideep Prabhu is a member of the editorial boards of the Journal of Marketing, the Journal of the Academy of Marketing Science, the International Journal of Research in Marketing and the Journal of Management Studies, and a member of the senior advisory board of the European Journal of Marketing.
He has consulted for or taught executives from Barclays, Bertelsmann, BP, BT, GE, IBM, INGBank, the NHS, Nokia, Philips, Roche, Shell, Siemens, Vodafone and Xerox, among others.
Opening remarks by the Authors
Jaideep shared his experiences in the eld of Frugal Innovation by mentioning various researches which included understanding what innovation was to emerging economies, talking to grass root innovators and entrepreneurs and also by understanding the requirements of large domestic and multinational companies. Jaideep pointed out the difference in innovation contrast which was seen within the western counterparts. ‘People in west are more value conscious and are ready to pay more for any better value’ he mentioned.
He also mentioned that in the US and across Europe, vertically integrated value chains controlled by large companies were already being challenged by new consumerorchestrated value ecosystems that allowed consumers to design, build, market, distribute and trade goods and services among themselves, eliminating the need for intermediaries. ‘This bottom-up approach to value creation is enabled by the horizontal (or peer-to-peer) networks and do-it-yourself (DIY) platforms that form the foundation of the “frugal” economy’, he said. Jaideep further explained the two different trends that were adopted in a frugal economy which
3 included ‘sharing’ and ‘making’. Sharing was to identify any unused resources that are held within and to provide the same for a use. ‘BlaBlaCar’ was explained as an example of sharing practice in frugal economy as they sell any additional seat left after a hiring it to any third party to make full use of the resource.
Navi explained the structural differences between frugal economy and traditional companies, frugal innovation and how it increased the scope and value for customers, shareholders and the society thereby decreasing resources such as time, nancial and natural resources. Showing case studies of Arla Foods, Fujitsu, GE and GSK, he emphasized the need for R&D managers to observe customer behavior in their natural environment and embed this principle within their organization.
He suggested companies to develop new approaches in production, logistics and service assets to satisfy demanding customers better. Navi also encouraged manufacturing managers to create sustainable solutions that would help businesses and environment. He stressed that marketing managers must improve brand loyalty and market share by creating products according to desires of customers and outlined steps for customers to co-create greater value for prosumers, build greater brand afnity and deepen their engagement with customers. While shedding beam on networking, he underlined the need for collaboration of operations managers with external partners such as suppliers, universities, venture capitalists and start-ups.
He further shared the consumerization of products at different sectors such as healthcare, nance, agriculture, banking etc by adopting frugal innovation strategies. An example of frugal innovation at agriculture is the invention of a product that could sense the quality of soil and the consumption of sunlight at a particular area to increase the crop quality, he quoted. He also said that nearly 50% of Europeans believed that within a decade, cars will be consumed as a “shared” good, instead of privately owned and 73% predicted the rapid growth of car-sharing services.
‘This shift in consumer attitudes extends far beyond transport. The peer-to-peer home-sharing service Airbnb now rents more room-nights annually than the entire Hilton hotel chain. And the peer-to-peer lending market, which bypasses banks and their hefty hidden fees, surpassed the $1 billion mark in early 2012. The global market for shared products and services is expected to grow dramatically, from $15 billion today to $335 billion by 2025, without requiring any major investment. The European Commission predicts that peer-to-peer sharing, now an income booster in a stagnant labor market, will evolve into a disruptive economic force’ he remarked. He further shared the six principles and three dimensions of Frugal Innovation which were engage and iterate; Flex your assets; Create sustainable solutions; Shape customer behavior; Co-Create value with “prosumers” and make innovative friends.
4 07 April 2015: Indian Institute of Technology: New Delhi
The panel discussion on “Frugal Innovation” was moderated by Hindol Sengupta, Editor-at-Large, Fortune India. The Panel consisted of Amit Tandon, Founder & Chief Executive Ofcer, VentanaCleantech; D Shiva Kumar, Chairman & Chief Executive Ofcer, PepsiCo India &Raghav Gupta, Country Manager, BlaBlaCar India along with Navi and Jaideep.
Hindol pointed out the shortfalls of Jugaad, given the association of the term with cheap products, poor quality, low prices and unsophisticated approaches. He discussed how Frugal Innovation would support Jugaad and make it more enabling. In doing so, he indicated portfolio approach, growth hacking, employment and breakthrough principles of innovation. Amit highlighted the needs, scope for improvisation, approaches and argued that the mindset for Jugaad was positive and enabling.
According to D Shivakumar, Jugaadwas a deep rooted apathy for bureaucracy while Frugal innovation was about connecting with the desires of the masses. He emphasized that frugal innovation gave weightage to value over price.Another question by Hindol was on the failure of Jugaad in India. Amit responded to the question by stressing on price cuts, brand names, lack of appreciation and price wavering in the market. He underscored that brands like LG and Philips created value through brand names in rural India. In addition to this, he expressed that media speculation obstructedJugaad in India.
Post this, Raghav spoke on BlaBlaCar and its fast- growing community of users with the support of ten million members. Founded on the European Model, he added thatBlaBlaCar in India owned 50,000 cars within a span of few months since its start in January 2015 and the positive response that it gathered from the Indian customers. While explaining ride-sharing facilities and other essential features of the organization, Raghav talked about deliverables on values, strategic models, purchase models, impact on supply, cost- sharing objectives, ideas of decentralization, centralization, strategic shift in balance sheet oriented CEO who gives importance to centralization than decentralization, value positions, existing social behavior, social challenges, socially supportive mechanisms and difference between supply and demand.
On the other hand, Amit drew attention to social challenges, existing social behaviours, economic pressures, challenges posed by technology, value proposition in merchandizing, initial hurdles of thinking out of the box, empowerment, challenges and management of projects, transfer of manufactured goods to consumption, recycling, different kinds of waste products, good commitment, ventures in recycling, solutions to recycling, commodities and scale of programmes and waste projects and so on.
Thereafter, Jaideep observed the role of social media, pollution index, community, think tanks, smaller budgets, lobbying local counsellors, manufacturing, villages and consignment in meeting the objectives of sharing economy. Navi noted the quality side in the production of goods, the role of Frugal government in delivering goods and services, policy making, bureaucracy, encouraged nding new ways of doing business with respect to efciency, completion of tasks on time, costs and business and so on.The programme beneted about 100 participants, which included students, lecturers, members and entrepreneurs.
5 08 April 2015 : Olympia Tech Park, Chennai
The panel discussion on “Frugal Innovation” was moderated by V Narasimhan, Executive Director, Brakes India Limited with the panel consisting of N Saravanan, Senior Vice President, Ashok Leyland Limited and Venkat Rangan, Co-Founder & Chief Executive Ofcer, Market Simplied (India) Ltd along with Navi and Jaideep.
V Narasimhan spoke about the importance of companies becoming agile, adaptable and exible to leverage the current scenario. Innovation in his context was CEO centric unless the top management believed in it. He has also shared three important functions of the management which were Retaining or Continuous Function, Continuous Improvement and Innovation. He further shared that frugal ingenuity of the emerging market will have to be synchronized with the incubators and R&D to give better results. ‘Even a radical chain in the supply chain could be a great frugal Innovation like a value chain management as a 3rd generation supply chain’ he said. Narasimhan also pointed out the need for ‘green products’ and its importance in the 12th Five Year Plan.
N Saravanan brought in the thought that lack of resource, infrastructure and skill had earlier made all to think more frugal but when the resources were at hand, we were not making use of it. To make a product frugal, he mentioned that there had to be a deeper customer insight and involving the mindset of the customer into the function, by which one can attain frugality. ‘The companies could use social media and by leveraging more tools to get customer insights’ he mentioned. He further emphasized that the second important aspect of frugality was that a product could be considered frugal only if the product is frugal in every aspect of it functioning. For example, he mentioned the product should also have cheap servicing to serve the purpose of frugal innovation. ‘The product life cycle is constantly changing along with the mindset and culture of people; hence it is important to be agile in the scenario’ he shared.
Venkat Rangan has also pointed out the business scenario of Market Simplied India Pvt Ltd and made it clear that customers from different background reect on the different aspects of a product and it is the duty of a company to meet both ends to survive. For this, companies in the current scenario should be agile, fast changing and adapting to technology in the same pace as others, he said. He also spoke about his experiences of adopting the frugal way in reaching out to consumers with constant feedback being received on a regular basis and mentioned that technology was a big boon that had to be used effectively to deliver services at the best prices and the best quality.
The session ended with an interactive question answer session from the audience with participation from around 80 Industry members of CII and Yi. The session had also marked an ofcial release of the book ‘Frugal Innovation’ in Chennai.
6 09 April 2015: PSG Institute of Management: Coimbatore
The panel discussion on the theme “Promoting Innovation at Workplace” was moderated by Harjeet Singh Wahan, Vice Chairman, ATS Elgi Ltd, with the panelists consisting of ArunachalamMuruganantham, Chief Executive Ofcer, Jayaashree Industries and N Visvanathan, Managing Partner & Chief Executive Ofcer, Ammarun Foundries along with Navi and Jaideep.
ArunachalamMuruganantham spoke about how his frugal innovation on Sanitary napkins did bring in a direct employment to more than 18000 rural women and impacted the lives of more than 7.5 million women! Muruganantham started by saying how a small innovation could create a change in the society. He designed, created, tested and implemented a sanitary napkin-making machine that operated on a small scale, contrary to a large-scale production model which required INR 3.5 Crores as initial investment. Through his frugal innovative approach, he could make a sanitary napkin making machine for around INR 65,000. “This allowed smaller players to adopt the business model propagated by me and thus generated more employment and wealth in the most neglected sections of society. More specically, an empowerment forum – such as a Self Help Group or a women’s group can invest in a sanitary napkin- making unit to create a business that employs up to ten women. The new invention is capable of making 120 napkins per hour” he said.
“Every Mind is innovating! But what you do with the innovation is what matters than the innovation itself” he said. “When Jayaashree Industries had to compete with top brands in the industry with its low cost product, I took a different route of socialization than commercialization. I am proud of taking that route as it created a positive impact in the society reaching out to rural India which would take 2 decades for the top brands to achieve!”
Vishwanathan shared his Innovation of converting foundry wastes like slag and sand into useful products like bricks, paver blocks, fencing posts with the latest being laying roads. His vision was to collect all wastes from the foundries of Coimbatore and convert them all into useful products. Ammarun Foundries contributes to the environment through their concept of waste-recovery and re-use of Co2 hardened Sodium silicate bonded silica sand. They have also been doing community development around their Foundry by sponsoring school uniforms, footwear and food packets to school children. Ammarun Foundries initiated an innovative project of waste sand reclamation and succeeded to produce a pilot model to suit small scale units with the provision to scale-up the operations. It has also developed alternate ooring blocks produced from the foundry waste, which is less dependent on the conventional cement material. “6,50,000 patents are led in China and India is no-where close to that number, the reason being innovators are not encouraged right from a tender age” he said and stressed the importance of exposing children to innovation. The panel started with a discussion on “Indo-vation”, a term coined by the authors that could replace “juggard”!
Jaideep went on to say that there were many companies in China that were focused on solar and battery technologies, transportation, etc where there was a lot of need within the country itself before they go global like BYD, etc. He also pointed out that the support from the Government is one of the differentiators where the Chinese innovators have an upper hand.
7 The role of CEO in encouraging Innova on was the next point of discussion during which Visvanathan said “It is only by means of mo va ng people though some benefits of their interest that they tend to innovate in an organiza on and the role of the CEO is to constantly trigger the need for it. People should also be exposed to innova on more o en than the current scenario which will imbibe the spark in them to innovate whenever there is an opportunity”. Harjeet Singh quoted Titan Industries which involved the stakeholders right from their suppliers to employees for brainstorming and an innova ve idea was always rewarded with a fair share which inturn would mo vate people to do it the next me!The discussion also focused on to Con nuous Manufacturing, Social Manufacturing, etc which were becoming the latest trends in Frugal Innova on!Followed by the panel discussion, there was an interac ve session with interes ng ques ons from the audience. Overall the session saw par cipa on from 165 par cipants.
10 April 2015 : SAP Labs: Bengaluru
The panel discussion on “Frugal Innovation” was moderated by Navi and Jaideep and consisted of ChetanMaini, Founder and CEO, Mahindra Reva Electric Vehicles Pvt Ltd; Mahesh Nayak, Chief Operating Ofcer, SAP Labs India; Manish Gupta, Director, Xerox Research Centre (India) &Shyam Prasad Rajan, Chief Technology Ofcer, GE Healthcare-India.
While speaking on the occasion, Chetan shared that the answer to frugal innovation was proper research and development. He gave examples from his own company to stress on the need to make economical but benecial products from the market. He proudly shared that Mahindra Reva’s current vehicle - the ‘Mahindra e2o’ was one of the world’s most cost effective, innovative and ingenious electric vehicle as it incorporated several world class features and technologies. ‘It is now a globally acclaimed electric vehicle winning the Italian Premier Innovation Award from the Italian magazine Focus and the Prestigious Design Excellence award from the Conference of Indian Industry. More recently, Mahindra Reva was voted as India’s most Innovative Company and one of the 50 most innovative companies in the world by the avant-
8 The panel discussion on “Frugal Innovation” was moderated by Navi and Jaideep and consisted of ChetanMaini, Founder and CEO, Mahindra Reva Electric Vehicles Pvt Ltd; Mahesh Nayak, Chief Operating Ofcer, SAP Labs India; Manish Gupta, Director, Xerox Research Centre (India) &Shyam Prasad Rajan, Chief Technology Ofcer, GE Healthcare-India.
While speaking on the occasion, Chetan shared that the answer to frugal innovation was proper research and development. He gave examples from his own company to stress on the need to make economical but benecial products from the market. He proudly shared that Mahindra Reva’s current vehicle - the ‘Mahindra e2o’ was one of the world’s most cost effective, innovative and ingenious electric vehicle as it incorporated several world class features and technologies. ‘It is now a globally acclaimed electric vehicle winning the Italian Premier Innovation Award from the Italian magazine Focus and the Prestigious Design Excellence award from the Conference of Indian Industry. More recently, Mahindra Reva was voted as India’s most Innovative Company and one of the 50 most innovative companies in the world by the avant-garde US business publication Fast Company’ he mentioned.
Manish shared that the essence of today’s economy was to create innovative products that could be marketed well to end consumers. ‘Our mission is to develop innovations that help our clients achieve transformational impact in their business. While we project the entire world as our playing eld, we have a special focus on addressing the unique challenges faced by the emerging markets like India. We see banks looking for a way to provide services in a nancially viable manner to a large unbanked population and a growing wave of young people entering the workforce who need to be well educated and given the right skills. We see healthcare providers trying to reach underserved regions and trying to improve the quality of healthcare by utilizing information technology. We see crowded cities where authorities need to nd ways of reducing the tedium in basic tasks like a daily commute to work for their citizens. In these challenges, we see amazing opportunities for world class research that enables our clients to touch the lives of real people’ he mentioned.
Shyam emphasized on the fact that less cost was not only the answer to innovation. ‘A proper market analysis is must for products to become useful’ he said. Giving the example of GE incubator for infants which was the rst of its kind technology was not relevant to the Indian market because of the power problem. He further shared that he was passionate about developing lifesaving technologies and the innovative use of imaging to improve diagnosis and therapy. He has contributed signicantly over the last 2 decades towards the development of Maternal Infant Care products such as Infant Warmers, Incubators and phototherapy equipment and has also worked on MRI, Ultrasound, PACS and CT imaging and visualization software. He is a rm believer that “low cost” does not translate to “low technology” – on the contrary the opposite was mostly true, he mentioned.
“Frugal Engineering is the science of breaking up complex engineering processes into its basic components and then re-building each component in the most economical manner. The end result is a simpler, more robust and easier to handle nal process. It also results in a much cheaper nal product which does the same job qualitatively and quantitatively as a more expensive complex engineered product”.The session ended with an interactive session with the audience.
9 11 April 2015 : Tech Mahindra, Hyderabad
The panel discussion on “Can India Lead the World in Frugal Innovation?'” was moderated by Noopoor Rabi, Service Delivery Manager, Tech Mahindra, with the other panelists were Ranjan Patnaik, Director, DuPont Knowledge Center, Vijayanand S, Chief Executive Ofcer, Amara Raja Power Systems Ltd along with Navi and Jaideep.
Jaideep Prabhu during his interaction with audience mentioned that doing more and better with less was the mantra today. ‘There is a growing need for frugal innovation in the west and values conscious nature of the west now driving them to frugal economy. This can be driven by having production and consumption at the same place’ he added. Jaideep further shared that it was important to break into the consumers mind set and plan accordingly. If you quote a price to someone INR 10 per day sounds very less as compared to INR 300 for a month, he candidly shared.
Navi Radjou suggested that the major innovations were possible by moving from linear to circular and making it more environment friendly. Further clarifying it, he said that after the life of the product expired - using the raw material to extract whatever one could to make another product (terming in re-cycle economy) was a new model that was catching up. ‘It is extremely important that India encourages such innovative methods across board. To that extent, we are delighted that partnering with Young Indians and CII has given both os us an opportunity to interact with a wide spectrum of people, more in the younger bracket’ he said. During the panel discussion, Ranjan said that the product diversication with frugal innovation was the need of the hour. He remarked that it was high time that we focused on reduction of environmental footprint in an innovative manner. He also suggested audience to get into the lowest level to desire success at the top level, by connecting with the end user which was a must. Vijayanand spoke about how Amararaja sustained frugal innovation in the past and continued with the practice. ‘We are company driven by values and one of them is to provide the best quality and service at the best global standards available. We imbibe that into all that we do, whether it is sales, marketing or manufacturing. We encourage innovation across board in all the facets of our business and see to it that frugal innovation is not a separate component, but something that is not an natural outcome of our desire to serve our customers with all dedication’ he remarked.
Jaideep suggested audience to experiment in small sections and if it worked well – then to go large and implement by expanding the horizon.The session concluded with a tag line “Don't scale up but scale out”.
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