Jugaad Innovation: Converting Adversity Into Opportunity

Jugaad Innovation: Converting Adversity Into Opportunity By Navi Radjou Jugaad is the gutsy art of spotting opportunities in the most adverse circumstances and resourcefully improvising solutions using simple means. "The jugaad innovators we studied all hail from different cultures and social and professional backgrounds. Yet they all share one unique quality: their uncanny ability to “make lemonade with any lemon” they are given." "Renault-Nissan's CEO Carlos Ghosn famously coined the term “frugal engineering” in 2006 to describe the Indian engineers’ unique ability to conceive high-quality solutions faster, better, and cheaper." We are entering an Age of Complexity manifested by intensified economic unpredictability, tectonic demographic and technological shifts, and accelerating scarcity of resources. Adversity has become the New Normal. The good news is that we humans are typically good at coping with adversity. From a biological perspective, humans are pre-programmed to react predictably to adverse—and even hostile—situations thanks to our well-perfected “fight-or-flight” instinct. Sadly, however, this preconditioned “fight-or-flight” reaction fails to produce optimal responses in today’s complex world. When we face an intractable problem many of us tend to throw in the towel quickly or keep on fighting the issue wishing it will vanish. Now visualize this: what if you could transcend this binary “fight-or-flight” reaction and uncover a “third way”—a new outlook that empowers you to see adversity as an opportunity for personal and collective growth? Adversity will suddenly morph into your ally—an ally that can ignite your ingenuity and drive you to the unearthing of revolutionary solutions that yield amazing value for yourselves and for humanity. You will become a modern-day alchemist—one who can literally transmute adversity into opportunity. Such alchemists do exist—and many of them live in emerging markets like India. Take Kanak Das, a young man who lives in Morigaon, a remote village in the northeast Indian state of Assam. Das got sick of riding his bicycle on poor village roads filled with potholes and bumps. Assume you were an R&D engineer who works for Ford, BMW, or Toyota trying to design a car that can ride smoothly on such potholes-filled roads: your “fight” instinct would have told you to design better shock absorbers to overcome the bumps. But Das didn’t “fight” the bumps: instead, he used this constraint to his advantage by equipping his bicycle with a makeshift device that converts the shocks it gets into acceleration energy—enabling his bicycle to run faster on bumpy roads! Das literally transformed adversity into an opportunity to innovate and extract value from the very problem he confronted. Das epitomizes the spirit of jugaad. Jugaad is a Hindi word meaning an innovative fix or an improvised solution born from ingenuity and cleverness. Jugaad is, quite simply, a unique way of thinking and acting in response to challenges; it is the gutsy art of spotting opportunities in the most adverse circumstances and resourcefully improvising solutions using simple means. Jugaad is about seeing the glass always half-full. Jugaad Innovators: The Modern Day Alchemists Jugaad is practised by almost all Indians in their daily lives to make the most of what they have. Jugaad applications include finding new shrewd uses for everyday objects—Indian kitchens are replete with empty soft drink or pickle bottles reused as containers for water, spices, or lentils—or inventing new utilitarian applications and ingenious solutions with everyday objects, like using cellphones to make “missed calls”. The entrepreneurial spirit of jugaad is not limited to India. It is widely practised across all emerging economies such as China, Africa, and Brazil, where resilient entrepreneurs are also pursuing growth in difficult circumstances. The Brazilians have their own word for this resourceful approach: jeitinho. The Chinese call it zizhu chuangxin, or indigenous innovation (in contrast with shanzhai, meaning copycat versions of foreign-made products). The Kenyans refer to it as jua kali. In our book Jugaad Innovation, my co-authors and I delved into the frugal and flexible mindset of thousands of ingenious entrepreneurs and enterprises around the world practicing jugaad to creatively address critical socio-economic issues in their communities. In Kenya, for instance, entrepreneurs have invented a device that enables bicycle riders to charge their cellphones while pedalling. In the Philippines, Illac Diaz invented A Litre of Light—a recycled plastic bottle containing bleach-processed water that refracts sunlight, producing the equivalent of a 55-watt light bulb. This product—which costs only $1—is a boon for scores of Filipino families living in makeshift houses in off-the-grid shantytowns. And in Lima, Peru (a country with 98% humidity that receives only 1 inch of rain a year), the local University of Engineering and Technology (UTEC) has designed advertising billboards that can generate up to 100 litres of potable water out of humid air each day. The jugaad innovators we studied all hail from different cultures and social and professional backgrounds. Yet they all share one unique quality: their uncanny ability to “make lemonade with any lemon” they are given. They are resilient entrepreneurs who overcame tremendous difficulties to invent ingenious solutions to vexing issues afflicting our societies. Like magicians, they conjured up these innovative solutions out of thin air—using meager resources. Just as an alchemist can convert low-value metal into high-value gold, these frugal innovators can “do more with less”: they can create lot more value using far fewer resources. What Makes Jugaad Innovators—And Their Solutions—Unique? Despite their diversity, all the jugaad innovators—be they entrepreneurs or corporate leaders—we studied in India and other emerging markets all have the following unique personality traits in common: They are empathetic: They recognize that their fellow citizens are suffering from adverse circumstances (e.g., poor access to healthcare or education services) and strive to lessen their pain. It is this compassion for other beings that sparks their own passion to discovering pertinent solutions to issues afflicting others. For instance, Jane Chen, a Stanford MBA, was deeply moved by the fact that 20 million babies are born prematurely or with a low birth weight each year worldwide, and four million of them die, most in developing nations, because their parents can’t afford to maintain them in baby incubators, which are too expensive. To address this issue, Jane co-founded Embrace, which makes inexpensive portable infant warmers that low-income mothers in rural India, China, and Africa can use to keep their premature babies warm, and thus save their lives. They are driven by a higher purpose: Jugaad innovators are not driven by fame or money. Rather, they are motivated by the aspiration to build “a better world”. This higher purpose provides them great ethical clarity and serves as an inner-compass that guides all their decisions and actions. For instance, brothers Abhishek Sinha and Abhinav Sinha cofounded Eko to make financial services affordable and accessible to the 600 million Indians who can’t avail of banking services. Eko enables low-income people to open a savings account in a kirana (neighborhood retail store) and then merely use a mobile phone to deposit/withdraw cash as well as send/receive money. They are nonconformists: Jugaad innovators boldly challenge the status-quo by relentlessly posing the question: “Why not?”. They exhibit what Samuel Taylor Coleridge calls “uncommon common sense”: they develop counterintuitive solutions that flout conventional wisdom or even turn it on its head. For example, when Ratan Tata announced his decision to produce the Nano industry experts and media analysts scoffed at the idea of making a $2,000 car, for which they believed there would be no market. But the maverick Tata stuck to his counterintuitive decision and he ended up creating not only a breakthrough car but he also shaped an entire new market for sub-compact cars that Western automakers are jumping into lately. They are ingeniously resourceful: Just like MacGyver (the famed TV action hero who can escape from any predicament by improvising solutions using just his Swiss Army knife) jugaad innovators display great ingenuity in the face of challenges. They leverage their (inner) resourcefulness when they have no external resources to tap into. They embody the frugal “bricoleurs” whom the legendary anthropologist Claude Lévi-Strauss lauded in his seminal book La Pensée Sauvage. According to Lévi-Strauss, a bricoleur taps into existing resources to quickly solve a problem—unlike an engineer who goes searching for the best resources available to design a perfect solution. Mansukh Prajapati is one such bricoleur: a potter by training, he created MittiCool, the world’s “greenest” fridge made entirely of clay that consumes no electricity and is 100% biodegradable. They are adaptable: Jugaad innovators possess an agile mindset that enables them to rapidly shift course and reach their objectives by trying out various approaches. They are not wedded to any specific approach or tool to solving problems. Their sense of purpose is steadfast (“Make the world a better place”) but their method to serving that purpose is dynamic and constantly evolving. Hence, they are resilient and can “reinvent” themselves continually. For example, Harish Hande founded SELCO in 1995 to debunk the myths that poor people can’t afford solar energy and cannot maintain sustainable technologies. Conservative banks refused to fund his startup and he initially struggled to convince rural consumers to switch from cheap-but-polluting kerosene to solar systems. But Hande applied his flexible thinking to improvise an ingenious solution that involves a grassroots network of micro-entrepreneurs who charge, install, maintain, and collect payment for solar lighting systems that they rent to people in remote villages. These personality traits of jugaad innovators also pervade the clever solutions they conceive. All their astute solutions (products or services) share the following attributes: They deliver more value at less cost: Their ingenious solutions are low-cost (or much less expensive than alternative solutions in the market) and yet they offer much greater value for users. As a result, these solutions deliver “more value for less”. For instance, the Embrace portable infant warmer costs less than $200—or 1% of the cost of Western baby incubators priced at $20,000. More importantly, mothers can now hold against them their premature babies—dramatically boosting their chances of survival. That’s real value! They are simple to use and maintain: The solutions are designed to be incredibly simple to use and maintain, thus lowering their “adoption barriers” for a larger number of users. For example, Eko’s mobile banking and payment services can be accessed using even the most basic mobile handset. This ease of use is a key success factor of Eko’s service which today counts 2 million clients. They are inclusive: The solutions make critical products and services available and accessible to “marginal segments” of the society—e.g., low-income people, the elderly, ethnic minorities—who traditionally couldn’t afford or access these products/services due their high cost or high complexity. For example, SELCO’s solar lighting systems are now used by over 125,000 rural households across India (SELCO aims to serve 200,00 households by 2013). They are sustainable: The solutions are both environmentally and socially First, these solutions are eco-friendly and minimize use of natural resources. Second, these solutions contribute to the social sustainability of local communities by spawning new “ecosystems” that create new jobs, etc.—thus catalyzing a virtuous cycle of enduring socio-economic growth. For instance, Mansukh Prajapati involves many women in his village in Gujarat to produce his MittiCools, thus creating gainful employment for local community members. The Rise Of Jugaad Innovation In The West The developed world, like emerging economies, is increasingly facing its own problems in areas such as healthcare, education, finance, and community development. Cash-strapped Western governments, however, are unable to deal with these challenges on their own. In this context, a new wave of flexible-minded jugaad innovators in the US and Europe are emerging. These nonconformists are turning the conventional practices of many industries upside down, and in the process creating affordable and sustainable products and services for more citizens. For instance, Sal Khan founded Khan Academy to democratize access to education and make learning more fun for kids. He has created over 4,000 video tutorials for math, sciences, and engineering that are freely available on YouTube and are today viewed by over 6 million users a month. Similarly, Erik Douglas co-founded CellScope, a startup that converts your smartphone into a medical diagnosis tool so you can do ear, throat, and skin exams at home without having to visit an expensive lab. CellScope is a boon for the 50 million Americans who lack medical insurance. And to meet the needs of the 68 million Americans today who are unbanked or underbanked, Danny Shader founded PayNearMe, which enables US citizens without credit/debit cards to pay for online transactions by cash in local convenient stores. Universities too are joining this jugaad innovation movement in the West. Several higher education institutions in the US and Europe are training a new breed of engineers and managers to design next-generation products and services that can deal with scarcity in a frugal and sustainable manner. For instance, Stanford runs a very popular multidisciplinary program called Entrepreneurial Design for Extreme Affordability. And MIT, with funding from Ratan Tata, recently launched the Tata Center for Technology and Design to train future generation of engineers and business leaders to create affordable technologies and inclusive systems that meet the needs of resource-constrained communities in the developing world. Finally, several vanguard Western corporations—helmed by visionary CEOs—are pioneering the adoption of jugaad innovation. The most notable of them is the global carmaker Renault-Nissan, whose CEO Carlos Ghosn famously coined the term “frugal engineering” in 2006 to describe the Indian engineers’ unique ability to conceive high-quality solutions faster, better, and cheaper. Ghosn is a big admirer of the jugaad mindset. As he puts it: “In the West, when we face huge problems and we lack resources, we tend to give up (too) easily. Jugaad is about never giving up!” In 2012, he sent Gérard Detourbet, a senior French executive in charge of Renault’s entry-level car business, to India. From his new R&D center in Chennai, Detourbet will be designing and producing several vehicles—all built on the ultra-low-cost “A-Entry” platform—that will first be launched in India and then marketed in Brazil and South Africa. There is no doubt that when Detourbet returns to Renault’s headquarters in Paris, he will carry with him the flexible jugaad mindset he acquired in India. Ultimately, the ingenious solutions devised by these audacious jugaad innovators—our modern-day alchemists—in emerging markets as well as in developed economies stand out not because they are “clever” but because they bring hope to millions around the world. In today’s morose economic climate and challenging social context, these alchemists help transmute pessimism into optimism—and that, by itself, is priceless. These ingenious alchemists—and their frugal and agile jugaad mindset—not only represent the hope for humanity but they also help restore our faith in humanity. This article is partially adapted from the book Jugaad Innovation: A Frugal And Flexible Approach To Innovation For The 21st Century (Random House India, 2012). SIDEBAR: THE WISE AND UNWISE USE OF JUGAAD In the Indian context, the word jugaad carries a slightly negative connotation for some. That’s because the jugaad mindset can also be applied to find an ingenious way to either game an existing system or even violate it. But by and large, the entrepreneurial spirit of jugaad is practiced by millions in India and in other emerging markets simply to improvise completely legitimate solutions to everyday problems. The figure below captures the three ways jugaad can be used based on the nobility of the intent (Sankalpa in Sanskrit) of the person using jugaad and the societal impact (Karma in Sanskrit) created by his/her actions: Figure 1. The Various Uses Of Jugaad In Figure 1 (depicted above), the red zone depicts the “negative” use of jugaad by unwise leaders—especially in political and business circles—for selfish purpose: they abuse or violate existing systems (think of the Commonwealth Games debacle), hence generating negative societal impact. The blue zone represents the “neutral” use of jugaad by someone who tries to “game” or circumvent an existing system—like in the case of “missed calls”—but that person is not ill-intentioned. In this context, a person may even create a jugaad solution that seemingly is illegitimate but do so with the motivation to help others (e.g., a rural youth siphoning off electricity from power lines to bring energy to his off-the-grid village) Finally, the green zone represents the “positive” use of jugaad by ingenious entrepreneurs inventing totally legitimate solutions that improve deficient existing systems (in healthcare, energy, education, retail, finance)—or aim to create entirely new systems that are highly efficient and bring greater benefits to a large number of people (think of the Nano car, mobile banking applications like Eko, or distributed solar energy systems like SELCO). The Buddhists have a saying: “A knife in the hands of a thief is life-threatening; but the same knife in the hands of a surgeon is life-giving.” Jugaad is like that knife. It’s merely a tool. What matters is why use the tool—and how wisely you use it. My book Jugaad Innovation deals with wise entrepreneurs and firms worldwide who are using the jugaad mindset with a noble intent to make positive societal impact on a large scale.

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Jugaad Innovation: Converting Adversity Into Opportunity

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