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What is Frugal or Jugaad Innovation

Frugal innovation or what we in India call jugaad or jugaad innovation is the ability to do more with less. Companies across the spectrum have encountered it in India from grassroots entrepreneurs to small and medium sized businesses to large companies and multinationals. Jugaad innovation captures this frugal, flexible and inclusive innovation. The term was first coined by two renowned academics, Navi Radjou and Jaideep Prabhu.

At Gandhar we view frugal innovation as a new type of business strategy that seeks to create economic and social value with optimal use of cash, natural resources and time and thus have tried to embody its spirit of doing more or better with less. Creativity, curiosity and iteration are the fundamental principles of this type of innovation which starts with the customer and not the R&D function. We try to understand our customers’ needs authentically and build products that address majority of those needs and also leave scope to improve incrementally instead of putting in all kinds of features in a product that don’t really serve the customer and are very expensive and time-consuming to build and environmentally unfriendly. Time, as mentioned above is of the essence here as in any customer facing function, and being responsive to changing customer needs increases the value you bring to the table as an organisation.

The frugal model is also more flexible, networked and connected and requires a shift in the whole culture of the organisation, a not so easy thing to achieve. It starts with the top management and how you empower people at different levels of the organisation to embrace and apply it. At Gandhar, we have also been able to successfully apply it in our supply chain and it has helped us open up possibilities to share more offerings and expertise of our supply network with our customers. I was impressed when I learned how companies like Renault managed the relationship between suppliers and the company and have tried to emulate it. The supply chain manager spends 60 percent of the time with suppliers because the company believes it cannot do frugal innovation unless the whole ecosystem is in sync. Suppliers in India may have amazing ideas but they may not know how to scale them up or bring them up to the level of quality that the company requires. In Renault’s case, they bring the scale and quality dimension and at the same time, the suppliers keep bringing these ingenious ideas, making it a win-win for both.

How we apply it at Gandhar

At Gandhar frugal innovation for us means creativity at its best. There is a tendency to believe that Jugaad means short lived solutions and process and creativity are mutually exclusive. This has not been my experience. Our strategy is to lower our client’s cost while providing a superior solution. This approach gives us plenty of room to be creative in both our R&D and in the applications where technology is put to work. Many layers of brainstorming, testing, process development and finally manufacturing are needed for the desired outcome. We did this for a leading tire manufacturer by creating a better rubber processing oil that could absorb higher temperatures for longer. This improved the manufacturer’s capacity utilisation from 60% to over 80%. We have also successfully applied frugal innovation to help us reduce costs of transformer oils while ensuring it is high-performing, trustworthy, and reliable.

Outlook for India

At the end of the day, a lot still needs to happen in India to drive the frugal innovation agenda. Our research and development figures don’t stack up to western counterparts but anecdotal evidence abounds in India where you see a lot of innovation happening that responds to customer needs around pricing, packaging, and distribution and adds value. But India needs to have a much larger part of its economy involved in manufacturing that requires more capital investment, technological innovation and of course more spending and maybe cleverer spending. A lot needs to still happen!