This expert on strategy and innovation, is Earl C. Daum professor of international business and the founding director of Tuck’s Center for Global Leadership. He was the first professor-in-residence and chief innovation consultant at General Electric. His latest mission is to design a simple dwelling that keeps a family safe, allows it to sleep at night and gives it a home and sense of dignity and can be constructed for less than $300. The social co-creation project is a contest open to architects, engineers, designers, students and professionals
There is always a danger when you come up with concepts like Jugaad. It could be mistaken as chalta hai or ‘everything goes’. But Jugaad, at the heart, is about a new model of innovation, which is based on constraints.
Historically, we viewed innovation as a process where you spend a lot of money and innovate. That is the US model, that’s the model in rich countries. Because we are rich, we can afford to spend money. So, if it’s healthcare, we want to really push the limits of medical technology and medical science and find a cure for the most complicated disease. This essentially means you innovate by spending more money on the problem.
But, in Jugaad, you ask, ‘How do I innovate by spending less money?’ Jugaad really means solving a customer problem in the most innovative way when your resources are constrained.
There are examples of companies that have done constraint-based innovations correctly (that is without resorting to shortcuts). Two examples of Jugaad: Aravind Eye Care and GE’s ECG machine.
Now, blindness is a big problem in India. It is needless blindness, which can be corrected through a surgery. There are millions of people like that and there are very few eye surgeons. This is a classic problem of innovation under constraint. You cannot relax the constraint, because even if you open medical schools to produce thousands of eye surgeons, it will take many decades to produce them. What do you do with the blind people in the meanwhile? Aravind Eye Care took a page out of McDonalds.
If you look at it, for McDonalds, it’s the same problem. They serve millions of hamburgers with very few people. So, like McDonalds, Aravind followed the principles of standardisation, economies of scale, volume and yet maintained consistent quality. That’s important because you can’t sacrifice quality. In the US, a surgeon wastes a lot of time moving between his office and operating theatres between two surgeries. In Aravind, there are two beds in the surgery room. While one operation is on, the nurse prepares the other patient, and very little time is wasted.
Take another problem: Heart attacks, which are the biggest cause of death in India. An ECG is the first point of diagnosis. The ECG machines that GE sells in the US cost $10,000. Those machines are also very big, so typically they sit in a hospital, and the patient goes to the hospital. Whereas 70 percent of India is in rural areas, where there are no hospitals. So GE decided to innovate: In GE’s $10,000 machine, ECG is printed on a specialised paper. So here, they looked at bus conductors printing tickets and asked, ‘Why can’t we use the same technique?’ Of course, they had to make it work with the hardware platform for ECG machines and that required certain skills. Using that technique is not a chalta hai attitude.
There are three keys to Jugaad: One, for Jugaad to really work, start by understanding the customer problem. Talk to customers, understand what they really want. Two, for a zero-based solution approach, forget about the refrigerator or a house as it exists now. Take a clean sheet of paper; start with the customer’s problem, and ask, ‘How do I solve it?’ Three, focus on execution. Innovation is not creativity. Creativity is about the big idea. Innovation is about executing it, and making money out of your idea. It’s about making the right resource allocations, building the right team, and getting the product to the market.
The key to Jugaad is clearly understanding the customer problem. Always start with the customer problem, and then go back for the solution. For example, Godrej wanted to come up with a refrigerator. Now, the refrigerator is an American innovation, and it costs hundreds of dollars. It is based on compressor technology. It’s the compressor that cools the thing down, and makes ice. In India, you want a machine for $50 or $75. How do you make it? You don’t start it with the refrigerator. You start with the customer’s problem.
When Godrej and Boyce talked to villagers, they found a couple of interesting things. First, villagers don’t want ice. American customers needed a freezer, as they use frozen food; they keep their food for a long time. Poor people in India don’t eat frozen food. They cook everyday. They want to store leftovers for maybe two meals, one day.
(This article is excerpted from the latest Forbes India 03 June, 2011 issue which is now available at news stands and book stores. You can buy our tablet version from Magzter.com)