Frugal Innovation – “the ability to do more with less” is the title of a recent book by academics Navi Radjou and Jaideep Prabhu. This started off as a book called Jugaad Innovation (from a Hindi word meaning an innovative fix), examining innovation facilities in developing countries, but then found interest in developed economies as companies tried to adapt to consumers’ more spendthrift ways as well as an increased importance being placed on sustainable solutions. Frugal innovation as proposed by the authors is all about finding alternative, low-cost, customer-led solutions to problems. In many ways, it is an antidote to the multi-billion R&D formula prevalent in big corporations – i.e. make it bigger, faster, better, and charge more for it.
There are many commonalities to Eric Ries’ Lean Startup – particularly in adopting quick, iterative development processes, tailoring products to meet customers’ needs, using meaningful metrics and building marketing and customer engagement right into the heart of the R&D process. This should come as no surprise, as start-ups and companies in emerging markets both face similar challenges in terms of resource constraints. It therefore stands to reason that the prescription for driving effective innovation for these two different types of companies should be so similar. Additionally, frugal innovation aims to provide cost-effective products and solutions for at the lowest price tiers (i.e. the bottom of the pyramid), which are often under-served by traditional products.
Indeed, much of the philosophy is aimed at developing “good enough” products rather than overly-engineered products that are too complex for customers. Focusing on the 20% of the functionality that drives 80% of the value is at the heart of the philosophy, just as the Minimum Viable Product has come to represent the soul of the Lean Startup Movement. Unlike Ries’ book, this is aimed primarily at the corporate desk jockey, and so makes an ideal second text to figure out how to drive cost-effective innovation in large corporate environments. The section on fostering a frugal culture, in particular, spells out the not insignificant challenges of changing both their business as well as their mental model – something which would be taken for granted in a start-up.
For further insights – The Economist has more on the topic: