Jugaad Innovation - Jugaad King

Faced with the adversity of declining revenue and brand reputation, George Buckley, who replaced McNerney as CEO in 2005, focused on reviving 3M’s risk-tolerant Jugaad culture. Buckley began rolling back Six Sigma initiatives and reinstituted the 15% programme, giving engineers more flexibility and freedom to pursue radical ideas without fear of retribution. Buckley acknowledges, “Perhaps one of the mistakes that we made as a company – it’s one of the dangers of Six Sigma is that when you value the sameness more than you value creativity, I think you potentially undermine the heart and soul of a company like 3M.” Buckley had to move fast as several of 3M’s products were becoming outmoded or increasingly commoditized. A great reality made 3M’s leadership realize that while the company was great at engineering products, it had to get better at designing them in an appealing fashion. Sensing an opportunity in this situation of adversity, 3M decided to broaden its traditional Jugaa

Founded in 1902, 3M has come to epitomize American ingenuity. Over the course of a century, its prolific inventors have churned out breakthrough products that have become part of Americana. From Scotch Tape to Scotchguard Protector and Thinsulate Insulation to the omnipresent Post-it Notes. What made 3M so innovative is the reason being, 3M set itself a goal of generating 30% of its total revenues from new products it had introduced in the preceding five years. This bold goal is known as the New Product Vitality Index (NPVI) within 3M. This helps the company to constantly invent and reinvent products.  The 3M culture helps create and cultivate new ideas. To be one of the most innovative companies in the world it has launched one of the most radical initiatives – the 15% program for its staff. This program allows 3M employees to use 15% of their paid work time to pursue their dream projects. 3M is also very supportive towards its employees with their projects. Some of th

TCS is one of the first Indian companies to embrace the structured R&D innovation model. In 1981, TCS inaugurated the Tata Research Design and Development Centre (TRDDC). It was India’s first dedicated R&D centre. Over the time TCS realized that the structured R&D innovation model has limitations and found it hard to keep the domestic as well as the international clients happy at all times. They no longer wanted TCS to just deliver cost effective IT services, but also wanted TCS to provide low-cost IT services with innovations.   To take on this challenge, CEO N. Chandrasekaran, explored ways to improvise innovation by harnessing the Jugaad ingenuity of TCS’s nearly 240,000 employees. Especially the collaboration minded Gen X and Gen Y employees which also account for TCS’s majority workforce. TCS invested heavily in social networks to bring together all the employees. As R&D CTO, Ananth Krishnan explains: ‘We are today probably one of the largest use

Few years ago if you told a typewriter making company that, soon the computers will be taking over the world and typewriters will be useless. The company would have considered shutting itself. But the company that once made typewrites is still making International Business machines. The company was rightly named International Business Machines (IBM), earlier it made typewriters; now it makes computers and corporate communication solutions. According to Carol Dweck, professor of psychology at Stanford University, most leaders operate with one of two mindsets, a fixed mindset and a growth mindset. Leaders with fixed mindset often tent to use the tried and tested ways to overcome challenges. They believe that their qualities are carved in stone and they prefer to stick to the rules. In contrast, leaders with growth mindset believe that their basic qualities can be nurtured and improved through efforts. Jugaad innovators are endowed with a growth mindset. IBM is one such company tha

Corporate leaders cannot build a resilient organization without a resilient workforce. Fred Luthans, professor of Organizational Behavior at University of Nebraska says “The true value of a company is no longer the tangible assets or even its technological processes. It lies in the human capital and underlying psychological capital. Anyone can buy your technology or obtain money from financial markets, but cannot buy employee motivation, engagement, confidence, resiliency, hope and optimism. Franck Riboud is one such leader who wants to boost his firm’s psychological capital. Riboud is the CEO of Danone, a French multinational that is one of the world’s largest suppliers of dairy products and bottled waters. In India, Danone is known in the North markets for its yogurt and lassi products. Danone is the company to launch Yakult the probiotic drink in India. Riboud believes that his 92 year old company is facing 2 major challenges, 1. Consumers around the world are looking for afford

Jugaad Innovators seek for adverse conditions to unleash their Jugaad skills. The more extreme condition calls for more extreme innovations. Corporate leaders should view extreme conditions such as massive technology shifts, change in regulations, or competitive threats that come out of blue as an opportunity to develop radical innovations that disrupt industries and shape whole new markets. Marc Benioff, Chairman & CEO of salesforce.com, is one such innovator. In the year 1999, he founded salesforce.com in his San Francisco apartment with bold vision. He wanted to make business software which enterprises use to manage their customer interactions affordable and accessible to more companies. The business model was pay as you go and it could be accessed by the browser itself. The software was not installed in the employees’ PCs thus avoiding the expensive license fees and maintenance costs charged by large software vendors like Oracle, Siebel and SAP. In 2001, when salesforce.c

Corporate leaders can learn from Jugaad Innovators how to turn adversity into advantage and get it to work in their favour. Rather than getting frighten about an upcoming problem, corporate leaders should use the change to work for them and not against them. According to author of “Better Under Pressure” Justin Menkes, when facing crises and challenges, leaders must cultivate a sense of equanimity and demonstrate ‘realistic optimism’. Most of the CEOs these days are afraid of the growing popularity of the social media today. It gives a lot of power in hands of the common man which is not comfortable for big brands. They fret about how social media tools, when placed in the wrong hands, can be used to spread false rumours, damage a brand name, and ruin corporate and personal reputations within hours. Rather than fearing from this companies like Procter & Gamble demonstrated how voice of the masses can be used for research and development. In the past, when developing new produ

In the previous post we saw some of the challenges faced by the large firms of today. These challenges are generating constraints within the environment in which large firms operate. These challenges could be used to create the need for innovation of it can cripple the corporate leader’s decision making process. Some of the reasons leaders fail to take advantage of the adversity are mentioned below. Failing to notice or ignore the early warnings: Leaders of large firms often fail to notice the shifts in demographic, technology and regulations. Gary Hamel, author of ‘The Future of Management’ notes that many executives don’t pay sufficient attention to the early warning signs. For instance, after the September 11, 2001 terror attacks on the US, the economy saw red. People after that were looking for cheaper cars according to the car manufactures like GM and Ford. They failed to notice that they were not only looking for cheaper cars but also eco friendly and fuel efficient cars.

Jugaad Innovators can be seen at all levels of economy. Right from an ordinary potter who made a refrigerator that runs without electricity to the Chairman of the country’s biggest bank . Jugaad Innovations occur when there are adversities and constrains. This ideally gives us an understanding that the larger firms will never require to implement Jugaad and it is limited to only small and mid size firms. We have seen some of the biggest firms getting into trouble and declaring themselves bankrupts. We have seen the Indian Airline major Kingfisher facing financial crisis, once a major cell phone manufacturer RIM has put their flagship Blackberry Phones division up for sale. These are some of the examples that even the giant can fall. It is instructive, therefore to look at the major sources of adversity that large companies face:   A worsening global economy: The US and the European economies have already seen a steep decline in the economic growth. According to The Int

Jugaad Innovators are often faced with criticism when they share their ideas with the world. By nature most of the humans are resistant to change. When an idea is brought to them, the first reaction of most of the people would be negative. It is the Jugaad Innovator’s job to stay focus and never give up. This quality was demonstrated very well by Enrique Gomez Junco, a Mexican engineer turned Jugaad entrepreneur. Junco was driven by a vision to create a sustainable energy business. In 1988 he set up a company called Celsol to sell thermosolar panels to Mexican businesses. But he found it hard to break the market. Market was dominated by monopolies, and he found difficult to find capital for Celsol. Rather than getting disappointed by this, Junco shut Celsol and started a new venture, Optima Energia in 2000. His plan was to sell effective energy solutions to buildings that used a lot of energy. But Optima’s value proposition did not impress the facility managers. It required a larg

Jugaad Innovators find opportunity in adversity in 3 different ways 1. Re framing or changing the lens through which they perceive the situation they face. 2. Making constraints work for them rather than against them 3. Being quick to act in response to the opportunities they see We saw in the previous post how O.P. Bhatt (former chairman of SBI) used the first way to do the most with what he had and brought the Parivartan. He looked at the same situation with a different angle to make the most with the current situation and the given resources. We also saw in a previous post how Kanak Das used the second way to make the constraints work for him rather than working against him. Das used to ride his bicycle to work and faced a lot of bumpy roads on the way. Being frustrated with his situation he modified his bike to collect energy every time the front tyre hit the pot holes. This energy is then used to power the rear tyre and accelerate the bike. Professor Anil Gupta of IIM

O.P. Bhatt State Bank of India (SBI) is India’s largest and oldest bank with 2 Lakhs employees and 20,000 branches across India. Appointed in 2006, O.P. Bhatt former chairman of the bank was aware of the immense creative potential of SBI’s large employee base and was eager to find ways to unleash it. Dr. Prasad Kaipa The problem faced by him was, since SBI is partially owned by the Government of India, which in turn is run by risk-averse bureaucrats who vet every hiring and firing decisions. As Dr. Prasad Kaipa, a CEO coach who has advised Bhatt, points out “it was clear to Bhatt from the start that he could neither ‘get the right people on the bus not get the wrong people off the bus”. Rather than feeling that his glass was half empty, he decided to do the most with what he has. He used his superior communication skill to develop an internal communication targeted towards staff. He wanted his employees to feel proud of SBI’s distinguished 200 year old history. It was done

In late 80s, Tulsi Tanti a young entrepreneur moved to Surat with dreams to start his own textile unit. Like other entrepreneurs in India, Tanti faced a lot of infrastructural bottlenecks. The biggest problem was the power supply, which also accounted for 40% to 50% of the operating cost. Electricity was expensive and unpredictable. All other means of fuel were even more expensive. With a profit margin of 5% he could not afford it. Instead of giving up and accepting whatever he has, he decided to experiment with various boilers and generators. But he soon realized that all of them might give him a better result but they all required some sort of fuel. He though why not find a solution to the fuel itself. This launched him into a search for an alternative source of power that was both reliable and sustainable. In 1990, he invested in two wind turbines to supply electricity to his textile unit. It soon became clear that this was the solution he had been looking for. After the initial

Jugaad is not restricted to India. Countries with similar economies and circumstances give rise to Jugaad Innovators. The BRIC countries (Brazil, Russia, India and China) are the epicenter of Jugaad Innovations. Due to the Jugaad way of thinking in these countries, even at the time of global recession, India and China were growing at 7% and 9% respectively. The very fact that BRIC nations have been grappling with complexity and instability for so long seems to give them an edge and a kind of immunity in volatile and adverse circumstances. What all these countries have in common is the way of thinking, the Jugaad way of thinking. By understanding various case studies and innovators, the 6 Principles of Jugaad have been derived. Seek opportunity in adversity Do more with less Think and act flexible Keep it simple Include the margin Follow your heart Together these 6 principles of jugaad help drive resilience, frugality, adaptability, simplicity, inclusivity, empathy and passion

Although Jugaad is practiced in India, it was once a big part of Western innovation too. Among the many early American jugaad innovators, the best known was Benjamin Franklin. Born in Boston, Massachusetts, USA, in 1706 had left his school when he was 10 to work in his father’s soap and candle factory. Early on, Franklin developed a knack for using limited resources to devise ingenious and frugal solutions to tackle everyday problems. Franklin’s one of the most practical inventions was the Franklin Stove. During the 18 th century, homes in the US were primarily heated by inefficient fireplaces that spewed smoke as much of the heat they generated escaped up the chimney. This was also dangerous as the sparks could easily trigger fires to the wood build homes. Franklin’s jugaad innovation was a new type of stove with a simple hooded enclosure in the front and an air box in the rear. The new stove and its reconfiguration of the flues enabled a more efficient fire. It consume

A potter named Mansukh Prajapati who stays in a remote village called Ramkrishna Nagar of Kutch, Gujarat has transformed his weaknesses into an invention. He stays in a desert city which does not have enough electricity and a certain deficit of water. Using his years of experience of being a potter, Mr. Prajapati was able to make a refrigerator out of terracotta which does not require electricity and costs only Rs. 2000. It is called “Mitti Cool”. All it requires for Mitti Cool it to pour drinking water from the top and it keeps the water as well as the contents of the refrigerator cool. After initial orders Prajapati started mass producing Mitti Cool. He taught local women how to make it and hired them to work in his factory. Mitti Cool is an idea born out of adverse circumstances, shows how a resilient mindset can transform scarcity into opportunity. Today Mitti Cool is used across the country and exported as well. Get more details on www.mitticool.in. Prajapati and his invent