Jugaad Innovation - Jugaad King

To compete with the dawning age of Scarcity corporate leaders will have to make some necessary changes in the way they think, the way their management thinks and the way their systems work. Some of the necessary steps that the leaders can take could be as mentioned. Tie Senior Management’s Compensation to Frugal Performance The senior management’s compensation should be linked to how frugal they can think. Florida Ice & Farm Co., a large food and beverage producer and distributor in Costa Rica developed and set the Balanced Scorecard to track how the company was reducing its consumption of natural resources. R&D Should be Challenged to Do More with Less To keep the huge R&D funding in control and to make sure that the engineers are not over doing it, it is best to budget the R&D and asking it do more with less. After visiting Russia, French carmaker Renault’s CEO Louis Schweitzer challenged his R&D team to make a car which costs less than Euro 6000 as that was...

In the new era of scarcity, large companies must learn how to produce higher value with fewer resources. Despite the benefits of doing more with less, large companies face significant obstacles in adopting this approach. Some of the major reasons are mentioned below. Mindset (Top Management) The top management is in many large companies are wedded to a previously successful ‘more for more’ strategy. However this ‘bigger is better’ approach is no longer sustainable as large companies face an increasing resource crunch and a growing number of aspirational but relatively low-income consumers seeking value-for-money offerings. Low cost would ideally mean low income and that in return will mean low profits. They typically think that each unit sold for Rs.100 will yield them a profit of Rs.10 and if this unit is sold at Rs.80 they will earn a profit of Rs.8. Instantly reducing the profits by Rs.2 per unit. They fail to understand that the consumer is no more ready to pay Rs.100 for t...