Jugaad Innovation - UXPA 2013 Keynote from Navi Radjou

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To win in today's fast-paced and hyper-competitive business environment, companies must learn to collaborate and partner extensively to innovate cost-effectively and sustainably under severe resource constraints. In this engaging presentation, Navi will unveil a groundbreaking business paradigm: Frugal Innovation. Frugal innovation is the ability to actively engage internal and external partners to do more with less: that is, to co-create significantly more business and social value for the entire ecosystem while minimizing use of increasingly limited resources. Thousands of inventive firms in resource-constrained emerging markets like India, China, Africa, and Brazil apply frugal innovation techniques to co-develop with partners affordable and sustainable solutions that deliver more value to customers at lower cost. These innovators extensively leverage public, private, and non-profit partnerships throughout the entire product development cycle. In this keynote, Navi will vividly describe how frugal innovation is practiced today by leading firms worldwide, and show how you can apply new collaborative tools, techniques and mindset to deeply engage partners to address the needs of cost-conscious and eco-aware consumers worldwide. Navi Radjou is an independent thought leader and strategy consultant based in Silicon Valley. He is an internationally-recognized voice of business innovation and leadership. Navi is a Fellow at Judge Business School, University of Cambridge, and a faculty member of the World Economic Forum (WEF). He is a member of WEFs Global Agenda Council on Design Innovation and a columnist on Harvard Business Review. Navi has consulted with leading international organizationsincluding Ernst & Young, GM, Hitachi, IBM, Marks & Spencer, Microsoft, Procter & Gamble, SAP, Sprint, and TCSon innovation and leadership strategies. Most recently, Navi served as the Executive Director of the Centre for India & Global Business at Cambridge Judge Business School. Previously, Navi was a longtime VP/analyst at Forrester Research in Boston and San Francisco advising senior executives worldwide on breakthrough growth strategies. Navi is a sought-after speaker by the World Economic Forum, Council on Foreign Relations, The Conference Board, Harvard University, and Asia Society. A prolific writer, Navi has coined and popularized several business concepts such as Global Innovation Networks, Polycentric Innovation and Jugaad Innovation. Navi has been featured in The Wall Street Journal, Bloomberg Businessweek, CNN, The Economist, The Financial Times, and I-CIO. Navi is the co-author of Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth (Jossey-Bass, 2012), which The Economist calls the most comprehensive book yet to appear on the subject of frugal innovation. Navi is also coauthor of From Smart to Wise, a book on next-generation leadership (Jossey-Bass, 2013).


<p>Frugal Innova,on: Collabora(ng To Innovate Faster, Be4er, Cheaper Navi Radjou Co-author, Jugaad Innova+on Co-author, From Smart To Wise World Economic Forum faculty member Fellow, Judge Business School, University of Cambridge </p> <p>UXPA 2013 Conference 11 July 2013, DC </p> <p>Western rms are being forced to innovate faster, be4er, cheaper </p> <p> Demographic shifts Rapid technology changes New regulations Global competition Dwindling purchasing power </p> <p>2 Copyright Navi Radjou </p> <p>Western consumers are now frugal </p> <p>E P I B R I E F I N G PA P E R #324 AU G U S T 31, 2011 PAG E 19</p> <p>Persistently high unemployment causes family incomes to fall, poverty to rise ! e labor market is the foundation of income for nearly all American families, so when the labor market deteriorates, family incomes suff er. Fam-ily incomes are aff ected through both job loss and through hours and wage cuts for those who have work. As Figure P shows, the median working-age household saw an income decline of $2,700 from 2007 to 2009. Furthermore, this recession came on the heels of one of the worst business cycles (2000-07) on record in terms of job creation, one in which the income of the median working-age household </p> <p>fell $2,250 the fi rst business cycle on record in which incomes did not end higher at the end of the recovery than at the peak of the last one. Conse-quently, the typical working-age household brought in roughly $5,000 less in 2009 than it did in 2000. Incomes will stay reduced until the unemployment rate drops toward full employment, a prospect that is years away. ! e weak labor market of the Great Recession and its aftermath has produced a substantial rise in poverty. In 2009, one in seven people, and one in fi ve under the age of 18, was living in poverty. For chil-dren under age 6, one in four live in poverty. Racial and ethnic minority families are more likely to live </p> <p>Real median income of working-age households, 2000-09</p> <p>F I G U R E P</p> <p>NOTE: Shaded areas denote recessions. </p> <p>SOURCE: EPI analysis of U.S. Census Bureau data. </p> <p>Med</p> <p>ian </p> <p>inco</p> <p>me </p> <p>($ 2</p> <p>009)</p> <p>$53,000</p> <p>$54,000</p> <p>$55,000</p> <p>$56,000</p> <p>$57,000</p> <p>$58,000</p> <p>$59,000</p> <p>$60,000</p> <p>$61,000</p> <p>$62,000</p> <p>$63,000</p> <p>2009200820072006200520042003200220012000</p> <p>$60,746</p> <p>$58,495</p> <p>$55,821</p> <p>3 Copyright Navi Radjou </p> <p>Bigger is be4er innova(on model </p> <p>$603 billion spent in R&amp;D </p> <p>in 2011 </p> <p>4 Copyright Navi Radjou </p> <p>5 Copyright Navi Radjou </p> <p>Source: Strategy &amp; Business Source: Strategy &amp; Business </p> <p>6 Copyright Navi Radjou </p> <p>Source: Strategy &amp; Business </p> <p>featuresspecial report</p> <p>3</p> <p>Not so fast. The results of our recent study of theBooz Allen Hamilton Global Innovation 1000 the1,000 publicly held companies from around the worldthat spent the most on research and development in2004 may provoke a crisis of faith. The study, whichwe believe is the most comprehensive effort to date toassess the influence of R&amp;D on corporate performance,suggests that nonmonetary factors may be the mostimportant drivers of a companys return on innovationinvestment (ROI2). The major findings: </p> <p>Money doesnt buy results. There is no relationshipbetween R&amp;D spending and the primary measures ofeconomic or corporate success, such as growth, enter-prise profitability, and shareholder return. </p> <p>Size matters. Scale leads to advantage. Larger or-ganizations can spend a smaller proportion of revenueon R&amp;D than can smaller organizations, and take nodiscernible performance hit. </p> <p>You can be too rich or too thin. Spending more doesnot necessarily help, but spending too little will hurt. </p> <p>There isnt clarity on how much is enough. Instead of clustering into any coherent pattern, R&amp;D budget levels vary substantially, even within industries. Thissuggests that no single approach to spending money oninnovation development is universally recognized as themost effective strategy. </p> <p>Its the process, not the pocketbook. Superior results,in most cases, seem to be a function of the quality of an</p> <p>organizations innovation process the bets it makesand how it pursues them rather than the magnitudeof its innovation spending.</p> <p>Collaboration is key. The link between spending andperformance tends to be strongest in those areas mostunder the control of the R&amp;D silo, such as productdesign, and weakest in those areas where cross-functionalcollaboration is most difficult, such as commercialization. </p> <p>These findings conjure up familiar images of frus-tration. Hardworking R&amp;D teams invest time andmoney in the wrong projects; manufacturing, market-ing, and sales drop the ball on winning products andservices; and senior executives and policymakers simplythrow more money at research and development in themistaken belief that it will make a difference. When itcomes to innovation investment, it appears that in manycases, less may be more.</p> <p>Innovations New ContextThe myth that higher R&amp;D spend translates into com-petitive advantage has been around for decades, but itappears to be particularly strong now. Pick up any busi-ness magazine or newspaper. Youll find ample evidenceof the belief in the effectiveness of larger budgets, forboth corporate and national competitiveness:</p> <p> U.S. spending on R&amp;D will also have to in-crease if the country wants to remain technologicallydominant. Fortune, July 2005 Ph</p> <p>otog</p> <p>raph</p> <p> (thi</p> <p>s pa</p> <p>ge) b</p> <p>y C</p> <p>hris</p> <p> Cal</p> <p>lis</p> <p>The quest for innovation has long been a faith-based initiative: Spend more, and profitwill come. Are you losing out to nimbler competitors? On the high-cost end of global-ization? Is your sales growth flattening? Are your margins narrowing? Want to prove toWall Street youre serious about growth? Dont worry; just increase the R&amp;D budget. Newproducts or services will emerge that make the difference wont they? </p> <p>Source: Strategy &amp; Business </p> <p>Firms need a new innova(on model </p> <p>7 Copyright Navi Radjou </p> <p>Thinking outside the (ice) box: </p> <p>what if my fridge can talk to my phone? </p> <p>8 Copyright Navi Radjou </p> <p>Thinking outside the (ice) box: WHAT IF my fridge </p> <p>can operate without electricity? </p> <p>9 Copyright Navi Radjou </p> <p>10 Copyright Navi Radjou </p> <p>Scarcity is mother of inven(on </p> <p>h4p://economic(mes.india(mes.com </p> <p>h4p://nif.org.in </p> <p>11 Copyright Navi Radjou </p> <p>Kanak Das </p> <p>Source: Prof Anil Gupta, IIM-Ahmedabad </p> <p>Adversity is father of inven(on </p> <p>Source: gcstz.com/products </p> <p>African ingenuity </p> <p>Source: www.quotednews.com </p> <p>Filipino ingenuity </p> <p>12 Copyright Navi Radjou </p> <p>Frugal ingenuity </p> <p>13 Copyright Navi Radjou </p> <p>Frugal ingenuity </p> <p>Ratan Tata, Chairman, Tata Group </p> <p>14 Copyright Navi Radjou </p> <p>Frugal ingenuity at a large scale </p> <p>15 Copyright Navi Radjou </p> <p>Frugal ingenuity at a large scale </p> <p>Frugal ingenuity at a large scale </p> <p>16 Copyright Navi Radjou </p> <p>FRUGAL PRODUCTS </p> <p>JUGAAD mindset </p> <p>17 Copyright Navi Radjou </p> <p>JUGAAD The gutsy ability to improvise an effective </p> <p>solution with limited resources using ingenuity &amp; resilience </p> <p>Also known as: Jeitinho or Gambiarra in Brazil </p> <p>Zizhu Chuangxin in China Systme D in France </p> <p>Do It Yourself (DIY) in USA </p> <p>18 Copyright Navi Radjou </p> <p>19 Copyright Navi Radjou </p> <p>Jugaad: frugal, exible, inclusive </p> <p>Tradi,onal innova,on: costly, rigid, eli(st </p> <p>Doing more with Less: Frugal Innova,on </p> <p>20 Copyright Navi Radjou </p> <p>FI = RESOURCES VALUE - Customers - Shareholders </p> <p>- Society - Financial resources - Natural resources - Time </p> <p>Frugal innova(on pioneer: Unilever </p> <p>Paul Polman, CEO, Unilever </p> <p>I want to double Unilevers revenues </p> <p>by 2020 while cueng our </p> <p>environmental impact by 50% </p> <p>Source: upload.wikim</p> <p>edia.org </p> <p>21 Copyright Navi Radjou </p> <p>Frugal innova(on pioneer: PepsiCo </p> <p>Shiv Singh Global Head of Digital, PepsiCo </p> <p>Marketers should invest HALF of their budgets on mobile </p> <p>marke(ngand look at smart investments on medium vehicles that </p> <p>generate instant conversa(ons. </p> <p>Source: upload.wikim</p> <p>edia.org </p> <p>22 Copyright Navi Radjou </p> <p>24 Copyright Navi Radjou </p> <p>Takeaway #1: Focus on customer value </p> <p>Jane Chen Co-founder EMBRACE </p> <p>25 Copyright Navi Radjou </p> <p>Takeaway #1: Focus on customer value </p> <p>26 Copyright Navi Radjou </p> <p>Takeaway #1: Focus on customer value </p> <p>27 Copyright Navi Radjou </p> <p>Source: Siemens </p> <p>Takeaway #2: Keep it Simple </p> <p>Keeping it simple: SIEMENS </p> <p>28 Copyright Navi Radjou </p> <p> Simple Maintenance-friendly Aordable Reliable Timely-to-market </p> <p>Elie Ohayon CEO, Saatchi &amp; Saatchi + Duke </p> <p>We must radically change the way we innovate. The new approach should be: I have an idea: </p> <p>I develop it cheaply, put it in market quickly, </p> <p>get feedback, and reiterate. </p> <p>29 Copyright Navi Radjou </p> <p>Takeaway #3: Rapid experimenta(on </p> <p>30 Copyright Navi Radjou </p> <p>Takeaway #4: Leverage partnerships </p> <p>State Agriculture Marke(ng Boards </p> <p>NGOs </p> <p>Thomson Reuters </p> <p>Bhar( </p> <p>Syngenta </p> <p>NOKIA LIFE </p> <p>TOOLS </p> <p>OnMobile </p> <p>Local villages </p> <p>Nokia Life Tools </p> <p>Shil from Linear Value Chains </p> <p>DESIGN CUSTOMERS PRODUCE SELL </p> <p>31 Copyright Navi Radjou </p> <p>to Open Innova(on Networks </p> <p>Market discovery partners Solu,on design partners Go-to-market partners </p> <p>32 Copyright Navi Radjou </p> <p>DISCOVER </p> <p>33 Copyright Navi Radjou </p> <p>to Open Innova(on Networks </p> <p>34 Copyright Navi Radjou </p> <p>Beth Comstock, CMO, GE </p> <p>Our tradi,onal teams are too slow. We're not </p> <p>innova,ng fast enough. We need to systema,ze change. </p> <p>Takeaway #4: Leverage partnerships </p> <p>GE CFSI Rock Health TechShop </p> <p>35 Copyright Navi Radjou </p> <p>Applying Frugal Innova,on to Sogware Development </p> <p>Frugal solware development: Intuit </p> <p>37 Copyright Navi Radjou </p> <p> Follow Me Home program Rapid prototyping and iterative development </p> <p> Dont solve world hungersolve one specific customer pain point Aim for good enough vs. perfect solution Dont try to change customer behaviordovetail into it Love metrics </p> <p>38 Copyright Navi Radjou </p> <p> AppHaus: Cross-functional and </p> <p>autonomous teams 90-day development cycle Design thinking </p> <p>(customer-centricity) Business &amp; social apps </p> <p> Boost in productivity and employee engagement </p> <p>V.R. Ferose MD, SAP Labs India </p> <p>Frugal solware development: SAP Labs </p> <p>The Emerging Frugal Innova,on Ecosystem in the West </p> <p>40 Copyright Navi Radjou </p> <p>US government is suppor(ng bo4om-up frugal innova(on </p> <p>41 Copyright Navi Radjou </p> <p>FEMA Think Tank Conference at White House, 6 February 2013 </p> <p>Richard Serino Deputy Administrator FEMA </p> <p>Desiree Matel-Anderson Innova(on Advisor FEMA Yours truly </p> <p>US government is suppor(ng bo4om-up frugal innova(on: FEMA </p> <p>Top US universi(es are training frugal engineers &amp; managers </p> <p>42 Copyright Navi Radjou </p> <p>43 </p> <p>Source: CellScope </p> <p>44 Copyright Navi Radjou </p> <p>CellScope </p> <p>Young entrepreneurs are driving the frugal innova(on revolu(on in healthcare </p> <p>Source: http://etaglive.com </p> <p>Young entrepreneurs are driving the frugal innova(on revolu(on in educa,on </p> <p>45 Copyright Navi Radjou </p> <p>46 Copyright Navi Radjou </p> <p>Young entrepreneurs are driving the frugal innova(on revolu(on in nance </p> <p>MAKER Movement in US: From DIY to Do-It-Ourselves </p> <p>h4p://fetosoap.com/blog/index.php?s=faire </p> <p>47 Copyright Navi Radjou </p> <p>Open Source Hardware Movement </p> <p>48 Copyright Navi Radjou </p> <p>49 Copyright Navi Radjou </p> <p>Slide with J&amp;J </p> <p>52 </p> <p>Discussion </p> <p>Navi Radjou navi@naviradjou.com </p> <p>jugaadinnova,on.com Twi4er @JugaadAtWork </p> <p>Facebook.com/jugaadinnova(on </p>