Frugal Innovation: How to do more with less (Economist Books)

Very happy with my new book!

I had earlier read the book “Open business models” by Henry Chesbrough, which was focused on the Open Innovation model. Frugal innovation is an interesting name to a cluster of business models emerging – whether it is through larger sharing model , open innovation models , resource constrained model or bottom of the pyramid model. It is the proliferation of the net which is playing a strong enabler in this. And yes, the driving ideology being - fail early, fail fast and fail often. This book is very contemporary and gives a good compendium of cases in each of the models. I am quite amazed to think about the amount of research which would have been undertaken to compile this. But given the models are very new and growing means that the research must have taken at a very good speed. I found so many cases which I wanted to highlight when I realized that I might end up highlighting the entire book !! So, had to curtail the impulse for that. While the case studies are in a way educative enough , Navi and Jaideep have tried to extract some six common principles driving frugal innovation. I found Engage & Iterate and Co-create with Prosumers to be very interesting . While I have interacted with Techshops, but the way they are getting adopted by big manufacturing corporates was very interesting. Surely, customers are the most powerful source for any innovation , and more so for frugal innovation.This book can tell you how to get around doing it Micro factories was another interesting case being discussed here. While it may not find application in major metal and petrochemical operations, but surely there are many other applications of this. Tarkett was a very good case study in Sustainability in true sense of ensuring growth of an organization, which is relying on resources which are not going to last long. Cradle to cradle being practiced at its best. Method was another good case in the same. It was also interesting to see how sharing business models (Airbnb, Relayrides, BlaBlaCar, Parkatmy house, yerdle, etc ) are forcing established manufacturers like BMW to innovate new business models. However, if such models proliferate, what will be the impact on the manufacturing economy also could have been spoken about. There are so many other cases that referring to all of them would amount to almost reproducing the book. So, if you are one of those in the larger 80% group of companies who are wondering what frugal innovation is all about and wondering how totally unrelated models have the potential to devastate an existing business, do read this book. It is almost like a guide to innovation – the last chapter actually helps one answer the question of why should one innovate. The book may have a slow start as the topics seem to be jumping frequently, but keep reading on and it gets very interesting. Yes, it could have been stitched better, but a stitch in time is more critical, so with this book.

I expected to find tools and techniques to apply frugal innovation. Unfortunately, the book provided various some good concepts. _

Great book.

In "Frugal Innovation," Authors Navi Radjou and Jaideep Prabhu expand on the concepts introduced in their first successful book, "Jugaad Innovation", and tease out a detailed roadmap for competing in an emerging global marketplace - one that demands speed and productivity by doing more with less, while creating sustainable value and reducing one's environmental footprint. The authors are keen observers of the "frugal" innovation movement and have organized this book around their "Six Frugal Principles": 1. Engage and iterate. Start with the customer, observe, pivot, and engage in a rapid iterative product or service development process. 2. Flex your assets. How to meet the growing demand for tailored products and services where and when they are wanted. 3. Create sustainable solutions. Companies can develop waste-free and self-sustaining product solutions that benefit both businesses and the environment. 4. Shape consumer behavior. Companies can influence consumers into behaving differently and feeling richer while consuming less. 5. Co-create value with prosumers. Consumers, especially the tech-savvy millennials, are evolving from passive individual users into communities of empowered "prosumers," who collectively design, create, and share the produces and services they want. 6. Make innovative friends. Collaboration with external partners can facilitate lean, flexibility, and speed to market. "Frugal" is a contrarian approach to the ways companies organize today for innovation. Success requires cultural change for organizations committed to success in this new, highly demanding environment. Radjou and Prabhu address this by outlining the path to a frugal culture. It requires leaders to embrace and communicate: the "what" - dynamic goals with a bold commitment; the "how" - adoption of new business and mental models; and the "why" - why change management is crucial to survival. How these are communicated and instilled vary across companies. Frugal is not limited to product (and service) development as it applies also to production, supply-chain, distribution, marketing, and customer service. The authors give examples for each with case studies on: * SNCF: high-speed innovation * Saatchi & Saatchi plus Duke: agile advertising * Unilever: sustainable solutions * simple thank: shaping financial behavior * giffgaff: the mobile network run by you * Accor: hyper-collaborating without reservation * Aetna's frugal healthcare strategy Frugal innovation must be a serious consideration for all Western companies today. It is the model in developing countries where customers demand affordable and sustainable products, and product developers are resource constrained. This new class of companies is not focused on short-term stock market gains, maintaining legacy margins but on long-term adoption and through-put (See Ram Charan's "What Every CEO Wants You to Know." Producers in the West are vulnerable and must get into the flow of industrial knowledge coming from these emerging countries. It is no longer a one-way street.

Some frightening statistics We were very taken by a book called “Leading from the emerging future”, which starts with some frightening statistics (with “Frugal innovation” adding a few): We leave an ecologic footprint of 1.5 planets Food prices are expected to double by 2030 In USA 1% owns more that the entire bottom 90% 25% of kids in the USA live in poverty 90% of new cancers are caused by lifestyle and environmental factors The US healthcare wastes 600 billion a year In 2000 twice of many people died of suicide as died in wars There are 200 million people unemployed going to 600,000, most of them youth Every one in five people lacks access to safe drinking water One third of our soil has eroded and have become unproductive 90% of industrial production in health sector concentrate on diseases that are lifestyle driven 125 million phones end up in landfills every year The life cycle of US buildings accounts for nearly 40% of all energy use, 72% of electricity consumption, 14% of potable water use, nearly 40% of CO2 emissions and 30% of waste output 2/3 of carbon emission happens at the end of the food chain (that is you and me) System break down The conclusion of "Leading from the emerging future" is that the current economic system has failed us and we need to move to an economy or business 4.0 model. Frugal innovation That is why "Frugal Innovation" is such an interesting book. Doing more with less. Real quality, real value and real purpose. In the developed world people are becoming not only more value conscious but also more values conscious. New methods of design, production and distribution allow for the continual reuse of parts and components, reducing waste and creating a so-called circular economy. More with less FRUGAL INNOVATION is the ability to “do more with less” – that is, to create significantly more business and social value while minimising the use of diminishing resources such as energy, capital and time. Do not wait Companies do not have the luxury of waiting and watching. Frugal competitors are already in the market. Particularly rivals from emerging markets. Your company is breaking down too Which means you need to understand how the current business practices do not work. Not enough return, too slow, high failure rate, underused IP, too complex and most important, not what the customer or your employees want. Checklist Here is a checklist. Do you understand the following: Crowd sourcing The dangers of concept testing Immersion techniques Design thinking (over 70% of a product’s life-cycle costs and environmental footprint is determined during its design phase) Just in time design Continues manufacturing Frugal manufacturing Additive manufacturing Decentralised production Micro factories Re-shoring Local sourcing Shared economy at B to B level Last mile distribution Circular economy Cradle to cradle (good!) Lab to landfill (bad!) Biomimetics Sharing economy at C to C level Spiral economy Global recovery of waste (GROW)” companies. Up-cycling GDP versus GNH (Gross National Happiness) Emerging-market “MacGyvers Prosumers Shared IP Horizontal economy Value co-creation DIY versus DIWO (Do It With Others) GAFAs (Google, Apple, Facebook and Amazon) Makers and 3D printing Shapeways, Fablab,Techshop and Quirky Agile marketing Dreamers, validators, makers, evangelists, fixers Hyper-collaboration MEcosystems Mental model disruption Industrial symbiosis Jiejian chuangxin Innovation practices in China, Africa and India Enlightened self disruption Sustainability as a success factor If some of these do not ring a bell, you will be in trouble soon. Sustainability will be a decisive factor in terms of which businesses will be here in 20 or 30 years’ time. It is the future of business. Customers demand eco-friendly and healthy solutions. Do it GE is doing Quirky, local motors, Techshop, Firstbuild, crowd sourcing, speed, agility, entrepreneurship, shared IP and mavericks. IBM is doing it. BMW is doing it. Nike, Heineken, Philips, Kingfisher, Mars, Pearson, Pepsi, Coca Cola, BNP and many, many more are doing it. Your staff will demand it. Your customers will demand it. Government will insist on it. Every business book we cover with our clients is predicting it. It is happening The circular economy could save us 700 billion annually. Some 80 million Americans (around one-quarter of the US population) and 23 million Britons (nearly one-third of the population) consider themselves sharers; and in France 48% consider themselves to be active participants in the collaborative economy. Business opportunity The authors estimate that 5% of businesses are involved in frugal innovation. Which means that it is a 95% opportunity. It is 100% threat for every business. Business 4.0 is coming at the speed of Moore’s law. We don’t think you have 20 or 30 years.

i would have been more attracted should the two Writers have dedicated more analysis on experiences in Less Developed Countries where they dont have sufficient resources ...,

This is a very frustrating book. The authors correctly identify the pressures that shape innovation and R&D these days. Unfortunately they have nothing of substance to offer the innovation practitioner. The book is essentially a few mom and apple pie statements about right sized engineering with dismissive comments about "over engineered" products interspersed. The tone is symptomatic of consultants who have only given advice without taking responsibility for development of a product. The examples and so called case studies all appear to have been gleaned from PR announcements quoting CEO and CTO level comments on successful innovation initiatives. Innovation practitioners will have ample personal examples where reality and the PR blurb from the CTO are quite different so the assembled evidence for their thesis is not convincing. If you are still on the fence read the Case study on page 42. If you find that valuable or interesting consider buying the book. It doesn't get better.