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Last updated: May 19, 2012 12:25 am
Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth, by Navi Radjou, Jaideep Prabhu and Simone Ahuja, Jossey-Bass, RRP£18.99/$27.95, 288 pages
Anand Mahindra is one of India’s more thoughtful tycoons. A film major at Harvard and serial Davos attendee, he took over Mahindra & Mahindra, his family’s conglomerate, in 1997. A reputation for innovation and honesty followed – not something automatically bestowed on the leaders of India’s larger business empires.
The company is a sprawling affair, best known for affordable cars and motorbikes but also turning out aircraft and computer software. In future, Mahindra & Mahindra plans to sell more products in the industrialised world, inspired by its overtaking this year of the US’s John Deere to become the world’s largest tractor maker by volume.
Given that the group’s hopes of achieving similar feats rest largely on selling products that are less expensive and less technologically advanced than western equivalents, it seemed reasonable to assume Mahindra would be an admirer of jugaad, a Hindi word roughly translated as a cobbled-together solution that is good enough, given the circumstances. But not a bit of it.
Instead, when I interviewed him recently, he launched into a lengthy critique of the idea, arguing that India was being held back by a reliance on just such improvised solutions. The increasingly fashionable concept, he hinted, was all too often used to excuse cut-price, second-rate answers to his nation’s pressing business and social problems.
There is much to agree with in this criticism, but its most eloquent rebuttal is to be found in Jugaad Innovation, an overview from a trio of academics at Cambridge University’s Judge Business School. Along with the related idea of “frugal” innovation (which puts more emphasis on ideas that are cheap, rather than thrown together), the authors provide a wealth of examples of entrepreneurs who have found success by doing more with less.
On the opening pages we meet the inventor of Mitticool, a terracotta box that doubles as a $50 fridge suitable for the wide swaths of India with no electricity. There is also an engineer who, stuck in Mumbai traffic, dreams up Revolo, a low-cost “plug-in” that turns a normal petrol-engined car into a cut-price hybrid; and a Chinese company that invented a $20,000 X-ray machine, roughly a tenth the normal cost.
These are compelling stories, although the authors can be vague on how many took off in the mass market. The text, meanwhile, aims at a mainstream business audience, meaning there is a little too much in the way of bullet-point lists and jargon of the “breakthrough growth strategies” variety.
While off-putting, these perhaps explain why jugaad ideas have become popular with prominent western business leaders, including Jeffrey Immelt of General Electric and Indra Nooyi of PepsiCo. Many such figures now talk up cost-conscious approaches to developing products as a means to win over emerging markets, while also finding low-cost ideas to bring back to the industrialised world.
Radjou et al are careful to note that jugaad approaches rarely build successful businesses on their own. Even so, they remain useful, and thus their advocates ought to be troubled that doubts of the sort expressed by Mahindra remain surprisingly widespread.
This may be a function of language. The word jugaad also describes a make of homemade truck, often with an engine designed to be used in a water pump or similar. Looking at such vehicles lurching about in rural areas, many Indians agree that their aspirant superpower ought not to be using a spatchcocked jalopy as its model.
Whatever the reason, it is worth noting that making do is precisely what other great powers have done at similar stages of their development, hence the related phrase “Yankee innovation”, which gained currency more than a century before. If India and countries like it are to follow on the same path, this important argument may well need to win more friends back at home.
James Crabtree is the FT’s Mumbai bureau chief
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