Frugal innovation: Strategies to create more with less
“Frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.”
What, according to you, is frugality in innovation? If you said, economical in use, very prudent in saving without wasting, you are right. We are aware that many industries are adopting this culture of doing more with less through automation, which has become the order of the day.
During frugal innovation, innovative thinkers do not create, but they connect, as it is a frame of mind and not a strategy. In this mindset, resource constraint is considered as an opportunity and not as a liability. Having said that, frugal innovation is not just about “doing more with less”, but about learning how to innovate under severe constraints and turning adversity into opportunity for growth.
According to Carlos Ghosn, CEO of Renault-Nissan, frugalism is not changing your Business Model, but mental model of your employees and organization in order to embed the frugality in them. He further adds that the Western world is under severe resource crunch; and is feeling the pressure of “do more with less,” which actually means deliver more value to customers at less cost.
“Western world is under severe resource crunch; and is feeling the pressure of 'do more with less,' which actually means deliver more value to customers at less cost.” says Carlos Ghosn, CEO, Renault-Nissan
This brings into reality the old adage, ‘change is always constant’ and will lead to new ways of adoption and innovation. What should be the way forward to adopt and innovate? As you ponder, here are few suggestions to make the change with agility:
Let us delve a bit more into the above four thoughts:
1) Give exposure to managers who can value frugal approach:
Gerard Detour Bet, Senior Executive in a French company was posted to Chennai, India, for leading the development of “Global Small Car”. The intent was to first test and commercialize this small car in India before taking it to emerging markets like Indonesia, South Africa, and Brazil etc. There was an expectation that Gerard will not only see himself enriched in this frugal concept but also a change in his mindset. Such kind of experiments allows the individuals to let go of themselves in the area of innovation and give their best to deliver the optimum result. Organizations should identify and leverage on managers who have a preference to innovate through frugality.
2) Look for partners in emerging markets, that innovate more with less:
Nissin of Japan, a noodle manufacturing giant; when they came to India, they collaborated with Brooke Bond and another company called Accelerating Freeze drying Company (AFDC), which revels in the technology of freeze-drying. They could adopt frugality by tapping into local resources which otherwise was not available. Quite a few companies struggle because of their wrong business model and not due to lack of viable offerings. They initially import their models, which do not fit into the local scheme of things. Then, for making up, they try variations such as better packaging, lowering prices, engaging with suppliers or redesigning the product. However, they continue with the basic mistake of pursuing with operating model of their home origin and carrying the paradigm of their working and profit formulas. One of the options they could try is to initially tie up with local partners or consultants to understand the local flavor and local market.
3) Enable employees to create products that are value for money:
“Aakash,” the 7inch touch screen, the internet-enabled hand help device launched in 2011 by Datawind, a UK based company, is a good example. The product was supplied at just $50 to the Indian Government and the supplier is further willing to work out on a lower pricing, commensurate with the volume from the government. To innovate and to arrive at “Low Cost”, Datawind has explained that they are using the available new technology. This concept of ‘doing more with less’ could enable other companies to create value for money products for their customers. Keeping an eye on current and relevant happenings in the market, organizations can tap into the unrealized thought processes and conceptualize products and services.
4) Healthy competition between rivals:
Brands like Coke and Pepsi, Nike and Reebok, Microsoft and Apple etc. compete with each other and are great rivals in their industry. However, the competition between them is healthy. To continue with their respective business and stay ahead in the competition, there is no other substitute for innovation. To compete, innovation in these companies is actually business as usual. The competition not only challenges these brands to bring in frugality mindset in their day to day work, it also benefits the end consumer as they get more quality offerings and variety of choices at same or lower cost. To this end, it is important to think about how companies are enabling their employees to think about innovation in their day-to-day work.
In the world of adventuresome technology, skilled resources might become a constraint. The test would be when organizations will have to do more with less and leverage the best to do more willingly.
Learning to “doing more with less” can be the solution for sustaining in today's global economy and towards building resilient organizations. Frugal Innovation will lead to fresh ideas and new perspectives in improving, both top line and bottom line. While the above suggestions will certainly help you to innovate through doing more with less, remember Tim Cook, Apple CEO’s quote, “Creativity and innovation are something you cannot flowchart out.”