Jugaad innovation not scalable

He was the man who originally put the term jugaad — the uniquely Indian concept of low-cost, improvised innovation — into the global management lexicon. Now Rishikesha T. Krishnan, Professor of Management Strategy and innovation at the Indian Institute of Management, Bangalore, argues just the reverse. In his new book 8 Steps To Innovation , co-authored with Vinay Dabholkar, Krishnan argues that jugaad is passe. In today’s globalised marketplace, Krishnan and Dabholkar argue, improvs and quick fixes are not enough to survive. What is needed is systematic innovation capability. The process for doing so are outlined in the book.

Why do you say that jugaad — the Indian model of workaround solutions — is unfit for the current global marketplace?

There are two main reasons why workaround jugaad innovations don’t work — they are not scalable, and they are not aligned with the aspirations of the marketplace. Today’s customers want well-engineered products and services that offer a smooth and integral customer experience. They prefer a product like the Tata Ace (India’s largest-selling light commercial vehicle) to a jugaad -type vehicle knocked together in the field.

If anyone can innovate, as you argue, then why isn’t jugaad — at its best, brilliant, low-cost innovation — not a scalable, learnable model?

Other authors have recently given jugaad a “larger than life” meaning that is far removed from what we understand as jugaad in the Indian context. A lot of traditional jugaad is not scalable. In contrast, the most scalable and affordable innovations often come from the use of technology and principles of mass manufacture. I like to think of Henry Ford’s invention of the automotive assembly line as one of the most successful affordability-driving innovations in history. The automotive assembly line is very different from the jugaad -type innovations that are often talked about.

You have talked extensively about ‘systematic innovation’ in your book? Can you clarify the concept? How is systematic innovation different from a process of continuous improvement which many companies implement?

Innovation need not be an accidental process dependent on the Eureka moment of an inventive genius or pure serendipity. It is possible for organisations to make innovation a more regular and predictable process with higher odds of success. Our book outlines some of the approaches that can make this possible. These include creating a challenge book based on an understanding of pain, wave and waste; building broader participation in innovation in the organisation; low-cost, fast cycle experimentation to test and refine ideas; use of innovation sandboxes to make sure that innovation is focused and efficient; and using tools like pre-mortem and “doing the last experiment first” to manage the risks involved in the innovation process.

Continuous improvement is an important element of most successful companies, but is usually focused on very small, incremental improvements. Our approach to systematic innovation goes well beyond such incremental efficiency enhancements.

Why is there a resistance to innovation in Indian businesses? Why are so few of them innovative enterprises?

Before liberalisation, there was no incentive for firms to innovate, except to find ways to get around the labyrinth of regulations that constrained Indian business. After liberalisation, the first 15 years or so saw the release of pent-up demand for goods and services, and innovation was not critical for most businesses. Innovation is only now becoming an imperative for most Indian companies.

However, Indian companies have tended to be hierarchical with a culture of not questioning the status quo. These trends have been reinforced by the hierarchical nature of Indian society, a preference for brainwork over getting one hands dirty, and a low tolerance of failure. Indian companies now need to overcome these barriers and build an innovation culture. Our book suggests one approach to doing so.

Start-ups, by definition, are innovative organisations, since most start with an innovative idea? How does one keep innovation going after the first big idea?

Not all start-ups are innovative — many can be of the me-too variety or driven by necessity rather than a good idea. However, even innovative start-ups can get stuck if they don’t focus on sustaining an idea pipeline and taking ideas forward through a process of low-cost high-speed experimentation. Firms like RedBus, Strand Life Sciences, Husk Power Systems and Vaathsalya Hospitals have shown the importance of this approach.

Indian entrepreneurs face many environmental challenges — like red tape, lack of infrastructure, etc — which are not faced by their competitors abroad. Given the tough environment in which they operate, what can be done at a policy level to support and nourish innovation?

Well, one obvious way is to reduce, if not remove, many of the challenges you mention. Other important methods are to improve the availability of risk capital and make it easier for small companies to do low-cost, quick experimentation. We recently visited the Venture Center set up on the campus of the National Chemical Laboratory in Pune. It provides pay-by-use laboratory and testing facilities for start-up biotech firms that helps them try out their ideas quickly and at low cost. We need to set up such facilities for different industrial sectors across the country. We need more regional and sector specific incubators where movement of ideas through funding and championing is given focus.

Most companies — even many very small ones — spend at least a part of their revenue on research and development (R&D). In the case of large enterprises, such spends can be quite large. Yet, most such companies are not seen as innovators. What is the difference between R&D and innovation?

Innovation is much more than R&D. Successful innovation involves connecting ideas to the market. Finding the right business model, and making sure that the benefits of innovation accrue to the firm are crucial for the success of innovation. These go well beyond R&D.

Establishing a culture of innovation may have its payoff, but there are also costs involved. How does one measure and account for the costs accurately? How can companies budget for this?

While innovation certainly involves costs, it is worthwhile pausing to think about the costs of not innovating. Nokia is a good example. The company is reported to have developed technologies similar to the ones commercialised by Apple in the iPhone, but failed to put these into its products. From being the leader of the smartphone business, today it’s struggling to catch up with Apple and Samsung.

Measurement is a very important part of managing innovation. But, measurement should not be restricted to cost alone. Our book proposes a comprehensive set of metrics to enable a company to track how it is progressing in its innovation journey.

Some of the measures specific to cost relate to resources dedicated to innovation, laboratory set-up and maintenance and experimentation.

The Government has spent billions in establishing research labs and development centres, which have been largely characterised by failure or extraordinary delays, which have rendered the eventual ‘success’ irrelevant. How can one introduce a culture of innovation within a Government environment?

We believe that many of the approaches we have suggested can be applied in a Government context as well, as long as there is a strong strategic intent. We give examples from the Indian Railways, the life of A.P.J. Abdul Kalam, and even Tihar Jail to show how this is possible.

Finally, in the era of networks and social media, can innovation be crowd-sourced?

Crowd-sourcing offers new ways of enhancing the idea pipeline. And, open and collaborative platforms, like the Open Source Drug Discovery platform of CSIR, offer new ways of collaborative innovation across individuals and organisations. But, as companies like Procter & Gamble have shown, open innovation needs active management to be successful.

Technology has brought down the cost of running an open innovation challenge campaign. Team Indus participating in the Google Lunar X Prize challenge is demonstrating how even a complex idea such as robotic spacecraft can move forward fast in an Indian context.

raghavan.s@thehindu.co.in

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