Some of you might have already read this article in Business Week. "Jugaad" for
most of us its a work around commonly used as a local language slang. Maybe
there is more to it than it sounds .... see article below.
Innovation December 2, 2009, 3:51PM EST text size: TT
India's Next Global Export: Innovation
Called jugaad, India's improvisational style of invention focuses on being fast
and cheap—attributes just right for these times
By Reena Jana
On a November afternoon, a dozen executives from companies including investment
banks Rothschild and Goldman Sachs (GS) and tech research firm Gartner (IT)
ringed a conference table in a brownstone on New York's Upper East Side. They
were there to learn how U.S. businesses could develop products more cheaply and
quickly by borrowing strategies from India. Speaker Navi Radjou, who heads the
recently formed Centre for India & Global Business at England's Cambridge
University, summed up his advice in one word: jugaad.
A Hindi slang word, jugaad (pronounced "joo-gaardh") translates to an
improvisational style of innovation that's driven by scarce resources and
attention to a customer's immediate needs, not their lifestyle wants. It
captures how Tata Group, Infosys Technologies (INFY), and other Indian
corporations have gained international stature. The term seems likely to enter
the lexicon of management consultants, mingling with Six Sigma, total quality,
lean, and kaizen, the Japanese term for continuous improvement.
Like previous management concepts, Indian-style innovation could be a fad.
Moreover, because jugaad essentially means inexpensive invention on the fly, it
can imply cutting corners, disregarding safety, or providing shoddy service.
"Jugaad means 'Somehow, get it done,' even if it involves corruption," cautions
M.S. Krishnan, a Ross business school professor. "Companies have to be careful.
They have to pursue jugaad with regulations and ethics in mind."
More than a Fad?
The rise of jugaad raises another question: Do companies really need to pay
someone to tell them something that's as elementary as keep it simple? "Having
a consulting industry built around jugaad is almost anathema to the word
itself," says Robert C. Wolcott, executive director of Northwestern
University's Kellogg Innovation Network. "I'm not sure how this is different
from old-fashioned Yankee ingenuity."
Nonetheless, jugaad seems aligned with the times. Recession-slammed
corporations no longer have money to burn on research and development.
Likewise, U.S. consumers are trading down to good-enough products and services.
Meantime, the Indian economy continues to plow ahead despite the global
recession—it grew at a 7.9% clip in the third quarter—suggesting its executives
have a winning strategy.
Already, companies as varied as Best Buy (BBY), Cisco Systems (CSCO) , and
Oracle (ORCL) are employing jugaad as they create products and services that
are more economical both for supplier and consumer. "In today's challenging
times, American companies are forced to learn to operate with Plan Bs," notes
Radjou. "But Indian engineers have long known how to invent with a whole
alphabet soup of options that work, are cheap, and can be rolled out instantly.
That is jugaad."
Spreading the Word
At the same time, a cottage industry has popped up to offer jugaad instruction.
Prasad Kaipa, a former manager at Apple's (AAPL) in-house training university,
uses jugaad in the courses he's teaching at Hyderabad's Indian School of
Business. The University of Michigan's Ross School of Business, where
high-profile Indian-born professor C.K. Prahalad teaches, has opened a research
office near Infosys' headquarters in India so faculty members can observe how
Indian software companies come up with ideas. McKinsey consultants have begun
talking up jugaad principles with clients, too.
Jugaad has been a colloquialism for decades throughout India. Sandeep Vij,
vice-president and general manager of Cisco Systems in Bangalore who heads a
new unit that makes energy-monitoring systems, says a good example is an Indian
villager who constructs a vehicle to transport goats and cattle by turning an
irrigation hand pump into a makeshift diesel engine for a wooden cart.
Its application also can be seen in Tata Motors' (TTM) much-hyped Nano, a
bare-bones subcompact car that the Indian company sells for the equivalent of
$2,500 to so-called bottom-of-the-pyramid consumers who had been priced out of
the auto market. "At Tata Group, we're used to thinking like this," says Ananth
Krishnan, chief technology officer of Tata Consultancy Services. "The jugaad
mindset is crucial. It's not just jargon."
Putting Jugaad into Practice
U.S. companies are starting to put jugaad into practice. At Best Buy's
headquarters, in Richfield, Minn., Kalendu Patel, the retailer's executive
vice-president for emerging business, is holding jugaad workshops to help store
personnel and managers come up with new products or services that could be
added easily and inexpensively to generate more sales per store. Among the
ideas: home health-care equipment.
Top executives at Cisco, which opened what the San Jose (Calif.) company calls
a second global headquarters in Bangalore in 2007, are importing the Indian
mindset as they meld teams of U.S. engineers with Indian supervisors. "The
innovation agenda in India is affordability and scale," says Wim Elfrink,
Cisco's chief globalization officer, who moved from San Jose to Bangalore in
2007. "People are masters of managing costs down, but not creativity. If Indian
engineers find out an executive has an MBA, they will say, 'Unlearn, and
observe.' "
The effort is beginning to show up in the marketplace. Last January, Cisco
acquired Richards-Zeta Building Intelligence, a 21-year-old company whose
software measures a building's energy usage through wall sensors and displays
it via the Web. Although Richards-Zeta still is headquartered in Goleta,
Calif., it has been managed from Bangalore, where Cisco's emerging technologies
group researches real estate and energy-related software.
The Bangalore staff approaches its work with a different set of assumptions
than Americans typically do: that power supplies are unreliable and that demand
is surging as urban populations expand. Sensing a broader market for the
Richards-Zeta technology, the Indian-led teams have, in just a few months, come
up with products such as software that allows companies to monitor energy
consumption across all buildings on a campus or even internationally. Clients
include Google (GOOG), which is using the program at its Mountain View (Calif.)
headquarters, and data-storage company NetApp (NTAP), which uses it at all its
properties, from Sunnyvale, Calif., to Amsterdam.
Other jugaad proponents such as Kaipa of the Indian School of Business say
companies are adopting India-style innovation without even knowing it. The
ex-Apple researcher points out that the iPhone maker is a champ at repurposing
existing ideas and technologies in simple ways which enables it to reduce R&D
outlays and produce high-margin products. "Jugaad is an Indian philosophy, but
it's not unique to India," Kaipa says. "Companies in all parts of the world can
learn from it and make it work for them, too."
Jana is the Innovation Dept. editor for BusinessWeek.
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