Solving problems without spending money

THE term “frugal innovation” was coined by Navi Radjou and Jaideep Prabhu to give a powerful meaning to the cliché “doing more with less” or “doing better with less.” It’s a product of a four- year old research in 2012 that started with their book called “Jugaad Innovation.” “Jugaad” is a Hindi word for

- vised solution born from ingenuity and cleverness,” according to Radjou and Prabhu, a Silicon Valley- based innovation and leadership thinker and marketing professor at University of Cambridge, respectively.

The co-authors prescribe that “companies simultaneously maximize value for all stakeholders while minimizing the use of resources.” This means creating greater and balanced value for the customers, stockholders and the general public without the extravagant use of natural resources, capital and time among others.

They claim that “frugal innovation is not a management technique like Six Sigma and Total

which aim to reduce cost and waste,” but it looks like the concept is similar to Kaizen which requires continuous improvements using one’s intellectual capacity. There’s no need to spend money to solve problems.

It came from Taiichi Ohno’s famous words: “Use your brain, and not the company’s money.” This is how Toyota became known for its maxim “Good Thinking, Good Products” which is proof to millions of ideas being sent in by thousands of its employees every year from around the globe.

Kaizen is the opposite of another Japanese term ‘ Kairyo’, which means improvement that requires sizeable investment for research and development (R&D) so organizations could come out with a new product. Kairyo is often referred to as innovation in the western culture.

“Frugal innovation” is an oxymoron. For how can you innovate without spending money? Even if companies are super prudent, still, they must spend

wishful thinking of Radjou and Prabhu that companies must create inexpensive products like “$ 30 computers, $ 40 tablets, $800 electrocardiogram (EGC) machines and $6,000 cars.”

But, do we have a market for those low-priced products? Radjou and Prabhu are looking for the “underserved markets at the bottom of the pyramid.” Quoting C.K. Prahalad’s book “The Fortune at the Bottom of the Pyramid” (2004), the frugal innovation authors say that “lowincome people in developing economies such as India, Africa, and Brazil collectively represent a huge, untapped market.”

Even in developed economies, those in the bottom of the pyramid represent a $280 billion untapped market, according to a study of Accenture, a multinational management consulting company.

Now, let’s test the application of frugal innovation in the case of Apple. Today, Apple’s latest models — the iPhone XR, XS and

for the most expensive model, according to a report by CNBC.

If Apple would apply frugal innovation, would it come out with say, a $100 iPhone? Would they be willing to do it? This is the fear of Radjou and Prabhu – “companies view complexity as progress, and doing more with less as a step back.” The issue is

concerned that consumers will equate frugal solutions with poor quality.”

Also, companies “fear that frugal products will eat into their more expensive goods, and even destroy their more profitable product lines” and stockholders “will typically oppose lowermargin products even if sales

So, would Apple proceed with a $100 iPhone? The answer may be categorically negative.

Therefore, I’d rather stick to Kaizen that gave me many ideas on how to identify low-cost solutions even to complex problems. They may not meet the criteria of