Chapter Eight

Integrating Jugaad into Your Organization:

Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you've got.

—Peter Drucker

So far, we've shown the many ways in which practicing the six principles of jugaad innovation—seeking opportunity in adversity, doing more with less, thinking and acting flexibly, keeping it simple, including the margin, and following your heart—can help Western companies generate and sustain breakthrough growth in today's complex environment. But jugaad innovation is not a panacea to be applied to all innovation problems in all situations; despite its clear benefits, it also has some clear limitations. Indeed, jugaad isn't a substitute for the traditional, structured approaches to innovation most commonly used in Western companies; rather, jugaad is a useful complement to this approach.

In this chapter, we discuss the advantages and limitations of jugaad innovation and the contexts in which it is best applied. We describe how Western companies can combine the agile and resilient spirit of jugaad with more structured approaches to innovation, and how they can prioritize the jugaad principles they need to adopt most urgently.

When Does Jugaad Work Best?

The relevance—and ultimate success—of any new business tool, practice, or approach depends on the context in which it is applied. When adopting any new tool or approach, companies should apply it not indiscriminately in all circumstances but selectively, in situations where the tool or approach is most appropriate. Companies must demonstrate similar discernment when implementing jugaad innovation—applying it in specific contexts that best lend themselves to this approach. We have found that jugaad innovation delivers the most impressive results when it is practiced in complex and volatile environments with the following characteristics:

• Rapid changes. Jugaad has particular potency in highly volatile settings where product lifecycles are shorter, demographic patterns are shifting, competition can come from anywhere, or governments are constantly changing policy and unleashing new regulations. For instance, the fast-paced consumer electronics industry, with its short product life spans, requires flexible thinking and rapid-fire action, which jugaad innovation can handily deliver.
• Widespread resource scarcity. Jugaad is most relevant to companies, sectors, or countries where capital is limited and access to natural resources is constrained. For example, the resource-hungry food and beverage industry as well as the automotive sector—confronted with scarcity of water and oil—need jugaad innovation to revamp their supply chains so they can do more with less.
• Frugal and diverse customers. Jugaad can be most powerful in markets where cost-conscious customers are seeking affordable products and want them to be tailored to their particular needs. For instance, the consumer products and health care sectors need jugaad innovation to discover ways to include marginal segments and build empathetic and personalized relationships with their diverse customers.
• Industry immaturity. Jugaad is important in sectors that are still nascent and where market mechanisms and industry standards aren't established. For example, in sunrise sectors like clean tech and biotech—which are highly unpredictable—jugaad innovation can help companies seek opportunity in adversity, turning it to their advantage.
• Exploding interconnectivity. Jugaad has relevance in industries that are undergoing a technology revolution and where free social media tools and ubiquitous cellphones are making communication cheaper and collaboration easier. Banks, for instance, can apply jugaad innovation to devise inclusive business models that leverage mobile technologies to cost-effectively serve marginal segments such as the sixty million unbanked or underbanked Americans.

These extreme conditions typically have been more prevalent in emerging markets like India, China, and Brazil than in the United States or Europe. As we discussed in previous chapters, however, Western economies have also begun to exhibit many of these aspects of scarcity, diversity, unpredictability, and interconnectivity. Given these developments, jugaad may be just what the doctor ordered for Western companies too: a pill that can boost their immune system, ward off complexity, and help them innovate and grow. But how should companies with an established, structured approach to innovation go about dealing with jugaad? Should they abandon the structured approach altogether? Or should they integrate it with the jugaad approach? If they choose to do the latter, how should they integrate the two approaches?

The Hammer Versus the Screwdriver

Despite the limits of the structured approach to innovation—particularly in complex, unpredictable contexts—companies shouldn't abandon these traditional structures and processes as they still hold value in certain conditions. Rather, companies with structured approaches to innovation—built around big budgets, large R&D teams, and standardized and linear product development processes—should expand their innovation toolkit with jugaad. As the global environment gets ever more complex, companies will need more than a single tool to deal with complexity. Instead of always using a hammer to deal with problems, they might find it useful to use a screwdriver too from time to time. If the structured approach to innovation is the hammer, then jugaad could well be the screwdriver.

The key issue for companies, therefore, is to know when to use the hammer and when the screwdriver. For that, they need to understand the capabilities and benefits of both tools and how they complement each other.

The traditional structured innovation approach brings three major benefits:

The jugaad approach extends these benefits by bringing additional value in the following ways:

To summarize: jugaad is like a booster, extending a company's ability to cope with volatility and do more with less in highly constrained settings. Ultimately, in order to simultaneously deal with low-volatility, resource-rich settings as well as high-volatility, resource-constrained settings, companies need to have both sets of capabilities: the volume-oriented economies of scale, hard capital, and efficiency of the structured approach to innovation, as well as the value-oriented economies of scope, soft capital, and flexibility of jugaad.

The challenge for companies is to know when to apply which approach—that is, when to use the hammer and when the screwdriver. This in turn requires leaders to create an organizational context in which both approaches can exist in harmony without one being favored over the other at all times. Tim Leberecht, chief marketing officer of frog, observes, “Companies need to give themselves the freedom to swing to both extremes—that is, from highly structured innovation to free-flowing jugaad—rather than settling in the middle trying to achieve an elusive ‘balance.’ ”¹

Such organizational flexibility can be visualized metaphorically as a pendulum whose dynamic movement enables companies to explore a wide range of options to meet the innovation requirements of the rapidly evolving marketplace. For leaders, this means they need to cultivate the wisdom to know when to be like Miles Davis and improvise innovation and when to be like Leonard Bernstein and orchestrate it.

Managing the creative tension between jugaad innovation and a structured approach can prove disruptive. Bringing in the new approach can conflict with companies' existing organizational structures and practices such as resource-intensive R&D models, time-consuming product development processes, mass-marketing techniques, and hierarchical management structures. Yet this creative tension between the “yin” (structured) and “yang” (unstructured) aspects of innovation is healthy and worth nurturing: it can even yield tremendous benefits for organizations. In an increasingly complex world, managing polarities—that is, extremes—is rapidly becoming a core competence for Western leaders. And there is no better way to develop it than by integrating jugaad into their organizations and learning how to balance and integrate multiple—and conflicting—approaches to innovation.

How GE Successfully Integrates Jugaad and Six Sigma

GE, a large conglomerate that heavily relies on structured approaches like Six Sigma, has managed to integrate the jugaad approach into its existing organization and, in the process, learned to swing with this “innovation pendulum.” There is a strategic reason behind this. The $150 billion industrial goliath that employs three hundred thousand people worldwide is striving hard to become agile and resilient in the face of growing complexity. The company is doing so by shifting its business model from that of an R&D driven company to that of a customer-focused organization.

GE's radical transformation is driven by CEO Jeffrey Immelt. Unlike his predecessors—such as the legendary Jack Welch—who had an operations or engineering background, Immelt's background is in sales and marketing, the first CEO with such a background in GE's 120-year history. Because he has spent most of his career interacting with customers, Immelt understands intuitively the importance of being customer-focused, agile, and responsive. In particular, through extensive interaction with customers, Immelt gained the following important insight: GE's customers no longer value just how well GE engineers its products, but also how well GE serves them throughout the product lifecycle. Plus they expect GE to deliver these quality products and services faster and cheaper.

For GE, this means that the ability to sense and respond swiftly to customers' requirements is as critical to success as engineering prowess is—if not more so. Recognizing that this new market reality calls for higher speed, agility, and cost-efficiency, Immelt is encouraging every GE employee to innovate and think differently by adopting the frugal and democratic principles of jugaad. And, as we'll now describe, this push is working.

GE Healthcare, one of GE's units, is a clear example of the massive cultural transformation GE is undergoing—and the resulting benefits. GE Healthcare operates in the West and in emerging markets, in an industry that is extremely complex, supercompetitive, highly regulated, and undergoing a great deal of change. Despite these challenges, GE Healthcare is managing to innovate by successfully practicing the six principles of jugaad to compete and win in a complex world of adversity, scarcity and unpredictability.

GE Seeks Opportunities in Adversity

The PET/CT scanners produced by GE Healthcare (hereafter simply “GE”) are high-end devices used for cancer diagnosis and treatment. The devices themselves are expensive. They also require a cyclotron—which is as costly as a PET/CT scanner—to generate a radioisotope called fludeoxyglucose (FDG) that is injected into patients to help produce the diagnostic images that can precisely locate the disease. In India, large hospitals have traditionally imported FDG for use with their PET/CT equipment. But this process is expensive and time-consuming—and quite beyond the reach of small-town and rural hospitals. Seeing an opportunity in these adverse circumstances, GE worked with private diagnostic centers and local airlines to domestically produce FDG and deliver it within hours to small-town hospitals around the country.² This just-in-time supply chain for FDG delivery is now fully operational and is being scaled up. In addition, GE has connected with Nueclear Healthcare, an Indian company, to set up a network of 120 advanced molecular imaging centers all across India by 2015. These types of affordable and accessible solutions for early cancer detection are of huge value to India, where cancer is one of the leading causes of death and the incidence of the disease is growing alarmingly fast. The number of cancer patients in India, currently about 2.5 million, is expected to increase five-fold by 2025.³

Despite the challenges of working in a country like India, where logistics can be highly unreliable, GE has succeeded in making high-quality cancer diagnosis and treatment available to even low-income communities across the country. Terri Bresenham, president and CEO of GE Healthcare India, says: “Our studies and pilot programs helped us imagine and innovate solutions that are appropriate and affordable. However our ‘jugaad’ innovations are not limited to technologies. We also focus on parallel needs in healthcare delivery; the scarcity of affordable capital, digitization for networking urban centers of excellence with tier-II and tier-III towns, and key partnerships with local suppliers, medical colleges, and state governments.”⁴

GE does more with less

GE recognized that its bulky and expensive electrocardiogram (ECG) devices were unaffordable for physicians in emerging markets like India, China, and Africa. The company also realized that these devices were impractical in these markets, as doctors could not carry them on their motorbikes or bicycles when visiting patients in far-flung villages. Plus, villages often didn't have electricity to power these ECG devices. Recognizing the problem and aware of the need for this device in rural areas, GE's researchers in India invented in 2008 the MAC 400—a portable electrocardiogram that costs one-tenth and weighs one-fifth of its current equivalent in Western markets. The compact MAC 400—priced at $1,000—boasts a super-long battery life and uses several off-the-shelf components. Its rugged printer, for instance, is an adapted version of the portable ticket machine used in Indian bus kiosks. As a result, MAC 400 is easy to use and maintain in dusty rural environments and delivers more value at a lower cost.⁵

After successfully deploying MAC 400 in emerging markets such as India and China, GE rolled out this FDA-approved device in the United States for applications such as emergency roadside assistance.⁶ After introducing MAC 400 in 2008, GE outdid itself in 2010 by launching the MAC i, an ECG device that is lighter than MAC 400 and is priced at around $500—potentially bringing the cost of ECG tests down to just $0.20 each.⁷

GE Thinks and Acts Flexibly

GE's recession-weary clients are reluctant to pay millions of dollars up front for big-ticket items like power turbines, aircraft engines, and medical equipment. This reality has forced GE to think flexibly. Accordingly, the company has transformed its business model from that of a product supplier to that of a total solutions provider, offering clients more financing options in the process. In particular, rather than selling its products outright, GE also now rents them out, using a “pay as you go” pricing model. Alternatively, the company works with partners to operate and maintain products for a fee under a performance-based service contract. For instance, in India, GE has implemented a flexible pricing model known as “pay-per-scan” that enables frugal medical diagnostic centers to rent GE's diagnosis equipment like CT scanners—instead of buying them at a high price—and to pay a variable fee depending on the total number of scans conducted each year.⁸

GE is also demonstrating its flexible thinking by revamping its relationship with government bodies. While many Western companies complain about escalating government regulations—and thus view the government as a barrier to increasing business performance—GE is forging win-win public-private partnerships (PPPs) with governments worldwide. For instance, in India, GE has partnered with state and local governments and specialized service providers that operate diagnostic imaging facilities equipped with GE's equipment at public hospitals—especially in rural areas. Such a win-win PPP model has helped increase the efficiency of state-run hospitals, which are spared the need to invest in expensive equipment or scramble to recruit qualified technicians—yet can provide affordable, high-quality care for rural patients.⁹

GE is not only empowering its executives to think flexibly but also enabling them to act flexibly. Indeed, GE has started redesigning its rigid, top-heavy organizational structure to allow for jugaad innovators in its regional units to sense and respond to local opportunities faster. In particular, the heads of GE operations in emerging markets are being given latitude to make strategic decisions without seeking approval or resources from headquarters.¹⁰ Now these regional leaders can quickly fund and execute promising jugaad ideas, such as the just-in-time delivery of FDG to hospitals and clinics equipped with PET/CT scanners.

GE Keeps It Simple

Having traditionally overengineered products, GE's R&D teams are now learning the virtues of simplicity. GE's top engineers found that physicians in rural areas of emerging markets like India, who use only a thermometer and stethoscope, had no use for their bulky, hard-to-use ultrasound machines. Yet these physicians were not technology averse—they all carried cellphones. With this information, GE's engineers had a jugaad idea: what if they could design an ultrasound machine as compact and simple to use as a cellphone? The result was Vscan, a portable ultrasound device that weighs merely one pound, is as small as a smartphone, and has a user interface as simple as an iPod's. Vscan has been a huge success in both developed countries and emerging markets. Immelt believes this simple but powerful device will one day become as indispensable to physicians as the thermometer and stethoscope. Indeed, a study conducted by Scripps Health validated Vscan's ability to accurate diagnose structural heart conditions. The study called Vscan the greatest invention since the two-hundred-year-old stethoscope (which was invented in 1816), because Vscan allows the physician to “see” a patient's heart, leading to more accurate diagnoses. Dr. Eric J. Topol, chief academic officer at Scripps Health and principal investigator on the study, explains: “Approximately twenty million echocardiograms are conducted in the United States every year, each costing $1,500 or more and requiring a return appointment for a hospital or clinic echo laboratory for an extended session of about forty-five minutes. A pocket echocardiogram [like the Vscan] could significantly reduce costs and improve the quality of the patient experience.”¹¹

GE Includes the Margin

In 2009, GE launched Healthymagination—a strategic initiative overseen by Immelt that aims to make high-quality health care affordable and accessible to more people, especially underserved communities around the world, including in the United States. As part of Healthymagination, GE has, for instance, partnered with P&G, Johnson & Johnson, Anthem, and UnitedHealthcare to pilot a government-funded community program in Cincinnati that aims to improve health delivery while reducing costs. Cincinnati's health statistics are alarming: over 12 percent of the population lacks health insurance, and the mortality rate is higher than the national average—causing health care spending to increase at 8 percent annually. The Beacon Community program will set up an electronically connected, citywide health care system called HealthBridge that aims to reduce the cost of care and improve quality and efficiency metrics targeted at diabetes, primary care, childhood asthma, and congestive heart failure. If this grassroots model in Cincinnati is successful, GE intends to apply it to other communities across the United States—thus making health care accessible to marginal segments. As part of the Healthymagination initiative, GE is making its low-cost, easy-to-use devices like the MAC 400 and Vscan more widely available to less-specialized community health workers—such as those in rural areas of the United States.¹²

GE Follows Its Heart

GE has traditionally served business customers such as airlines, hospitals, factories, and governments. But given his commercial background, Jeff Immelt recognized the importance of developing empathy for end users—those whom its business clients serve. To that end, Immelt has tasked Beth Comstock, GE's chief marketing officer, with increasing GE's emotional quotient by engaging these end users in a meaningful dialogue. Comstock is now connecting GE's left-brain R&D engineers more closely with end users through an empathy-building initiative called “market back”—that is, first identify end users' needs, and then co-create new solutions, in partnership with business customers and partners. These market back solutions are designed from the ground up in local markets rather than being pushed down by senior executives in headquarters, so they fit specific local contexts better. They are quickly rolled out and tested using immediate customer feedback. For instance, GE's R&D engineers are immersing themselves in village clinics in India and Bangladesh to develop empathy for rural patients and understand how to come up with health care solutions that are affordable and accessible for low-income communities worldwide. Comstock notes: “Global perception and expectation of innovation is changing and businesses would be short-sighted not to change with it. And that means looking at innovation in both the science lab and the ‘real world’ lab. From the top down to the masses up. And from pure profit to profit with a purpose. Companies that embrace this new model for innovation today will be better positioned for growth tomorrow.”¹³

By internalizing the six principles of jugaad, GE is developing the flexible and inclusive mindset needed to improvise empathetic solutions that are affordable and sustainable for a larger number of people. But where does Six Sigma fit into all this? Six Sigma enhances—and helps magnify—the value of GE's jugaad inventions. In particular, GE leverages structured Six Sigma processes, first to improve the quality of its jugaad inventions so they meet international standards (in the same way it obtained FDA approval for its MAC 400 and Vscan devices), and then to rapidly scale up these jugaad inventions—taking advantage of GE's impressive global manufacturing and distribution capabilities—so they can be made available to a larger number of customers worldwide, thus accelerating the market adoption of jugaad inventions.

In sum, GE is a successful example of how a Western company, by embracing jugaad, can think flexibly, act nimbly, and harness the ingenuity of its vast base of employees, customers, and partners to drive breakthrough innovation and growth. More important, GE has shown how to mesh the bottom-up, unstructured approach of jugaad innovation with a more traditional, structured approach to innovation in the context of an advanced global organization.

But GE is not alone in achieving this synergistic blend. Hundreds of organizations are effectively integrating jugaad into their organizations—enabling them to innovate faster, better, and cheaper. And so too can you and your company. But to make the most of jugaad, you need to prioritize your efforts to adopt this new frugal and flexible approach to innovation.

Getting Started with Jugaad

Jugaad can disrupt business as usual—for the better. As with any disruptive change, however, companies can adopt jugaad in one of two ways: in one fell swoop or in small chunks. Large corporations led by visionary leaders, such as 3M, GE, PepsiCo, and Procter & Gamble have the resources and the willpower to reinvent the entire organization around the six jugaad principles. But the majority of Western companies—and their leaders—may be intimidated by the thought of such a wholesale adoption. For those companies and their executives we offer two suggestions:

In our companion website (JugaadInnovation.com) we showcase additional tools that can help you prioritize how you implement jugaad and guide you in how to do so effectively.

Prioritizing and adapting the six principles most relevant to your business will help you build buy-in for jugaad across the organization and successfully integrate its most relevant principles into your enterprise—enabling you to use jugaad as a powerful tool to accelerate innovation and growth. The most critical factor, however—one that can make or break the successful adoption of jugaad in an organization—is leadership. Without strong commitment and backing from senior leaders, starting with the CEO, a potent yet disruptive approach like jugaad will fail to take hold in organizations accustomed to the structured approach to innovation.

Driving Jugaad Adoption: The CEO's Agenda

Ultimately, jugaad won't take hold in a corporation without active support from the very top. Growth-seeking CEOs have a key role to play in driving the adoption of jugaad across their enterprise. Based on our knowledge of many companies' experiences, we've created a list of dos and don'ts for CEOs seeking to integrate jugaad into their organizations.

Don't Try to Implement Jugaad in a Systematic, Top-Down Fashion

In these recessionary times, CEOs may view jugaad as a silver bullet for driving innovation-led growth. They may be very tempted to adopt—and even impose—jugaad as a new “best practice” that can quickly be implemented in a top-down fashion. Yet such an attempt is more likely than not to fail. You don't roll out jugaad across your organization the same way you roll out a Six Sigma process or an enterprise software tool. Jugaad is neither a process nor a tool nor a scientific method that can be deployed in a top-down way. In spirit and practice, jugaad is closer to a fluid art and culture than a rigorous science. More important, an organization doesn't practice jugaad; rather, the individuals in that organization do so. CEOs need to exercise restraint, enabling the ingenuity that lies dormant in each one of his or her employees to emerge on its own and flourish from the bottom up.

Do Celebrate Your Existing Jugaad Innovators

Rather than trying to institutionalize jugaad, CEOs should seek instead to identify—and celebrate—those maverick employees who already think and act like jugaad innovators. These mavericks are the “outliers” who defy corporate policies and guidelines to come up with groundbreaking inventions. By publicly celebrating their achievements, CEOs can send a signal to other employees that it's OK to think and act flexibly or do more with less or include the margin. But CEOs should also acknowledge—and even celebrate—the failures of jugaad innovators—to also send the signal that failure in the pursuit of innovation is fine. For instance, Google's ethos celebrates both success and failure. Google's executive chairman Eric Schmidt explains that his company is a risk-tolerant organization where “it's absolutely OK to try something that's very hard, have it not be successful, and take the learning from that.”¹⁴

Do Persuade Skeptical Employees by Creating a Sense of Urgency

CEOs may find it difficult to convince some employees in the United States or Europe to embrace jugaad innovation. These employees may lack the appropriate context to properly appreciate these principles and their relevance in today's complex world. For instance, R&D teams in the West, accustomed to abundant resources and devoted to pushing the technology frontier for its own sake, may find it hard to relate to the jugaad principles of do more with less and keep it simple. Here is some anecdotal evidence to that effect: after attending our workshop on jugaad, a senior executive at a Fortune 500 company pointed to the hundreds of cars in his company's vast parking lot and said, “Look: all I see is abundance, not scarcity. Why should I bother doing more with less?”

Nevertheless, engineers and scientists love challenges. And CEOs can appeal to this competitive spirit by setting R&D teams challenges that are both socioeconomic and technological. These challenges will foster a sense of urgency by creating artificial constraints that favor the emergence of jugaad ideas and “good enough” solutions. For instance, inspired by Ratan Tata (who came up with the idea for a $2,000 car), Renault-Nissan's CEO Carlos Ghosn, who famously coined the term “frugal engineering” in 2006, is challenging his French and Japanese engineers to match and even exceed the cost, performance, and speed of his Indian engineers. In one instance, Mr. Ghosn asked three different R&D teams—one each from France, Japan, and India—to come up with an engineering solution for the same technical problem. The teams came up with solutions of equal quality—yet the Indian engineers' solution cost only one-fifth of what the French and Japanese engineers' solutions cost.¹⁵ Jean-Philippe Salar, a Frenchman who heads Renault's Design Studio in Mumbai, notes that Renault's R&D and marketing leaders in headquarters are learning to appreciate the flexible and frugal mindset of Indian engineers—who think and act like jugaad innovators do.¹⁶ Indeed, as frugal engineering becomes key to competing and winning in the recessionary economies of the West, Renault's executives want to embrace the principles of jugaad in France.

Don't Patent Jugaad Inventions—Monetize Them

As the jugaad culture blossoms in companies, it is bound to unleash a torrent of inventions—conceived by thousands of ingenious employees. Rather than trying to patent them all—which will only cost time and money—companies should focus on monetizing the most promising ideas by commercializing them at speed. In this area, Asian companies are ahead of Western companies in their perception of and approach to intellectual property (IP)—as exemplified by Neusoft, China's largest IT solution and service provider. Dr. Liu Jiren, chairman and CEO of Neusoft, explains: “When we introduced our first software in China, it was immediately copied by other Chinese rivals. That's when we realized that even if I had patented an idea, someone else could have come up with a better idea. So we shifted our focus from patenting a single big idea to generating a multitude of ideas and then executing on our ideas as fast as possible. The faster we can monetize our ideas, the better positioned we will be vis-à-vis our competition.”¹⁷ Compare Dr. Liu's attitude with the practices more typical of technology companies in Silicon Valley, who tend to place greater emphasis on patenting a single big idea and desperately trying to defend it against competitors—an obsession that often leads to unending lawsuits and counter lawsuits for patent infringement. Jugaad isn't about who has the best ideas, but who is the best at executing ideas.

Do Use “Innovation Brokers” to Cross-Pollinate and Synergize Jugaad Ideas

Although “letting a hundred jugaad ideas bloom” is a great way to harness the ingenuity of all employees, there's a danger that companies may miss out on bigger opportunities that could emerge by recombining and integrating multiple ideas in a synergistic solution. To avoid forming “islands of creativity,” CEOs need to create an “innovation brokering” function tasked with cross-pollinating and cross-fertilizing jugaad ideas across teams.

For instance, after dabbling in Six Sigma and finding that it stifled innovation, 3M swiftly returned to a more jugaad approach to innovation (see Chapter Two). Now Chief Technology Officer Fred J. Palensky oversees the cross-fertilization of jugaad ideas produced by fiercely independent inventors across the company as a whole. According to Palensky, 3M allows all technical members in its R&D group to invest 15 percent of their time and efforts in programs, interactions, teaching, and learning in areas totally outside their core activities. To enable collaboration and cross-pollination of ideas across business units, 3M has launched more than three hundred joint innovation programs that span multiple divisions. Palensky points out: “All of this creates a community of collaboration and ensures that everybody has some skin in the innovation game. And because our senior leaders have grown up in this culture, they continue to nurture and protect this highly collaborative, enterprising environment.”¹⁸

Do Apply Jugaad to Formulate Robust Strategies

When John F. Kennedy gave voice to the bold vision of putting a man on the moon, he refrained from formulating the precise means by which to achieve that vision. Instead, he allowed the means to emerge organically through the creative input and interplay of the scientific community. Similarly, CEOs must paint a bold vision for their company's future and then trust that employees will tap into the jugaad spirit to come up with the appropriate strategy for realizing this vision. For instance, although Best Buy's vision of expanding globally was driven by top management, the precise means to execute this vision were developed by passionate employees eager to take Best Buy into foreign markets.

Do Use Web 2.0 Collaboration Tools to Harness Customer and Partner Creativity

CEOs should extend the adoption of jugaad beyond the limits of their organization and seek out bright ideas from jugaad innovators in their customer and partner communities as well. To do so, they should invest in social media technologies to engage customers and partners in a dialogue on key issues of relevance to the company. Such grassroots collaboration can help identify challenging problems and generate counterintuitive solutions.

For instance, IBM regularly conducts “jamming” sessions involving hundreds of customers and partners. These sessions help identify major socioeconomic problems, like global warming and the health care crisis, as well as promising ideas that can be developed to tackle these problems. Similarly, design houses such as frog and IDEO are now practicing crowdsourcing: using social medial tools, they are inviting jugaad innovators in cyberspace to put their brains together to solve vexing problems that afflict corporations and societies alike, worldwide.¹⁹ These issues range from the mundane exploration of “how to make a user-friendly fridge” to more serious stuff like how to increase the number of registered bone marrow donors to help save more lives.

Bold, creative leadership is vital for the successful adoption—and integration—of jugaad in an organization. Rather than imposing jugaad as the best practice du jour, CEOs should strive to facilitate the adoption of jugaad as a grassroots movement that evolves organically and voluntarily. In doing so, CEOs will increase the stickiness of jugaad in the organization so it can deliver sustainable value to the company.²⁰

Conclusion

Hundreds of corporations, such as GE and PepsiCo, are adopting jugaad practices and integrating them into their existing innovation approaches. But we believe that jugaad isn't applicable only to corporations; it also has relevance to non-governmental organizations (NGOs), governments, and society at large. Indeed, entire nations, especially the developed economies of the West, stand to gain from adopting a jugaad approach to innovation. The good news is that a growing number of grassroots entrepreneurs in the West—especially ordinary citizens and Generation Y—have already begun to apply jugaad to address major issues related to areas such as health care, energy, and education. As a result, a whole jugaad ecosystem is emerging in the United States and Europe, with the backing of forward-thinking government agencies and academic institutions.

In the next chapter we describe how corporations can actively support—and benefit from—the groundswell innovation movement unfolding across Western societies, a movement that is emblematic of a return to their jugaad roots and their rebirth as jugaad nations.