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Frugal Innovation: Doing More with Less

| Posted by Ben Linders Follow 13 Followers on Dec 20, 2017. Estimated reading time: 11 minutes |

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Key Takeaways

  • In the developing world, large and small firms see the bottom of the pyramid as a market opportunity and have begun to design frugal, market-based solutions to meet the unmet needs of billions.
  • In the developed world, ubiquitous tools and technologies such as smart phones, cloud computing, 3D printers, crowdfunding, and social media, are empowering more and more people to do with limited resources what only large firms could do in the past.
  • The phenomenon of frugal innovation—the creation of faster, better and cheaper solutions that employ minimal resources—is now a global phenomenon driving inclusive and sustainable growth across nations.
  • Large firms need to learn how to do more with less, become more agile and inclusive in their approach to innovation.
  • Small firms need to learn how to scale and partner with large firms to do so.

Frugal innovation provides ways to do more and better with less. It helps us to solve problems with limited resources in a sustainable way and to address inequality and empower billions of people at the bottom of the pyramid. Agile and frugal support each other; both aim to solve the problem at hand and nothing more, getting products into the hands of the users early to learn from that use to evolve products.

InfoQ spoke with Betty Enyonam Kumahor, managing partner of The Cobalt Partners, co-founder of Ghana Women in IT and board member of TechinBraam, Jaideep Prabhu, Nehru Professor of Indian Business at Judge Business School and co-author of Frugal Innovation, and Michael Boyle, curator of www.frugalinnovation.io

InfoQ: What is frugal innovation?

Betty Enyonam Kumahor: Frugal innovation is about solving problems with much less, and for much less. It requires a special creativity in a constrained environment to develop solutions that not only work for the context for which they are intended, but also scale.

Jaideep Prabhu: Frugal innovation is about doing more (and better) with less for more people. It is about generating greater value for consumers, society and shareholders while reducing the resources used. It is about innovating faster, better and cheaper.

Michael Boyle: On a grand scale, it’s about how we manage scarcity and waste. Now, I know this is a pretty large tent, but all those areas that I have found which deal with frugal innovation have something to do with one of the areas, or both. Within this domain, one can find the sharing economy or freeconomy, circular economy and circular design (getting past the product in, trash out - PITO - model we have had since the Industrial Revolution), upscaling (turning something wasteful into something productive), the inclusive economy (highlighted by CK Prahalad’s book The Fortune at the Bottom of the Pyramid), and lastly reverse engineering (importing innovation from ‘developing’ nations to fulfill the needs of underserved segments in ‘developed’ countries).

InfoQ: What makes frugal innovation so important?

Prabhu: Over 3 billion people around the world (about half the world’s population) earn less than 9 USD a day, adjusted for purchasing power parity (PPP), and live outside the formal economy. These people face unmet basic needs in areas such as financial services, energy, healthcare and education. In order to meet the needs of these large numbers of people without breaking the bank or bankrupting the planet, we need to find new ways to do more and better with less. Meanwhile in the developed world, declining real incomes and government spending, accompanied by greater concerns about the environment, are making consumers both value and values conscious. Further, more and more people in the West are now empowered to do with limited resources what only large firms could do in the past. Ubiquitous tools and technologies such as smart phones, cloud computing, 3D printers, crowdfunding, and social media, have given rise to grassroots innovation and entrepreneurship exemplified by the maker movement and the sharing economy. Thus, frugal innovation is increasingly important in the West too, as a way to solve problems of need, but also to address inequality and unemployment in environmentally sustainable ways.

Boyle: Constraints force once to be innovative. Abundance does not. This might sound utopian, but I believe those elements identified as being part of frugal innovation allow us to properly address those unsolvable problems that society is confronted with; be it sustenance, our dealings with natural resources, or our approach towards ecology.

Enyo Kumahor: The Fourth Industrial Revolution is upon us and the rate of technology evolution is faster than it has ever been, meaning that unless we learn how to create and evolve innovation solutions to the world’s biggest challenges that input the 3 billion people at the bottom of the pyramid, the digital divide will grow … exponentially. Frugal innovation is at the heart of closing that digital divide gap. Without it we stand the chance of leaving half the world’s population in the new “dark ages”, and losing on the amazing technological collateral we could farm from the current constrained environments that are ripe for frugal innovation.

InfoQ: How can frugal innovation be applied in software development?

Boyle: I think the idea of developing software that includes what people need, and nothing more, is inherently frugal. We see the necessity of open hardware (the ability to repair, recycle and remanufacture without hindrance) and use of sensors (continuous feedback from the product user to the producer in order to gauge product efficiency) within circular design having everything to do with software development. When managed properly, the producer can measure the usability of a product after it has been delivered, which changes the way we look at elicitation; how far such actions transpire, the value after deployment, and the overall value of information for both the producer and consumer.

Enyo Kumahor: Frugal innovation is at its core a mindset and hence can be, and should be, applied to each stage and various practices in the SDLC. In my firm, The Cobalt Partners, we work primarily in Africa, with clients who are often doing work where their customers earn and live on less than $1 a day, or where our clients simply have very limited budgets. We ask and answer the hard questions to develop a skinny form of the SDLC we’ve typically used in the developed world. How do we do this without pair-programming (!) since human resources are one of the most expensive? How do we reuse open source components? How do we effectively understand the context … is our design thinking phase well-executed? Who has to maintain this software afterwards? In fact, we provide hosting services in addition to software engineering services for over half our clients since many of our clients do not have staff who can provide or adequately advise them on local and cost-effective hosting solutions. One way in which we have modified our SDLC is that instead of pair-programming and using just “In Dev” on our story walls for our simpler website work, we breakdown the development work into multiple components like a factory-line including creating content, uploading content, deploying the website to staging, deploying the website to live (once approved by client) and so forth, and only one person works on each stage. Though this means that there is a pressure on how we schedule and handover work, it also means that we have multiple checkpoints along the way by various members of the team who themselves become specialized in a particular part of the process. It allows us to validate what we are building and complete each stage more efficiently.

Prabhu: Frugal innovation techniques are particularly relevant to software development and the digital economy. Indeed, digital tools and techniques are inherently frugal; they require fewer physical resources and engender asset light business models that are easier to scale. Thus, digital and software sectors are particularly well poised to innovate faster, better and cheaper.

InfoQ: How are agile and frugal innovation related? Can they support each other?

Prabhu: Again techniques such as lean manufacturing and innovation are inherently frugal; they are designed to do more, faster, better and cheaper. However, the main difference with frugal is that frugal innovation includes both supply and demand sides of the equation. Specifically, frugal innovation is about creating more value for customers while reducing resources and time for suppliers. Agile, on the other hand, is mainly concerned about the supply side and what manufacturers can do to innovate faster, better and cheaper. Agile is therefore an input into and a subset of the frugal innovation approach.

Enyo Kumahor: Absolutely they are related and in our opinion, you can be more frugally innovative in our environment when you use more agile practices. Agile’s core principles center around people over process, and getting the product into the hands of the users as early as is practical and learn from that use to evolve the product. That is exactly the focus needed to be frugally innovative. The budget in our environments to focus on aspects of a solution such as security or even safety or sometimes even accuracy right out the gate, is often a luxury a frugal-innovation cannot afford. We need to be able to prototype and evolve core aspects of a product before focusing on robustness and scalability … and to do so quickly and cheaply. There are many agile practices that help with the process.

Boyle: One can find a distinct commonality in both domains. Rapid prototyping and continuous validation are both key components of a frugal innovation approach. The solution is intended to solve the problem at hand and nothing more. That being said, one can discover components of frugal innovation within the maker movement and the teachings of Professor Eric von Hippel, author of Free Innovation, who believes that most innovation comes from people who are just trying to improve the products they own.

InfoQ: How can organizations become more frugal?

Enyo Kumahor: In my opinion, one of the core ingredients to successful frugal innovation is the very environment - the constrained environment - that inspired both the innovation and the frugality of the innovation and the creation process that produced it. Hence, one of the techniques that we have applied successfully now in multiple businesses, and on multiple projects, is to … even if it is artificial, introduce constraints into the project environment as well.

One of my business analysts at 19 years old had joined a university hackathon and her team won a prize for their product idea. The prize was to spend a few weeks at an incubator to further develop their product idea into a full-fledged product. After two months in the incubator, little had been achieved on a the product idea. When asked why that was, she replied simply that “The air conditioning in the team room somehow made me forget who we were creating the product for and why we were creating the product for them.”

Organizations need to find ways to introduce the constraints that are so essential to understanding the context in which the solution will be used, and to introduce the constraints that led to frugal designs and implements. We want to be comfortable when solving problems but with frugal innovation it may just be that comfort is exactly the opposite of what is needed.

Prabhu: Large firms face three challenges in their attempts to innovate faster, better and cheaper:

  1. They are typically used to innovating with big budgets and with plentiful resources. This often results in waste or excess.
  2. They typically adopt very structured approaches to innovation which means they find it hard to be agile and flexible.
  3. They are typically insular and secretive in their approach and so find it hard to include other actors in the innovation approach, both within and outside the company.

Three frugal strategies firms can use to overcome these challenges and do more with less are:

  1. Empower their innovators to experiment (as Ford did in Detroit by allowing its R&D personnel to tinker with prosumers in the local TechShop)
  2. Engage with frugal entrepreneurs (as Barclays Bank does in its accelerators in London, Manchester and New York)
  3. Engage with emerging economies (as GE and Siemens are doing in India and China)

Boyle: There are a number of examples where global players have learned that, by allowing for local staff to solve local problems, new products and services are created in ways that would not be possible otherwise. The big challenge for companies is to overcome the fear of cannibalization and the ability to create new business models to support these new frugal innovation artifacts.

Here are some examples:

  • GE - who has been utilizing developments in ‘developing’ countries (see How Healthcare Hacks Help Doctors Innovate) to cross-sell (‘developing’ to ‘developing’) or upsell (‘developing’ to underserviced ‘developed’)
  • Unilever - Hindustan Lever had to take a frugal approach, out of necessity. In his seminal book The Fortune at the Bottom of the Pyramid, CK Prahalad describes an organization that was given the freedom to create products specific issues tied to the Indian market.  They have become the trailblazers for the entire Unilever organization.
  • Phillips established an Africa Innovation Hub, which is the center for them to develop locally relevant innovation in-Africa, for-Africa, with local African talent. Part of the activities includes an analysis on whether these African inventions can be used for other markets by working in close collaboration with the Philips research labs in Bangalore, Shanghai and Eindhoven. One of their recent innovations tied to a wind-up portable doppler ultrasound machine that needs no power and provides a digital readout of a fetus’s heartbeat was recently highlighted by The Economist in Technology can make scarce medical resources go further.

About the Interviewees

Jaideep Prabhu is professor of marketing at Cambridge Judge Business School. He is the co-author of Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth, described by The Economist as “the most comprehensive book yet” on the subject of frugal innovation. His most recent book, Frugal Innovation, won the CMI’s Management Book of the Year Award 2016.

Michael Boyle is the curator of frugalinnovation.io and is currently working on a multi-disciplinary effort tied to establishing open-source frugal innovation framework.

 

 

Betty Enyonam Kumahor is the managing partner of the business advisory firm The Cobalt Partners which specializes in design thinking, software consulting and business consulting, services primarily in and for companies doing business in Africa. Enyo is a World Economic Forum Young Global Leader and led ThoughtWorks Africa to be nominated as the Best African Company of the Year in 2013.

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