Jugaad 3.0 | How firms can get great ideas from within organisation if they are open-minded

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Updated: May 12, 2019 7:34:21 AM

CEOs surely need to read this book to provide space for indigenous innovation, which will require a change in mindsets.

Workers at a Future Group warehouse in Nagpur. The conglomerate, the author says, allows managers to look at different ways of enhancing sales based on their own experience or intuition without having to get the nod from above. (Bloomberg)

Jugaad 3.0 is another book on how to get a corporation running based on innovation which comes not from outside but within. We are, hence, talking of entrepreneurship (also called intrapreneurship) coming from within an organisation, which helps to foster growth. This sounds really out of place in almost all companies where there is always a top-down approach, where the CEO in particular ‘knows it all’ and rarely likes to accept that there can be another view. This is why companies stagnate. Author Simone Ahuja goes to show that if space is provided to employees to come up with innovations, then the ‘jugaad’ can work wonders.

When you read this book, you should begin with the assumption that such a framework is possible, or else the book might sound too utopian. This sort of thing is prevalent in some companies, but not common across the universe. The author gives the example of Future Group where a set of managers are allowed space to look at different ways of enhancing sales based on their own experience or intuition without having to get the nod from above. Hence, they can get in products or design outlets based on their ideas. Such employees actually get time to think out of the box and this is a case of people donning the innovator’s hat outside their periphery of work. They work out solutions that can be used and present them to the management, which can decide on their feasibility.

Jugaad 3.0: Hacking the Corporation to Make it Fast, Fluid and Frugal Simone Ahuja Penguin Random House Pp 229, Rs 499

As the title suggests, there are three factors working here that have to be put together—fast, fluid and frugal. When we talk of jugaad being ‘fast’, it is actually asking for the impossible in most companies where the hierarchy has to be sidestepped and the bureaucratic processes dodged. This is required for new ideas to be implemented. While theoretically this sounds good and makes sense, rarely do ideas from inside the organisation get accepted by the management, as seniors are unlikely to acknowledge that there are other ways of doing it. In fact, in the corporate world, it is often said in a lighter manner that any new plan gets accepted if it comes from a management consultant, where big bucks are paid, and not from employees. Hence, while Ahuja’s idea is the right way to go about to encourage a continuous flow of ideas, getting support from the top is forever challenging. This works in startups where there is a desire to take everyone along, but once these organisations grow, they begin to resemble traditional firms.

The second factor spoken of is being ‘frugal’, which is an easier hurdle as when there is limited cost involved, it is easier to accept from above. Companies are otherwise loath to provide time and money to employees to experiment with a parallel strategy or R&D that can trigger new products or services. ‘Keeping it frugal’ works well in terms of the logistics of carrying out such exercises. In fact, ironically, companies that have a separate strategy team are willing to deploy far more resources than if other employees are keen on similar exercises.

The third clue provided by Ahuja is that the exercise must be ‘fluid’, which is interesting. This actually involves people from across the organisation coming together and not being restricted to just one set of employees in, say, the product innovation department. Again, this idea at the practical level is hard to come across, as the dynamics of all companies normally is individualistic where people don’t talk to one another and coordination through hierarchy is the only way out. This is a challenge as all divisions or departments are involved in protecting their turf and are less receptive to working with others. Therefore, while it is theoretically a sound idea for companies to actually openly announce that they would like to encourage employees to get together on their own for a certain purpose, internal rivalries tend to come in the way.

There are other principles spoken of like being customer-oriented. This class of ‘intrapreneurs’ has to work continuously with customers to get the product right. This sounds logical because at the end of the day, the final product needs to be sold and has to be tested before being presented. Continuous interface with the customers is, hence, a necessary condition to appeal to the management. There are other attributes added, like being passionate and employees having purpose, which will work provided companies are open. Very often, when the doors are closed, which is the case in most companies, employees do not waste their time on such actions as they feel dis-incentivised from the beginning.

While this concept of jugaad is more likely to work in new companies, including startups where there is continuous experimentation and employees tend to be involved all the time, the same reactions from established companies are seldom forthcoming. This is the main reason for companies to stagnate as they tend to be closed to ideas from below. CEOs surely need to read this book to provide space for indigenous innovation, which will require a change in mindsets.

(Madan Sabnavis is chief economist, CARE Ratings)

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