Book Review – Frugal InnovationBy Navi Radjou and Jaideep Prabhu

Frugal InnovationFrugal innovation according to Radjou and Prabhu is the ability to do more with less, they define it as – to create significantly more business and social value while minimising the use of diminishing resources such as energy, capital and time. This book based on research carried out by the two authors across the US, Europe and Japan is based on the premise that in a world that is becoming more and more volatile, uncertain, complex and ambiguous (VUCA) organisations can no more do business as usual because while the resources available to deliver high quality services and products are diminishing, the rate at which things change is so rapid that no more can organisations spend inordinate amount of time bringing new products and services to market.

More so because of the advent of more advanced technology organisations are now competing with more nimble start ups who are not encumbered with a lot of the legacy issues big companies have to deal with and are also able to innovate much faster and cheaper. Frugal innovation is not about creating cheaper and less quality products, rather it is about building high quality and sustainable products that meet people’s needs with less resources and the authors outline in detail how to engage in frugal innovation.

The book starts with a preface by Paul Polman, Unilever’s CEO who summarises why frugal innovation is an idea whose time has come. The authors then use the preface to introduce the book giving a summary of what each chapter covers. The book has nine chapters which are briefly reviewed below. Six of these chapters (two to seven) describe the six principles for implementing frugal innovation.

  • Chapter one: Frugal innovation –  a disruptive growth strategy: deals with what frugal innovation is, why it is necessary and what is driving it. It uses an example of how Renault built a $5000 car to illustrate frugal innovation.
  • Chapter two: principle one: engage and innovate- observe and understand your customers in their natural environments and create products that meet their needs.
  • Chapter three: principle two: flex your assets- customers are becoming more demanding and this chapter describes how organisations can flex their assets and resources to meet customer needs.
  • Chapter four: principle three: create sustainable solutions- demonstrates how organisations can implement sustainable practices.
  • Chapter five: principle four: shape customer behaviour- drawing on research and organisational practices this chapter outlines how organisations can influence customers to behave differently.
  • Chapters six: principle five: co-create value with pro-sumers- customers are becoming what the authors refer to as pro-sumers who collectively design, create, and share the products and services they want. This chapter describes how organisations are tapping into the collective knowledge of pro-sumer communities to inform their own research and innovative processes.
  • Chapter seven: principle six: make innovative friends: this is the last principle and it explains how organisations can create frugal products, services and business models more efficiently by partnering with external partners such as universities, venture capitalists and startups.
  • Chapter eight: fostering a frugal culture- this chapter focuses on how organisations can build a frugal innovation culture.
  • Chapter nine: conclusion- the last chapter, it simply reemphasizes the importance of frugal innovation, highlighting the challenges involved in implementing it and how factors such as good leadership can help.

There is nothing new in this book as the principles outlined can be read from various other sources, but what this book does differently is to bring those principles together into one source and illustrate them with real life insightful stories.

The One Idea

My one learning idea from the book comes from the first principle of frugal innovation, which is to engage and iterate. The example of how Scott Cook started Intuit is used to illustrate the importance of learning about customer behaviour in their natural environment. After releasing Intuit’s first product, Quicken, a personal finance management desktop software product, Cook would follow customers home to see how they used the product so that he could better understand how they used it, their challenges and changing needs. With this information he continued to improve the product through iteration. This has become a culture at Intuit which spend lot of time understanding how customers use their products so that they can make them better.

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