MIC PRESENTATION

JUGAAD
INNOVATION : THINK FRUGAL,
BE FLEXIBLE,
GENERATE
BREAKTHROUGH
GROWTH

Prepared By :
Sooraj K
17810073
JUGAAD

 Colloquial Hindi word that roughly translates as

‘‘an innovative fix; an improvised solution born
from ingenuity and cleverness.’’
 Jugaad is, quite simply, a unique way of thinking
and acting in response to challenges;
 It is the gutsy art of spotting opportunities in the
most adverse circumstances and resourcefully
improvising solutions using simple means.
 Jugaad is about doing more with less.
THE SIX PRINCIPLES OF JUGAAD
 Seek opportunity in adversity.
 Do more with less.
 Think and act flexibly.
 Keep it simple.
 Include the margin.
 Follow your heart.
PRINCIPLE ONE :
SEEK OPPORTUNITY IN ADVERSITY
 In the late 1980s, Tulsi
Tanti moved to Surat, in the
Indian state of Gujarat, to
set up a textile unit.
 Tanti found himself faced
with infrastructural
bottlenecks. The biggest of
these was the power supply.
 His profit margins were only
around,5 percent, while
energy accounted for a
staggering 40 to 50 percent
of total operating costs.
 He looked at different kinds
of power generators. He tried
out different combinations of
boilers and generators. And
then he realized that all these
were, in one way or another,
dependent on fuel, gas, or oil.
 This launched him on a
search for an alternative
source of power that was
both reliable and sustainable.
 Today Suzlon is the world’s fifth largest wind
energy solution provider.
 The company employs more than thirteen
thousand people and provides a full spectrum of
wind power solutions in over thirty countries on
six continents.
 In the space of two decades, Tanti has gone from
being dependent on an erratic and expensive
supply of energy to creating—through
innovation—a plentiful supply of it for millions
worldwide.
EXAMPLE -2
 Kanak Das, a
jugaad innovator
who hails from
Morigaon, a village
in the northeast
Indian state of
Assam.
 And, as in many
parts of India, the
roads he travels on
are full of potholes
and bumps.
 These not only gave
him back problems
but also slowed him
down considerably.
 ‘‘What if I can actually find a way to make my bike
run faster on these cratered roads?’’
 That question inspired him to retrofit his bicycle so
that every time the front wheel hits a bump, a shock
absorber compresses and releases energy to the rear
wheel.
 By converting the energy in the shock absorber into a
propulsive force, his bicycle can run faster on bumpy
roads.
PRINCIPLE TWO:
DO MORE WITH LESS
 Gustavo Grobocopatel is a
fourth-generation Argentinian
farmer of Russian-Jewish
extraction
 First, Grobocapatel had difficulty
accessing large tracts of land.
 Next, Grobocopatel faced a
shortage of the skilled labor
needed to scale up his business.
 Third, Grobocopatel didn’t have
the capital to buy the farm
equipment he needed to achieve
scale without using labor
 Instead of giving in to these
challenges, Grobocopatel
conceived and then
implemented an ingenious
business model.
 He overcame the scarcity of
land by leasing it rather than
acquiring it.
 He dealt with the scarcity of
labor by subcontracting every
aspect of farm work to a
network of specialized service
providers, giving him access to
‘‘freelance’’ laborers
 And he overcame the cost of
owning equipment and the
lack of access to capital by
renting the equipment needed
from networks of small local
companies.
 EXAMPLE – 2
 In Kenya, only 10 percent of
the population has access to
banking services, yet mobile
penetration is over 50 percent

 Sensing an opportunity,
Safaricom, a local telecoms
service provider, 40 percent
owned by UK-based Vodafone,
launched a service called M-
PESA in 2007
 M-PESA is an SMS-based (text message) system
that enables people to spend, save, and transfer
money using their cellphones at a fraction of the
cost of money transfer services like Western
Union—and without having a bank account
PRINCIPLE THREE :
THINK AND ACT FLEXIBLY
 The Nano was the brainchild of
Ratan Tata, chairman of the
Tata Group (Tata Motors’ parent
company), who conceived it as
comfortable an affordable, and
safe alternative to the perilous
two wheelers that often carry
entire families on Indian roads.
 In 2006, Tata Motors
announced that the Nano would
be manufactured in Singur,West
Bengal, an East Indian state.
 The factory was to be built on
land acquired from farmers by
the state government in a bid to
boost local industry.
 In 2007, however, local
farmers began protesting
against the acquisition of
land for the factory.
 As the protests intensified
through 2008, Ravi Kant,
then managing director of
Tata Motors (and later its
nonexecutive vice
chairman) made a bold
decision.
 He set aside his firm’s prior
manufacturing plans and
swiftly shifted the
production of the Nano to
Sanand, in the investor-
friendly state of Gujarat, on
the other side of the
country.
 He didn’t hire a management consultant to
advise him on the move; he just trusted his
instinct that this was the right thing to do, given
the circumstances.
 In just fourteen months (compared to the
expected twenty-eight months for the Singur
plant), Tata Motors built a new factory in
Sanand, Gujarat.
 The new factory began production of Nanos in
June 2010.
EXAMPLE -2
 Haier’s organizational agility
enables it to react swiftly to
rapidly changing—or
unexpected—customer needs, and
to innovate faster, better, and
cheaper than its rivals
 A few years back, one such call
came from a farmer in a remote
village in Sichuan province who
complained about the constantly
clogged drainpipe in his washing
machine.
 The Haier technician who went to
investigate found that the farmer
was using the machine to wash
the mud off his freshly harvested
potatoes; it was this mud that was
causing the clogging.
 Sensing a big market
opportunity, Haier’s cross-
functional teams quickly acted
on their intuition by developing
a washing machine with larger
pipes that could also handle
vegetables
 The new model (XPB40-DS)
served to clean not only clothes,
but also gourds and even clams
at an affordable price of 848
yuan.
 They also invented a washing
machine that can peel potatoes
and even designed a model for
herders in Inner Mongolia and
the Tibetan Plateau to help
churn yak milk into butter.
PRINCIPLE FOUR :
KEEP IT SIMPLE
 To address the high cost of
electricity in Filipino slums, Illac
Diaz invented an ingeniously
simple solution: Isang Litrong
Liwanag (A Liter of Light), is a
scheme that brings an eco-friendly
solar bottle bulb to
underprivileged communities
across the Philippines.
 The solar bottle bulb (SLB) is
simply a recycled plastic bottle
filled with bleach-treated water
(to prevent formation of mold)
that is fitted snugly into a hole in
the corrugated roof of makeshift
homes in shantytowns.
 The water in the bottle refracts
the sun’s rays producing the
equivalent of a 55-watt light bulb
 An SLB produces more light than
a conventional window might let
in. And, unlike windows, the bulb
doesn’t break or leak during the
typhoon season.
 The SLB is made from recyclable
materials; is very easy to
assemble, install, and maintain;
and helps create new jobs in
underdeveloped communities, as
slum dwellers can now work in
their normally dark homes during
the day.
 More important, an SLB can be
installed for just $1.3 Diaz’s vision
is to deploy SLBs in one million
homes across the Philippines by
the end of 2012
EXAMPLE – 2
 Nokia’s ethnographers studied
migrant workers in Indian slums,
the shantytowns of Ghana, and the
favelas of Brazil to figure out how
technology could make their lives
easier.
 They were humbled to discover
that regular cell phones were too
expensive, flashy, and complex for
slum-dwellers to buy and use and
that the devices couldn’t withstand
the dusty, no-electricity
environment where these people
worked and lived.
 Armed with this insight, Nokia’s
researchers set out to develop a
simple solution that would blend
into the lives of these target users.
 The result was the Nokia
1100, a rugged cellphone with
a minimalist design that
allows calling and texting,
withstands dust, and can be
recharged within a few
minutes.
 The Nokia 1100 was launched
in 2003 and became an
immediate hit: it appealed to
not only low-income
consumers but even middle-
class users looking for an
uncomplicated cellphone.
 The Nokia 1100 has sold 250
million units around the
world, making it the best-
selling cellphone ever
PRINCIPLE FIVE :
INCLUDE THE MARGIN
 YES BANK’s inclusive model—fueled by jugaad
innovation—is profitable.
 Even though 46 percent of the bank’s loans are
extended to underserved segments of the Indian
economy, it still earns 2 percent over its cost of
lending, whereas most banks earn 1 to 1.5
percent less than what lending costs them.
 Riding on the back of his successful banking
model, Dr. Rana Kapoor intends to grow YES
BANK’s revenues from $4.6 billion today to $30
billion by 2015.
 YES BANK noticed that there
was no viable solution in the
market for credit appraisal of
micro entrepreneurs who
neither maintain formal
business records nor file
business details with
authorities.
 To address this shortcoming,
the bank developed the Credit
Appraisal Toolkit
 (CAT): an Excel-based data
analysis tool that compares
details orally provided by a
micro entrepreneur applying
for a loan against those
collected earlier from his or her
peers for a better and quicker
credit approval decision
 PRINCIPLE SIX :
FOLLOW YOUR HEART
 Biyani owns Big Bazaar, one of
India’s largest grocery and home
goods retail chains or
‘‘hypermarkets.’’
 When Big Bazaar opened its first
store in India, Biyani was advised
to follow the traditional, Western
approach to retailing, using neatly
organized aisles and soothing
music.
 But that format didn’t go down well
with Indian shoppers who found it
all a bit too sleek and unnatural.
 After all, Indians are used to
shopping in noisy, disorganized
street markets.
 Guided by his intuition, Biyani
swiftly reconfigured his stores to
have the chaotic look and feel of
Indian street markets: cluttered
aisles, store clerks in casual
clothing, and bins of vegetables with
some bad items thrown in to make
customers feel they had scored
when, for instance, they found the
perfect onion.
 And rather than standardize their
offerings across all stores, he made
sure that each Big Bazaar outlet
stocked a product mix that fit local
needs.
 Further, these needs weren’t
identified by expensive market
researchers, but by regional store
managers with an intuitive and
empathetic understanding of local
preferences.
THANK YOU