Reaching New Heights With Frugal Innovation

Doing more with less can re-ignite the creative spirit at your company, give your business a competitive edge – and better the world around you.

I grew up in Southern India in a small town in a tiny house next to an urban slum. It was incredibly dry. We all had a keen sensitivity and appreciation of scarce resources. When it was time to shower, we used only one bucket of water.

Many of my friends lived in abject poverty. But here’s what I noticed: Their creativity knew no bounds.

They devised makeshift solutions to everyday problems. The lack of resources actually gave them the freedom to create.

They did more – and did it better – with less. This was my first exposure to frugal innovation. It’s a philosophy that has since guided my life’s work.

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But here’s what I noticed: Their creativity knew no bounds.

Businesses today would be wise to embrace a similar mindset.

At our current rate of consumption, by 2030 we would require two planets to supply necessary resources and to absorb our waste.

With 3 billion people joining the global middle class over the next 20 years, demand for resources like energy, food, water and materials is set to explode. This looming resource scarcity will threaten the viability of many businesses.

But if companies of all sizes can find ways to do more with less, they’ll provide greater economic and social good, proving that sustainability and profitability aren’t mutually exclusive.

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The pursuit of happiness

Gandhi once said: Happiness is when what you think, what you say and what you do are in harmony.

That thinking has even greater relevance today as consumers, especially Millennials, become more value and values conscious. If a company’s values conflict with a consumer’s beliefs, that person will often take their business elsewhere.

My research shows that people increasingly believe quality is more important than quantity. This conflicts with the traditional more for more growth model deployed by businesses and individuals alike.

Each person can use their unique talents and inner resources to do something inventive and of magnitude. It’s about channeling the creative energy of diverse thinkers to create the greatest benefit for as many people as possible.

Even knowing that reality, how many executives actually believe they must re-invent their business model to integrate sustainability and profitability?

Not enough.

[Also on Longitudes: Investing in Resilience]

A frugal society

I believe we are moving to a frugal society powered by a human-scale economy where supply meets people’s real needs, rather than artificial wants. Value chains will be forever changed, a reflection of the on-demand nature of consumption today.

Enter logistics providers like UPS, effectively hyper-localizing supply chains in regions around the world. The last mile in a supply chain becomes the first mile of innovation. This is moving from passive consumption to active co-creation.

This is also a win for consumers and the environment, lessening the carbon footprint that powers your daily life.

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Frugal innovation is a game-changing growth strategy fit for a low-carbon economy. 

But your carbon footprint is hardly the sole barometer for measuring change. Ask yourself: Am I bettering the world?

It’s a simple question but one that can cause many sleepless nights. This is especially true for businesses looking to build upon past success without jeopardizing future growth.

The only way companies can reduce their emissions and overcome resource scarcity is by building a sustainable growth engine that consumes fewer resources and generates more economic value in an eco-friendly way.

Frugal innovation is a game-changing growth strategy fit for a low-carbon economy, enabling companies to not just do less harm but consciously do more good by simultaneously generating more positive business, societal and ecological value.

[Also on Longitudes: Putting a Price Tag on Pollution]

Living like alchemists

As we consider how to build a brighter and more prosperous future, I think back to my upbringing in India.

I went to a French-speaking high school. I learned to speak English only by reading old magazines and books “rented” to me by a recycling shop near my house (this frugal practice today is fancifully labeled the sharing economy or circular economy).

This was just a small example of frugal innovation at work. Yet many small acts like this can change the world.

In India, you learn pretty fast how to extract more value from limited resources. As I explained in my recent TED Talk, we call this Jugaad, a Hindi word meaning an improvised fix born out of adversity. This is the resilient MacGyver spirit!

The entrepreneurs who create Jugaad solutions are like alchemists, magically transforming adversity into opportunity and mastering the art of doing more – and better – with less. They are frugal innovators.

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I believe we are at a fork-in-the-road moment.

I now live in Silicon Valley, an enclave always focused on the next big tech idea. Sadly, in this innovation arms race, we too often forget about the massive resource drain of pursuing these ideas – or whether people can even afford our latest innovative products.

We must move past this short-sighted outlook and foster a culture that seeks out the frugal innovators, those looking to improve the world around them – not just their profit margins.

I believe we are at a fork-in-the-road moment. Businesses can either embrace frugal innovation or wonder what went wrong when other enlightened companies surpass them both as corporate citizens and in the marketplace of ideas.

In my experience, true success is when you achieve that right balance between realizing your full potential and achieving results for others. That’s the secret to leading a meaningful life.goldbrown2


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Navi Radjou is an innovation advisor based in Silicon Valley. He is a fellow at Cambridge University’s Judge Business School. He is also the coauthor of Jugaad Innovation (2012), From Smart to Wise (2013), and Frugal Innovation (2015). His next book, Conscious Society: Reinventing How We Consume, Work, Relate and Live, will be published in 2019.

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Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.