55. The new reality

Dear Gerard,

Last week I saw a trend watcher on TV. He discovers trends by traveling, speaking with CEOs and universities and so on. The trends he identified emerged from the crisis of 2008-2013: austerity, increased recycling and more clumping. It is interesting to see that in a country like India and other emerging countries, the innovations resulting from this are referred to as Jugaad, which means “do more with less.” The most striking aspect of the Jugaad innovators is their way of thinking about thrift. These entrepreneurs are trying to offer more value at a lower cost, and continuously adding value. This stems from a rational response to the scarcity which is constantly present in their environment. Jugaad for entrepreneurs is the only way to survive.

The Jugaad innovation consists of a number of principles. For me the most important principle is number 7: “Follow your heart, your time is limited, so do not waste time and do not live the life someone else expects you to lead.” Have the courage to follow your own heart and intuition (Steve Jobs). The heart is the seat of passion, intuition and empathy. Jugaad innovators have these qualities in abundance.

In the western world, the stable environment with its abundance of patronage is often regarded as secure. But there is a great danger here: things have gone well for too long and if we do not notice that the world is rapidly changing, we risk missing opportunities in the West. We seem to have little incentive to change course over the next few decades to meet customers’ wishes. Jugaad innovators rely more on their social skills and intuition and on their own observations of what is of significance for their customers. They experiment to test their thoughts instead of making predictions, the Jugaad innovators test their intuition in practice to get instant feedback (learning by doing). In addition, passion must be constantly nurtured. It is important that you do not give up when facing adversity. If you truly believe in what is important to your customers, you must perform.

Now that Western prosperity is crumbling and we are being overtaken by the emerging markets, things must change. Most of us know this and it can only be done by harnessing passion and through the entrepreneurial dynamism of young people who are motivated to make this change while using their creative skills. A good example of such an innovation in recent years is Starbucks. They involve the customer emotionally instead of competing on price and convenience, which drastically changed the way coffee was bought and sold. The big challenge for most companies is to organize in a way which provides sufficient incentives for innovation. If companies like General Electric, Apple and Starbucks are able to implement Jugaad innovation next to the traditional structures, then smaller companies should also be able to benefit from this.

Regards,

Jan Stam