56. Krinomai

Dear Jan,

Maybe I’m also a Jugaad entrepreneur. After the 2008/9 crisis, which the company felt most strongly in 2009, one thing became very clear to me. Something had definitely changed. Sometime in 2009, I googled “crisis” and I found it probably originates from the Greek word “krinomai” which means “moment of truth” or “the moment when a decision must be made with a major impact on the future”. In China, the character for “crisis” also means “opportunity” and in ancient biblical translations, the word crisis is directly linked to the word confidence.This changed my focus from “crisis management” to “looking for the new economic rules of the game”, and to seizing the opportunities for our company in an economic environment that had suddenly changed drastically. My conclusion was that I had to deliver higher quality, at a much lower price and faster with less people to a more discerning customer.
The crisis led to a very spectacular development. We increased our turnover per employee from €74,000 a year (2007) to €216,000 a year (2012). With an unchanged absolute profit (margin has gone down considerably). This seems very Jugaad: more value at a lower price.
But it can be much, much better and more spectacular. There are many new and very successful companies offering their services for free or at incredible low prices: Google, Facebook, Ryanair, EasyJet, to name a few. This trend is unstoppable and more and more companies are providing their services free of charge and can still generate enough income for a healthy business.
I think this represents a benefit of the crisis and also an accelerator of the negative impact that the crisis entails. Companies which continue playing by the economic rules of 2007 will not last. These companies are doomed to disappear. And I suspect that most of these companies are based in the traditional richer economies in Western Europe. Companies in the emerging economies do not suffer from the old dogmas and the governments in these economies are flexible and open to change.

If you want to be successful you will need to apply the new rules. And that will be a shock for many entrepreneurs. How can I deliver my service to my clients free of charge and still make a profit?

Best regards,
Gerard