On a November afternoon, a dozen executives from companies including investment banks Rothschild and Goldman Sachs (GS) and tech research firm Gartner (IT) ringed a conference table in a brownstone on New York's Upper East Side. They were there to learn how U.S. businesses could develop products more cheaply and quickly by borrowing strategies from India. Speaker Navi Radjou, who heads the recently formed Centre for India & Global Business at England's Cambridge University, summed up his advice in one word: jugaad.
A Hindi slang word, jugaad (pronounced "joo-gaardh") translates to an improvisational style of innovation that's driven by scarce resources and attention to a customer's immediate needs, not their lifestyle wants. It captures how Tata Group, Infosys Technologies (INFY), and other Indian corporations have gained international stature. The term seems likely to enter the lexicon of management consultants, mingling with Six Sigma, total quality, lean, and kaizen, the Japanese term for continuous improvement.
Like previous management concepts, Indian-style innovation could be a fad. Moreover, because jugaad essentially means inexpensive invention on the fly, it can imply cutting corners, disregarding safety, or providing shoddy service. "Jugaad means 'Somehow, get it done,' even if it involves corruption," cautions M.S. Krishnan, a Ross business school professor. "Companies have to be careful. They have to pursue jugaad with regulations and ethics in mind."
More than a Fad?
The rise of jugaad raises another question: Do companies really need to pay someone to tell them something that's as elementary as keep it simple? "Having a consulting industry built around jugaad is almost anathema to the word itself," says Robert C. Wolcott, executive director of Northwestern University's Kellogg Innovation Network. "I'm not sure how this is different from old-fashioned Yankee ingenuity."
Nonetheless, jugaad seems aligned with the times. Recession-slammed corporations no longer have money to burn on research and development. Likewise, U.S. consumers are trading down to good-enough products and services. Meantime, the Indian economy continues to plow ahead despite the global recession—it grew at a 7.9% clip in the third quarter—suggesting its executives have a winning strategy.
Already, companies as varied as Best Buy (BBY), Cisco Systems (CSCO) , and Oracle (ORCL) are employing jugaad as they create products and services that are more economical both for supplier and consumer. "In today's challenging times, American companies are forced to learn to operate with Plan Bs," notes Radjou. "But Indian engineers have long known how to invent with a whole alphabet soup of options that work, are cheap, and can be rolled out instantly. That is jugaad."
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