Jugaad Innovation summary

As North American and European economies expanded during the 20th century, Western corporations became characterized by ever-increasing institutionalization. With dedicated research and development (R&D) departments and standardized business processes, emphasis was consistently placed on managing innovation.

While this structured approach has indeed proven successful, it’s not particularly sustainable. Not only are institutionalized methods expensive and a drain on resources, they also lack flexibility and are insular to the point of elitism.

Consider “Six Sigma,” the leading dogma for major Fortune 500 firms such as Boeing and General Electric. An integrated set of management techniques, Six Sigma is designed to reduce defects and increase efficiency in production.

Six Sigma was pioneered by Motorola in 1986, and although it works wonders in limiting production mistakes – ensuring 99.99966 percent of products will be manufactured defect-free –  it hardly allows any room for change or development. In an age of diversifying customer groups and rapid technological shifts, this is a significant drawback.

Six Sigma and other standardized approaches also serve to stifle novel strategies put forth by a company’s more enterprising employees, even when these unconventional methods can solve business problems in ways that traditional approaches cannot.

The reality is that many Western firms are ill-equipped to survive, let alone innovate, in the complex market environment of the future. Scarcity, diversity, hyperconnectivity and breakneck globalization all present never-before-seen challenges to businesses.

Hierarchical communication, linear planning and insular approaches to innovation suggest that these companies will struggle to adapt to major trends, such as increasing social media use.

Facebook, for example, has become a brainstorming center for many young employees, as one firm revealed to the authors. However, the company admitted that they simply couldn’t manage to funnel these ideas back into its corporate R&D system.

While many organizations are at a loss as to how to incorporate future challenges into their structure, there is a solution. It’s called jugaad innovation, and it’s simple, yet effective. Learn more in the following blinks!