SME World Forum

Frugal Innovation

Tuesday, April 14, 2020, By Dr. Ayman El Tarabishy

When Frugal Innovation Meets Reverse Engineering

We are beginning with a simple yet intrinsically complex question: how can we innovate with limited resources in a way that will create products and services that are accessible to all? In taking a step back, we might see the solution more easily; that being, we must do better with less. In introducing the concept of frugal innovation, we can begin to think about how SMEs can escape the volatility of crisis and change, and eventually start finding solutions that uplift the values of ingenuity, empathy, and resilience.

The inspiration for this concept came from the personal experience of Mr. Navi Radjou in his book Frugal Innovation that he shared with me in a very enlightening webinar (link below), and how he experienced and learned about scarcity. Confrontation with limitations, such as that of water, led to an understanding of the real importance and preciousness of resources. In a mission to use less of these scarcities, we can become suddenly and creatively emancipated. When we remember that having less does not equal being less, we can transition from a world of limits to one of the innovative opportunities.

Exemplifying the boundless ends of frugal innovation, we can look to China, who, ten years ago, shifted to telemedicine, initially to care for its citizens who had limited access to medical care. In doing this, China’s medical professionals were able to adapt to the needs of their consumers, or patients, including a population of nearly 500 million senior citizens. In shifting to a business model that meets customers where they are, remote doctors were able to consult patients in villages and create treatment plans for their patients’ chronic diseases, with which community workers could assist, thus building local and global solidarity. Demonstrating the power of a collective, communal level for frugal innovation, China was able to capitalize on this preset system, in the wake of diagnosing and treating patients infected with COVID-19. This keen example demonstrates how those who work to promote the inclusion and participation of their entire community can stand stronger and adapt more smoothly during times of crisis.

Frugal innovation is not just a method, nor a set of principles, but more so a metaparadigm, which is an entirely new way of thinking about innovation and value creation. Returning to our main point of doing better with less, we are directed to two essential truths: it is necessary to focus on creating more value, in addition to minimizing scarce resources and maximizing the intangible ones. Our question, then, develops to how can we optimize the delivery of value, while using all the available tangible and intangible resources.

There stand six key principles of frugal innovation. Those being to engage and iterate, to flex your existing resources, to co-create regenerative solutions, to shape customer behavior, to co-create value with ‘prosumers,’ and to hyper-collaborate with atypical partners. In looking more closely at three of these principles, we can more definitively comprehend the importance of value-based businesses in the realm of SMEs.

When flexing existing resources, we are challenged to step outside of the scarcity mindset in which we so often find ourselves during moments of crisis. Instead, by celebrating and valorizing what we already have, we can leverage our existing resources immediately to then convert that into what our business might need. By using what we already have, we ask ‘why not’ instead of just ‘why.’ Co-creating regenerative solutions is another essential part of frugal innovation. With the current climate crisis becoming ever more pressing, we need to decide if it is sustainability or regeneration that is more important to us. Sustaining our current business models, supply chains, and political systems will only lead us to the same place of deficit in which we currently sit. However, in regenerating, we can imagine a shift from a linear to a circular economy, one which includes a continuation of interactions between usage, the end-use, materials, and production distribution. This allows us to act on our social, ecological, and economic priorities all at once, instead of choosing only one value to the target. Lastly, hyper-collaborate with atypical partners encourages us to think outside our predetermined box to find new and more significant solutions. By substituting a scarcity of resources for resource sharing, we can exemplify the radical nature of frugal innovation. If this B2B (Business to Business) sharing economies and marketplaces could spread all over the world, we would be able to increase transparency, resource utilization, all while focusing on multiple Sustainable Development Goals (SDGs). This also holds the potential to create partnerships that allow the expertise of SMEs to work with the backing of big companies to respond to the world’s most pressing issues.

In this time of crisis, the most crucial solution will be found when we can move away from a place of fear, which clouds our ability to see from other perspectives and shift to a place of calmness and diversity. By calming the limbic system, we will be able to see more clearly the answers found within and in front of us. Reaching out to those who are different from us during moments of panic, can bring us different perspectives, which will break our own routine mistakes. Being aware of our inherent need to do something familiar can signal us that this is a moment to try something radically different. On the other side of stress and fear, we can find ourselves in a place to be entirely open to anything and everything at the moment. The goal is to stop thinking about after COVID and think about right now. It is time to begin developing frugally, and maybe later, we will be able to bolden the frugal strategy made possible only by this crisis.

In his closing remarks, Navi Radjou reminds us that “the world is one family,” meaning that it is only through the positive reinforcement of this family that we can truly bring about the real and necessary changes needed to survive and eventually succeed in a moment such as this.

Welcome back, Frugal Innovation.

Reference video: Meet the Author: Frugal Innovation: How SMEs Can Do Better With Less.

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