Collective genius rescues innovation

The scarcity of natural and financial resources is forcing companies to do more, or better, with less. How can you maximize return on capital as well as gain speed and agility? Navi Radjou and Jaideep Prabhu identify six key principles of frugal innovation: the common thread being that all rely heavily on leveraging collective genius. Excerpt from the latest issue of Business Digest.

Innovation équipe Business Digest

Principle 1: Match R&D to real market needs
This is a question of “producing easy-to-use offerings that may lack bells and whistles but are good enough, especially if they are available cheaply.” It is an approach that involves learning to adapt to fluctuating demands and that requires more agile and iterative processes.

Principle No. 2: Make the most of the resources in which you invest
For example, shortening the distance between the manufacturing site and point of consumption can enhance the flexibility of the production chain. More and more companies are turning to local suppliers or are relocating production. Zara is one such company. The retail giant brought its manufacturing back to Portugal in the late 2000s to speed up the renewal of its collections for the European market.

Principle No. 3: Create sustainable solutions
Companies have to start incorporating eco-design into their business model now, including cradle-to-cradle (zero consumption and 100% recycling). Doing so will enable them to comply with growing regulation, cut costs and even improve employee engagement.

Principle No. 4: Shape customer behavior
In 2011, Nest developed a smart thermostat for the home, which encourages users to save energy. Each month, customers receive their meter reading, accompanied by energy saving tips and offers for discounts on future rates in exchange for decreases in consumptions during peak hours. Households that use the Nest thermostat reduce their energy consumption by an average of 55%.

Principle No. 5: Co-create value with prosumers
Customers can also be involved in devising frugal products and services, thereby crossing the traditional divide between supply and demand. The age of the passive consumer is over. Many are becoming prosumers, tinkering with products to personalize them.

Principle No. 6: Develop an approach based on “hyper-collaboration”
Companies have to go beyond open innovation, which consists of increasing the depth and scope of cooperative partnerships, and instead practice “hyper-collaboration.” This means building horizontal eco-systems, including with competitors, and sharing under-utilized assets to save resources.


Based on Frugal Innovation: How to Do More with Less by Navi Radjou and Jaideep Prabhu (Diateino, March 2015), “Creative problem-solving in the face of extreme limits” TED Talk by Navi Radjou (TED, October 2014), and “The Google Way of Attacking Problems” by Greg Satell (Harvard Business Review, December 2014) and the interview with François De Renière, CEO of Diften Transports, Argentina, March 2015.

Watch the video:

Navi Radjou: Creative problem-solving in the face of extreme limits

Peppering his talk with examples of human ingenuity at work, Navi Radjou shares three principles for how we can all do more with less.