Jugaad is a Hindi word that roughly translates as “overcoming harsh constraints by improvising an effective solution using limited resources”. Jugaad innovation is a powerful approach to innovation that is most active in emerging markets such as India. It has the benefits of being frugal, i.e. enabling innovators to do more with less. Further, it is flexible, supporting improvisation and iteration, and it is inclusive or democratic, bringing in the knowledge of diverse swaths of customers and employees alike while addressing the needs of previously marginalized consumers. Similar to frugal innovation, we found through our research that jugaad innovation is becoming increasingly active in the West, where it complements the structured approach to innovation to deliver the agility, speed and efficiency that is so crucial in today’s complex economic environment.
Jugaad innovators don’t view customers as merely passive users of their products and services. Recognizing the diversity of customer needs, they invent new solutions from the ground up by working closely with marginal groups to identify their unique needs. They then engage local communities and partners to set up a grassroots value chain to locally build, deliver, and support their solutions—making these solutions in turn affordable, accessible, and sustainable.
For instance, to effectively serve the six hundred million unbanked Indians, YES BANK is constantly experimenting with new technology-powered inclusive business models that tap a vast network of partners. The YES MONEY service is one such initiative. As part of this initiative, the bank has teamed up with various payment platform companies like Suvidhaa Infoserve and Oxigen Services which offer payment services through about two hundred thousand mom-and-pop retail stores in urban and rural areas. YES BANK has helped these companies to deploy a specialized “domestic remittance” module, allowing, for example, migrant workers in cities to send money to their families in far-flung villages Compared to money order remittance services (offered by India Post, a government undertaking), YES MONEY is about five times cheaper and five times faster. YES MONEY also offers a cost-effective alternative to Western Union. Moreover, the majority of the fees collected are passed back to the payment platform companies and the retailers—creating value for all partners in the YES MONEY ecosystem.