Frugal Innovation

Sitting in a meeting on redesigning some government office space other day I tried to make sense of a number of phrases which, I'm assuming, are common in the world I am learning to inhabit. So, I heard block and stack, density ratios, lift and shift, fit factor (not physical fitness of people), finishings, and then various things about HVAC systems, fan coils and so on. We meeting participants all looked at floor plans of office layouts with 'innovation hubs', 'huddle rooms', and other space descriptors.

What I did not hear was anything about the people (not just the numbers of them) who are going to work in the space, the work they will do, the technology they will use, and the adaptations to business processes the move opportunity offers that could result in a transformed business: on that offers higher value for less cost than currently. This seems to me a missed opportunity. Surely organizations should be as aware of the indirect costs and opportunities of moving employees to a new or refurbished office or other workplace as they are of the direct costs and opportunities of the physical bricks, finishings, and furnishings?

If organizational leaders took a holistic, strategic and integrated approach to workplace design: an approach that included consideration of business processes, people's modes of working together, and better use of available technology. The end result would deliver much more than what is implied in the 'lift and shift' approach.

So this was in my mind as I tackled another task on my 'to do' list – writing a piece about frugal innovation. Two books have come out on it recently: 'Reverse Innovation' by Vijay Govindarajan and Chris Trimble, and 'Jugaad Innovation' by Navi Radjou, Jaideep Prabhu and Simone Ahuja. From what I can gather, the latter has got the more write-ups but that may not mean it is a better book, and as yet I have not read either but have put both on my Amazon wish list.

The various articles, blogs, videos and things which I did explore all point to India as the main illustrator of examples of frugal innovation in action. The most frequently mentioned products associated with frugal innovation include the $800 electrocardiogram (GE), the $24 water filter (Tata Chemicals), the $2,500 car – the Tata Nano, the $12 solar lamp (SELCO). There are also numerous healthcare services examples based on the frugal model – Aravind, an eye hospital crops up a lot, but also banking and telecoms appear as examples of frugal innovation.

There seems to be a fairly commonly held definition of what frugal innovation is. This is a welcome change from other phrases like 'organization development' that have multiple definitions. So, frugal innovation is the application of a combination of attitudes and practices. These include mastering the ability to seek opportunity in adversity and/or scarcity, doing more with less, thinking and acting flexibly, keeping things simple, generating buzz, and improvising with what's available. Adrian Wooldridge in his blog piece suggests three ways of frugally innovating:

  • Contract out ever more work
  • Use existing technology in imaginative new ways
  • Apply mass-production techniques in new and unexpected areas

These themes also appear in a provocative report on applying frugal innovation approaches to government services. Frugal Innovation, Learning from Social Entrepreneurs in India is published by the Serco Institute. The report makes the point that

"The traditional model of public service delivery in developed economies is under siege. The provision of high-quality and universal services in a uniform way is fast becoming unaffordable as governments are coming under greater pressure to cut costs and reduce deficits. At the same time, citizens expect more from governments, whether it is health care for older people or education for their children. … Within Western economies, bureaucracy has impeded public service design over the last 20 years. … The public sector is one of the most heavily regulated and scrutinized parts of the economy, and a powerful group of stakeholders (policymakers, professionals and their associations, workers and their unions and beneficiaries and the organisations that represent them) have both the interest and the influence to argue against radically different business models that might require them to change.'

So this is where the two thoughts came together. Maybe we could radically improve governments (and other moribund service organizations) by using a workplace and organization design approach to force new thinking about services provision. The Serco report suggests seven ways that government services could be approached that would lead towards frugal innovation:

  • Smarter use of people
  • Economies of scale
  • Technological innovation
  • Scaling up
  • Finding a niche
  • Tiered pricing
  • Alternate sources of revenue

So in the meeting mentioned in the opening paragraph, instead of only considering the physical space we would be asking, and answering questions related to people that included:

  • What is being done to assess the work that the new teams will be doing, is it the same as now or can it be done differently, better?
  • How are we getting information that will enable the space design to meet the business purpose of the service teams?
  • What is being done to involve people in thinking about changes in role and ways of offering the services?
  • What are the risks of not preparing people for a change in role, a change in the way they work, and a change in the way they work in the space?

In relation to business process we would be asking

  • What business processes could and should change?
  • How are the work processes going to be accommodated in the new space? E.g. shared document filing (either physical or on-line), printing, etc.?
  • What work processes will be dropped, contracted out, etc?

About technology we would be asking

  • Will the technology enable worker mobility?
  • Will the technology be able to accommodate any new/changed business processes?
  • What is being planned to train people in mobility/changes to business processes?
  • How will the space and technology encourage mobility? (Is mobility a desired outcome? If so, why?)

About the costs we would be considering not just direct costs but also
• Opportunity costs of moving towards a frugal innovation model (and what this would mean in practice)
• Productivity losses/gains in using space differently
• Staff turnover costs (if people are not adequately prepared to work in the new environment/way)

Seizing the opportunity of space reburbishment or re-building to force discussion on the ways citizen services are provided would make good business sense. Any ideas on how to sell this potential gain via facilities managers and traditional ways of redoing office space would be much appreciated It will help us move away from the 'lift and shift' mentality towards a frugal innovation mindset that could benefit all citizens.

Sidebar: Read the UK Government's white paper 'Open Public Services' and the comments received on this for one government's thinking on different service models.