3 Jugaad ways to reinvent yourself successfully during the crisis

The IMF predicts that in 2020 the world could experience the worst recession since the 1930s. All businesses and startups want to pivot their way out of the upcoming recession. CEOs and entrepreneurs seek new strategies to turn around and reposition their hard-hit businesses.

But more than a shiny new business model, what you need to reboot yourself is a different mental model. Specifically, you need a new frugal and agile mindset to successfully reinvent yourself during the recession. Let me give you two examples to show how this resilient and creative mindset actually works.

Jugaad case study #1: Embrace

20 million babies are born prematurely around the world, and 4 million of them die within one month. 99% of neonatal deaths occur in developing nations, due to a lack of incubators. Incubators cost $20,000, which is too costly in low-income countries which also lack reliable electricity to operate the devices. Rather than create a simplified low-cost incubator, a group of Stanford students asked themselves: “Why not create a new device that keeps preemies warm but looks and functions very differently than a typical incubator?”

This bold “why not” question led them to invent the Embrace Infant Warmer, a tiny sleeping bag that uses phase change material to insulate the baby against the cold. This ingenious solution, which costs only $200 and doesn’t require electricity, has saved the lives of over 300,000 babies worldwide.

Jugaad case study #2: Qarnot Computing

Data centers today consume 1.5% of global electricity, a number set to increase to 3% by 2030. 50% of energy used in data centers is to power the servers, and since they tend to overheat, another 50% of energy is spent in air conditioning to cool down the servers. This aberration led Paul Benoit, a French engineer, to ask himself: “Rather than fight the server-generated heat as an enemy we must rid of, what if we treat that heat as an ally? What if I turn heat into an opportunity?”

That “what if” question led Benoit to launch Qarnot Computing, a startup that has reinvented centralized data servers as a distributed network of digital radiators installed in homes and offices. The heat produced by these radiators is used to warm buildings. These hi-tech radiators are linked together to create a high-performance computing network in the cloud which enables firms like BNP Paribas and research centers to perform complex calculations.

These two examples perfectly illustrate the jugaad mindset.

Jugaad is a Hindi word meaning the ingenious ability to develop rapidly a simple and effective solution with limited means in a situation of constraints.

Jugaad is creative resilience that transforms adversity into an opportunity.

During the COVID-19 crisis this year we saw thousands of jugaad demonstrations worldwide. In just 7 weeks, makers in India have produced 1 million face shields using just overhead projector films. Big firms like Ford and General Motors quickly adapted their assembly lines to manufacture ventilators in a matter of weeks.

A few years ago, my coauthors and I published Jugaad Innovation, a book that expounds the six key principles to innovate and succeed in extremely adverse situations. Let me share with you three of these principles that will allow you to reinvent yourself effectively during this year’s recession.

Principle 1: Transform adversity into opportunity

In coming months, many of your financially-stretched customers won’t be able topurchase your products and services. Rather than worry or complain that your clients no longer buy your current products, why not contact them proactively to identify their new needs?

Customers will tell you that their greatest needs in 2020 and beyond center on four things they highly value:

1) Safety: COVID-19 is driving consumers to value goods and services that keep them safe, healthy, and enhance their well-being. Ask yourself how you can adapt your offerings to meet these new needs? For example, the beauty industry players like LVMH and L’Oréal, which began manufacturing hand sanitizer during COVID-19, are most likely to launch entire new branded product lines focused on health and well-being. You can go on step further and reinvent yourself as a “caring brand” as the Brazilian beauty product firm Natura did by repositioning themselves as a conscious provider of “beauty care that cares”.

2) Affordability: Due to the recession, your cost-conscious consumers can no longer afford your “premium” products. According to a McKinsey & Company study, the #1 purchasing criteria for consumers in 2020 is affordability. So you need to redesign your products — or develop new ones — that fit the limited budget of frugal consumers, or else your customers will switch to low-cost alternatives. Remember: during a recession, brand loyalty doesn’t exist! You need to adopt the principles of frugal innovation to make your more products more affordable or create new ones from scratch. Learn how Google teamed up with Jio to co-create very affordable smartphones to serve billions of consumers in developed countries.

3) Simplicity: Life is getting more and more complicated. Unsurprisingly, an IBM survey reveals that a whopping 84% shoppers value products and services that simplify their lives. Ask yourself: “How can we simplify the entire customer lifecycle so we make it easy for our customers to interact us and buy/maintain/dispose our products? How can we create new products and services that reduce complexity in customers’ daily lives?”

4) Sustainability: the #BlackLivesMatter movement and the worsening climate change are driving consumers to “vote with their wallet” for brands that are not only socially and ecologically responsible, but regenerate society and planet. Visionary brands like Danone and MAIF are using the 2020 crisis as an opportunity to redefine their raison d’être — their existential purpose — with a social mission. These firms are committing themselves to reinvent their entire value chains and build new ecosystems to regenerate communities and the biosphere. Ask yourself: “How can we use this 2020 crisis to fundamentally redefine who we are and embed sustainability and regeneration at the core of our business model ?”

So, don’t panic if your current market is decimated by the crisis; try to identify and shape new markets that don’t yet exist. Focus your efforts on developing and marketing new affordable products and services that help customers feel safe, simplify their lives, and sustain and regenerate society and the planet.

You can also shape new ways of working for your employees. For example, the IT services giant TCS has decided that two-thirds of its 450,000 employees will continue to work from home even after COVID-19. Other tech firms like Twitter, Siemens, Google are following suit and want to maintain and even scale up tele-working in the post-COVID-19 world.

Principle 2: Do better with less

During a crisis, driven by a sense of scarcity, we tend to see the glass half empty. Rather than fret about the resources you lack, identify the resources you already have and try to leverage or repurpose them to create new value for your customers. This is the essence of frugal innovation, the resourceful art of repurposing what you got for a purpose.

You can consult the amazing guide created by the serial entrepreneur Brad Stevens who identified 125 new product and service growth opportunities spawn by the COVID-19 crisis. By cleverly reusing your existing assets and talent, you can frugally reposition yourself to tap into these lucrative 125 new markets (Brad’s team created this guide in just 3 days with $50!).

Read this article coauthored by Yasser Bhatti, Jaideep Prabhu, and Matthew Harris on how you can reuse, repurpose, recombine, and rapidly innovate under resource and time pressure.

I also advise my clients to fully leverage their “know-how” by decoupling what they “know” from “how” they apply that knowledge. This frugal introspective technique will help you discover your true “essence” and explore new markets where you can maximize the value of your vast knowledge and expertise, without relying exclusively on your own “go-to-market” capabilities.

For instance, if you used to sell food and beverage products, you can leverage your deep knowledge of nutrition to build a digital platform that enables agrifood entrepreneurs to create and sell online high-nutrition products to your health-conscious customers. And if you are a transportation firm, rather than continue moving people and objects with your own assets, you can use your supply chain expertise to help other companies optimize their logistics networks.

Principle 3: Think and act flexibly

During crises, you need to think out of the box and challenge the status quo by asking “Why not?” — just like the inventors of Embrace infant warmer and Paul Benoit did. By asking “Why not?” you free yourself from existing frames of reference and can think and act flexibly to generate breakthrough innovations.

For instance, Dr. Renato Favero, a physician in the Lombardy region of Italy, which was hardest hit by COVID-19, asked himself: “Why not adapt a snorkeling mask so it can be used as a non-invasive ventilator?” Dr. Favero teamed up with Isinnova, an Italian design consultancy, to create the Charlotte valve, a 3D-printed component that helps easily adapt the Decathlon Easybreath scuba-diving mask into a ventilator. Isinnova has made the design files of the Charlotte valve freely available for download on its website. Thanks to the agile thinking of Dr. Favero and Isinnova, thousands of COVID-19 patients’ lives were saved in Italy and worldwide.

I ask my clients: “Why not share your resources with other companies and aggregate your competences to co-create more value for everyone by making the pie larger for all players?”. This agile thinking could pave the way for the business-to-business (B2B) sharing economy, which is already under way in Asia and Europe, but is struggling to take off in individualistic and competitive Corporate America.

For example, in India, EM3 Agri Servicesis a B2B sharing platform in the agricultural sector that gives small farmers on demand access to equipment like tractors and crop management services, all available on a pay-as-you-basis. At Les Deux Rives, a business district in the heart of Paris, 30 co-located enterprises share office space, equipment, and services and recycle/upcycle waste as an integrated, synergistic network. Vénétis is an association of 360 small French businesses that hires experts, say in artificial intelligence or sustainability, as full-time employees and shares them on a project basis among its member firms, thus replacing unstable part-time jobs with safe “shared time” jobs.

I encourage you to cultivate this frugal and agile jugaad mindset by learning to transform adversity into opportunity, do better with less, and think and act flexibly by asking “Why not?”.

By applying these three jugaad principles, you can reinvent your business — and yourself — successfully and thrive in the post-COVID-19 world.

To learn more on jugaad and you how you can apply it, watch my TED Talk:

Read my book Jugaad Innovation