Elements of Frugal Innovation - Steps to Success


Essential Criteria for Frugal Innovation

Frugal Innovation is a process to reduce the costs of a product/process by removing secondary (non-essential) parts of the system. It also helps to utilize the minimum available resource in the most effective and optimum manner. Many criteria must be satisfied for a process to be accepted as a result of frugal innovation. Though there are many definitions and theories for identifying the criteria, few common topics exist in all the theories. Let’s probe further to know the common criteria needed for frugal innovation.

Three Important Criteria

Timo Weyrauch and Cornelius published an article on the most basic criteria required for frugal innovation. They undertook a multi-pronged approach by interviewing managers from various verticals. Their intense literature review, along with the ideas from people of research institutes helped them to identify the most required criteria for a process to be termed as frugal innovation. The point to be noted is frugal innovation is still in its growth phase. And the number of peer-reviewed articles on the criteria remains very low. So, more research has to be done for identifying the criteria. Nevertheless, the criteria identified by Timo and Cornelius are essential for frugal innovation. They identified three important criteria that must satisfy for frugal innovation. They are as follows

  1. Reduction of Cost

  2. Core Functionalities

  3. Level of Performance

Reduction of Cost:




For any product to be successful in the longer run, reducing the overall cost would be one of the important steps. And Frugal innovation is all about reducing the cost as much as possible. But it does not come for the sake of sacrificing durability and quality. Many mistook cost-reducing features to bring a negative effect on quality which is incorrect. A unique approach, coupled with out-of-the-box ideas would always help to achieve cost-reduction, and maintain the required quality.

And all definition of frugal innovation in articles lays a strong emphasis on reducing cost in a substantial manner. The reduction of cost can be done in many ways. It can be either using the resources obtained from recycling instead of new resources. For instance, Apple manufactured its entire MacBook air laptops by utilizing 100% recycled aluminium.

Reducing cost from the perspective of the consumer (customer) would help in sustained cost reduction. Minimizing the cost in manufacturing alone cannot be termed as frugal innovation.

Core Functionalities:





Frugal Innovation aims to reduce the cost of the product by eliminating non-essential features for a product. In other ways, it can be termed as concentrating on the main functionalities of the product. By eliminating the secondary (non-essential) feature, the complexity of the product gets reduced. This does not make the component to be available at low cost alone. Apart from this, it makes the product easier to use. One of the main aims of frugal innovation is to make the product simple to use while reducing the cost.

Concentration on the functionalities helps to increase the efficiency of the product. It also helps in the optimization of the product. As the required features are retained in a product, it also helps in minimizing the impact on the environment. Overall frugal innovation emphasizes retaining the core features of a product.

Level of Performance:




Optimization is important in every aspect of the product. It helps in using the resource in an efficient manner. In turn, it enables to enhance the performance level of the product/process involved. Covering one or two aspects of performance alone won't suffice. A product must ensure it covers all important features such as quality, durability, accuracy, safety, etc... Sometimes, it may not be possible to cover all aspects of performance. So, striking the right balance is highly important to ensure an optimized state. Understanding the local needs would help us to arrive at the optimum state for a particular product. For instance, the electrocardiogram device, manufactured by GE Healthcare was incorporated with commercially available components to reduce cost. But then, care was taken to make sure that the system operates at an optimum performance level. This was only possible by understanding the local needs and demand for that product.


Conclusion:

Other than the above-mentioned criteria, there are so many criteria that further add a feather to the cap. And making sustainable solutions is one of those. Due to climate change, people have started showing more important in ensuring the sustainability of the resources incorporated by the product. Gone are the days where the producer showcases the environmental sustainability of their product as an additional point. In the current scenario, following an eco-friendly approach is becoming essential in the creation of any product/process. Other criteria for frugal innovations include shaping the needs of the consumers and taking account of the needs of the customer and co-creating the product. Many firms have started capitalizing on ideas crowd-sourced from customers, and bringing them into a reality as preferred by the consumers. This ensures a win-win solution for both firms and customers.


Article by

Hayagrivan Balaji

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