No.of pages : 280
Publisher : Hachette India
Published on : February 15th 2015
Genre : Business, Non-fiction
Co-author Links : Goodreads
What is frugal innovation? Creating more high quality goods with less resources(Optimum level approach). Is it possible? If that is where your doubt lies, this book is tailor made for you. Business owners will find this book useful and extraordinary as it guides them HOW to produce consumer goods utilizing less resources that has the capacity to satiate the needs and wants of the consumers without compromising on the value, quality. I am not speaking as a book reviewer. I am speaking as a consumer. How to make more with less resources?I love this concept.
The authors have done a thorough research on various countries like how did the respective companies over there succeeded in creating more high quality products with less resources. Remember Nano cars in India?The solution is simple. You don’t have to study economics to understand this concept, frugal innovation. Apply creativity and you can fantastically create more complex products with lesser resources if you want to startup a business.
Who is more important for a business man/business woman, the employees or the consumers? Of course, it is always the consumers. If the employees are given due respect and encouragement, they will work on creating frugal products that will become a huge hit among the consumers. How to get to the top?It is not as complicated as it seems.
Do not underestimate the book. The what’s and why’s and how’s are explained inside the book. Startups must buy the book and get an idea of how frugal innovation can help them making huge profits.There are various strategies discussed in the book.These strategies will help in determining/estimating whether their business will become a success or a failure.For any business, the owner is dependent on the consumer not the other way around.This is a basic principle.As said in the book, the consumer is doing the business man a favor by giving them an opportunity to do so.
“When we design and build products, we focus on the consumers”. Will they buy the product?If they do buy it, will they buy it again in the future? Through word of mouth will they motivate their neighbors, friends and family to buy it?
The main theme of the book is to do more with less. At present, frugal innovation has been followed by plenty of Industries, so if someone is going to startup a business how their business is going to stand out from others, they should ask themselves.
There are 9 chapters in the book and 7 case studies.This book is dedicated by the authors to all the frugal innovators out there who are everyday making the world a better place for
Quotes that caught my eyes and my views
“The industrial R&D model, based on big science and technology push, is increasingly maladapted to the 21st century’s fast paced digital economy. In a world of growing economy financial constraints, resource scarcity and increased competition, involving highly empowered, cost conscious and eco-aware customers, there are several reasons why the industrial R&D model is losing its effectiveness”.
“It can take up to 15 years to develop a new drug, over five years to design and build a new air craft and three years on average to conceive of and launch a car”. What is the reason?Time consuming and inflexible R&D.
The primary motive for publishing this book in my opinion is that to seek cheaper, good enough solutions and eliminate complex, expensive and environmentally unfriendly products as mentioned in the initial chapters.
“Customers can view their budgets, savings and spending in their current account.Any spending on their debit card is quickly reflected in their account; They get push notifications of their spending too.The bank uses customer data to provide them with an instantaneous view of their spending patterns”.The same principle applies to companies whether it’s a small concern or a big concern.
“All kinds of cognitive and psychological biases intervene and scupper even the best intentions of conscientious consumers.There are ways companies can help overcome their customers’ profligacy;and many of them will be more than willing to try”.
“Collective buying platforms cutout middlemen and support small producers”. Food is a good example and it targets mainstream consumers.
Crowd-sourcing and social media helps in gathering ideas from the consumers to produce a new product based on quality not on quantity. Well said. Once the consumer is satisfied with the product, they will become loyal buyers. This is a fact.
“Customers who love their brands also like to play an active role in supporting them. They are willing to help design and produce them, and to share this passion with others”.
“It would be hypocritical of chief executives to ask their consumers to save energy while criss-cross the world in private jets. Senior corporate leaders must also do frugally if they are to inspire the customers to do the same”.
“The silver lining in the post-crisis gloom is that citizens’ search for a more balanced lifestyle is helping to create a new economic system-a frugal economy”.
“Doing better with less and finding ways to reduce complexity in all aspects of business. The branding crisis that most countries face today is , if the cost of the good is low and there are fewer features, they think the product is not worthy of their hard earned money.“So managers fear that frugal products will damage the corporate brand, so think in terms of money for value rather than value for money”.
If the company is big, the major concern is the board members as they have to oblige to the shareholders and think twice before allowing the employees to produce frugal products. Stock price may fall down is their strong opinion.
“Even if senior managers are amenable to a strategic shift, they may be unable to get it past the board”.The board members will oppose lower margin products even if sales volumes and profits rise. This view has to be changed. Frugal innovation creates market success must be understood by large companies. A fine example is Walmart. It has many branches in US and serves the low income consumers with great sincerity and genuineness. How many will agree to this?
"Whether it is Renault-Nissan in automotive, GE and Siemens in manufacturing, Univerlever and Pepsico in consumer goods, Marks & Spencer and Auchan in retail, Novartis and GSK in pharmaceuticals, Pearson in education, American express and Barclays in finance, Aetna in healthcare, these frugal innovation pioneers are rewriting the rules of the game".
The drawback of the book is , it is written in a boring tone, and people who are averse to reading Non-fiction books will find it very hard to sit for a long duration. But this is a must read book not only for (aspiring) business man and business woman, it is for everyone including the homemakers. I hope when the authors publish their third book, they understand the wants of a layman and produce a book that is interesting and creates enthusiasm to turn the pages and not skip some pages. For instance, I got tired of reading and felt sleepy while reading the book.
I really appreciate the hard work done by the authors. They have done an analysis of big companies like Renault, Zopa, Unilever, Tata Motors, Facebook, Apple, Google, Cisco, IBM, Nike, Herman Miller, Heineken, Philips, Tech shop, Levi Straus, Uber La Ruche qui ditOui, Aetna, etc. Whatever you want to convey to the readers next time, tell it in a manner that attracts a large number of consumers.
The one thing that caught my full attention in the book was “Companies cannot expect consumers to change their behavior by themselves or overnight. First though, managers must change their behavior”. If you have studied marketing, you will know the four P’S-product, place, promotion and price.There are actually 7 P's just letting you know. This sure is a clever and tested method a startup owner can follow.
Mental models of the employees must be changed and they should work by creating sustainable solutions. Motivation plays vital role in the life of the employees. Customer is a tool to motivate them. The change in the behavior of the customer must create a change in the employees too. They should act accordingly to satisfy the customers with new innovative products.Hats off to the authors for having the wisdom to produce a quality book.
Disclaimer I thank Hachette India for providing me a free copy of the book.
Disclaimer I thank Hachette India for providing me a free copy of the book.