Resource scarcity: Our survival is becoming the main driver of creative thought behind innovation. (continued from part 1)
How can we nurture a mindset of constant reinvention in the workplace to create and sustain a competitive advantage in today’s resource-constrained economy? If we consider that our current consumption of water, food and energy is expanding at a rate that cannot be maintained without depleting the planet’s resources, then surely most of us are (or should be) already in the mindset of “doing more with less”. Paul Polman, CEO of Unilever, strongly believes that resource scarcity can be a catalyst for radical innovation. He recognises that, at our current rate of consumption, by 2030 we would need two planets to supply the resources we need and to absorb our waste. (N. Radjou and J. Prabhu, Frugal Innovation: A New Business Paradigm, Jan 2013)
A more recent term coined for the kind of “radical innovation” Paul Polman is referring to is Frugal innovation, which is a type of “resource constrained” innovation. Frugal innovation is the ability of an individual or a team to generate more business and social value while significantly reducing the use of scarce resources. “Frugal innovation is a game-changing strategy for an “Age of Austerity” in which firms are being compelled by cost-conscious and eco-aware consumers, employees, and governments to create offerings that are simultaneously affordable, sustainable, and of high quality. Even more than a strategy, frugal innovation is a whole new mindset, a flexible approach that perceives resource constraints not as a debilitating challenge but as a growth opportunity.” (N. Radjou and J. Prabhu, Jan 2013)
With all this in mind, I’d like to add clarity to a mixed literature that argues on the one hand that limited resources foster creativity, and on the other, that abundant, and a variety, of resources foster creativity. Instead, I avert the questions that experts ask by shifting the discussion away from variance-explanation models (which are regrettably largely based on assumptions) and towards understanding organisational processes, specifically around how employees can tap into their own creativity under constraints, and how managers could enable them to do so.
All of us have at some point in our lives come up with an “ingenious” idea. Ideas as small and simple as using a paper clip in place of a button to tie a piece of clothing together, to something big like you believe you’re the first person to have thought of the electric car, or even the solar powered car! Whatever your invention/s might be; whether just ideas or you actually have a patent for them, they are not innovations until they actually change the behaviours of the users, businesses and the processes around them. Most innovations are evolutionary changes to existing processes, uses or functions which are made better by one or more contributing inventions e.g the tablet is an evolution of smart phones, portable computers, touch-screen interfaces, and content/media aggregation. All of these inventions existed well before the Kindle, iPad or GalaxyTab devices. But when do we come up with these ideas? When we are under constraints. When we either have no time, money or natural resources. In fact, we actually look for and even create constraints for ourselves when emerged in the conscious and subconscious creative process. For example, a typical (albeit simple) creative process looks like this:
- We define the problem or need.
- We define our resources (the fewer the better, because we are then able to see the solution clearer)
- We try to figure out what we know and don’t know and what we can and can’t do
- We function best in an environment free from distractions because the clock is ticking and the pressure drives action. We create a sense of urgency (time constraint) and the adrenaline kicks in at the last minute before the deadline.
- You learn by doing, and you keep doing because failure is not an option. You don’t just think about it, you need to take action.
A recent example of individual creativity followed by innovation is the “Bamboo Bike” Initiative founded by Ghanaian-born Bernice Dapaah. She basically started a small company making bikes in Ghana from bamboo. Sounds ingenious, but is it? Or did this talented woman see clearly what she had to do, defined the problems: poverty, rural-urban migration and youth unemployment. Then looked at her resources: bamboo. Ghana has plenty of it. Along with second generation bikes. Put the two resources together and you have a social enterprise that replants bamboo and creates a sustainable solution to Ghana’s socio-economic problem. It adds value. And changes lives.
As we move into a new era of business, the most successful organisations have come to realise that fostering creativity in the workplace is what drives innovative thinking. But as we know, creativity on its own is of no commercial value until and when you have set up the type of processes in place that will harness and transform this creative output into real innovation. According to Fast Company, 60% of CEOs polled said they felt creativity was the most important leadership skill, ranking higher than both integrity and global thinking.
In Western corporations, most individual creativity gets stifled because of the many structures put into place not leaving any room for employees to literally do things differently. This, you may think, is a constraint, which I argued early as imperative if you are to produce any innovative solutions. These structures however, are not there as constraints, they literally throw a bunch of resources at you and then give you the actual guidelines to solve a pre supposed problem. This clearly doesn’t allow for any flexibility of thought or complexity. And certainly doesn’t let employees look inside themselves. These structures reward employees who operate within these guidelines and produce the same old cookie cutter solutions. They don’t allow the growth of a resilient mindset that will turn scarcity into opportunity. Most Western companies have assimilated the idea that an innovation system—like any other industrial system—will generate more output (inventions) if fed more input (resources). As a result, the structured innovation engine in most companies is capital intensive, requiring an abundant supply of financial and natural resources at a time when both are scarce. This structured innovation process has caused sizeable R&D investments with the outcome of becoming more risk averse e.g implementation of standardised business processes such as Six Sigma and stage-gate analysis to manage innovation projects to drastically reduce uncertainty and the risk of failure. Although these processes have had “well-documented benefits, including delivering volume-oriented economies of scale for standardised products and services, providing for the capital-intense needs of “big risk, big reward’’ R&D projects, and enabling more effective and efficient execution of innovation projects in stable environments. Yet structured processes can’t deliver the agility and differentiation that enterprises need in a fast-paced and volatile world.” (Navi Radjou, What the West can learn from Jugaad, 2013)
Typically, extreme conditions that have made Frugal innovation possible and more in demand have become prevalent in emerging markets such as China, Brazil and India, however in recent years, developed economies such as the US and Europe have begun to exhibit many of the same aspects of scarcity, diversity, unpredictability, and interconnectivity, making these principles relevant to companies around the world who are already jumping onto the band wagon. Renault-Nissan has proactively adopted “Frugal Engineering” and established itself as major global manufacturer of both low-cost vehicles and electric cars. Siemens, the German industrial giant, is also leveraging the frugal mindset of its R&D groups in India and China to develop frugal solutions that deliver higher value to customers e.g Siemens’ Indian engineers — in close collaboration with their German peers — have developed a Fetal Heart Monitor that uses inexpensive microphone technology rather than costly ultrasound technology. This affordable Fetal Heart Monitor is part of Siemens’ larger portfolio of frugal solutions labelled SMART (Simple, Maintenance-friendly, Affordable, Reliable, and Timely-to-market). SMART products are 40-60 percent cheaper than high-end solutions. They are also energy-efficient as well as quicker and easier to implement, use, and maintain. Siemens estimates there is a US$200 billion global market for SMART products. As Peter Löscher, CEO of Siemens, affirms: “Scarcity of resources is not an impediment but an enabler (of innovation).”
Implications for the future
If you’d like to start harnessing your and your people’s creativity towards a truly sustainable innovation engine, consider the following:
- Identify your customer’s needs and what value you can bring
- Prioritise strategic direction and communicate the vision with everyone in the company
- Keep it simple (break down into manageable steps, cut out the frills, streamline designs, cut costs wherever possible by looking at which resources you already have at hand)
- Introduce constraints (natural resources, money, time)
- Have diversity in teams; diversity of thought, skills, backgrounds and experiences
- Nurture a “flexible” environment, both collaborative and competitive
- Never give up!
This could easily look like your existing innovation process. But this time, the constraints are very real and imminent, and people’s perception of value is changing. Ultimately, it is time for a new era in the workplace — an era of creativity that will redefine how organisations function. You don’t need to change your existing structures, just consider that there is no ingenuity needed. It’s about creativity; connecting the dots. The fewer the dots, the easier the connection. Do more with less.