WEBINAR Frugal Innovation Supports Customer-Obsessed Innovation

2. WEBINARFrugal Innovation Supports Customer-Obsessed Innovation Dan Bieler, Principal Analyst September 19, 2016. Call in at 10:55 a.m. Eastern time

4. Reach new customers with low-cost innovation • Frugal innovation (FI) re-engineers traditional R&D. • Digital technology boosts frugal innovation. • Frugal innovation offers more agile and customer-focused innovation.

5. Definition of frugal innovation • Targets the customer’s hidden aspiration or unvoiced problem • Represents a move from a linear model to circular models of innovation • Constitutes a collaborate approach to innovation • Is a complementary approach to traditional R&D

6. “I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.” — Jeff Bezos

7. Key takeaways FI requires a change of mindset and a different approach to innovation. The FI mindset sees constraints not as a disadvantage, but an opportunity. FI is complementary to traditional R&D, not a substitute. FI will add a new approach to drive innovation. FI opens opportunities to cater to people “at the bottom of the pyramid.” FI specifically targets this customer segment.

8. Frugal innovation re-engineers traditional R&D

9. FI keeps innovation simple and focuses on what customers actually need • FI targets customer’s hidden aspiration or unvoiced problems. • FI supports a move from a linear model to circular models of innovation. • FI builds on a collaborative approach to innovation. • FI is a complementary approach to traditional R&D.

10. FI can be split into two broad categories FI complements and simplifies existing technology. Jugaad innovation unlocks business creativity in resource-constrained environments.

11. Digital technology boosts frugal innovation

12. Digital technology boosts frugal innovation Mobile internet Feature-phone based solutions Affordable smartphones

13. Digital technology boosts frugal innovation (cont.) Open source hardware Mobile banking Biometric authentication

14. FI turns ubiquitous phones into microscopes and other medical tools

15. Frugal innovation offers more agile and customer-focused innovation

16. FI is not limited to basic products New customer segments Customer-centric innovation Speedy innovation and avoidance of over-engineered solutions Increased productivity through minimum asset input and easy-to-use

17. FI is not limited to basic products (cont.) Reduced innovation budgets Lower production costs Talent attraction and retention

18. FI provides a mindset for global customer-focused innovation Western businesses pushing frugal innovation to target emerging market customers Jugaad innovation targeting customers in developed markets

19. What it means

20. FI offers more agile and customer-focused innovation • Develop more cost effective and customer-centric offerings. • Listen to less-well-off customers during product development. • Involve customers more in the innovation process. • Boost an experimentation culture at work.

21. FI offers more agile and customer-focused innovation (cont.) • Learn from digital companies and startup mentalities. • Open new sales channels. • Frugal innovation is not simply about striped-down versions of products.

22. Put in place a collaborative infrastructure for frugal innovation

23. Boost involvement and interdisciplinary collaboration • Test out opportunities for frugal innovation in IT. • Support lateral thinking both internally and externally. • Design technology solutions that are intuitive to use for everybody. • Create a (part-time) position responsibility for frugal innovation support.

24. For further reference: “Mobilize The Internet Of Things” Forrester report Dan Bieler +49 176 2955 3606 dbieler@forrester.com Twitter: @DSBieler