Transcription

• Speaker #0

  I don't know. What a wonderful thing it is. Hakuna Matata. Is it possible to continue innovating when simplicity should be king? This was 30 years ago. 30 years. Mufasa took Simba by the paw and from the top of a rock showed him his kingdom.

• Speaker #1

  Everything you see exists together.

• Speaker #0

  They are in balance. Prophesied Mufasa. 30 years ago, long before most political leaders, a cartoon lion was talking about a sustainable world, a world in which lions eat antelopes, but just what is necessary. This cycle of life takes place in a world cut off from time, which has always been as such and which, without Scar's actions, could have remained this way. What if Scar, the regicidal lion who seizes power, was in fact an entrepreneur? an innovator, and what if Scar had understood that innovation was impossible in the era of simplicity? In this day and age, our consumer society boasts great innovations that might not have seen the light of day without using many resources. So is it possible to continue innovating when simplicity should be king? Make sense? Make sense. Welcome to Make Sense, a leap in pop culture. to explore society's challenges. I found someone who thinks so and who's made Frugal Innovation his specialty, Denis Eduardo Roseto, who comes to us straight from the Schema Business School campus in Belo Horizonte, Brazil, where he is a researcher and professor of global entrepreneurship and innovation. Hi, Denis.

• Speaker #1

  Hi, Mary.

• Speaker #0

  So, Dennis, you're here because you claim that we can innovate with a few resources. Really?

• Speaker #1

  You're absolutely right, Mary. We can innovate even when resources are scarce. And his approach is known as frugal innovation. You might think of a similar to the Hakuna Matata philosophy. You know, it's about being carefree, but also smart with what we have, making the most out of limited resources. Frugal innovation, it's not just about cutting costs. It's about rethinking how we innovate making solutions that are most accessible, affordable, and sustainable. Whether in emerging markets or developing economies, frugal innovation thrives under constraints, whether those are financial, technological, or environmental. The key is turning this constraint into opportunities.

• Speaker #0

  Historically, the tendency has been to innovate like SCAR, right?

• Speaker #1

  Innovating without considering limits. SCAR was all about grabbing power and resources without any thought for sustainability. Classic innovation often piles on more features, more complexity, and naturally more costs. But frugal innovation flips this script. It's like decluttering your garage. Get rid of what you don't need and focus on what truly matters. Maximum impact, minimum resources, Mary. Look at Simba. Poor guy lost everything and end up hanging out with a meerkat and a hard dog. But he didn't just sit there feeling sorry for himself. He adapted, learned some new tricks and eventually become king again. Sure, he didn't have the perks of... fried rock, but he made the best out of what he had, turning lemons into royal lemonade. That's frugal innovation in a nutshell. Start with little and build something great by focusing on the essentials.

• Speaker #0

  Do you have any examples to provide us?

• Speaker #1

  Think about Tata Nano from India, for example. They designed this car for meet the needs of families who are more used to riding scooters. Basically, they took the idea of a car. and strip it down to the basics. No fancy bells, no whistles, just a functional, safe, and affordable vehicle that could be sold for around $2,000. Tata Motors basically said, who needs a fancy dashboard when you've got everything you need? That's the frugal innovation, high value at a low cost. Take the Brazilian Embrapa example. They have developed low-cost agricultural technologies like the Zerotillage system, which minimizes soil disturbance and reduces the need for expensive inputs like fertilizers. Their system has made sustainable farming practices more affordable for small farmers. Similarly in France and in Brazil as well, by the way, Renault developed a Diquid, a budget-friendly compact car designed with frugal principles in mind. Initially targeted at the emerging markets like Brazil and India, but they focused on an affordable without sacrificing essential features. The success of Diquid in these markets even led to this introduction in Europe. showcase how Frugal Innovation can be adapted to different contexts.

• Speaker #0

  So let's talk about Simba. How did Simba manage to become king from nothing? How do you make a lot out of almost nothing?

• Speaker #1

  Well, Mary, Simba's journey from rock bottom to king of Pride Rock, it's the ultimate playbook for Frugal Innovation. Picture this. Simba's out in the wild, having lost everything, his kingdom, his status. Even his diet of fine antelope. What does he do? He doesn't wallow. He teams up with a meerkat and a warthog. Now, if that's not a frog innovation, I don't know what it is. Timon and Pumba introduced him to the Hakuna Matata philosophy, which is basically a chill-out and improvised mindset with all needs when the chips are down. Simba learns... to survive on the bare minimal. Bugs instead of buffalo steaks and he makes it work. Talk about adapting to your environment. As he grows up, Simba doesn't just sit around. He books up, grows a mane and gets ready to take back what is his. This transformation is like when a company starts small, learns the hopes and eventually becomes Become a market leader. And of course, Simba finds love along the way because what's a good comeback story without a little romance? But seriously, love here represents innovation. It's a new motivation that drives him to reclaim his throne.

• Speaker #0

  Do you have any tips that we could provide entrepreneurs today? about how to innovate in a frugal or simple manner?

• Speaker #1

  What's the lessons here, Mary? We have some tips. Innovation doesn't need a ton of resources. We need to shift the mindset. This is the main idea. Think like Simba, you know, with unexpected allies, adapt to your surroundings and use whatever at hand to build something great. Whether you are a startup or established business, Embracing frugal innovation can turn your business challenges into a very nice opportunity. My research has consistently shown that innovation often requires a kind of mindset shift. In my work, I have been exploring this way about how companies can take advantage of frugal innovation, can leverage frugal innovation to transform constraints into opportunities, just like Simba did.

• Speaker #0

  So thanks for those tips. for entrepreneurs who want to innovate, maybe we can think about times of crisis and perhaps compare Simba's innovations with reality and examples of companies who've had to innovate during times of crisis.

• Speaker #1

  Remember Airbnb during this pandemic? They were hit hard, just like Simba, when Scar took over Pride Rock. But instead of giving up, they pulled a Hakuna Matata of their own. Airbnb shifted gears, focusing on online experiences and long-term stays. They didn't have the same resources as before, but they made do with what they had and came out even stronger. Kind of like Simba turning a bunch of bugs into a banquet. This transformation is similar to what BMO, a retailer, and the Brazilian Amazon did to expand its market reach. BMO implemented low-cost logistics solutions and mobile banking services tailored to the needs of isolated communities. By making the most of the resources available and adapting to the challenging environment, BMO thrived in a region where others struggled. In France, Michelin's development of a twill airless tire is another example. Designed to withstand extreme environments without the risk of punctures, the twill represents how a company can innovate and adapt to new challenges, much like Simba's transformation to reclaim his kingdom.

• Speaker #0

  Thank you, Dennis. So in The Lion King, it's basically a crisis situation that allows Simba to innovate and reclaim the throne. Does it really always have to take a crisis situation to make people innovate in a sustainable way?

• Speaker #1

  Well, Mary, in The Lion King, it's the whole uncle's murder fighter and steel throne crisis that forces Simba to step up his game and innovate. But here's the big question. Do you really need a familiar drama of... epic proportions to drive innovation? Not necessarily. While a crisis can definitely light a fire under you, you are not the only way to spark innovation. The real secret ingredient? Resilience. The ability to adapt, learn, and keep moving forward even when things get tough. So, frugal innovation, it's all about keeping that resilient mind even when you are not. in the middle of a full-blown crisis. It's about making innovation a habit, not just something you do when things go wrong. Take India's healthcare system, for example. They have been dealing with research constraints for years, but instead of waiting for a disaster to strike, they have been proactive. They have come up with low-cost surgeries and portable diagnostic tools, real game changers. And these weren't just quick fixes. They're sustainable solutions to long-standing challenges. My research has highlighted the importance of resilience and innovation, showing that sustainable innovation doesn't just come from reacting to crisis. It stems from a culture that continuously seeks to improve and adapt. While a good crisis can certainly kick-start innovation, the real magic happens. When you build a culture of resilience, it's like Simba. His journey wasn't just about reclaiming the throne in a moment of crisis. It was about building a kingdom that could stand the test of time with or without the drama.

• Speaker #0

  Is it necessary to constantly innovate or should we take a break from innovation? In other words, once Simba is in power, should he stop innovating or... continue to innovate, but perhaps differently from Scar?

• Speaker #1

  That's a really thought-provoking question, Mary. When Simba finally becomes king, he doesn't just sit back and relax. Instead, he chooses a different path from his uncle Scar. Simba's leadership, it's all about balance and sustainability. Much like how modern companies need to focus on long-term value. rather than short-term gains. The concept of degrowth suggests that sometimes we need to step back, reduce consumption, and maybe even slow down innovation to protect our resources. But I believe that sustainable innovation, particularly frugal innovation, offers a middle ground for that. It's about creating products and services that meet essential needs without exhausting the resources we have. In France, Veolia's water management solution has implemented frugal innovation in water purification and distribution systems that are both cost-effective and environmental-friendly, demonstrating that sustainable innovation can coexist with principles of the growth. My research into frugal innovation has shown that innovation doesn't have to stop in the name of sustainability. Instead, it's about innovating smarter, creating solutions that are both effective and sustainable, just like Simba led with balance and foresight.

• Speaker #0

  Do you have any closing remarks? I know you've mentioned research constraints as part of your research. Do you have any closing remarks about that, related to the Lion King, perhaps? to finish with?

• Speaker #1

  So Mary, I think it's nice to highlight that over the last years I have expanded my time doing research, trying to help and support companies, small, medium and even big companies to overcome crisis in an affordable way. Usually nowadays, after a pandemic context, With this war situation between Ukraine and Russia and, you know, Israel and Palestine, everybody used to work hard to make money and everybody overthinking about how to spend their money. And companies, it's the same. How? They're trying to make their customers to choose their product instead of the other ones, their competitors in the market. And how to be an innovator, how to innovate in a resource-constrained environment. Even in emerging markets or in a developed country, companies are trying to find ways to innovate, but the resources are not always available. So I'm trying to help companies to overcome crisis by innovating in an affordable way. And these multiple ways to innovate that started to pop up from 2010, it's like frugal innovation, cost innovation, and many other types of innovation that helps the companies to innovate in an affordable way. Innovation. Particular frugal innovation teaches that constraints are not just obstacles, they are opportunities. Just as Simba found his way back to the throne with limited resources, business today can pave the way for sustainability and impactful innovations, even in the most challenging environments. My research in frugal innovation underscores this point, showing that Hakuna Matata Problem-free philosophy can coexist with a relentless drive to innovation and make the difference. By the way, Mary, in our campus, Escamac campus in Brazil, in Belo Horizonte, we have a focus on emerging markets, research constraints, unstable environments. And we always try to build... this skill to the students who choose to spend some time in our campus to learn and develop their skills about how to manage and how to be a very good entrepreneur in a resource-constrained environment. So I think all of this can help them.

• Speaker #0

  So thank you, Dennis. Well, to finish, what, according to you, is the most frugally innovative product or company? What is that number one?

• Speaker #1

  That's a very good question, Mary. We have many emblematic flogging innovation examples around the world. The most emblematic example is the General Electric Airwood Sound Scan. You know, when General Electric starts to get in the Indian market, they realize their scan machines, you know, doesn't fit the Indian market because their scans and their products requires a huge... infrastructure, you know, and equipments. And sometimes they barely can have streets to deliver, you know, their machines, their huge machines and pretty expensive. Then after creating innovation center in India and take advantage of their local knowledge and take advantage of their local scientists, they learned about India. They develop a portable ultrasound scan. Making these products a huge success and these products came back to the developed countries and then gained the world. This is a very nice example. When they took out most of the unnecessary features, they de-featured the products focusing on what really matters. Make the images and help in the diagnosis. So that's... It's one example. The Tata Nano is another very nice example. When they took out the freezals, no freezals, no luxuries, no additional features, they focused on the essential. So, frugal innovation, it's mainly composed by three components. We must focus on the essential functionalities, the core functionalities. We must show a substantial cost reduction and we must develop or we must found a sustainable shared engagement through the value chain when you are in. So if you are not engaging in your environment, in your innovation ecosystem, you must try to get in, engage yourself and try to develop a shared sustainable engagement. you know, to be possible, reduce the costs and focus on the core functionalities.

• Speaker #0

  Thank you, Dennis. I've learned a lot about making a maximum out of a minimum and being engaged in your environment.

• Speaker #1

  Thank you, Mary. It was a pleasure.

• Speaker #0

  So are you more Scar or Simba? One thing's for sure, makes sense, the Scammer Business School podcast has more surprises in store. Before the Land of the Lions, we were at Central Perk wondering if Joey, Phoebe, Chandler and co. would have been friends in the age of social media. I'll let you find out whether Ross and Rachel would have ended up together or not. And to find out more about the school and its different programs, visit scammer.edu.