Frugal management 101

Frugal innovation in academic literature is mainly defined and described as a product, process or business model that is robust, sustainable, and affordable made with minimal resource usage or locally available resources for highest impact. An effectual mindset with a community driven grassroots approach and an entrepreneurial spirit makes it a natural innovation process.

Having gone through various innovation methods, frameworks, organizational theories, I have transposed the philosophy and approach of frugal innovation for application in an organizational context through the term Frugal Management. In an organizational context the biggest underused intangible asset or resource available and accessible are employee competencies and capabilities. Most of the available human capital is not mapped, not known, undervalued, or not shared. Similarly, knowledge and skills not capitalised upon and shared is a lost value for an organization when an employee leaves a company.

Frugal innovation as defined by R.A Mashelkar is popularly known as “doing more with less for more people”. People just retain “doing more with less” which undermines the notions of “doing” and “for more people”. Behind the term “Doing” are a set of skills, a mindset, mental models, values, behaviour, and an attitude as in an organizational context the resources available are skills.

From my experience and discussions with various experts such as Prof. Anil Gupta founder of the Honeybee Network, the foundation of frugal innovation is based on the value of compassion, ethics and equity. Compassion being a core value of social well-being, collaboration, and cooperation.

Thus, frugal management is instilling an attitude of a change agent and applying an effectual approach to solve constraint based organizational problems for better productivity, agility, and well-being rooted in the basic values.

Frugal management is also about mastery, leadership and excellence.

The various continuous improvement practices along with certain constraint driven frameworks can also be applied under the frugal management umbrella. A lot of these practices in my opinion are already well accepted in agile practices where developers take on the role of craftsman. However, it becomes difficult for other service-oriented departments to embody this attitude.

The frugal management approach can inspire leaders, product managers, entrepreneurs, managers, and employees as a framework for change driven by individual and collective values, skills and competencies with the following objectives:

1. Strategic and Adaptive Leadership:

• Aligning personal growth with organizational goals, adopting a long-term perspective for decision-making, and leadership’s pivotal role in guiding towards a learning, adaptable, and efficient organizational model.

2. Valuing Talent :

• Recognizing and leveraging individual and team capabilities through a skills-based approach and data analytics, designing customized training programs, and strategically deploying talent for maximum impact.

3. Continuous Learning and Innovation:

• Establishing centers of excellence for continuous learning, capitalisation and innovation. Fostering a culture of feedback, conflict management, and internal mobility to enhance processes and develop new solutions by encouraging intrapreneurship and supporting change agents.

4. Inclusive and Responsible Culture:

• Promoting an inclusive and participatory decision-making culture, encouraging diversity, and embedding a responsibility for the welfare of workers, society, and the environment, aligning organizational goals with social responsibility.

5. Efficiency and Resource Optimization:

• Enhancing collaboration, proactive risk management, utilizing insights for innovation, and leveraging digital transformation to automate tasks and leveraging human capital for ressource and process effciency.

6. Change Management and Agility:

• Ensuring the organization remains adaptable and responsive through effective change management practices, fostering a learning organization that evolves with changes for optimized resource use.

7. Outcome focus

Working towards outcomes and high impact projects with available resource.

8. A value based culture

• Living the company values as a shared culture; making value aligned decision.

9. Contributing to the common good for building a regenrative culture

• Contributing to local initiatives for bettering the planet and social conditions.

Frugal management is as much about tapping into the unused potential of employee talent, identifying underused skills, building ad hoc teams with diverse skills for projects instead of recruiting new resources. It’s also about capitalising on best practices and experience of older employees. This approach is similar to SBO (skill-based organizations) or Braided organizations as defined by Michael Zarka or extreeme agile practices.

Many similar models such as teal organizations, conscious organizations already exist, so why to create another model for frugal management? The idea behind frugal management is to keep alive the rebellious spirit of grassroot innovation where simplicity, compassion, integrity, generosity, courage, creativity, well-being, responsibility are key values around which every leader can experiment common sense management with a non-linear and effectual approach.

Here is a list of non-exhaustive tools, frameworks and practices that have inspired my frugal management practices:

• OKR — bottom-up approach to impact driven change
• Theory of change
• Theory of constraints
• Polarity mapping for solving wicked problems and identifying tensions
• Lean startup
• Principles of Effectuation
• Liberating structures /art of hosting practices for leveraging collective intelligence
• User experience practices for a user centric approach to problem solving/ design thinking
• Value proposition canvas
• Value engineering
• Systems thinking
• Sociocracy / holacracy