Navi Radjou, author of ‘Frugal Innovation’, has spent the last decade studying entrepreneurship in the Global South. We met him at the Thinkers50 European Business Forum to discuss how creative problem solving can address some of today’s biggest global issues.

In India, a potter has invented a clay refrigerator that doesn’t depend on electricity to run. This is useful in a country that will need to quadruple its per-capita energy consumption to meet its citizens needs. In Peru, engineering students have found a way to absorb humidity through a billboard that converts water vapour into purified drinking water. Handy, in a country that oscillates between extreme drought and flash flooding.

These inventions, argues Radjou, come from creative problem-solving in the face of extreme limitations. The frugality inherent in these poorer economic regions pushes ‘out of the box’ thinking and ingenuity. These inventions are borne out of necessity, not from an imposed corporate social responsibility policy, and as such, they create long-term value.

Earlier this year at Davos, environmentalist David Attenborough delivered the keynote address. Last month, CEOs of 181 member companies of the Business Roundtable publicly supported a shift from a shareholder-value-first model to addressing environmental and social issues. But this can present a conundrum for business — how do senior leadership teams connect the dots between these purpose-driven outputs and long-lasting value creation? We are, after all, still living in a globalised marketplace.

“Wise leadership is an inner leadership”

Radjou’s latest book From Smart to Wise: Acting and Leading with Wisdom says that it takes courage to stick to one’s convictions and that a new, creative approach to leadership – just as frugal innovation has seen – will deliver the goods. “Wise leadership is an inner leadership,” says Radjou “It’s self-governance, and if you can govern your own fear, you can express your authentic self. That is to say that these are my beliefs, this is my perspective, and this is how I want to reconcile profitability and still do the right thing for society”.

In 2016, CEO Emmanuel Faber had a new vision: introduce GMO-free products into the US market for the express purpose of improving soil health and bio-diversity. The French multinational’s CEO was met with great resistance from his US colleagues and American farm and dairy groups, his key stakeholders. This new way of doing things went against the giant agricultural system that has a vested interest in GMO crops. Three years later, Danone’s GMO-free products increased its US market share from 30 to 40 per cent. Danone disrupted the old frameworks and in doing so, created value but not out of an urge to be the cleverest, but rather in service of a higher purpose.

“The biggest challenge is to present new ideas in front of senior management, then the rank and file and present to investors, every step of the way there’ll be criticism, rejection. You need to have the courage to stay true to your convictions and in this to strive for humility as a leader. This idea of ‘I am the smartest guy in the room’ and the ‘my way or the highway’ approach to leadership is old-fashioned, it doesn’t work. It’s toxic masculinity.”

“Purpose is very nebulous but you have to ground it so that it can be embodied so others can internalise it. You have to captivate people from the heart.”

Paul Polman and his vision for Unilever’s Sustainable Living Plan is another example of wise leadership. “He was working in a highly decentralised organisation and he was humble enough to say ‘I don’t know how this is going to happen because each region has different product lines, but I will support you along the way’. He gave them the carte blanche to try. There was a commitment to the cause and faith and trust as well.” says Radjou. “Purpose is very nebulous but you have to ground it so that it can be embodied so others can internalise it. You have to captivate people from the heart. Here, leadership is not just about having a purpose, it is all about taking action to serve others. It’s not about just you using your own intelligence, but leveraging and making the best of what others can contribute.” 

According to Radjou, the key to wisdom in leadership, lies in training our neurological pathways to attune to our wisdom. Smart thinking – being the strongest, the most competitive, the one to spot commercial opportunity is linked to our limbic system that is responsible for flight or fight. These are thought processes that passively fall back on default patterns. Wisdom, however, relies on the pre-frontal cortex, to override ingrained, limbic systems of thought. “It is the seat of will,” says Radjou “and if you want to change and unlearn old habits, it happens here [prefrontal cortex]”. Wise leadership, says Radjou, is the step toward conscious leadership and that will shape a better world.