How can companies afford to allocate scarce resources to innovation in these unprecedented times?
When every extraneous expenditure is cut back to preserve cash flow how can it be justified to lavish money on experiments that might fail?
You do not get innovation for free – you have to allocate time, money and people to the search for new products, services, methods etc. However, innovation can lead to powerful cost savings, profitable new products and competitive advantage. Indeed right now the main benefit of innovation might be survival. If you just cut costs and don’t innovate you will be bypassed in the market by more agile competitors.
There are many ways to achieve innovation. Let’s divide activities into three categories.
1. It costs virtually nothing to:
Communicate a vision of innovation
Set goals and objectives for ideas, prototypes and innovations
Ask your people for ideas
Ask customers for ideas
Ask suppliers for ideas
2. It costs very little to:
Run brainstorm meetings
Set up an intranet based suggestion scheme
Evaluate and select the best ideas
Build models and prototypes
Ask customers to evaluate your prototype products or services
Implement small incremental innovations in your products, services and methods
Empower people to try more initiatives in their areas
Investigate new collaborations and partnerships
3. It costs a lot of money to:
Roll out major new products or services
Try an entirely new business model
Re-engineer your IT systems
So you should do a lot of items from Category 1. Generate many ideas from all sources – it costs very little.
You should do a few things from Category 2. Definitely move the best ideas to the prototype stage and evaluate them (but kill them if necessary).
You should think carefully about items from Category 3, but be prepared to allocate some of your scarce resources in this area.
Innovation involves making bets. Often these bets fail. But you have to stay in the game and keep making small bets until one or more come off. Innovation is not free, but it can be done on slender means if you adopt this kind of approach
Paul is a professional keynote conference speaker and expert facilitator on innovation and lateral thinking. He helps companies improve idea generation and creative leadership. His workshops transform innovation leadership skills and generate great ideas for business issues. His recent clients include Airbus, Microsoft, Unilever, Nike, Novartis and Swarovski. He has published 30 books on lateral thinking puzzles, innovation, leadership and problem solving (with over 2 million copies sold). He also acts as link presenter at conferences and facilitator at high level meetings such as a corporate advisory board. He has acted as host or MC at Awards Dinners. Previously, he was CEO of Monactive, VP International of MathSoft and UK MD of Ashton-Tate. He recently launched a series of podcast interviews entitled Insights from Successful People.