Innovating On A Budget
The current recession is a problem so we need to be innovating on a budget. It is hurting businesses of all sizes in all sectors. Innovation can help you to cut costs, improve margins, retain customers, acquire new customers, gain market share and ultimately to survive. But when you are cutting costs and squeezing resources in all areas how can you find the people, time and money for innovation? Since experiments are not guaranteed to succeed it can look wasteful to fund large innovation projects.
Here are five tips to help you innovate on a budget:
- Tell people that you want their ideas. Tell your staff, tell your customers and tell your suppliers that you want ideas that will help streamline the business, improve service, cut costs or delight customers. Tell everyone! If you do not have an effective suggestions scheme then set one up. Listen to all suggestions with an open mind and evaluate them constructively.
- Allocate a budget for innovation. You do not get innovation for free. You must allocate time, people and money but you do not have to be extravagant. The most important thing is to give people some time and space to generate, evaluate, select and test Ideas. Google famously gives all employees one a day a week for this sort of activity. You do not have to be quite so generous – maybe one afternoon a month will work for you. However you do it you allow people to have ideas and experiment.
- Move quickly. Once you have selected a promising idea move rapidly to building a model that you can show to people. This might be built in Lego, it might be a series of sketches or a role play. Once you show it to selected customers or other stakeholders you can quickly get useful feedback and of course funding.
- Kill the losers. Set standards for innovations – e.g. Can we make money at this? Is there a real need? Can we make it work? Can we win with this? If the answers are negative then be prepared to cancel the project and move onto something else. Resources are limited and should only be devoted to potential winners. Be ruthless!
- Pinch other people’s ideas, we call this ‘creative swiping’. A low cost way to innovate is to copy ideas from other industries or other places and to try them in your business. What are they doing in other countries to solve this kind of problem? What can you use that is new to you but has been proved elsewhere?
Make innovation a priority and add it to people’s objectives. You have to make the current model work better and at the same time find ways to replace it with something better. Continuous innovation is demanding but rewarding, and is the best way to survive.