Innovation can even happen with limited budgets
What are barriers for innovation? Limited budgets is often mentioned. I beg to differ. I believe this argument is often used as an excuse to stick with business as usual. As Innovation Leader, focused on Horizon 2 commercial innovation, I have guided innovators accross the globe for 5 years and have not observed one failure due to the lack of budget. Let’s have a look at each of the 3 innovation stages and how Innovation Leaders can be catalysts.
Ideation. In this stage, the Innovation Leader can help the innovators to clearly define what they want to solve (the problem), how they plan to do this (the innovation) and what the expected outcomes could be (the value the innovation will create). In virtually all cases, this should need practically no budget.
- To understand the problem, the innovator should read about it and listen to business owners or to customers. No need for a budget, except maybe some traveling expenses to visit customers. I prefer 1-1 interactions with customers, although some brand teams may want to organize focus groups (and pay for it).
- A bright idea from an internal innovator doesn’t cost anything. Even if a business owner wants to organize an internal brainstorm session, its still free. Another option For the business owner is an Open Innovation Challenge, which does come at a cost.
- The third part is to define the expected outcome: it takes less than 15′ to write down the value the innovation might create. This doesn’t cost anything either. [See more in my blog on storytelling]
Experimentation. In this stage, it’s about learning fast or failing fast (cheaply). The typical approach is to identify a few key assumptions and to validate them.
- The innovators identify the key assumptions themselves or talk to a few key stakeholders. Again, to talk to some external stakeholders, this may incur some travel expenses. A simple way to avoid investing too early in an exciting idea is to ask the innovator to create a simple Reverse Income Statement. It takes about an hour and helps identify the key financial assumptions (drivers and barriers). The Innovation Leader can facilitate this.
- To validate those key assumptions, innovators can use desk research (e.g. to define costs for materials) or talk to internal stakeholders (e.g. to Compliance to get input on potential ethical hurdles). In some cases, a MVP (a Minimum Viable Product, a prototype) needs to be developed to more realistically test the innovation with a few potential customers. This can be a simple sketch (no cost) or an internally developed software (the benefit of corporations is that the IT organization can help with this – I have seen multiple thriving internal partnerships). Sometimes, testing materials can be borrowed [see my blog on fail fast] or bought. In all cases, the budget is usually so small that it can be easily secured from the innovators own budget, the business owner’s budget or the IT budget.
Pilot. In this stage, a larger budget is typically required. If the previous 2 steps have been taken, it is relatively easy to find a sponsor. The clarity of the argumentation and the passion of the innovator make this happen. The Innovation Leader can help to make the appropriate connections across the corporation and can mentor the innovator. I have seen many effective examples:
- The manufacturing organization was eager to sponsor a business innovator who wanted to test a smart refrigerator to address direct physician access to vaccines. They saw broader applications from a supply chain perspective.
- The IT organization secured a budget to support business innovators who performed software experiments. The IT team was eager to develop an internal center of excellence and wanted to avoid that business innovators worked with external vendors to develop software (for cost, confidentiality and scaling/platform purposes).
- The global marketing team sponsored a pilot where a country innovator tried out a comprehensive diabetes management approach. The global team was looking for a scalable beyond-the-pill value solution.
- The local management of the UAE, in collaboration with the global innovation team, bought a commercially available robot to help a local innovator test an innovative oncology patient engagement approach
- The regional commercial team organized an Innovation Award. The winners received a budget to test their innovation and had to commit to report back with the results – succes or failure.
Although it sometimes took some time and energy to secure a budget, there were several advantages of having to argue for resources. The innovators had to be really passionate about their idea and had to have completed initial homework. The sponsors became engaged partners with “skin in the game”, they were often from other parts of the corporation (increasing collaboration across silos) and they facilitated scaling of successful pilots.
As Norman Vincent Peale said:
“Empty pockets never held anyone back. Only empty heads and empty hearts can do that.”
So, as Innovation Leader, I guided the innovators through these 3 stages, made the appropriate connections and helped them to secure budgets when needed.
More about this topic: 5 Ways To Fund Innovation On A Budget by Ellis Booker in CIO.
What do you think? Please share below!
More of my blogs on innovation: Wim Vandenhouweele