Innovating On A Budget

The current recession is a problem. It is hurting businesses of all sizes in all sectors. The solution is innovation. 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:

1. 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.
   
2. 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.
   
3. 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.
   
4. 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!
   
5. 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.

Business Creativity and Innovation - why aren't more companies taking it seriously?

Lets face it, most of the economies around the world have been in deep trouble for a couple of years and the problems do not look like they are going to end soon. We have politicians talking of radical reforms, new beginnings and innovative policies and then at the bottom of the chain there is us, the businesses both large and small that the politicians are betting on to help dig us out of the mess.

A lot of companies are making the right noises and I have contact with many who state that they wish to run 'innovation workshops', kick off an 'innovation programme' or make their business more creative. They all seem to appreciate that taking some action will improve many HR issues such as intrinsic motivation, communications and decision making to name a few. These businesses all claim to be looking to the future, to determine what the products and services of the future will look like and meet that challenge.

So senior managers, and above, are tackling strategic issues and seeking for the most effective tools to get the job done. Why is it then that when presented by a number of solid proposals that they do not go ahead? Mysteriously something comes up at the last minute, people cannot make the workshop, the cost is too high or best of all something more important has come up! What can be more important than the future of your company?

The worst offenders seem to be large multinational companies with a degree of financial inertia (maybe some cash in the bank and the ability to sit it out and see the competition wither) who elect to ride out the storm rather than steering around it. These companies need to be showing us the way and leading global recovery or else we are just going to be left with a handful of dinosaurs in sectors such as oil and gas, power generation and airlines.

So, my plea is, if the future really matters to your business then take Business Creativity and Innovation seriously and give it the time and funds that it deserves or you may not have a future.

Innovation 2010

Innovation 2010 is the title of a report published by the Boston Consulting Group (BCG) in April regarding the state of Innovation globally. There are a number of conclusions that can be drawn, but it is heartening to see that after a cautious 2009, companies are committing once more to pursuing Innovation during 2010.

Innovation is now a top three priority for 72% of respondents to the BCG survey, the highest figure since the survey was first introduced seven years ago. In addition, 84% of respondents consider Innovation an important or extremely important lever for reaping the benefits of an economic recovery. Companies are backing up their statements with hard cash too as 61% of companies plan to boost spending on Innovation and 26% plan to increase spending by more than 10%.

Executives cite the following as the major factors that are reducing the return on their Innovation spend:

• Risk averse corporate culture
• Lengthy product development cycles
• Poor Innovation measurement

For a while we have been saying that there is the possibility of a new world order in Innovation and survey respondents also echoed this. Although Apple and Google top the list of most innovative companies less than half of those surveyed believe that US companies will remain the most innovative over the next 5 years.

If we look at the first-time entrants to the most innovative list, all but one come from outside the US. One topical observation relates to the energy sector. Here BP rank number one and Exxon Mobil rank number four!

So what are the implications for senior executives this year?  

• Improving your innovation efforts this year are key. You have survived the recession, you must now beat the others that have done so.
• If you don't show a decent return on your innovation programme then someone will cut back on your funding eventually or find someone who can improve return.
• Your top team needs to be more 'holistic', embracing rather than merely supporting Innovation.
• You must keep looking over your shoulder. You might have a head start if you are based in a developing country but there are others who can run faster.

If you would like to find more about how to improve your Innovation prospects please get in touch.

Story - The Easy Way To Communicate

Story is one of the best and easiest ways to communicate meaning, rather than just spraying out words like we tend to do from time to time. I came across this little gem the other day which seems apt and needs no further explanation. I do not know the author so if you have come across this before and can attribute the author please let me know.

What is recession?

This story is about a man who once upon a time was selling Hotdogs by the roadside. He was illiterate, so he never read newspapers. He was hard of hearing, so he never listened to the radio. His eyes were weak, so he never watched television. But enthusiastically, he sold lots of hotdogs. He was smart enough to offer some attractive schemes to increase his sales. His sales and profit went up. He ordered more and more raw material and buns and sold more. He recruited more supporting staff to serve more customers. He started offering home deliveries. Eventually he got himself a bigger and better stove. As his business was growing, the son, who had recently graduated from college, joined his father.

Then something strange happened. The son asked, "Dad, aren't you aware of the great recession that is coming our way?" The father replied, "No, but tell me about it." The son said, "The international situation is terrible. The domestic situation is even worse. We should be prepared for the coming bad times."

The man thought that since his son had been to college, read the papers, listened to the radio and watched TV. He ought to know and his advice should not be taken lightly. So from the next day onwards, the father cut down the his raw material order and buns, took down the colourful signboard, removed all the special schemes he was offering to the customers and was no longer as enthusiastic. He reduced his staff numbers. Very soon, fewer and fewer people bothered to stop at his Hotdog stand. And his sales started coming down rapidly and so did the profit. The father said to his son, "Son, you were right. We are in the middle of a recession and crisis. I am glad you warned me ahead of time."

What Recession - reasons to be cheerful

The recession may have touched us all but it is not nearly as bad as the pundits and commentators would have us believe. One or two businesses have gone under but I am here and you are still here reading this. We are all still 'in the game' so we have some of the skills and resources necessary to survive. We must at the very least be capable of examining our external environment and reacting to it in a positive manner. We are flexible, adaptable, resourceful and understand our own competencies.

A downturn is a good time to plan and watch what others are doing. Take a look at your competitors, visit their shops and trade stands or use their services. See how your competitors are handling the bad times, take on board their good ideas and learn from the bad ones. In short be ready to beat them when the time is right. Use this slack time to review your own business, something you will not have time to do in the busier times ahead. Now is also a good time to woo new clients even if they are not going to buy from you right now. Understand them and listen to their woes. We are experts in our field.

We know that things are cyclical and so we can safely assume that after the crash will come a period of growth once more. We cannot say for sure what the timescales will be but we know that it will happen. We have demonstrated our flexibility in surviving initially and then been cunning in our approach to observing our competitors, creating a plan and acquiring resources. We have a business that will thrive when the time is right. In the meantime, leverage your expertise and assist your customers to save money or add value for existing customers (without charging them extra). We thoroughly understand our customers and our marketplace.

So you:

• are flexible, adaptable, resourceful and self aware
• experts in your field
• thoroughly understand your customers and your marketplace

Congratulations, you are now innovating!