How do you deal with the situation where you're supposed to innovate but have no budget?
It is a situation surprisingly common. Management, especially those who are proponents of innovation culture, feel that all that it takes to get more innovation is to assign a couple of people the task. In many organisations, in fact, finding people is much easier than finding money, so this seems like an easy way to get an innovation programme started.
The problem, of course, is that making innovation happen is not just about people and ideas. Execution, which is the difference between having an idea that just sits around, and having an idea which can actually be converted into something useful, costs money.
Innovators with no financial resources at all almost always fail and the reason is this:
Before it is possible to make an investment decision with respect to something new, there are three key questions which must be answered. The first is "Can we do this?" which is actually about the technicalities of the innovation. The second question is "Should we do this", which is actually about the financials of the innovation. And the third question is "When?", which has to do with market entry timing.
In order to get the answers to these questions, the innovators will probably have to pay for research, prototypes and the time of analysts. It is rare that an innovation group will have all these capabilities in house.
Therefore, an innovator with no money at all has few alternatives but to make the attempt to answer the key questions themselves. Usually, this results in quite poor business cases which are extremely unattractive to big budget holders. The result is the innovators wind up tossing very poorly formed propositions at stakeholders for funding, and have little chance of being taken seriously. - 32383
It is a situation surprisingly common. Management, especially those who are proponents of innovation culture, feel that all that it takes to get more innovation is to assign a couple of people the task. In many organisations, in fact, finding people is much easier than finding money, so this seems like an easy way to get an innovation programme started.
The problem, of course, is that making innovation happen is not just about people and ideas. Execution, which is the difference between having an idea that just sits around, and having an idea which can actually be converted into something useful, costs money.
Innovators with no financial resources at all almost always fail and the reason is this:
Before it is possible to make an investment decision with respect to something new, there are three key questions which must be answered. The first is "Can we do this?" which is actually about the technicalities of the innovation. The second question is "Should we do this", which is actually about the financials of the innovation. And the third question is "When?", which has to do with market entry timing.
In order to get the answers to these questions, the innovators will probably have to pay for research, prototypes and the time of analysts. It is rare that an innovation group will have all these capabilities in house.
Therefore, an innovator with no money at all has few alternatives but to make the attempt to answer the key questions themselves. Usually, this results in quite poor business cases which are extremely unattractive to big budget holders. The result is the innovators wind up tossing very poorly formed propositions at stakeholders for funding, and have little chance of being taken seriously. - 32383
About the Author:
Prior to starting your innovation effort, you need to decide on methods of funding. James Gardner's free online innovation book has advice you should review.
