| How to Innovate Without Money |
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| Written by James A Gardner |
| Thursday, 25 March 2010 12:59 |
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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 issue with this is that making innovation happen is not just about ideas and people. It also requires execution, which is the difference between an idea which sits around gathering dust, and one which can actually be converted into something that creates revenue. Execution, usually, requires money. Innovators with no financial resources at all almost always fail and the reason is this: Before anyone can make an investment decision in something new, there are three key questions which need to be answered. The first, which is "can we do this", is really technical: are the technologies, production capabilities, management systems, and other artefacts needed to create the innovation available? If not, can they be created at a reasonable price? 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 answer such questions, innovators will probably have to pay for research, prototypes and, potentially, the time of analysts. It is rare indeed that an innovation group will have access to 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. About the Author: Before you begin your innovation group, you need to decide on methods of funding. James Gardner's free online innovation book has material you should consider. |