Over the last few months, I had noticed a growing trend amongst C-levels at companies, covers of magazines such as BusinessWeek, Time, Fortune cover the topic of innovation, but that was a few months ago. September 2009 seems to have put a damper on some of these well meaning and well laid-out plans to create new products and services within many companies. The big question in many of these companies is will they follow the “innovate of die” mantra in the cold winter (financially speaking) ahead of us? Will the companies follow-up on their innovation charter with real actions and back them financially. In my opinion, answer will be yes for only a few. This is because generally speaking when people think about innovation; it often conjures up the image of spending more money with uncertain ROI. In sound risky and the general mood seems to around conserving cash. I wanted to share some of my thoughts in terms of how companies can continue to innovate during tough times without increasing R&D expenses. Some examples would be this category of innovation would be….
- Extend the definition and scope of innovation to beyond product/ technology innovation. Think innovations in operations and business model. Think Dell. Dell did not design or manufacture state-of the art computers, it just sold them directly to the customer; an idea truly revolutionary in the computer industry in 1980’s. This type of innovation often does not require technology break-through or large investments. Additionally this type of innovation creates longer term sustainable advantage for the company which is getting harder and harder with product innovation.
- Making innovation everybody’s responsibility, not the domain of a few. Most organizations are structured as thinkers and doers. However, most people who work in these organizations are capable of thinking and executing! So in the best case if 10% of the company’s budget is R&D, today companies are leaving 90% of their innovation capacity unexploited. However, this is probably easier said than done because of how decision and allocation processes work at most organizations.
- Creating inclusive innovation… this is an idea in addition to your own team, a company uses it extended team, its customers, its customer’s customer, its vendors, its ecosystem of distributors into the innovation process. Two big advantages a) in a way you have outsourced the cost of innovation b) you are now listening to your customers. In today’s world this is lot easier (technically speaking), think Enterprise 2.0. However mindset and legal (IP) challenges continue to slow the adoption.
- Innovation by pruning…Many R&D departments think about innovation as adding new features or creating totally brand new products. The argument I make here is that if you segment your customers and understood their real requirements, one could create better target product. These simpler products will end-up reducing cost and potentially gaining a market segment thru feature-lite, but more targeted products. Include your customers into the process. Make the process engaging and fun, think “Serious Games”.
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