Colleagues in a meeting room
Strategic budgeting seems to be a big trend right now, especially given the possibility — or inevitability — of a widespread recession. In the face of uncertainty, many business leaders try to maximize their finances for the greatest impact. Some are drastic cut jobswhile others are slow cut back on marketing spending.
You may also be in the process of reallocating corporate dollars. However, you should avoid drawing back on anything that encourages innovation. This includes brainstorming committees, research and development, and more.
Simply put, innovation keeps the lights on. It is the catalyst for short-term success and long-term growth. You cannot be agile without innovation. This puts you at risk of falling behind competitors. McKinsey & Company study shows that innovative companies outperformed the market average by more than 30% during the last recession and accelerated growth over the following three to five years.
However, this does not mean that you have to spend all your money on innovation. You can invest in growing your business without changing how much you spend on other operational functions. Here’s how:
1. Embrace jugaad innovation.
It is a big misconception that innovation has to be expensive to have any impact. To counter this, best-selling author, keynote speaker and Fortune 500 innovation strategist Dr Simone Ahuja encourages jugaad innovation or frugal innovation. This innovation approach promotes quality solutions despite adverse conditions or scarcity of resources.
Dr. Ahuja explains that jugaad innovation “is often driven by purposeful intrapreneurs, or entrepreneurs within the organization, who know how to prioritize action, handle ambiguity, and stay close to the right problems to solve.” She continues that frugal innovation mitigates risk by leveraging employee ingenuity without cutting corners. “Frugal innovation is often seen as cheap or stripped down when in fact it is based on empathy, solving the right problem and focusing on the core need to avoid unnecessary bells and whistles.”
If your business survived the recent pandemic, think about all the innovations that COVID-19 has fueled. This can help you identify instances of jugaad that you may have missed. Once located, you can figure out how to repeat the same approach that got you through a tough time.
2. Get your team excited about doing more with less.
History lessons can be motivating. After all, innovation is about building something new, and what better way to determine what might work than by looking to the past? “On closer inspection, innovation often turns out to be an adaptation of an earlier idea, technique or organization.” writes Peter Burke, emeritus professor of cultural history at the University of Cambridge. “It may be a free or creative edit, but it’s still an edit. Think of the printing press. Gutenberg was from the Rhineland, so he was very familiar with the wine press, which he adapted for printing books.”
So educate your team about past innovations that emerged from economic downturns through Zoom meetings, webinars, and more. You could cover increase in patents during the Great Depression of the 1930s. During the Great Depression, large companies had to consider new opportunities. They weren’t as financially constrained as individual entrepreneurs, putting them in better places for creativity. As a result, we ended up with products such as the popular board game Monopoly and the mass market car radio.
The more you can educate your team about previous innovation successes, the more likely they are to reconsider their part in the process. And if you can rely on collective problem solving, your limited finances will stretch further.
3. Let employees test their ideas.
Autonomy is a wonderful gift that you can give your employees now. It won’t cost you a dime, but it can provide a huge return on your investment. However, it can be difficult to give your gift if you’re not willing to let go.
For example, Holger Reisinger, senior vice president of large enterprise solutions at Jabra, and Dane Fetterer, staff researcher and writer at Jabra, studied the relationship between hybrid work and autonomy. They found that the only way to give employees real flexibility is to remove all mandates that could get in the way of employee empowerment. “In short, autonomy is an indispensable part of motivation and an important driver of performance and well-being,” they say to write.
The good news is that you don’t have to give employees a lot of new tools to experiment with. As long as they know how to build a hypothesis that can be tested and measured, they can carry out innovative thinking at work. However, make sure everyone understands how to think like scientists. You don’t want employees to create expensive products or execute ideas without running mini-sprints to measure effectiveness.
Innovation is the best way to future-proof your business against crises. Now is not the time to put innovation on the back burner. If you want to survive and thrive after the recession, you need to get creative today.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.