(Note: This is a slightly updated article I posted to a much smaller audience on LinkedIn in June 2015. I believe it really fits the conversations we’re having here on Inside the Marketplace and I will continue to take opportunities to discuss innovation as a whole as it is imperative to innovate, not just when creating your business model but all throughout your businesses lifecycle as well as in various different ways – for product development, for client/customer experience, for team member experience just to name a few.)
I heard a very similar theme from some of my fellow innovation experts when I have attended Innovation conferences: ‘Innovation is hard to justify to managers who worry about the cost and effort involved’.
The fact that many companies are willing to dip their toes in is a somewhat good sign but dipping your toes in isn’t really the way to learn how to swim. It’s time to jump into the water and find out if you are up to the task.
My previous company (which I was representing at these conferences) always had the luxury of a long-standing, multiple pronged innovation approach and team members understand early on that no matter their roles in the company their minds are appreciated and their ideas are wanted – no matter the size. The maturity of our program was not a common theme as I noticed at these conferences. It always felt as if companies were always struggling to keep things going because of the constant tug of war over meeting projected revenue from the program.
If your entire goal is to quantify your investment in terms of major dollars and cents made from said innovations, you’re going about it all wrong. There is a philosophy that Dan Gilbert’s family of companies follow (there are 19 of them but this is the one appropriate to this conversation): Numbers and Money follow, they do not lead. It’s entirely true and that’s because if you spend every second hoping for some major gain out of your investment, you’re going to be very short sighted in what you consider a success and are more likely to shut things down as soon as they don’t provide the immediate results you require.
Innovation needs to be a long term, open strategy. One you provide to all team members, not just people you deem to be “thought leaders” or “subject matter experts”. Many of the presentations we viewed saw that the best innovations actually came from team members who were not SMEs. Why?
They’re on the ground, dealing with processes and people every day. It’s easy to write them off as foot soldiers but these are the people who have heard enough feedback to really give you that additional insight that might make whatever you come up with something that will work for clients, customers and ultimately, you.
Not to mention there is a major factor that the number crunchers miss when they try to evaluate how valuable their innovation program is in dollars and cents. Giving team members a voice in your company brings immeasurable value in retention of quality team members who feel they have a stake in the future of your company when you allow them the opportunity to innovate and ideate within it and it’s an incredibly strong recruiting tool as well. It’s impossible to measure this as you’re not going to be able to find out the program’s direct impact on a team member staying in their role but happy team members almost always are more productive and that increased productivity along with reduced costs of hiring and benefits tied to replacing them is a much larger amount of money than you might think.
Consider NASA. Every year their funding has been questioned from the beginning of time. How can we possibly spend tons of money on space exploration if we have so much we need to spend on to fix down here? In addition to the wonderful results of visiting the Moon and sending satellites every where to explore, investing in NASA has caused an endless amount of tech research which brought us technologies that have solved a ton of problems right here, on Earth. If we had listened to the short term thinking, you’d probably not have a lot of the luxuries of modern tech that you have today.
Buy in for the long term. It’s not about chasing every single dollar. That will happen on it’s own. As you develop a wide open program and push hard for a culture that asks team members to be a part of the solution, people will start to participate and slowly but surely those ideas will bear fruit. If you need to consider each year’s innovation budget a sunk cost, so be it, however it’s not always going to remain that way if you’re vigilant and stick with it.
It only works if you buy in long term and push everyone from Senior Leadership to Middle Management to be on board at the same time. It’s the job from the top down to promote the kind of culture that brings team members into the mix and gives them the chance to be the change your company and your customers are looking for
Ask yourself this: Do I want to chase dollars and make a lot of money right now but avoid spending on innovation programs or do I still want to be relevant and on the cutting edge 5-10 years from now when your team members helped push you ahead of the curve?