Innovation Series — Post 3: Budget and focus

A series of posts I am publishing focused on innovation in a real business environment — not theory, not ideal world scenarios, but what innovation really is, how to foster it within a business, pitfalls to avoid, and how ultimately it can deliver value to a business, its customers and clients.

If you missed them, post 1 is available here and post 2 is here

In this post I’ll look at two structural challenges to innovation in corporates :
- Why (in my opinion) it can’t be something that everyone does
- How to fund innovation for success

“We all do Innovation”

A common phrase I have heard when talking to other businesses is “We all do innovation”. The concept here is that you have a team that is always looking for the next thing, focussed on improving their product, and regularly creating improvements. In the right situation you then have a whole company full of people innovating and creating future business value beyond normal growth, but is it the best way?

Continuous improvement gives a clear path to follow for the next 1 to 3 years, and can bring regular benefits to the business. This is really important for the business and customers in the short term. In contrast, as we discussed in the first of these articles, a focus on horizon 2 & 3 innovation will mean experimentation, testing, and ultimately creating or identifying things that bring value further in the future.

By having a “We all do innovation” approach you potentially miss what your customers need now and can even risk the viability of the short term business. More realistically, your team will actually focus on the continuous improvement that brings measurable results soon and therefore you entirely miss the horizon 2 & 3 opportunities. Basically, if everyone is tasked with real innovation you lose the business you have today or conversely nobody really does innovation as their KPI’s focus them on the current business.

Innovation in a corporate needs a different focus. Some people, but not everyone, need to look outside of competitor or industry trends to understand what models, technologies, processes and expectations will be relevant in the future.

Paying for Innovation

Innovation takes resource and investment that varies by how you want to operate and invest. I’ve launched innovation trials with clear measures for under $1,000, whilst some businesses invest multiple millions in innovation each year.

I’ve worked in an innovation team where there was zero budget. There was a team of highly skilled people, a backlog of ideas, clear mid-term expectations of return, but no money to run even the cheapest, simplest trials or experiments.

I’ve also worked in an innovation environment where the same rigour and process for spending was applied across the business without exception. If you need to spend $20 on some Bluetooth beacons, or $20,000,000 on a major project, the process was the same and the need for Return on Investment ruled.

A third example is when I worked in an environment where technology was standardised without exception. You need a MacBook to build an iPhone app? No. You need to use a function only available on the latest Samsung? No.

Corporates are designed to control budgets, have spend processes, and try to limit diversification of hardware and software as this lowers cost and support needs. There is no question that this should be the normal way of operating, but in all these cases, the processes also meant achievements were very limited and opportunity was missed.

Your innovation team will need a much lighter process. Testing a technology or proving a concept takes money and resource. You need to have a process of control that your company is comfortable with that also has the minimum impact on testing new concepts and technologies. A lot can be achieved with a small amount of money, and giving a team a budget and freedom up to a certain amount is one way to drive clever solutions at a low cost. If your team can spend $5k on a trial without approval you will see a lot of learning that costs less than $5k, and losing $5k to learn that something won’t work or is something to concentrate on more, is money well invested.

If you like what we are doing with technology and travel in TUI and want to help us on our digital journey then come and join our team. The roles we have open are here on our careers site