When most people think of innovation programs, they picture Google or some other large companies with millions of dollars at their disposal. But, in general, that is not really the case. A lot of companies have innovative ideas but not a sufficient budget to give them the form of a product or service. And so more companies now launch low cost innovation programs.
Many innovation programs fail because managers don’t take all the costs into consideration. While this is wasteful, it doesn’t have to be this way. With careful planning, your company can launch an effective and low cost innovation program that aligns with your goals and gives you a good return on your investment. Let us discuss some tips to ensure your company’s innovation program stays within budget.
How to Successfully Lead Low Cost Innovation Programs?
1. Define Your Objectives
Any innovation effort should start with the question, “Why are we doing this in the first place?”. At its core, your innovation program should improve some aspect(s) of your business — whether it’s revenue, profit, or customer retention. You should note down your objectives for the program so you can refer to them as you proceed. Defining the goals forces you to focus on what you want to achieve and not get distracted. This also helps cap your innovation program budget by spending only to advance pre-defined objectives.
2. Access Current Resources & Capabilities
What resources do you have available to launch an innovation program? How many people do you have in your innovation team? How much time do they have to dedicate to the program? What’s the budget available to your innovation team? By assessing these factors, you can identify what you can realistically achieve within your budget. This will help you decide how many pilots and what types of pilots to launch and where to focus your resources.
3. Set a Maximum Budget for Pilot Projects
By setting a maximum budget for pilots, you can avoid situations where you run out of budget halfway through the innovation program and have to choose between cutting pilots or increasing your budget. It is important to estimate the costs for each pilot as accurately as possible. Doing so will help you stay on track with your budget and avoid overspending. Further, this might help you identify cost savings opportunities across your program.
4. Put a Clear Deadline
If you don’t put a deadline on your innovation program, it could go on indefinitely. What does that mean? More and more expenditure. Of course, you don’t want that, especially, when you are trying to lead low cost innovation programs. So, setting a clear deadline will help you stay focused, avoid getting derailed & achieve your goals within the stipulated time — or at least inform you about what is possible with your current budget.
Now, let’s hear from you — what tips & tricks do you find useful to effectively plan the budget for your low cost innovation programs? Get in touch & share your insights!