In many sectors, the anticipated bounce-back from COVID and its market disruptions has turned out to be more of a bounce-sideways. The “new normal” is still elusive, inflationary conditions persist, and volatile geopolitics only adds to that uncertainty. In response, we’ve seen many corporations reduce their innovation budgets. Which is not to say they have abandoned their ambitious growth goals. The net result is, we’re in a do-more-with-less cycle.
We’ve been here before, of course. The key for corporate innovators is to keep contributing to the mission in critical ways, despite having fewer inputs and outputs. All without compromising the ability to resume full-speed when conditions become more favorable.
With that balancing act in mind, here are our 6 Hacks for Innovating with a Tight Budget.
#1 - Get closer to the core.
Corporate innovation is about creating a bright future for the core business. Sometimes that means a 3-5 year time horizon, but … When the present is wobbly, the innovation aperture necessarily needs to become tighter. Sit down with your corporate sponsor and determine: what can we contribute this quarter – not to earnings, necessarily, but at least to get clarity on how best to deploy our limited resources. If they have a key A-B decision to make, for example, find a way for the innovation unit to inform that decision.
Example: At Intel New Business Initiatives, one key downturn decision involved a potential M&A investment in wearables. The NBI group shifted its portfolio focus to this topic, and ran experiments that provided key insights that shaped the new wearables division.
#2 - Combine forces with other functions.
Other functional groups are feeling the same pressures. Now is the time to join forces, combine budgets, and make a near-term impact – together. Since innovation is closer to the core now (see #1 above), it is easier to combine with Marketing, Brand, Ops, etc. They may not be used to your methods, so expect to compromise a little. But you’ll stretch them in good ways, too. And there will be enough credit to go around.
Example: In the 2009 consumer downturn, Hewlett-Packard Chief Design Officer Sam Lucente and Chief Brand Officer Glenna Paton joined forces to lead an internal “HP One Voice” program. The innovation team templatized product branding, while also standardizing internal storage and other technologies. HP One Voice saved millions of dollars, making a direct impact on current year performance, while positioning them to support future growth.
#3 - Audition intriguing third parties (at a fair discount).
You know those up-and-comer agencies who can sound so enticing? Now is the time to run an experiment together. Explain the tight budget and keep the scope small. The right partners can often find a way to meet you there in exchange for a turn at bat. Like #2 above, this is a form of spending other people’s money. We’re not talking exploitation, just fair-minded exploration.
Example: Our firm built some great relationships with P&G and UPS this way, back in the 2000s. We helped them, and they helped us.
#4 - Run component tests in lieu of end-to-end tests.
No budget for an end-to-end test? One thing we've seen work is to conduct a smaller experiment that yields encouraging results – and attracts a bit more funding to go further. Take what you wish you could test, and break it down into component parts. For example, you could do a pitch deck test to get a channel partner excited. Or landing page tests (off-brand) to get direct-to-consumer signals (including willingness to pay). That way you can keep momentum, keep learning, and keep the innovation lights on (albeit a bit dimmer).
Example: The two component test examples above are among the methods described in our just-released book, The Experimentation Field Book. Like us, the book is very practical, including examples from Nike and PMI, along with ready-to-use templates.
#5 - Get out of the building while staying put – through virtual research.
When deadlines and budgets are tighter, we swap our field trips for virtual trips. The digital tools for customer insights have gotten better, more affordable, and easier to use. And users are so familiar with video meetings that the insights are nearly as rich as in-person. Some of our favorite tools are dscout for diary studies, Fullstory for user testing, and VideoAsk for structured video Q&A. [See this full blog post for more details.]
Example: For a recent ArcBest logistics project, we had conversations with account managers in their cars as they pulled over to enter notes or as they traveled from one customer to the next. These in-the-moment videos captured the sales teams’ thoughts and feedback in real-time, without the expense or disruption of ride-alongs or IDIs.
#6 - Begin data mining and continuous customer need discovery.
Another way to stay in the building and still generate value is to learn to make use of all the data we’re swimming in. While it seems unglamorous at first, teams quickly get excited when patterns emerge and new hypotheses result. This is business value that has been hiding in plain sight. The discipline of getting in front of customers every week is another way to generate continuous data. This can become an early warning system for both hidden pain points and changing customer tastes.
Example: Providence Health has become adept at data mining for insights into patient experiences ranging from clinical scheduling to med compliance to collections. They are teaching RPA tools to do the repetitive heavy lifting, while human teams do the sense-making and opportunity identification on top of it.
Summary
The benefits of these 6 corporate innovation hacks are many, including:
- Assure your contributions to the core business mission
- Build your innovation team skills, retain them
- Improve your connective tissue to C-Suite, sister functions, and third parties
- Keep momentum on existing programs, even if reduced
With these time-tested methods, your corporate innovation unit can provide superb support on a tight budget, while being ready to crank up the volume when the investing conditions improve – as they inevitably do.
