Hacking the Enterprise: Internal Tactics to Deal with Innovation Budget Cuts

Bad quarters can happen to the best companies and budgets cuts to innovation tend to follow. While strategically dubious, this will continue as long as short term goals are prioritized over long term objectives.

If you find yourself in this situation, don’t dial back your plans or feel deflated. Use these internal tactics to embrace the constraints.

Prototype and experiment to learn, not to perfect

We love the sprint methodology. Each week, determine your scariest assumption and create an experiment to validate or invalidate it. Prototypes and materials for experiments are meant to be rudimentary — they are a tool for learning, making them cost effective. It’s important to know what you are trying to learn in order to know exactly what kind of prototype you need to build.

In one example, a team was trying to learn how some retail fixtures would perform functionally in an outlet, but they spent a great deal of time and money making them look perfect with graphics and a high level of finish by professional model makers. This created issues: leadership was distracted by the level of finish and could only focus on the aesthetics, providing feedback that wasn’t useful and distracting the team; and the real goals of testing the functionality of the system were forgotten.

Give teams the ability to kill projects

At some of the large-scale innovation initiatives I’ve been a part of, we ignored our scariest assumptions about the actual consumer pain point. As a result, we wasted time and money by delivering a product that didn’t align with any real consumer need; it only solved one we imagined, in order to justify our continued work on the project.

This is a symptom of yearly objective setting that is deliverable-based. If you don’t deliver your objectives, you won’t get a good review, you won’t get a bonus, etc. Teams must be allowed to kill projects when there is a lack of evidence that it should be continued. Enabling teams to seek evidence of valid consumer needs — and eliminate projects that don’t have it — will save us from zombie solutions that suck up resources and make little market impact.

Stop working on good ideas. Start working on great ones

Once you have sorted out and eliminated the bad ideas, get serious about validating ideas for true customer demand. Create some go/no go criteria everyone can use to evaluate ideas and make decisions faster. This will help you push the great ideas forward and shut down the ideas that sound good, but fall short of addressing core business goals. Try measuring how fast you kill ideas or create a target for throughput of ideas — the number of ideas explored over time — and get comfortable walking away from the ones without an overwhelming pull from the market.

Empower people internally to help create an innovation pipeline

I can’t stress enough how inefficient brainstorming sessions can be. At the end of the session you may have a stack of ideas that seem useful, but you still have no idea if customers will care. Bringing people together to help you fill your innovation pipeline is a great idea, but use the time to engage them in customer empathy interviews, prototyping and experimentation. These tactics will help you know which ideas should be pursued and which can be discarded.

The New Ventures team at Cox Automotive used this approach to tap into employees across all functions who had ideas for their internal incubator. The employees self-selected into the workshop — learning new skills they can take back to their day jobs, getting the experience of working with others across the company, and feeling empowered because their ideas were heard and they get to see them come to life.

Partner with other business units with similar objectives

When driving innovation, partner with business units who have core business objectives to deliver that innovation. Find ways to work together with more speed and focus.

I recently heard about a Business Model Innovation Leader opening at a large company. The most interesting aspect was that the role would not be supported by any budget. What a great way to engineer collaboration with business units and operating functions to develop and launch new business models!

Use it as an opportunity to set new (more ambitious) goals

While it’s never a joy to lose funding or have your budgets slashed, I like to think of it as an opportunity to deliver more. Instead of simply whittling down what you deliver, or still trying to do everything (just not as well), commit to something new.

For example, ask yourself: what if we were asked to deliver 10X with the same budget? What might that force you and your teams to do? Challenge yourself to take on more and use skills to do this more efficiently, shattering your stretch goals.

Note: this is Part 1 in a 2-part series. Part 1 focuses on internal innovation tactics; part 2 (published on Your Ideas Are Terrible’s blog) focuses on external tactics.

Carie Davis is a former Coca-Cola Global Director of Innovation & Entrepreneurship. She started Your Ideas Are Terrible and The Enterprise Growth Institute and serves as Program Director of the BridgeCommunity. She works with global companies to implement tools & systems for a steady flow of validated ideas.