Colleagues in a conference room
Strategic budgeting seems to be a big trend at the moment, especially given the possibility—or inevitability—of a widespread recession. In the face of uncertainty, many business leaders are trying to maximize their finances for the biggest impact. Some are drastically cutting jobs, while others are slowly trimming marketing spend.
You might also be in the process of reallocating company dollars. However, you should avoid pulling back on anything that drives innovation. This includes brainstorming committees, research and development, and more.
Put simply, innovation keeps the light on. It’s the catalyst for short-term success and long-term growth. Without innovation, you can’t be agile. This puts you at risk of falling behind competitors. McKinsey & Company research shows that during the last recession, innovative enterprises outperformed the market average by over 30% and had accelerated growth over the following three to five years.
This doesn’t mean you have to dedicate all your dollars to innovation, though. You can invest in your company’s growth without changing how much you spend on other operational functions. Here’s how:
1. Embrace jugaad innovation.
It’s a big misconception that innovation has to be expensive to have any impact. To counter this, best-selling author, keynote speaker, and Fortune 500 innovation strategist Dr. Simone Ahuja encourages jugaad innovation, or frugal innovation. This innovation approach promotes quality solutions despite adverse conditions or resource scarcity.
Dr. Ahuja explains that jugaad innovation “is often driven by purpose-driven intrapreneurs, or entrepreneurs inside the organization, who know how to prioritize action, manage ambiguity, and stay close to the right problems to solve.” She goes on to say that frugal innovation reduces risk by leveraging employee ingenuity without cutting corners. “Frugal innovation is often thought of as being cheap or stripped down when, in fact, it’s based on empathy, solving the right problem, and focusing on the core need to avoid unnecessary bells and whistles.”
If your company survived the recent pandemic, reflect on any innovations that COVID-19 spurred. This can help you spot instances of jugaad you might have missed. Once pinpointed, you can figure out how to repeat the same approach that got you through a tough time.
2. Get your team excited about doing more with less.
History lessons can be motivating. After all, innovation is about building something new, and what better way to determine what could work than to look at the past? “If we take a closer look, innovation often turns out to be an adaptation of an earlier idea, technique, or organization,” writes Peter Burke, professor emeritus of cultural history at Cambridge University. “It may be a free or creative adaptation, but it is an adaptation all the same. Think of the printing press. Gutenberg came from the Rhineland, so he was extremely familiar with the wine press, which he adapted for printing books.”
So, teach your team about previous innovations that came out of economic downturns via Zoom meetings, webinars, and more. You might cover the rise in patents during the Great Depression of the 1930s. During the Great Depression, large companies were forced to consider new opportunities. They weren’t as financially constrained as individual entrepreneurs, putting them in better spots for creativity. As a result, we ended up with products like the popular board game Monopoly and the mass-marketed car radio.
The more you can educate your team on previous innovation successes, the more likely they’ll rethink their part in the process. And if you can rely on collective problem-solving, your limited finances will stretch further.
3. Allow employees to test their ideas.
Autonomy is a wonderful gift that you can give your employees right now. It doesn’t cost you a dime, but it can result in huge returns on your investment. However, it can be tough to give your gift if you aren’t willing to let go.
For instance, Holger Reisinger, senior vice president of large enterprise solutions at Jabra, and Dane Fetterer, staff researcher and writer at Jabra, studied the relationship between hybrid work and autonomy. They found that the only way to give employees true flexibility is to lift all mandates that might get in the way of worker empowerment. “In short, autonomy is an indispensable component of motivation and a key driver of performance and well-being,” they write.
The good news is that experimentation doesn’t require you to give employees a lot of new tools. As long as they know how to set up a hypothesis that can be tested and measured, they can execute innovative thinking on the job. Be sure everyone understands how to think like scientists, though. You don’t want employees to make expensive products or follow through on ideas without conducting mini sprints to gauge effectiveness along the way.
Innovation is the best way to future-proof your business against crises. Now is not the time to put innovation on the back burner. If you want to survive and thrive after the recession, you’ll need to start getting creative today.
