Innovation can sometimes be difficult to fund, as innovation is often seen as something that happens when you have the luxury of downtime. Smarter firms are more intentional about funding innovation as a consistent part of their strategy. But what happens when the economy is down? What is the business case for innovation now?
In a recent Knowledge@Wharton article, panelists discuss the possibilities and advantages of investing in innovation even when the economy and the business are weak. Among the ideas for identifying worthwhile projects:
- Align innovation initiatives with company goals. Follow the money trail. Create projects that will contribute to the firm's vision of success.
- Look for opportunities in customer experience innovation, in addition to product and service innovation.
- Look at weak spots in your portfolio. A slow economy reveals weaknesses that may not have been noticeable in stronger times.
- Focus on projects that can create cost reduction.
- Look at major trends, such as nanotechnology, energy and health care. What are the irreversible trends that could affect your industry?
Just as even great products need to be sold effectively to customers, innovation ideas need to be sold internally. Here were some of the suggestions mentioned for how to sell your ideas:
- Get executive sponsorship (some things don't change, do they?)
- Communicate effectively. Get beyond technical jargon. Sell from your audience's point of view. People need to like you, in addition to your idea.
- Develop your political savvy. You may hate to schmooze. To be successful, You may have to get over it.
Notably, great companies continue invest in innovation, even when challenged. In fact, studies of previous downturns have shown that companies that tuned their cost structure and then spent down their cash ended up far more successful in the long run than firms that chose to hoard their cash until business activity picked up again.
If you are a leader, make sure you focus on supporting and appreciating your innovation talent.
How are you making the business case for your innovation efforts? What is working right now?