You can't make a return if there's no investment of resources. This is true of every business venture, and it is even more true when it comes to innovation.
But innovation isn’t easy. It can tempt for many businesses to focus on innovation and instead encourage steady, incremental growth, which is less expensive and feels like much less of a risk. But no matter the risks, the rewards of innovation (when done right) will almost always be better.
In order to achieve this innovation—to create ideas, processes, services, and products that are forward-thinking and unique—companies need to make permanent allocations of money, people, time, and equipment that are dedicated to the sole mission of designing and innovating new products and services.
So, what is the main thing a company must allow if innovation is to thrive?
Defining the Law Of Resources
Of the 7 Immutable Laws of Innovation, the Law of Resources tells us that innovation requires a long-term and protected commitment of resources. The extent to which a company dedicates its resources directly reflects the importance that C-suite executives place on innovation.
While many businesses claim to support and encourage innovation, they only do so when it is convenient (i.e. when there is excess labor, time, equipment, or money). When things get busy and the budget gets tight, innovation is moved to the back burner. But, if a company wants to be truly innovative and a leader in its industry, they need to commit a baseline of resources at all times—not just when it's easy.
The key is striking a balance that exists as a framework to uphold and nurture innovation. Experts have varying opinions about what percentage of budget, personnel, equipment, and time should be dedicated to innovating. Some say 10 percent, some say it depends on the company, and some say do what you can when you can. And while it’s true, there is no perfect percentage that will work for every business, the “do what you can, when you can” approach is not and never will be enough.
The process organizations go through to select resources needed to support competing in the innovation economy is critical yet overlooked by most.
What resources are needed to develop innovation?
Innovation cannot happen without dedicated funds that allow employees to bring their ideas to life. This means an appropriate percentage of your budget should be set aside to further innovation. And it shouldn't be moved around if there is a budgetary shortfall somewhere else. Maybe this is 10 percent, or maybe it's more. (If you are truly dedicated to being progressive and innovative, you likely shouldn't account for any less than 10 percent.)
There is such a thing as too much innovation funding, or rather, an improper balance of funding and other valuable resources. Is money the only resource you allocate for innovation? If so, you may not be seeing that money paying off.
Money is a necessary resource that helps to support innovation, but without a team of innovative thinkers who have regular access to equipment and dedicated time for innovation, the money will either be wasted or simply sit there unutilized.
By far, your greatest asset for innovation is your people, and in order to truly make innovation a priority in your company, you must get your personnel involved. You should get your top-performing personnel involved.
Your best players are the stars that will guide you to creative solutions and progressive ideas. Yet, too often, companies safeguard these employees and keep them for the “important” tasks. Or, companies allow high-achieving employees to follow innovative pursuits—until something more important comes along. And since something more important always comes along, innovation never happens.
Businesses that value innovation must understand that this investment of talent and time is necessary. It will not only allow but actually encourage your very best employees to work on projects that interest them, even if they don’t correlate with their normal job duties.
Businesses that value innovation must understand that an investment of talent AND time is necessary.
Another resource that is crucial for supporting innovation is time. As a business, you may not recognize time as a resource. In fact, you may not think very much of time at all, except as something that there is never enough of. Because of this, the mentality of “do what you can, when you can” started to take over, forcing innovation to take place outside of the normal 9 to 5.
Instead of dedicating time for innovation, businesses wait until the “busy season” passes or until a big project is wrapped to give their personnel, the space and time to innovate. Unfortunately, the busy season rarely passes, and there is always another big project on the horizon.
A business that prioritizes innovation will build in time for its most valuable personnel to think, create, design, and develop new and progressive services, products, or processes. This means blocking off several hours every month, or even every week, for your employees to focus on creative endeavors.
The Law of Resources also calls for businesses to allocate equipment for innovation. This is one of the most overlooked resources a company has, yet without it, innovative ideas can never be carried out or tested.
This equipment, whether it is software or hardware, is likely being used for core business purposes. If an employee is not engaged in a project assigned to them, they are often discouraged from using workplace equipment or may not have access to it. Sometimes, even if a company allows its team members to use the equipment for innovative projects, it is only possible to do so when the equipment is not being used for something “more important.”
Businesses that want to see innovative ideas cultivated by their staff should consistently set equipment aside for that specific purpose.
The Proof That Allocating Resources Works
With 61% of worldwide CEOs making innovation a primary business focus, it is hard to ignore its importance. And the difficult truth is that companies with formally planned innovation programs will grow 3 fold that of companies without innovation programs during a 5-year period. This is done by committing the select resources needed to support innovation.
With 61% of worldwide CEOs making innovation a primary business focus, it is hard to ignore its importance of it.
The importance of innovation in an organization is key to success. To ensure that your business is on the right page and is moving towards a culture of innovation, contact us today.
Phil McKinney Newsletter
Join the newsletter to receive the latest updates in your inbox.