I am often asked how a mid-sized company can fund innovation. Big technologies, such as artificial intelligence, 3D printing, blockchains, etc., seem out of reach for many groups. People believe it’s “too big” for them or “too exotic”, and thus assume they shouldn’t or can’t even experiment. That assumption is false.
Innovation exists in many forms, and the key is not to define it specifically, but to encourage the push to try new things. Regardless of whether ideas are revolutionary or evolutionary, the benefit of innovation is twofold; the actual benefit to the organization because the new advancement brings value, and also the positive ‘can do’ attitude that teams develop as they learn.
Formal budgets and processes to promote innovation can actually stall creativity. Many initial ideas can be proven by having people do research, build inexpensive prototypes or asking vendors to promote their material. Often, the early discovers are people with a passion for the subject, who study on their own time and work late without being asked. While I suggest holding a portion of the budget aside for consulting or outside services budget aside for new technology projects, it’s hard to know how much each project may cost. A simple gross portion of one budget line item can be easiest.
Equally, demanding a formal ROI during early stages can severely hinder the imagination process. A better approach might be to press how the idea solves a specific problem. As an example, we were discussing how to use drones in a warehouse to count inventory. After several technical points were debated, one of the team said “Why not just mount a pole with cameras on a golf cart and drive around to read the labels? In this case personnel wouldn’t have to mess with all the safety issues of a drone, but the inventory would still be counted.” That statement forced the group to define the problem, not the technology. We’re still considering drones, but the problem we want to solve is clear. More importantly, this process led us to define several possible benefits. In other words, if you demand an ROI for the experimentation work, you may never start. But if one asks for a refined set of problem statements as an outcome, then the ROI for implementation may be very different.
Traditionally research by mid-size companies is limited to contacting a series of vendors to use their proposed products as the solution, with new technology examined by requests for proposals (RFPs). In this case, the ‘make vs buy’ discussion doesn’t enter into the equation. Vendor input is crucial, but with the advances in software development, a ‘make’ decision may actually be the best approach. For experimentation, prototypes built in house are often cheaper, faster and also promote more understanding for your team.
When you are ready to start a project, use Agile Scrum to test the ideas. Recognize you are on the edge of the unknown when you start. The time-box approach of Scrum assures that you don’t waste time or significant resources if an idea is not going to work.
Allowing people some leeway to explore their passions, can bring marvelous ideas. Small fast teams working iteratively produce outcomes that can far exceed cost. In other words, helping stoke curiosity and encouraging small group collaboration can bring outsized results to your innovation work.