How to Innovate Even If You Only Have Limited Funds

Having the right mind set is an important requirement for innovation. Unfortunately, when it comes to innovation, the thoughts in many people’s mind go something like this:

“If only I had more money, I could do something innovative. Then my company could invest in research and be an industry leader. In the meantime, I’ll just copy what others are doing”.

Does this sound painfully familiar?

The truth is that if you want your company to be innovative, then the first step is commitment.

It takes more than money to be innovative. Innovation requires relationships, having the right know-how, access to tools, resources and more. Really and truly being innovative is not just a matter of getting the necessary funds but it’s also a matter of overcoming a number of obstacles.

Before we go on any further, I’d like to clarify what is meant by innovation.

What is Innovation?

In 1985, Peter Drucker described innovation as;

“The specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being practised”

— Peter Drucker

What’s notable is that he describes innovation as something that can be learned. Often times, we don’t look at innovation as a field in its own right. We don’t give the field the respect that it deserves. The fact is that innovation is a process and the better you understand this process, the more you will be able to overcome the challenges keeping you from innovating in your company.

Different Types of Innovation

Understanding the different types of innovation is actually an example of how a better understanding of this field can result into new ideas for innovation. I’ll elaborate.

One way of differentiating between different innovations is by the degree of novelty. An innovation can be incremental, or radical. An incremental innovation is one in which there isn’t a lot of novelty whereas a radical innovation is an industry game-changer. Let me give you a couple of examples.

Nowadays, you can purchase accounting services that are delivered completely online. This is an innovation as traditionally what usually happens is that when you wish to purchase accounting services, you look up an accountant and you visit him. Then, after you hire him, if you require his services you would probably at some point need to visit his offices or vice-versa.

With online accounting services, there is no face-to-face contact and this changes the sales and delivery aspects of the service. It’s an innovation, however it’s not that big an innovation that will totally change the industry. Traditional accountants probably don’t feel very threatened by this development.

On the other hand, a radical innovation would be something like the development of the mobile phone, the printing press and Uber (which is disrupting the taxi industry). By being aware of these different degrees of innovation, innovation itself becomes less intimidating. If you have limited funds, then it might make more sense to be more focused on how you can incrementally innovate, instead of trying to think how you can disrupt your whole industry.

The 4 P’s of Innovation

Another way you can think of innovation is by dividing it into four different dimensions:

  • Product innovation – changes in the products that an organization offers.
  • Process innovation – changes in the ways in which products are created and delivered.
  • Position innovation – changes in the context in which the products are introduced.
  • Paradigm innovation – changes in the underlying mental models which frame what the organisation does.

(source: Tidd and Bessant, 2009, Managing Innovation)

Again, by being able to frame the discussion about innovation in different ways, you can spark new ideas, some of which may fit within your budget. Often times, people only think of product and process innovations. So if you’re asking the question, “how can we creatively re-position our product brands?”, you are already ahead of the curve.

Innovating Together

Another strategy that you can use to encourage your chances of innovating is by going through the innovation process in collaboration with other people.

There are many different ways you can collaborate with others. The benefits of collaborating in the innovation process is that you can tap into the strengths and resources of other organisations, it enables collective learning (from each other’s experiences) and it allows for collective risk-taking.

A collaboration can be in the form of joint ventures, partnering for national / international funds, working with business and scientific groups or networks, etc.

When the organisation doesn’t just develop and commercialize the innovation internally, then it may be considered as what is called open innovation. Open innovation is a fast growing trend around the world.

In order to find partners for your innovation projects, you can use dedicated innovation networks like OpenIDEO or other intuitive business match-making networks like the Scheduit app.

Building a Culture of Learning

It is important to realise that if you are going to engage in the innovation process, there is an element of risk.

You might fail.

Big companies that regularly innovate know that a number of their projects will fail. Even Google, a tech giant, releases products that fail (remember Google Buzz?).

The important thing is that your company has a culture and framework that supports innovation and is able to learn from its previous mistakes.

Conclusion

As we have seen in this article, there are a number of ways to be innovative, that do not necessarily require significant amounts of funds.

For example, we have seen that an ‘incremental process innovation’ might give a company a competitive advantage in a mature market (e.g. accounting services).

There are opportunities for innovation all around. But to take advantage of those opportunities, you must have the right mindset and commitment towards innovation. Only then will you start seeing what is possible.

Do you believe there are low-cost opportunities for innovation in your industry?

About the Author

Jeffrey Romano studied Creativity and Innovation at Masters level at the University of Malta. He is now the PR & Community manager at Scheduit, an innovative matchmaking app for professionals looking for compatible networking opportunities.

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