As we head into Budget season, with Brexit rapidly approaching and with China and the USA at economic loggerheads – one would not be blamed for feeling possibly a little less than optimistic when it comes to personal and business finances. The reality is no-one knows – but there is a definite “vibe” in the weather forecasts.
For businesses, this can often become a time of investment retrenchment and “hunkering down” as the waves and winds of economic uncertainty batter away.
So, what does this mean for innovation? Does it get cast onto the scrapheap of “discretionary spend” (I hate that term – but that is for another blog)? Understandably the answer seems like it might be ‘yes’.
However, having founded and ran my own start-up for several years and worked in many innovation initiatives, I can say without shadow of a doubt that a cost-controlled environment is the ideal place to incubate an innovative culture and an entrepreneurial mindset.
How many times in your business has something happened that has really had to focus the collective minds of the team? Haven’t you found when the chips are down the collaboration and innovative levels increase? The same is with budgets.
I believe there are 3 key innovation behaviours that are heightened further when budgets are tight.
Big budgets often drive complacency. When capital is limited then every financial decision needs to be considered and scrutinised. For me, during my time at my start-up, this drove a higher quality of thinking. It is not about being mean but shrewd and value-focused.
If I invested £1 in you and set you the challenge of returning me £5 tomorrow, would you have to be more imaginative and creative with how that money was spent, if I had given you £4 instead and asked for the same return?
The answer is 100% ‘yes’. The choices you make and the options you consider are (rather counter-intuitively) dramatically widened when resources are dramatically narrowed.
Money is not the only resource of a business. Agreed, it is an important one, but innovation is more a by—product of focus, resilience and enthusiasm. At Big Radical we find when approaching a complex business problem, often the most efficient solution starts simply with a question, curiosity and a lot of motivation. We quickly pull together the right team to:
1. Define the problem space; prototype and prioritise theories to test; and
2. Produce results that tell us whether to
a. stop now, or
b. invest and scale further.
Rather than time and resource spent, we find success more commonly relies upon team focus, determination and adaptability, which I believe in the right environment and culture; are in endless supply.
Innovation does include risk. No idea or concept is fool-proof and will guarantee success – and the amount of money you throw at it definitely doesn’t remove the risk. Tight budgets can however lead to interesting changes to the risk profile of businesses when wanting to do something new or different.
Firstly, it leads to sensible incremental steps. Test and learn becomes a daily reality as the business adopts agile working methods to not fritter away finite working capital too quickly. This is a good thing.
Big budgets will deliver one guaranteed outcome. Big spend. This doesn’t mean big success.
Secondly, I have found the approach to risk changes too. Let’s take GDPR for example. A very necessary legislative change to protect consumers and our data. For big businesses, they have spent years working on this and spending massive budgets to de-risk the situation. But if budgets were smaller, I am very confident their approach to the risk would change. I am not suggesting being uncompliant – but at any level of an organisation, you will need to make practical risk-based decisions that fit your size, scale and budget. For example, at a start-up everything may be legally signed off – but probably would have make the Compliance Officers of many a large corporate collapse. Why? Because large corporates have the budget to do more and therefore will do more. But not necessarily when they need to.
In my humble opinion; those that link building a culture of innovation and driving great innovative outcomes to spending big and large transformational programmes have got it wrong. Lean and agile, thrifty and value focused, coupled with a sense of risk and reward is what truly drives great innovation outcomes.
So, let us not collectively cower from the rising tide, typhoons and storms of economic uncertainty.
My recommendation?
Don’t run for the safety of dry land: look around yourself and lash together a rudimentary raft from what you have around you and crew it with a passionate and committed team.
Who knows where your ingenuity might take you?
If you’re a Radical Thinker and would like the opportunity to join our next Intelligently Rebellious meetup, pop your details in an email to cathryn.hartland@etchuk.com and we’ll register you!