We are entering the second quarter of the calendar year as we move into the month of April. Normally, Easter is a time for joy and community celebrations. But what most adults have defined as “normal” will probably not ever occur again in our lifetimes. Yet as innovation professionals we know that learning and adaptation are the lifeblood of survival.
Every year I choose a word to guide me and to help me reach new levels of achievement. In 2019, my word of the year was “outreach”. I applied that concept in my business with new ways of connecting with you and with others who are interested in becoming innovation leaders. “Outreach” also drove my connections with family and friends. Even if I had not heard from someone for a long time, I initiated communication with greetings and questions. My goal was to create and maintain connections with all the people in my life, both personal and professional.
Interestingly, my word of the year for 2020 is “economical”. It came to me while my husband and I were hiking in Sedona, Arizona around Christmastime. To me, economical means optimizing my time and resources to be the most effective leader and coach that I can be. On a personal level, economizing means reducing waste, clearing clutter, and enjoying every moment of time I have with the family and friends that I love and cherish. At the time, I could not have anticipated that economical meant finding an alternative to toilet paper!
In innovation, our decisions and actions must be economical, too. There are limited resources for every new product development (NPD) project. Remember that resources include people, money, equipment, and time. Especially as companies will be forced to pay higher taxes to support America’s skyrocketing debt and transfer payments as a result of the coronavirus panic, money will become a very limited resource for innovation.
Making decisions making product, portfolio, and business decisions has always been difficult. Too many good ideas clash with two few resources. If you choose to work on all of your new product ideas, you will starve them. This results in poor quality work, delayed market launches, and frustrated team members. On the other hand, when the investment decisions are too stringent, innovations fail to be interesting and customers become bored with your product offerings.
Product portfolio management (PPM) is a tool to help senior managers align the highest value projects with investment, risk, and strategic goals. Allocating resources – including people and money – is a key outcome of effective PPM. Read more about how to create and sustain an effective decision-making process in PPM in 100 Days.
As companies move toward a survival mode, money and investment risk will be primary decision factors for any new product or service development project. Customer needs should remain a focus, but most firms will jettison “luxury” services, like training and outside consulting. Of course, my belief is that training and outside consultant viewpoints are impactful throughout the economic cycle. I also know how people and organizations behave in a time of crisis and I’m a realist.
Doing Less with Less
So, if your firm ends up with fewer employees and tiny investments to continue R&D, what do you do as an innovation leader? Rather than jumping on the “do more with less” bandwagon, consider how to economically focus and optimize the remaining resources. Make plans in each of the four categories of resources: people, money, equipment, and time.
During recessionary times, companies cut their full-time staff. Travel and training budgets are slashed. As an innovation leader, you must evaluate your remaining talent pool and utilize your people to their highest ability. Under no circumstances should you ask them to work extra hours without pay or to take on multiple jobs. Meet with each of your team members one-on-one and as a group to listen to their needs and ideas as engaged and empowered employees.
Your team members are closer to the technology development and markets than are managers, so take their input seriously. Then, make a list of all potential projects in – including those necessary for business survival and those that are more innovative. Let your staff vote with their feet. Choose projects in which your team members have the skills and energy to complete.
Money is a tricky resource to manage during economic hardship. It is important to be frugal but failing to spend money can mean missing an opportunity. Project investment starts with those actions necessary to keep the doors open. If you can scale back by moving to a place with less expensive rent, do so. Turn out the lights and adjust your thermostats to save money. Serve pizza at your team lunches instead of gourmet steak sandwiches.
However, don’t forget that some spending is required to position the firm for success with innovation when the recession ends. This means being more detailed and realistic with risk analysis. It also means innovation leaders must encourage more upfront (and less expensive) testing, especially in building prototypes. Be relentless in planning and executing project budgets.
When times are good, it’s easy to acquire equipment. Going back to my word of the year, though, it is not always economical to replace failing equipment. For example, my laptop has a failing HDMI port and I was having difficulty connecting to complex projection systems for presentations. Times were good in 2019 and early 2020, so I planned to replace my laptop. Now as almost all of my 2020 speaking gigs are cancelled, I am choosing to find alternate equipment. If and when I can do public speaking again, I will ask that the organization provide help with the equipment.
You also may be able to repair equipment used for R&D at a lower cost than replacing it. Another option is to sell excess equipment. Because all businesses are suffering during a recession, you might not get top dollar in selling equipment, but you can generate cash from unused assets. And unless the federal government changes capital gains tax rates to pay for ballooning debt, unloading unnecessary assets can be a great way to fund future innovation work with favorable tax treatment. (Of course, this is just my opinion and is not professional financial advice. You should consult your legal and accounting department before deciding to sell any equipment.)
Of all the resources we use in business, innovation, in life, time is the most precious. Time is irreplaceable. Once we “spend” a minute of time, we can never get it back. And, time is limited. We don’t know our life span, but we do know it will end someday – maybe today or maybe in 30 years. Therefore, being economical with time is tremendously important for personal happiness and for business growth.
A quick way for innovation leaders to gain time is to reduce and eliminate meetings. For years, I have preached a philosophy that meetings are only for making decisions. Ineffective managers use meetings to learn what their employees are doing on an individual basis. These lengthy “around-the-room” meetings are useless and boring for every attendee except the one person talking.
Effective innovation leaders use other means of communication to share project progress broadly. Productive teams know they are responsible – as individual contributors – to understand global communications and the impact on their role in the project. Team members must be empowered to work autonomously and to make decisions consistent with organizational strategy.
In a weird way, downsized organizations will give people more time to focus on what matters most to the business – whether that is sustaining revenue or creating new profits through innovation. Smaller teams and focused investment result in higher utility in time management. As an innovation leader, be respectful of your time and that of your team members. Don’t ask them to work late or cancel their vacations. And always remember that time is an irreplaceable resource.
Becoming an Economical Innovation Leader
Economical does not mean cheap. Instead, being economical means making strategic decisions to optimize scarce resources. Resources include people, money, equipment, and time. During global or local economic strife, we certainly must “tighten our belts” but we also must make wise investments to compete. Innovation looks different in a recession and involves decisions on how to survive as a viable business. Innovation also includes prospects for long-term growth.
if you’re unsure of how to approach innovation during challenging economic times, please join me for a free webinar on 30 April 2020 at 1 pm CDT (2 pm EDT, 11 am PDT) for 20 Tips of Innovation in 2020. Register here. Each unique company attendee receives a complimentary Five Behaviors of a Cohesive Team™ Personal Development assessment so you can become an economical innovation leader!
I am passionate about innovation and inspired by writing, teaching, and coaching. I tackle life with an infusion of rigor, zeal, and faith. It brings me great joy to help you build innovation leadership. I am an experienced innovation professional with a thirst for lifelong learning. My degrees are in Chemical Engineering (BS and PhD) and in Computer and Information Decision Making (MBA). My credentials include PE (State of Louisiana), NPDP, PMP®, and CPEM, and I am a DiSC® certified facilitator. Contact Teresa Jurgens-Kowal at email@example.com or area code 281 + phone 280-8717 for more information on coaching for entrepreneurs and innovators.
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