Ah, budgets. Are there any other elements of business that wield the same power as the freedoms or restrictions of the almighty budget? In today’s wounded economy, financial constraints dictate much more than just expenditures — they determine when people can create, how big they can brainstorm, and unfortunately, the potential for supporting valuable innovation. It often doesn’t matter how brilliant or dynamic a solution is, if a company’s resources can’t back it up — and that’s a problem. How are industries supposed to evolve when dollar signs are holding great ideas hostage?
Customers Have Needs, Too (So Why Aren’t We Taking them Seriously?)
Budgeting constraints aren’t really a new problem, and there are certainly plenty of examples of companies overcoming them (just ask monoliths like Apple and Whole Foods, both of which sit at the top of this list of Fortune 500 companies that started with next to nothing). But it’s not necessarily fiery entrepreneurship that’s suffering, since trying to make something out of nothing comes with the territory. More so, it’s organizations that have some roots and systems in place failing to fund innovation as a result of misplaced capital.
All business undertakings involve a certain level of risk, and despite a shift towards the agile approach of embracing and learning from failure, gambling in the name of innovation sometimes scares investors and stakeholders into hoarding assets. The thing is, customers have problems and needs that, because they’re ultimately more impactful to future growth, trump those qualms — at least, they should. In a nutshell:
- Customers are suffocated by the sheer amount of options they face, and although brand loyalty is a factor, things get dropped if a different offering clearly does a better job.
- They want companies to follow the same financial platitudes that they do — you get what you pay for, quality over quantity, etc.
- That said, they don’t expect to shoulder the cost of your talent when there’s evidence that jacked up prices are being used to generate quick profits rather than develop better products.
- They have zero tolerance for poor performance and slow support.
- They know that alternatives exist, and they’re not afraid to use them as leverage.
Again, not new challenges, but they’re placing a decent amount of pressure on today’s companies to explore new markets, develop more robust product offerings, and make use of commercial technologies. Working within limited financial frames is forcing businesses to get creative and collaborative. The problem is, not everyone is very good at it.
The C-Word (Collaboration. Sheesh.)
It’s true that we already celebrated collaboration month here at Mindjet, but it’s no secret that innovation is really just collaboration’s louder, more animated sister. There’s an undeniable kinship between working together and turning ideas into action, and I’ve said before that innovation doesn’t keep good company with redundancy. In this case, that could equate to how dangerous it is to distribute funds in the same way each quarter (which most companies do), a practice that makes department heads scramble to spend if it turns out they don’t need their entire allowance. It’s an understandable tactic (we’d all rather be left with a surplus, right?), but it paints an inaccurate picture of company needs, causes us to spend money without any viable strategic foundations, and lessens the chance that the more ambiguous initiatives — like fostering innovation — will actually receive the financial backing they need.
If there’s a call to action to be found here, it’s this: if you want your organization to grow, be profitable, thrive, and all that other good stuff, pay attention. Stop being afraid to use resources differently. Reanalyze potential, and make sure that funds are lining the paths that are actually driving your company forward, not those that simply used to.
Bottom line? Companies that invest in innovation, even at the risk of losing traction and depleting the corporate nest egg, set themselves apart as savvy, consumer-driven, and willing to advance at a faster pace than their markets. That means competitive advantage — and you can’t put a price on that.