Innovating in a Time of Zero Budget

You don't need much to get to that "Ah-Ha" moment

Survive the recession but not the recovery? File that under “most unfortunate irony.”

“Innovation” is thrown around today like re-engineering was in the ’90’s — as something magical that will cure every economic and company woe. Innovation is expected in products, services, business processes, research, social communications, and of course technology. We know that without rethinking just about everything we do, we’re never get going, let alone get ahead.

But what I run into every day are businesses balking at innovating anything besides ways to cut costs — and those tendencies are understandable. Many companies are purely in survival mode, having let go everyone they could, reeled in every cost and cut back every activity possible. And that latter item is a real problem — cutting back on every activity often means cutting back on innovation.

As someone who has designed a great many products and services I know that it can take some serious cash to innovate and create. Money that just isn’t available right now for too many companies.

But I also know that you can accomplish a great deal of real innovation and creation with virtually no budget at all. For every company just waiting out the recession, there’s a 20-something in Silicon Valley eating ramen noodles, using open source (free) software and just their smarts to create something new. Without venture or angel funding they’re starting to build something they believe will turn into a product or service of great value.

They aren’t waiting for funding before they start building. They’re not letting the recession and lack of financial backing prevent them from innovating. So when the economy does get back on track, many will be ready to roll, get funded and create real revenue for their investors and customers.

But for now, they’re living on just about nothing and focusing completely on innovation and execution.

When the budget's gone, innovation takes innovation

But most businesses aren’t software or web-based, and any kind of innovation takes hard dollars. But that does not mean you cannot innovate beyond simply cost cutting. When the budget is empty, innovation takes…some innovation.

Here are some ideas on how you can use the resources you have right now to innovate, regardless of your budget:

• Start re-evaluating your product line. When we emerge from the recession, buying behaviors of both consumers and businesses will change, in many cases dramatically. A “new practicality” will set in, and that which is perceived as overly indulgent, frivolous, or unnecessary will become obsolete. Don’t expect that poor sales for an offering during a recession will necessarily improve after the recession is over.
• Look at new ways of producing your offerings. As more attention is turned to value – “better” is more saleable than “more” — will you still want to produce overseas where quality can be an issue? Post-recession, would having your services produced in the near to home be an actual selling point, as you will be creating jobs? You might find that incremental sales due to interests in higher quality and building at home far exceed any incremental costs.
• Evaluate the profitability of “greening” your offerings and your company. Enormous energy cost increases are in our future — whether due to regulation, taxation, shortages, political strife — you name it. It’s not ideology, it’s  reality. We’re going to get hammered, and soon, whatever the source of the problem. Can your offerings and your processes be made more efficient? You may like gasoline or wind or nuclear, but whatever your preference, the less you use the less it will cost you. The closer you are to your suppliers, the more efficient your operations, the more you’ll be saving. Once the real crunches start — and they will be starting in 2010 — the costs to design and fix your energy inefficiencies will spike enormously with demand for those services. If you start planning now you can save yourself a fortune later.
  • Likewise start planning to make your products and offerings more efficient. A green perception will be helpful for sales, but if you’ll be able to save your customers money when the crunch comes, you will be in a much better competitive position.
• What free/low cost tools can you use to improve your operations and offerings? The more you can move operations and information to the web, the more you can save if done properly. There have never been more free and low-cost tools to help you sell, operate, and communicate as there are today. Take advantage of what you can by trying them out now and implementing where you can.
• Get every measure of value out of your offerings. I’ve yet to find a company that truly leveraged their offerings in every possible way. In the creation of a product or service you create more than just a widget — everything that goes into that offering has value you should exploit. And every product or service you create may be able to reach new people in new ways. Post recession, don’t expect all your old customers to be there. Now is the time to consider who else you could be selling to — even if it’s in ways you are not serving now.

This is just a small sampling of ideas to get you started. Yes, it takes some innovation to innovate when you have no budget. But when the sun finally does come up, you’ll be looking at a different world. Those that haven’t been innovating during this time may never emerge from the dark.

Look at it this way — using your brain is free. And as long as we have some ramen noodles, that’s all the energy we need to keep on innovating.