Big budget, small tranches
The discipline of saying no.
Congratulations!
You have secured your innovation budget! Executives are enthusiastic, ambitions are high, and numbers look good.
Now comes the difficult part.
Holding onto that money, and saying no... A lot.
Funding corporate innovation looks like a paradox: you want big budget, but then you still have to act frugal.
The logic is simple. Since innovation is uncertain, you do not wish to make one big bet. The only certain thing early on is that everybody is wrong. We just don't know how much wrong, yet.
So, in order to maximise the returns on your innovation budget, you want to control it tightly, and release it in small chunks dedicated to specific learning goals.
I cannot tell you how many times I have seen a variant of the following: a division finally secures a budget for their innovative ideas. It is supposed to cover a year or two of work. But people front-load the spending, usually based on incomplete knowledge, untested assumptions, and questionable hypotheses.
Money, time, effort, it all goes to waste.
This problem can be minimised by disciplined funding. Instead of wasting the whole budget, you spend a percent or two to find out an idea doesn't work—early. That way, you still have flexibility to invest in other, more promising, ideas.
Even the biggest of projects and ideas can be broken down to smaller, testable chunks. Demand, and fund, only those, and the change will soon follow.
As will the results.
P.S. You might find the following posts helpful:
Bruno Pešec
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