Budgeting for innovation

There are two universal truths about innovation budgeting. Everybody thinks this is really important and everyone believes they aren’t spending enough. To put it simple, the effort of daily running a company and its operations (everything that needs to be done to simply “keep the lights on”) consumes a substantial part of the company’s available resources (around 85 to 90% according to a HBS study – 92 to 95% according to what I have seen in some realities) and not much is then available for innovation.

But the opportunity lies exactly in taming the daily operational turbulence. Systematize, create routines in your operations that free resources. Do less, track less, prioritize what is important from all the superfluous stuff so that you can free more resources. End zombie initiatives that are leading you nowhere so you can free more resources. And don’t manage the symptoms of a problem but zero-in on its’ root cause so that… you can free more resources.

I am 100% sure you need more resources for innovation (everybody does… - unless you are someone from Apple or Google, and maybe even so…). If they can’t appear out of nowhere, you need to create them from your current operational budget – the “how” needs a ruthless and focused approach that delivers results and allows for your customer focused innovation (be it a product, a sales channel or a very disruptive approach to the market) to shine through.