It's easy to say that you're innovative. It's easy for companies to have an 'innovation' pillar in their strategic plan, to insert a paragraph on innovation in their annual report, or even to list innovation as one of their values, but what does true commitment to innovation look like?'
At least three types of commitment are required for effective innovation. These are financial commitment, time commitment and cultural commitment.
Part of the perceived risk of innovation is that 'we can't afford it'. There can be a fear that costs will spiral out of control. While the outcomes of specific innovation initiatives are by definition unknowable, the costs can and should be well defined and clearly controlled. A financial commitment to innovation should be clear in the budget, where specific funds have been allocated to innovation initiatives.
Defining your financial commitment is one of the ways that you can reduce risk, by employing the concept of affordable loss. Just like any other budget item, funding for innovation should not be a bottomless pit. Allocate what you can afford and put those funds to best use. Like a bungee rope, this allows you take the plunge while at the same time feeling secure that there's a limit to how far you can fall. Setting budgets limits the downside risk, without restricting the upside opportunities that innovation brings.
A lot can be achieved, even with a small investment. It's the commitment itself, rather than the size of the budget that's important. However, even a small amount of money will be wasted if there isn't also a commitment of time and a cultural commitment by the organisation. I'll talk about these aspects of commitment to innovation in my next two articles.