Budgeting for Innovation
4 minute read
Mind Over Machines is all about innovation. Our CEO Tom Loveland recently explained why in his Q&A with the Maryland Chamber of Commerce:
“Innovation is everything! It’s a primal urge. It’s what moves humanity forward. And it’s essential to business. Business without innovation is stagnation, which leads to extinction.”
Our COO Dmitry Cherches puts it a little less poetically, but just as honestly: “Innovation or unemployment.”
What Can An Innovation Budget Do For You?
If innovation is the key to your continued success (and paychecks), it makes sense to invest in it.
Innovation has the potential to exponentially increase your bottom line; that’s why we do it. Amazon CEO Jeff Bezos likens it to swinging for the fences and hitting the ball so hard you get a thousand runs.* But there will be lots of strikeouts, too. Not every effort will pay off or produce immediate returns.
Think of your innovation budget as a little pot of money liberated from the demands of ROI. It’s your chance to explore what’s possible, to execute and evaluate that proof of concept. If you play your cards right, it can also be your insurance policy against industry disruption.
“Most companies set aside 1-2% of total revenue – up to 10% of their IT budget – to innovate and stay ahead of their competitors,” Dmitry explains.
“Your innovation budget should be spent de-risking your grand ideas, going directly to their most complicated parts and figuring out how to implement them.”
CIOs often use their innovation budget to demonstrate a big, cutting-edge idea for their company. If you have a plan to revolutionize how people work, they need to see a prototype to make the Big Idea tangible. Once you’ve done that, the green light becomes much more attainable.
Innovation looks different for every industry and every business. “For some companies, innovation may just be getting to the cloud, increasing independence from on-premise operations,” observes Dmitry. “For others, it looks like automation freeing humans to do higher-level work. That could take the form of artificial intelligence, bots or computer vision — getting your computers to recognize objects in your work environment and make business decisions based on what they see.”
Benefits Beyond the Bottom Line
Innovation is a process of invention, failure and reinvention. But even as you shepherd your brainchild through that process, moving toward fruition and payoff, your innovation budget is improving work morale in myriad ways.
First, it brings joy to your tech team. “Call them ‘IT geeks’ if you want, but they show up because they love learning and solving challenges with technology,” says Dmitry. “Nobody wants to do the same old stuff year after year. They want to try new things, move forward in their careers. When you let them scratch that itch, it’s a huge morale booster, especially for Millennial employees who have been raised on, and expect, innovation.”
Beyond your IT department, the mere act of having an innovation budget can make your whole operation more nimble. As Molly St. Louis told marketing professionals in Inc.com, earmarking money to innovate “mentally prepares you to think on the fly. When your company is positioned for innovation, you’ll embrace change.”
Embracing change gives you a leg up on the competition that will save you money in the long run. “We’ve done a lot of innovation projects, so I can tell you from experience:
When you are the driving force of a new idea and take the time to develop it properly, you end up spending less than your competitors who rush to catch up.” Dmitry asserts.
Don’t Innovate Alone
Here at Mind Over Machines, we have a team of people “doing innovation” full-time. We call it our Emerging Technologies Practice, and it’s led by Mid-Atlantic tech expert and augmented-reality-for-enterprise pioneer Tim Kulp, our very own director of emerging technologies.
“We’ve been helping clients leverage mainstream and emerging technologies for 30 years now. We’ve solved common and unusual challenges across pretty much every industry. We can help you sort through the buzzwords; tell you what sounds hard but isn’t; and find ways to do the things that are hard but worth doing,” says Dmitry.
Is your company currently budgeting for innovation? How are you putting those funds to use? Whether you are ready to de-risk your grand idea, or you just have a problem in need of a novel solution, give us a call. Let’s prioritize innovation together!