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How can businesses innovate successfully if resources are limited?
Innovation is not always about new products and markets, which often require extensive additional resources. Innovative businesses often look at total innovation at three levels, often known as the 70-20-10 rule.
This model is applied to both time and budgets, to mitigate risks and maximise opportunities.
- Innovation in one's core business - This pertains to continuous improvements, extensions, variants and cost reductions. Seventy per cent of a company's innovation should take place in its core business, and this is where most resources are already focused.
In this sphere, businesses should explore every opportunity for improvement, and empower teams to suggest enhancements. Amid limited resources, budgets should be set aside for the implementation of the best ideas, and this will help drive a culture of innovation and ownership among employees.
- Adjacent growth - This refers to developing the next generation of products and solutions related to the core business, and about 20 per cent of resources are ideally allocated to this. With limited resources, it is especially critical to ensure that there is a strong risk assessment of the opportunities pertaining to adjacent growth, to ensure that resources are maximised.
Businesses should ask themselves questions relating to whether the features in their next-gen products are competitive, timing of their launch and ensure that any faulty assumptions and gaps in knowledge are fixed before proceeding further.
- New markets and products - This is often the area that gets most associated with innovation. It should, however, not distract a business from its core, and about 10 per cent of resources can be spent on projects unrelated to the core business.
Within this sphere, teams should explore questions around whether the market is real, ask questions about profitability and adoption, and look at how these new markets and products add strategic value to the business.
Underpinning successful innovation within limited resources is a highly engaged workforce. Many successful companies have a formula of placing smart, passionate people together and charging them with being candid, and to identify problems and drive solutions.
These small teams often catalyse their colleagues towards excellence, as they come together to troubleshoot problems and drive innovative thinking.
The people within your business are your greatest asset and even amid limited resources, you can successfully innovate if you challenge and empower them to achieve this.
- The writer is market head, South and South-east Asia, Standard Chartered Private Bank
The information in this article does not constitute legal or professional advice. You are encouraged to consult a lawyer or relevant professional should you have any questions in relation to the topics raised in this article.