This week’s Federal Budget cuts will make it even tougher to innovate. Cuts include a reduction in R&D Tax credits and the abolition of Commercialisation Australia and the Innovation Research Fund. Where will this leave Australian businesses? The future impacts are hard to predict.
Commercialisation Australia has supported many success stories, including recruitment behemoth SEEK. The CSIRO is also losing 500 jobs. The research institute has been instrumental in many innovations across a range of industries, including the development of Wi-Fi technology.
Think for a minute. Where would we be without SEEK.com? Where would we be without Wi-Fi? What future innovations will never see the light of day due to these substantial cuts in the Federal Budget?
Now, it would be very un-Australian to complain about something without rolling up our sleeves and doing something about it. So, in the wake of last night’s budget announcement, here are three ways to innovate when your budget is tight.
1. Look for 80/20 opportunities
When I talk to my clients about the 80/20 rule, most have heard of it. If it doesn’t ring a bell, the 80/20 rule, popularised by author Richard Koch, states that 80 percent of effects come from 20 percent of causes. For example, 80 percent of your profits typically come from 20 percent of your customers, and 80 percent of your sales typically come from 20 percent of your products.
While many of my clients have heard of the 80/20 rule, most of my clients are not using 80/20 to identify and prioritise opportunities for innovation. What would happen if you standardised the 20 percent of processes that are performed most of the time? What would happen if you let go of the customer categories that generate the highest number of complaints? These are substantial changes, not to be entered into lightly, but the world’s biggest companies are harnessing the power of 80/20 and simplification, with compelling results.
2. Do one thing, do it brilliantly, then grow
When it comes to innovation, bigger is not always better, and this is more the case every year. With the explosion in the App-based approach to software development, global small businesses that do just one thing but do it brilliantly are taking the world by storm. Daniel Priestley explores the Global Small Business phenomenon in his latest book, The Entrepreneur Revolution. Let’s take a look at one example.
Fitbit has become a leader in pedometers with an incredibly feature-rich solution in a minimalist package. This tiny, elegant pedometer does away with the bulkiness of many of its competitors (I always loved the idea of using a pedometer to measure my daily step count but didn’t particularly want to accessorise my work suits with a bulky pedometer).
It’s also incredibly accurate (more accurate than many of its competitors, measures how many floors you’ve climbed, as well as your step count, and syncs wirelessly to your smart phone or computer so you don’t have to enter your step count manually.
Fitbit also has a feature rich online dashboard, automatically tracking your progress against goals, giving you badges when you hit 10,000 steps for the day or have climbed 1000 lifetime floors. It also allows you to sync up with friends (my sister and I cheer each other’s progress despite living more than 800 kilometres apart). Fitbit does one thing and does it brilliantly, starting simple and adding features, apps, and products along the way.
Global Innovative Companies lists such as Fast Company and are dominated by global small businesses that do one thing (or started with one thing) do it brilliantly and are taking on the biggest brands in the world. Fitbit now has Nike playing catch up with its own wearable tech.
Those that are succeeding are finding ways to focus start small and do it brilliantly. Launch a new product, starting with the 20% of features that are most important to your clients. Start small, do it brilliantly and grow from there.
3. Mastering simplicity
One of the keys to Apple’s success has been that Apple is not focussed on packing in as many features, as many apps, as many pre-bundled applications as they possibly can. Instead, they focus on the features that they see as most important, and execute them brilliantly. Apple became the largest company in the world with only seven products. How many products does your company sell? How innovative is your execution?
Another one of the largest companies in the world, BHP Billiton, is living and breathing the power of simplicity, with one global system for HR, Finance, Supply and Work Management with one standard set of processes across 100,000 staff in 22 countries and 20 mining divisions. Now this hardly seems an example of starting small, but if BHP can master simple, why can’t anyone, at least in some parts of the business?
If the big players can harness the power of simplicity – what can you do in your team? What are your 80/20 opportunities? What one thing could you start with? Do one thing, do it brilliantly, then grow. There are many complex, challenging problems in our communities and in our businesses. Tight budgets, limited resources and changes in direction only make it tougher. If you can harness the power of simplicity, you can still create remarkable results.