The Role of Innovation During Economic Crises

In times of economic downturn, businesses often face tough decisions. The pressure to deliver short-term results often prompts cost-cutting measures and operational streamlining, resulting in substantial shifts in organizational strategies. One discipline that is frequently affected by these adjustments is innovation. Companies, facing uncertainty, tend to lay-off their innovation teams and reduce budgets allocated to innovation initiatives, quickly.  

But is this the right approach? Let’s explore the reasons and examine an alternative path. 


The Traditional Approach: High Upfront Investment and Uncertain Outcomes 

It should be intuitive that corporate innovation initiatives demand a high upfront investment. Whether a company aims to establish a corporate venturing unit or start a company-wide innovation program, resources are required upfront. This is a challenge since the outcomes remain uncertain. Unlike traditional projects with more predictable returns, innovation involves uncertainty and therefore risk. In addition to that, C-Level executives are often motivated by short-term incentives, and corporate innovation failures are actively sought after as newsworthy stories by the media. 

During more difficult economic times, companies tend to be more risk averse. Thus, allocating substantial funds to innovation without guaranteed Return on Investment (ROI) is perceived as a luxury. The concern of dedicating resources to uncharted territory—only to encounter possibly disappointing results—drives many organizations to cut back on innovation efforts. The centralized innovation team, once a beacon of creativity, becomes a casualty of cost-cutting measures. 


The Modern Approach: Minimal Upfront Costs, Predictable Outcomes 

Considering this, the question arises whether we should attempt to find a way to reduce the initial investment while mitigating the uncertainty in outcomes, rather than just shutting down the innovation initiatives. How can we test the most critical hypotheses before investing a relevant sum of money into building an innovation hub, hiring a consultancy to co-create a solid innovation process, or investing in venture building capabilities?  


Hypothesis 1

There are enough promising ideas within your company 

A company should not worry too much about getting started with the optimal process in place. One might be surprised at how little it matters whether innovation is organized along a three- or a four stage-gate process. What matters a lot more is what is required during the steps of this process to de-risk an idea, and how to prevent frustrated employees triggered by the program. Too often, ideas are sourced from team members without setting clear expectations and end goals, leading to unengaged talents. 

If it's uncertain how many (promising) ideas employees are considering, initiate a campaign or discussion aligned with the company's strategy. Get the news out there and source ideas. Use simple but targeted tools and means to do so. It could be Microsoft Forms and Excel but (in the midterm) you may lack the transparency needed to break down silos, the ability to gain solid data insights, and gamification features to boost employee engagement.

A centralized platform for all ideas not only prevents redundancy and captures insights, but also helps you to realize quick wins like incremental process improvements and cost savings. 


Hypothesis 2

A Decentralized Approach works and is cost-effective 

When companies embrace a decentralized approach to innovation rather than establishing a centralized team on stand-by, innovation becomes everyone’s responsibility. The proven Kickbox method that forms the basis of rready’s KICKBOX program, shifts the focus of innovation from a centralized team to the entire organization. Every employee becomes a potential source of groundbreaking ideas. By tapping into diverse perspectives, companies can uncover hidden gems that might otherwise remain undiscovered.  

Once promising ideas are identified through a process of idea validation (see Hypothesis 3), more resources (and a dedicated team) can still be allocated to the project further down the line.  


Hypothesis 3

There is an easy-to-understand and structured way to de-risk ideas 

Rather than relying on gut feelings, the KICKBOX program mentioned, consists of a systematic approach to de-risk ideas. As part of the program, ideas progress through well-defined stages, investments are slowly increased as the ideas become more concrete, and decisions are made based on gathered data – not merely on gut-feeling. Structured de-risking of ideas ensures that promising concepts move forward while unfeasible ones are discarded early on, saving the company both time and resources. 

The Kickbox method does not end with the ideation phase: the method emphasizes outcome prediction. As relevant ideas and talents emerge along the process, companies can assess their potential impact. By linking investments to expected outcomes, organizations can make informed decisions. This predictability bridges the gap between innovation and financial prudence. 


Embracing the Paradigm Shift 

In uncertain times, companies must adapt swiftly. Rather than abandoning innovation, they should pivot towards a decentralized model. The KICKBOX intrapreneurship program exemplifies this shift—a departure from the traditional, innovation hub approach. By democratizing innovation, organizations can weather economic storms while fostering creativity in a controlled environment. The cost-effective nature of crowd intelligence combined with a data-driven approach ensures that innovation remains accessible even when budgets tighten. 

Enable your team to consider the KICKBOX program as their compass and navigate uncertainty with confidence, unlocking the collective brilliance of your entire team. Contact us to arrange a free demo today.

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