Innovation: A nice to have or a necessity?
Cost Cutting Vs. Productivity Enhancements?
In bad times the first strategic decision that executives tend to make is cost cutting. If this is the direction that you’re considering be aware that innovation is a great tool for cost cutting while giving people the chance to prove themselves before being fired.
Leading companies train their employees on Innovation while providing them with the right process and tool to innovate. Innovate or Evaporate! By doing so the employee will decide his destiny. Will he stay or pack and leave? Will he use the innovation process and tool to improve his work process, come up with new ideas, products, services events or models? In other words will he take the initiative to save his job and the company working for?
Cutting down on cost can take different directions:
- Quick wins
- Getting rid of unnecessary frivolities
- Undergoing an organizational restructuring
- Productivity enhancements.
Quick Wins: are considered decisions with direct impact on the company so short term savings. It could be reconsidering an agreement with an agency or a consultant that hasn’t been performing. An advertising campaign or an activity that was not really working. These are areas that are known to be considered as costly and not producing. In tough times luxury is not a priority.
Unnecessary Frivolities: known as nice to have things. Like expensive events and gatherings that are not related directly to performance. Free snack and beverages, unnecessary travels that could be replaced by online meetings. Unnecessary Frivolities when considered by item it doesn’t make a financial difference but whenever consumed regularly can do so.
Organizational Restructuring: looking at the performance of each unit or business in your company is the first step to take while restructuring. Considering each department as a profit or cost center would help you make a decision. If a business has been costing the company a lot of money and can be outsourced at a minimal budget, why wait? A market that hasn’t been generating income for years. If in good days they were not generating income do you think they will in tough days?
Productivity Enhancements: knownas frugal innovation or doing more with less. Productivity enhancement is a long-term project meanwhile has a sustainable effect on the bottom line. Innovators think about Productivity Enhancements as their first step to take and personally it’s my preferred strategic decision both in good and bad times. Process reengineering and job automation are for instance good examples.
If you keep on doing business as you’ve been doing so far, nothing will change whereas challenges are increasing therefore your results will shrink. We come to a conclusion that innovation is not luxury or a nice to have, it’s a must to survive.
Start by kicking-off a Hackaton or an idea competition where all employees participate individually to come up with new ideas that can improve productivity, cut cost or grow the business. Let your employees share their ideas with the innovation committee or management & don’t forget to reward ideas.
Remember that downturn is the right time to innovate where everybody will be focusing on surviving that’s where the surprise factor will be multiplied. Innovate or Evaporate!
About the Author
Maher Mezher
International Innovation Expert
Inventor of the Innovators Tool the leading innovation App