Paul Sloane has a great blog post about how expensive innovation is. He divides the scope of innovation expenditures into three categories:

1. It costs virtually nothing to
- communicate a vision of innovation
- set goals and objectives for ideas, prototypes and innovations
- ask your people for ideas
- ask customers for ideas
- ask suppliers for ideas

2. It costs very little to……
- run brainstorm meetings
- set up an intranet based suggestion scheme
- evaluate and select the best ideas
- build models and prototypes
- ask customers to evaluate your prototype products or services
- implement small incremental innovations in your products, services and methods
- empower people to try more initiatives in their areas
- investigate new collaborations and partnerships

3. It costs a lot of money to….
- roll out major new products or services
- try an entirely new business model
- re-engineer your IT systems

I think that’s a very clever observation and it sheds light on the innovation activities that are suitable to engage in during a cost-cutting period as the one we all face at the moment.

All the experts keep telling that when the going gets tough the winners innovate. But how do you innovate without spending money? I think Paul Sloane has given the answer. You build the foundation and lay the groundwork because that’s not the expensive part. When things look better you engage in the heavy investments.

Read Paul Sloanes blog post here.