Daily Archives: July 1, 2010

For True Innovation …

Ditch the budget. First of all, as per this Financial Times article, there is no correlation between R&D spend and innovation success. Secondly, as per this Harvard Business Review blog post, fixing an innovation budget puts your people into a mindset that their innovation is limited to the budget they have. Third, and most important, while you can budget the cost of product development (based on what the market is expected to bear), you can’t budget the cost of innovation. That relies as much on inspiration as it does perspiration.

Plus, and this is key, you can’t “innovate” a new product until you know what is, and is not, doable. That’s why it’s ridiculous to tie the research and development budgets together. They should be separate. While the two units should come together regularly to collaborate on research directions (i.e. “this is what we’d like to build, what’s possible”) and product directions (i.e. “this is what we’ve [sort-of] figured out, what do you think you can use and sell, and we’ll focus on improving that”), research should be free from distracting day-to-day product development, market, and associated budget constraints so they can focus on figuring out what can be done and, once development has identified certain capabilities as currently marketable, how (cost) efficiently it can be done.

Now, I’m not saying Research shouldn’t have a budget, as it should, but that budget should be at the department level, and not the researcher / research project level, and it should be up to the director(s) to figure out how best to allocate it on an on-going basis. For instance, if a team requests a purchase of a new piece of hardware that would be generally applicable to multiple research projects, then even if it exceeds the typical hardware investment, the director(s) can choose to allow the purchase and then spend less elsewhere. But if a certain costly request would not be generally applicable, the director(s) can choose to deny the request and urge the investigator(s) to innovate a more cost effective way to obtain what is needed for an experiment or investigation. In other words, we need to return to the innovation lab model, where productive researchers and true innovators aren’t spending all their time worrying about budgets … because when you’re worrying about budgets, you’re not getting anything done. GE understood that, and that’s why they did so well for so many years. Not only did they give their top people the budgets they needed to be effective, but they paid also paid their top people very well so they wouldn’t have to worry about money in their personal life. While “what can we do for 20% less” is inspiring, nothing kills an innovation mindset faster than if the team is constantly stressed about money.

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Will Apple Save You More on Print and Marketing than Negotiation Ever Will?

As I mentioned in my recent post on how marketing is a huge savings opportunity, last year, the Marketing Supply Chain Institute released Define Where to Streamline: Making Marketing Supply Chains More Efficient, Agile, and Enviro-Friendly (registration required) that noted that, with good visibility, an average marketing organization can easily find 20% to 25% savings with Procurement’s help.

About ten pages in, the report lists the top five areas where the marketing supply chains could realize sustainability gains (which are the ultimate key to long term savings). These are:

  • print, production, warehousing, and delivery
  • transportation and logistics (of material)
  • packaging and material
  • meetings, user conferences, & events
  • merchandising & point-of-sale displays

And they all have one thing in common: printed paper. First you print the fliers and brochures and inserts and then you transport them to your facilities and events and points of sale for distribution and use. If you could reduce your paper costs, which aren’t ever going to go down as wood becomes more precious, and printing costs, which are going to stay as high as the price of ink, you could substantially increase your savings.

Thanks to Apple, and the iPod, iPhone, and iPad madness, you can now do just that! 3 Million iPads in less than eighty days, and sales are still going strong. Pre-orders for the iPhone 4 racked up to 600,000 units so fast that the providers had to stop taking them. And there are over thirty million iPod Touches in the wild already. (With many more on their way now that Apple has a promotion that students get a free one with a new Mac.)

Thanks to Apple, the paperless world of ST:TNG is almost here and it won’t be long before everyone has their own personal electronic pad (be it an iPhone, an iPod touch, or, more likely, an iPad). And if you take advantage of it (like other early adopters), you will save a fortune in the long run. (Many conferences have already put their schedules and proceedings on Apple’s iPlatform, including the 2010 International Builders’ Show, Social Media Week Toronto, and the GameHorizon Conference 2010.) If you’re an organizer, you can choose to go i and dictate no printed materials. If it’s a large conference, you can negotiate with Apple for an “educational” discount and anyone who doesn’t already have an iMobile can have the price of one included in their conference fees.

But events aren’t the only opportunity for saving on printed paper — the boardroom is another great opportunity. How many bales of paper does your organization print out each day, only to see it used for a single meeting before it goes to the shredder? Considering that the average employee in the US uses 10,000 sheets of printer & copy paper every year, if we take an average blended per-sheet cost of just 5 cents, that says that your average employee is using at least $500 worth of paper each year. If we’re talking executives and predominantly colour print-outs, we’re looking at a minimum of $1,000 worth of paper each year. A 16 GB WI-FI iPad, which will hold all the documents they need at one time, is $499 (+ $99 for 2 years of Apple Care). If you institute a zero-printing policy for the boardroom (and meeting rooms), and buy a stack of corporate iPads that can be quickly loaded with whatever documents are needed for the meeting, you can reduce your internal printing costs by at least 50% (as there will be no costs in year two), even assuming you always upgrade every two years when AppleCare runs out. (Many of the devices will probably last three or four years, considering Apple’s track record of quality hardware, so you can sell the old devices at this time and recover some green if you wish. Or you can be a good corporate citizen and, after having the batteries refurbished, donate them to a needy school!)

Think about it. Paper + Ink + Printers + Energy to Print + Transportation + Shredding & Recycling is costly. e-Printing is almost free, as it’s just the cost of the e-Reader, which is much more energy efficient than a printer!

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