If you’re a business owner or manager, you’re probably painfully aware of the fact that your company can’t survive without innovation. But innovation may also be a huge drain on your business: it costs money to innovate, and that can make it difficult to convince your business partners and your board of directors to invest in innovation.
Before you can convince your business partners and your board that strategic innovation is worth the expenditure, you’ll need to get them to think of innovation as a business investment and not as a cost.
The problem with this is that, for many business managers and company owners, the word “investment” is synonymous with “cost”, and that makes them worry that innovation is going to be a huge drain on their finances. But innovation doesn’t have to cost your company any more than any other part of the business. In fact, innovation should be viewed as an essential business investment, and it should have a place on your budget.
To help you convince your business partners and your board of directors that strategic innovation is an essential business investment, here are some facts to consider:
- Innovation is necessary to stay competitive. If your company isn’t innovating, your business will fail. That’s just a fact: either you innovate or you’re out of business.
- Innovation is necessary to keep your employees happy. Research shows that employees who are challenged and engaged with their work are significantly more productive and likely to stay with the company.
- Innovation is necessary to attract and retain customers. Your customers want new products, new services, new experiences, and new ways of interacting with your company. If you’re not delivering innovation, you’re going to lose your customers to a competitor that does.
- Innovation is necessary to grow your company’s bottom line. Innovation is the only way to grow your company’s revenue. If your company isn’t growing, it’s shrinking. And shrinking businesses don’t last long.
While the idea of innovation seems intimidating, remember that it doesn’t have to be a drain on your company’s budget. If you treat innovation as an essential business investment, your business partners and your board of directors will likely view it in the same way.
So this really all boils down to this: budgeting money for research and development is a mindset thing. A company with a mindset focused on innovation views R&D as an essential investment, and a company with a mindset focused on cost views R&D as a cost. You need to change your business partners’ and your board’s mindset if you want to convince them to invest in strategic innovation and thus grow the enterprise value of the organisation for your shareholders’ benefit.