Shipulski On Design

In business, the only direct lever to pull is resource allocation. The people are already on the books, just change what they work on. But pulling that off is difficult.

No need to wait for new hires, just move resources from one project to another.  Stop project A and start project B.  Simple, right? Not so much. Emotional attachment causes project A to defend their resources and project B to complain the resources haven’t moved. Resources will be slow to flow.

No need to take the time to develop new capability, just reassign capable resources from business 1 to business 2 and watch progress unfold. No problem, right? Wrong. There’s immense organizational drama from prioritizing one business over another. Again, the pace of resource flow will be glacial.

And with innovation, the drama is doubled. It’s threatening when resources flow from mainstream projects with tangible (but small) returns to more speculative projects with highly uncertain returns.  But that’s what must happen.

If there’s a mismatch between the words and resource allocation, believe resource allocation.

If the innovation banners are plastered on all the walls and everyone has the tee shirt, yet the resources don’t flow to the innovation work, it’s an innovation farce. Run away.  Here’s what the four HOWs of innovation look like through the lens of resource allocation.

How To Start. Define the yearly funding level for innovation resources that is independent of the yearly planning process.  In short, create an innovation tax at a fixed percentage of revenue.  This gets funded before anything else.  It’s the pay-yourself-first approach to innovation. And when the money is allocated and the resources flow, there’s no need for banners and tee shirts.  Alignment comes with the money.

Next, choose a leader to put in place standing processes to continuously funnel project ideas into a common hopper.  One pile for all ideas – university research, mergers and acquisitions, voice of the technology, voice of the customer (direct observation and listening), patents and YouTube videos of purposeful misuse of your product.

How To Choose. Define funding levels across the various flavors of projects in the portfolio and set up a standing meeting for senior leaders to choose the best projects. This selection process is light on analysis and heavy on judgment, so allocate leaders who are not afraid to use good judgement. And set up a standing meeting with the CEO to pace the selection work (make sure senior leaders allocate their time.)

How To Execute. Internal, external, or partner, the work defines the right way to allocate resources.  Based on the work, choose the right organization and the best leader and fully staff the project before considering a second project.  The most popular failure mode is running too many projects in parallel and getting none done.  The second popular failure mode forgetting to fund the support resources needed for innovation.  Allocate money for tools, time, training and a teacher. Establish a standing meeting where senior leaders review the projects.  This must be outside the review process normal projects.

How To Improve. No one ever allocates time to do this.  To get the work done, trick the system and include the work as a standing agenda item in the How To Execute review meetings.  Find a problem, fix a problem. Improve as you go.

Allocate the best resources to the best projects and make sure senior leaders allocate time to the innovation work. The best predictors of successful innovation are the character of the fully-staffed, fully-funded projects and the character of people that run them.

Image credit – conorwithonen

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