Innovation is about a lot of different things. Partly it's about flexible thinking, being creative.
Partly it's about taking risk.
One thing that often gets overlooked in innovation is raw spending power. If you put money into R&D, the odds are that you are going to be a little bit more innovative than the next company.
One country that gets big props for innovation is India. When we traveled to Detroit to tear down the Chevy Volt in January 2012, we had a chance to see, up close and personal, an example of Indian innovation.
As we were wrapping up our teardown, the folks at Munro and Associates, our hosts, took delivery of a 2012 Tata family van. Several years before, the engineers at Munro had analyzed a Tata truck for the Indian company and come away reporting that the vehicle shouldn't even be on the road, it was so poorly designed.
But the van that they took delivery of was a spectacular piece of engineering, and it stopped the engineers in their tracks. It suggested to me that automotive design in India has come a long way in just a few years.
But take a look at the info graphic below. It appears that the unions aren't spending as much on R&D as the rest of the world is, and that's having an effect on their innovation.
This article originally appeared on EBN's sister site Drive for Innovation .
Certainly, it takes investment to produce advances in technology, but I think that is only one of the necessary ingredients. It also requires a culture of innovation. Innovation needs to be encouraged, even required, from the organization.
Any ideas regarding other ingredients for innovation?
Freedom. People come up with the best of ideas when they are not restricted to HOW they should be thinking & working. Look at how many good things come out of Hackathons & even Google Labs projects.
@pocharle – excellent point! We don't all think or innovate in the same way.
How about the opportunity to succeed from or be rewarded for innovation? To innovate often requires that the organization go above and beyond their comfort level to achieve results. The opportunity to succeed, with the assurance that the organization won't unduly punish itself in the process.
@eldredge: Yes indeed since if everyone starts to think the same way there will be differentiation in products or services.Â
Intersting stuff. Â Is there a way you can share with us the findings on the Tata van tear down. Â We'd be very interested to see how it compares against the offerings from Detroit.
pocharle,
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That's a good point. A lot of companies do not treat the R&D department well and most of the time these companies suffer more losses than ever.
“As we were wrapping up our teardown, the folks at Munro and Associates, our hosts, took delivery of a 2012 Tata family van. Several years before, the engineers at Munro had analyzed a Tata truck for the Indian company and come away reporting that the vehicle shouldn't even be on the road, it was so poorly designed.”
Brain, you may be right about poor design because of other reasons. Tata is a leading automobile company is India and they used to design the vehicles, which can suit to the poor roads, hilly areas etc. that may be good for Indian situation but may not be for good runway type smooth roads in US and EU.
“Freedom. People come up with the best of ideas when they are not restricted to HOW they should be thinking & working. Look at how many good things come out of Hackathons & even Google Labs projects.”
Pocharle, freedom includes financial freedom too, which may not be affordable for SMEs. For MNCs, they used to account certain portion of their profit for R&D through each year budget.
@Eldredge, You are right on that, investment cannot be the only ingredient of innovation. I believe its not even the first thing. I believe vision( Having the end – product in mind) should come first
@Eldredge, yes, we can't all think the same, as our faces differs so also is the way we think and act.
YES. And we shouldn't otherwise the innovation would stall.
A lot of companies do not treat the R&D department well and most of the time these companies suffer more losses than ever.
@t.alex, I agree with you. Companies should not neglect R&D department. R&D activity is very important for the companies to build new line of products which will bring good profits to the companies in future.
I believe its not even the first thing. I believe vision( Having the end – product in mind) should come first
@Adeniji, I agree with you. But manytimes people have good idea and vision but they dont have necessary investment to convert that idea into product. So investment also plays major role in product development.
True. Much like IT, a lot of organizations view it as an expense. But going from engineering straight to sales cycles is a bad idea.
I think SMEs can manage it too. Maybe not as much as the Google's of the world but still give some time for side project encouragement. Most techies will end up creating things on the side anyway. Why not benefit the organization too?
“True. Much like IT, a lot of organizations view it as an expense. But going from engineering straight to sales cycles is a bad idea.”
Pocharle, if they are not able to market or productize the R&D efforts, then it's an expense. If they are successful in productizing or marketing, it can bring more profit too.
“A lot of companies do not treat the R&D department well and most of the time these companies suffer more losses than ever.
@t.alex, I agree with you. Companies should not neglect R&D department. R&D activity is very important for the companies to build new line of products which will bring good profits to the companies in future .”
Tirlapur, R&D is an important factor for innovation and productizing new ideas. When companies failed to productize or marketing the R&D outcomes; then obliviously it's a resource and time wastage for them. Unfortunately most of the companies are falling to that category and only few are able to productize their innovations.
@pochale: Yes no  one can do it better than Google for user and the main reason behind is that they have the resources. So when you have enough resources its easy to get things done.Â
@pochale: I feel looking at as an expense is not a bad thing but having that mentality for the entire process is not the best thing to do. That will block the process of development if so.Â
I know this. But typically, it's one of the first things on the chopping block when budget cuts are made. I understand why but it still hurts all around.
“So when you have enough resources its easy to get things done.”
You also have more room for even more creativity & innovation.
One thing about having money: you have time and room for failure. That's critically important to innovatoin. #conomist and Financial Times columnist Tim Harford writes in his book, Adapt: Why Success Always Starts With Failure “success comes through rapidly fixing our mistakes rather than getting things right first time.”
@Eldredge, you said: To inovate often requires that the organization go above and beyond their comfort level to achieve results.
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This is really true. if you think about it, most innovation comes when someone has an audacious and nearly impossible idea, something well beyond what makes sense based on the current paradigm. Certainly, some companies tell these people to shut up and then innovation is lost.
Hailey, yep most companies tell employees to shutup. Blame the management!
tirlapur, most companies would consider R&D as cost center and they would scrutinize each and every move. This definitely limit the level of creativity and innovation.
“I know this. But typically, it's one of the first things on the chopping block when budget cuts are made. I understand why but it still hurts all around.”
Pocharle, you know it better than me. From your experience and knowledge; how can we reduce such chopping from R&D.
” You also have more room for even more creativity & innovation.”
Pocharle, most of the companies are pressurizing employees for making miracles in R&D without resource and budgets. Every year they reduce the R&D expenses and toping with warnings. Warning in the sense, if there is no output further reduction in budget may happen.
It's easy to stifle innovation, but difficult to cultivate it.
There's no one-size-fits-all answer for that. I think it usually depends on how much the R&D matters to the bottom line. A lot of times, if the decision-makers feel like it wouldn't hurt the brand if customers are used as guinea pigs, then R&D will go bye-bye real fast. But if they're smart & maybe skim some resources instead of remiving the whole infrastructure, then they may still be able to get by.
It's a sad cycle, I know. But I've been surprised how some great things come out of nothing. More often than not, if the personnel care enough, they'll make things happen, even on their own time.
“I think it usually depends on how much the R&D matters to the bottom line. A lot of times, if the decision-makers feel like it wouldn't hurt the brand if customers are used as guinea pigs, then R&D will go bye-bye real fast. But if they're smart & maybe skim some resources instead of remiving the whole infrastructure, then they may still be able to get by.”
Pocharle, R&D matters for long term sustainability. No one can sustain with a single or same product for a long time. So innovation has to happens and for that R&D is a main factor.
“It's a sad cycle, I know. But I've been surprised how some great things come out of nothing. More often than not, if the personnel care enough, they'll make things happen, even on their own time.”
Pocharle, R&D is a continuous evolving process. Those who involved with such activities are full time devotees. So they used to think out of box, even at home too and many new ideas are sparking at leisure times.
I know this from being in the trenches for a long time (on the other side of product development –customer facing). Bu the big wigs look at it as an expense, which is the root of the issue here.
I agree. It's a gift & a curse. But it comes with the territory when all that's on you or your team's shoulders.
“I know this from being in the trenches for a long time (on the other side of product development –customer facing). Bu the big wigs look at it as an expense, which is the root of the issue here”
Pocharle, without investment, there is no return. Â Only service level companies can sustain without much investment.
“I agree. It's a gift & a curse. But it comes with the territory when all that's on you or your team's shoulders.”
Pocharle, one can expect anything at any time.
Even companies that teeter along the SLA line, they still need budgets to automate & streamline processes to make management easier. That is still very important. I'm not disagreeing with you, just pointing that out.
I agree. And as they say, you should always start with the worst!
“Even companies that teeter along the SLA line, they still need budgets to automate & streamline processes to make management easier. That is still very important. I'm not disagreeing with you, just pointing that out.”
Pocharle, expenditure for R&D and facilitations are different. Automation and streamlining comes under facilitation or day to day expenditure. Any investment for R&D is for future, where there is no immediate Return on investment.
“I agree. And as they say, you should always start with the worst!”
Pocharle, anything can happens at any time.
It depends on how large an organization you're talking about. Sometimes improving the current infrastructure isn't swept under the OpEx budgets but R&D. I'm not saying it's best practice but I've seen it done in a few cases.
And Murphy's Law dictates that it will be with the most undesired outcomes.
“It depends on how large an organization you're talking about. Sometimes improving the current infrastructure isn't swept under the OpEx budgets but R&D. I'm not saying it's best practice but I've seen it done in a few cases.”
Am talking about my company, which belongs to SME category. Any modernization plan is accounted under regular maintenance budget
“And Murphy's Law dictates that it will be with the most undesired outcomes.”
Pocharle, expected outcomes at unexpected time and vice versa.
That's better than most. Most companies only consider “maintenance” when things break, so they do NOT even have a budget for it.
Yes. You mentioned SMEs earlier. This Murphy's Law typically happened with them. Getting the business people to stop thinking of technology as an expense, but instead, as an asset if veeeeery difficult.
“That's better than most. Most companies only consider “maintenance” when things break, so they do NOT even have a budget for it.”
Pocharle, but regular and periodic maintenance can expand the life time of products and machineries.
“You mentioned SMEs earlier. This Murphy's Law typically happened with them. Getting the business people to stop thinking of technology as an expense, but instead, as an asset if veeeeery difficult.”
Pocharle, may be various from type of companies and managements. For most of the SMEs survival is important than investment.
I understand that. I'm just pointing out the irony.
I know this. Staying alive is the only thing that matters in most small businesses. That's what makes it a catch 22 when it comes to investing in technology that you NEED to stay alive.
“I know this. Staying alive is the only thing that matters in most small businesses. That's what makes it a catch 22 when it comes to investing in technology that you NEED to stay alive.”
Pocharle,you are right. Â Survival is important than any further investment. They want to maximize the profit without further investment.
“I understand that. I'm just pointing out the irony.”
Pocharle, thanks for your understanding.
@pocharles: But still to stay alive you need to make certain decisions which might be risky in most cases. So its all about how confident are you in taking the risk is the question that needs to be answered. Â
@Jacob: How do they highlight maintenance as their important factor without budgeting ? Im kind of confused  Â
SMBs have the flexibility to move quickly and be creative. The downside is often a lack of resources. To really success, SMBs have to be smart about partnering and using available prdoucts and services (cloud for example) to get the benefits of a large organization without the cost.
Absolutely. If only I could come up with a more eloquent & effective way to put this, I'd write a book & make tons of $$!
I don't know if I agree with that. To stay alive, you try to avoid being risky. You usually take risks to reach another level or make a major achievement.
“How do they highlight maintenance as their important factor without budgeting ? Im kind of confused “
Nimantha, maintenance is a part of regular activity and accounting under running expenses. Any other modernization expenses won't count under this head.
“SMBs have the flexibility to move quickly and be creative. The downside is often a lack of resources. To really success, SMBs have to be smart about partnering and using available prdoucts and services (cloud for example) to get the benefits of a large organization without the cost.”
You are right Hailey, but lack of resources and money for further investments are major issues.
“Absolutely. If only I could come up with a more eloquent & effective way to put this, I'd write a book & make tons of $$!”
Pocharle, why can't you try for that.
Writers block.
“Writers block.”
Pocharle, No you have the right to write books.
I do. But the book itself is blocking me from creating it. Ha
“Oh. You meant that you are unable to write because you are having trouble coming up with ideas, not that someone's is trying to take away your rights. See? That's what happens when Jacob lends out our copy of The Big Book of American Idioms.”
Rich, ha ha ha…
“I do. But the book itself is blocking me from creating it. Ha”
Pocharle, be positive
You're right. But it gets you notoriety in the space, which can go a long way.
I am. Just being fun at the same time.
“I am. Just being fun at the same time.”
Pocharle, good, keep it up
“xa xa xa, or ja ja ja.”
Rich, ????
“You're right. But it gets you notoriety in the space, which can go a long way.”
Pocharle, for certain cases time is also a factor
Well for anything, time is always a factor. It's the only thing you can never get back. The hope is that the time spent is effective.
“Well for anything, time is always a factor. It's the only thing you can never get back. The hope is that the time spent is effective.”
Pocharle, that has to be decide when while we spending time. NO regrets later
What do you mean?
“What do you mean?”
Pocharle, I meant while spending time use it wisely; later No use in regrets for wastage of time.
OK thanks for the clarification. Just wanted to be sure I understood
Pocharle, thanks.
Np. Just want to ensure I understand your point.
“Np. Just want to ensure I understand your point.”
Pocharle, thanks for your understanding