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Want to Innovate? Try Spending Some Money

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.

79 comments on “Want to Innovate? Try Spending Some Money

  1. Eldredge
    January 20, 2014

    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?

  2. itguyphil
    January 21, 2014

    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.

  3. Eldredge
    January 21, 2014

    @pocharle – excellent point! We don't all think or innovate in the same way.

  4. Eldredge
    January 21, 2014

    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.

  5. ahdand
    January 21, 2014

    @eldredge: Yes indeed since if everyone starts to think the same way there will be differentiation in products or services. 

  6. FLYINGSCOT
    January 23, 2014

    Intersting stuff.  Is there a way you can share with us the findings on the Tata van tear down.  We'd be very interested to see how it compares against the offerings from Detroit.

  7. t.alex
    January 23, 2014

    pocharle,

     

    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.

  8. Daniel
    January 23, 2014

    “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.

  9. Daniel
    January 23, 2014

    “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.

  10. Adeniji Kayode
    January 26, 2014

    @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

  11. Adeniji Kayode
    January 26, 2014

    @Eldredge, yes, we can't all think the same, as our faces differs so also is the way we think and act.

  12. itguyphil
    January 28, 2014

    YES. And we shouldn't otherwise the innovation would stall.

  13. SunitaT
    January 29, 2014

    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.

  14. SunitaT
    January 29, 2014

    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.

  15. itguyphil
    January 30, 2014

    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.

  16. itguyphil
    January 30, 2014

    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?

  17. Daniel
    January 30, 2014

    “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.

  18. Daniel
    January 30, 2014

    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.

  19. ahdand
    January 30, 2014

    @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. 

  20. ahdand
    January 31, 2014

    @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. 

  21. itguyphil
    January 31, 2014

    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.

  22. itguyphil
    January 31, 2014

    “So when you have enough resources its easy to get things done.”

    You also have more room for even more creativity & innovation.

  23. Hailey Lynne McKeefry
    January 31, 2014

    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.”

  24. Hailey Lynne McKeefry
    January 31, 2014

    @Eldredge, you said: To inovate often requires that the organization go above and beyond their comfort level to achieve results.

     

    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.

  25. t.alex
    February 3, 2014

    Hailey, yep most companies tell employees to shutup. Blame the management!

  26. t.alex
    February 3, 2014

    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.

  27. Daniel
    February 3, 2014

    “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.

  28. Daniel
    February 3, 2014

    ” 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.

  29. Eldredge
    February 7, 2014

    It's easy to stifle innovation, but difficult to cultivate it.

  30. itguyphil
    February 18, 2014

    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.

  31. itguyphil
    February 18, 2014

    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.

  32. Daniel
    February 18, 2014

    “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.

  33. Daniel
    February 18, 2014

    “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.

  34. itguyphil
    February 20, 2014

    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.

  35. itguyphil
    February 20, 2014

    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.

  36. Daniel
    February 21, 2014

    “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.  Only service level companies can sustain without much investment.

  37. Daniel
    February 21, 2014

    “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.

  38. itguyphil
    February 24, 2014

    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.

  39. itguyphil
    February 24, 2014

    I agree. And as they say, you should always start with the worst!

  40. Daniel
    March 3, 2014

    “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.

  41. Daniel
    March 3, 2014

    “I agree. And as they say, you should always start with the worst!”

    Pocharle, anything can happens at any time.

  42. itguyphil
    March 18, 2014

    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.

  43. itguyphil
    March 18, 2014

    And Murphy's Law dictates that it will be with the most undesired outcomes.

  44. Daniel
    March 20, 2014

    “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

  45. Daniel
    March 20, 2014

    “And Murphy's Law dictates that it will be with the most undesired outcomes.”

    Pocharle, expected outcomes at unexpected time and vice versa.

  46. itguyphil
    March 24, 2014

    That's better than most. Most companies only consider “maintenance” when things break, so they do NOT even have a budget for it.

  47. itguyphil
    March 24, 2014

    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.

  48. Daniel
    March 25, 2014

    “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.

  49. Daniel
    March 25, 2014

    “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.

  50. itguyphil
    March 27, 2014

    I understand that. I'm just pointing out the irony.

  51. itguyphil
    March 27, 2014

    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.

  52. Daniel
    March 28, 2014

    “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.  Survival is important than any further investment. They want to maximize the profit without further investment.

  53. Daniel
    March 28, 2014

    “I understand that. I'm just pointing out the irony.”

    Pocharle, thanks for your understanding.

  54. ahdand
    March 28, 2014

    @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.  

  55. ahdand
    March 28, 2014

    @Jacob: How do they highlight maintenance as their important factor without budgeting ? Im kind of confused   

  56. Hailey Lynne McKeefry
    March 28, 2014

    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.

  57. itguyphil
    March 28, 2014

    Absolutely. If only I could come up with a more eloquent & effective way to put this, I'd write a book & make tons of $$!

  58. itguyphil
    March 31, 2014

    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.

  59. Daniel
    April 1, 2014

    “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.

  60. Daniel
    April 1, 2014

    “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.

  61. Daniel
    April 1, 2014

    “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.

  62. itguyphil
    April 18, 2014

    Writers block.

  63. Daniel
    April 21, 2014

    “Writers block.”

    Pocharle, No you have the right to write books.

  64. itguyphil
    April 22, 2014

    I do. But the book itself is blocking me from creating it. Ha

  65. Daniel
    April 24, 2014

    “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…

  66. Daniel
    April 24, 2014

    “I do. But the book itself is blocking me from creating it. Ha”

    Pocharle, be positive

  67. itguyphil
    April 25, 2014

    You're right. But it gets you notoriety in the space, which can go a long way.

  68. itguyphil
    April 25, 2014

    I am. Just being fun at the same time.

  69. Daniel
    May 4, 2014

    “I am. Just being fun at the same time.”

    Pocharle, good, keep it up

  70. Daniel
    May 4, 2014

    “xa xa xa, or ja ja ja.”

    Rich, ????

  71. Daniel
    May 4, 2014

    “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

  72. itguyphil
    May 27, 2014

    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.

  73. Daniel
    June 2, 2014

    “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

  74. itguyphil
    June 19, 2014

    What do you mean?

  75. Daniel
    June 20, 2014

    “What do you mean?”

    Pocharle, I meant while spending time use it wisely; later No use in regrets for wastage of time.

  76. itguyphil
    June 27, 2014

    OK thanks for the clarification. Just wanted to be sure I understood

  77. Daniel
    July 1, 2014

    Pocharle, thanks.

  78. itguyphil
    July 22, 2014

    Np. Just want to ensure I understand your point.

  79. Daniel
    July 23, 2014

    “Np. Just want to ensure I understand your point.”

    Pocharle, thanks for your understanding

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