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How to Manage Business Innovation During a Corporate Turnaround

How to Manage Business Innovation During a Corporate Turnaround

Dealing with a corporate turnaround can be really tough on a business. There’s usually a lot of pressure to cut costs and improve efficiency quickly. But it’s important not to sacrifice innovation entirely during the process. Innovation is what drives long-term growth and sustainability. The key is finding the right balance between optimizing what you have now and investing in the future.

Take Stock of Existing Innovation Assets

When a company is struggling, there can be a tendency to throw the baby out with the bathwater. Before making drastic cuts, it’s important to fully understand what innovation assets already exist within the company. This includes things like:

  • Intellectual Property: Assess patents, trademarks, proprietary tech/processes etc. See if any can be monetized.
  • Partnerships: Review existing innovation partnerships and collaborations. Determine if any should be maintained/expanded.
  • Talent: Identify key innovators and creators already within the company. Look for ways to empower them.
  • Ideas Pipeline: Review existing internal systems for generating ideas. See if any diamonds in the rough could be fast-tracked.

Taking stock will help identify innovation strengths to build upon and gaps that need to be addressed.

Focus Innovation Investment on Quick Wins

When resources are tight, you have to be very targeted about where you invest in innovation. Focus energy and budget on quick wins that can drive near-term revenue or cost savings.Types of quick win innovation projects:

  • Efficiency improvements: Projects to improve productivity, streamline supply chain etc.
  • Enhanced existing offerings: Add new features/capabilities to current products.
  • New offerings that leverage existing assets: Develop offerings adjacent to current ones that reuse IP, tech, partnerships etc.
  • Process innovations to drive cost savings: Changes to internal processes that reduce costs.

Avoid longer-term, higher risk innovation projects until the company has more financial stability. Manage innovation like a portfolio – quick wins help fund the riskier bets.

Empower Middle Managers on Innovation

During a turnaround, there can be a tendency for top executives to centralize control and decision making. But when it comes to innovation, it’s important to also empower middle managers.Innovation often happens most effectively at smaller scales where teams are closest to customers and day-to-day operations. Middle managers understand these contexts the best. Empower them to:

  • Champion innovation: Give them goals/resources to initiate innovative projects within their divisions.
  • Unblock innovation teams: Ensure they aren’t creating unnecessary barriers for teams.
  • Funnel ideas & insights to top: Connect them to execs so good ideas can get lift-off.

Giving middle managers more ownership over innovation helps unlock the creativity and problem-solving capabilities closest to the real work.

Maintain Some Slack for Creativity

During a turnaround, typically every part of the business is put under a microscope to improve efficiency. However, it’s important to still maintain some “slack” in the system – resources that aren’t tightly managed.This creative slack gives innovators space to experiment, learn and uncover unexpected insights. Without it, people typically just optimize existing ways of doing things. Maintaining slack can look like:

  • Innovation time: Allowing certain teams one day a week for self-directed projects.
  • Seed funding: Keep some small innovation budget available for testing new ideas.
  • Flexible roles: Have people dedicate ~20% of their time for creativity vs daily tasks.

While slack resources need to be small and tightly monitored, they pay dividends by uncovering innovations that reimagine whole ways of doing business.

Leverage External Partners Where Possible

While investing internally has to be frugal during a turnaround, don’t overlook opportunities to leverage external innovation. Look for win-win partnerships with startups, university researchers, vendors etc. where both parties bring unique assets to the table.Types of partnerships to consider:Research collaborations: Fund research projects at universities to solve key challenges.Startup partnerships: Trade access to assets/distribution for equity or first-customer privileges.Innovation outposts: Small, semi-autonomous external teams focused on certain emerging opportunities.Vendor innovation programs: Partner with existing vendors/suppliers on co-innovation projects.Partnerships allow you to tap into talent and ideas beyond the company’s walls on a flexible basis. This boosts innovation bandwidth when internal resources are strapped.

Inspire a Culture of Scrappy Innovation

As leaders, it’s critical that you continue to inspire a culture of innovation even in tough times. Communicate that innovation is still a priority and celebrate scrappy, frugal innovation efforts happening at all levels of company.Some tips for fostering scrappy innovation culture during turnaround:

  • Spotlight frugal projects that drove disproportionate value. Tell their stories.
  • Celebrate non-financial contributions like creativity, hustle, boldness.
  • Encourage quick experiments over big bets. Learn fast, fail fast.
  • Emphasize constraints breed creativity and force focus on biggest value drivers.

The more you can spotlight those innovating more with less, the more likely others will emulate them. Frugality is innovative!Innovation may need to slow down and tighten up during a corporate turnaround, but it can’t grind to a complete halt. Following these best practices will help you achieve the right balance. Focus innovation investment on the quick wins while empowering middle managers and maintaining some slack for creativity. And continue to inspire a culture where innovation thrives, even under tight constraints. Maintaining forward momentum is key for coming out the other side stronger than ever!

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