3 ways to innovate on a budget

3 TIPS FOR INNOVATING ON A BUDGET PAGE | 2

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Introduction

14th May, 2014

Last night’s Federal Budget cuts will make it even tougher to

innovate. Cuts include a reduction in R&D Tax credits and the

abolition of Commercialisation Australia and the Innovation Research

Fund. Where will this leave Australian businesses? The future

impacts are hard to predict.

Commercialisation Australia has supported many success stories,

including recruitment behemoth SEEK. The CSIRO is also losing 500

jobs. The research institute has been instrumental in many

innovations across a range of industries, including the development of

Wi-Fi technology. Think for a minute. Where would we be without

SEEK.com? Where would we be without Wi-Fi? What future

innovations will never see the light of day due to these substantial

cuts in the Federal Budget?

Now, it would be very un-Australian to complain about something

without rolling up our sleeves and doing something about it. So, in

the wake of last night’s budget announcement, here are three ways

to innovate when your budget is tight.


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Table of Contents

THE 80/20 RULE 3

DO ONE THING, DO IT BRILLIANTLY, THEN GROW 4

MASTERING SIMPLICITY 6

Underestimating simplicity 7

New bank, one product 8

New system, one focus 8

The 80/20 rule

It’s surprising how often the Pareto Principle shows up in economics

and business. The Pareto Principle, popularised by author Richard

Koch, states that often 80 percent of effects come from 20 percent of

causes. In his second book, Living the 80/20 Way, Koch provides a

number of examples of 80/20 in business. How many of these

circumstances apply to your business?

80 percent of your profits come from

20 percent of your customers

80 percent of your complaints come from

20 percent of your customers

80 percent of your profits come from

20 percent of the time you spend

80 percent of your sales come from

20 percent of your products


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Working out the 80/20 opportunities in your business could be one of

your biggest opportunities to innovate. What would happen if you

standardised the 20 percent of processes that are performed most of

the time? What would happen if you focused your solution on

prioritising the 20 percent of system features that deliver the highest

ROI? What would happen if you let go of the customer categories that

generate the highest number of complaints? What would happen if

you let go of the 80 percent of customers who only contribute 20

percent of your income? These are substantial changes, not to be

entered into lightly, but the world’s biggest companies are harnessing

the power of 80/20 and simplification, with compelling results.

Do one thing, do it brilliantly, then grow

When it comes to innovation, bigger is not always better, and this is

more the case every year. With the explosion in the App-based

approach to software development, global small businesses that do

just one thing but do it brilliantly are taking the world by storm.

Daniel Priestley explores the Global Small Business phenomenon in his

latest book, The Entrepreneur Revolution. Let’s take a look at a few

examples.

Fitbit has become a leader in pedometers with an incredibly feature-

rich solution in a minimalist package. This tiny, elegant pedometer

does away with the bulkiness of many of its competitors (I always


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loved the idea of using a pedometer to measure my daily step count

but didn’t particularly want to accessorise my work suits with a bulky

pedometer). It’s also incredibly accurate (more accurate than many

of its competitors, measures how many floors you’ve climbed, as well

as your step count, and syncs wirelessly to your smart phone or

computer so you don’t have to enter your step count manually.

Fitbit also has a feature rich online dashboard, automatically tracking

your progress against goals, giving you badges when you hit 10,000

steps for the day or have climbed 1000 lifetime floors. It also allows

you to sync up with friends (my sister and I cheer each other’s prog-

ress despite living more than 800 kilometres apart). Fitbit does one

thing and does it brilliantly, starting simple and adding features,apps,

and products along the way.

Evernote has become a leader in knowledge management, or as I like

to think of it, outsourcing your brain. I no longer use Post It notes

stuck to my computer screen to remind myself to do things, I jot it

down in Evernote. I can take a photo of a product I want to research

on my smart phone when I’m out and about. I can save text, images

and URL’s from a web page I’ve visited for articles I’d like to read or

reference.

The feature set keeps getting better and better. You can share note-

books with team members privately and save final versions of key


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documents. Powerful tagging and search means that you can easily

find that note you jotted down three weeks ago. The location you

took the note is tagged too, so if you went to a conference in Sydney

you can search by location and find all your Sydney notes, sorted by

date. Evernote does one thing well, does it brilliantly, then grows.

Innovative Companies lists such as Fast Company and BRW are

dominated by global small businesses that do one thing (or started

with one thing) do it brilliantly and are taking on the biggest brands

in the world. Evernote is now taking on the likes of Microsoft

Sharepoint and Google Docs with its feature rich Evernote Business

offering. This trend is making it even more challenging for big

businesses to innovate. Those that are succeeding are finding ways to

focus start small and do it brilliantly. Starting with one new shoe at

Nike. Starting with one new store at Target. Starting with one city at

Amazon. Start small, do it brilliantly and grow from there.

Mastering simplicity

One of the keys to Apple’s success has been that Apple is not

focussed on packing in as many features, as many apps, as many pre-

bundled applications as they possibly can. Instead, they focus on the

features that they see as most important, and execute them

brilliantly. Apple became the largest company in the world with only


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seven products. How many products does your company sell? How

innovative is your execution?

Underestimating simplicity

Something to consider in refining your solution, making the final

decision on the direction you’ll take, is how complex is your solution

- don’t underestimate the power of simplicity.

Many people think that if it’s simple, it must be easy. Not true! When

you’re an expert in something, you see that subject in a very differ-

ent way to the ‘average Joe’. Take colour - the ‘average Joe’ will see

an artist’s palette with five blue paints, and see blue, blue, blue,

blue, blue, but an artist or graphic designer or fashion designer will

see cerise, marine, sky, cornflower, and peacock.

When you’re an expert you see variables the layperson can’t distin-

guish. You see problems others don’t pick up on. Unfortunately this

can also mean that you overcomplicate things unnecessarily because

you want to account for all those variables, you want all the bells and

whistles you know are possible, and you want the solution to be the

solution you’d want to use yourself.

Similarly, there is a tendency to think that innovative solutions need

to be complex; however, many amazing innovations are incredibly,

powerfully simple. We’ve already talked about the emergence of


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global small businesses like Fitbit and Evernote that do one thing and

do it brilliantly, but big business is also unlocking the power of

simplicity.

New bank, one product

ING launched into the Australian market with a single product - their

high interest online savings account, their only product for several

years. They started small, executed brilliantly, and then grew.

In 2009, NAB jumped on the bandwagon, launching a separate brand,

UBank, with distinct branding, systems and culture from the parent

company, and a single product - a high interest online savings

account, that quickly became a rival to ING for Market Leader status.

Start small, do it brilliantly, then expand.

New system, one focus

In 2010 ANZ became the first Australian bank to launch a native

Smartphone internet banking app. Their approach - keep it simple -

the first version gave you access to your own accounts, including the

ability to transfer to friends’ accounts even without their account

details (all you needed was their mobile phone number). Features

like BPAY and versions for Android and other devices were added

later.


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One of the largest companies in the world, BHP, is living and breath-

ing the power of simplicity, with one global system for HR, Finance,

Supply and Work Management with one standard set of processes

across 100,000 staff in 22 countries and 20 mining divisions. Now this

hardly seems an example of starting small, but if BHP can master

simple, why can’t anyone, at least in some parts of the business.

Over to you...

If the big players can harness the power of simplicity - what can you

do in your team? What are your 80/20 opportunities? What one thing

could you start with? Do one thing, do it brilliantly, then grow.

There are many complex, challenging problems in our communities

and in our businesses. Tight budgets, limited resources and changes

in direction only make it tougher. If you can harness the power of

simplicity, you can still create remarkable results.

When you focus on 80/20 opportunities…

When you do one thing, do it brilliantly, then grow…

A simple, elegant solution can have a remarkable impact.


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About the book

This guide to innovating on a budget has been adapted from Jenny’s

book, The Innovation Recipe: Key ingredients for world-class results

in big business. Details about the book, including where to buy the

book, are available on the Zumbara website.


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Mastering your Innovation Recipe

Zumbara can help you to translate great ideas into great results. Our

principal consultant, Jenny Vandyke, has developed Zumbara’s own

six-step Innovation Recipe to help business leaders translate great

ideas into great results. Jenny’s approach is based on more than 10

years senior level experience on major projects at Australia’s largest

companies. Past projects have included National Australia Bank, BHP

Billiton, ANZ Institutional Bank and KPMG. Jenny has managed

multiple successful implementations and delivered award winning

results.

In addition to her practical experience, Jenny has spoken at various

conferences and industry events on innovation and change

management, and over the years she has delivered hundreds of

workshops. Jenny loves her work because for more than ten years

she has been getting businesses buzzing. Jenny and her team can help

set you up for innovation success through our range of services.

Strategy workshops

At Zumbara’s strategy workshops we work with leadership teams and

boards of directors to build a strategy that is more than empty words

– a strategy that the whole team can commit to, with a practical plan

to translate strategy into bottom line results. We can tailor an


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agenda to suit your needs, whether you’re setting the strategy for a

specific project, your team, or your entire business.

Innovation Recipe briefings and keynotes

At Zumbara’s briefings and keynote presentations, we uncover the

secret ingredients to innovation, using Zumbara’s own six-step

Innovation Recipe to translate ideas into results. Zumbara’s

Innovation Recipe covers the key ingredients for selecting the right

ideas, as well as all the key ingredients for successful

implementation, including leadership, planning, risk management and

communications, to name a few. Our briefings can be tailored to suit

your needs, ranging from a 30 minute keynote presentation through

to a multi-day training program.

Topics available include:

Five signs your project is a lemon – innovation mistakes to

avoid

15 minute innovation - how to innovate without turning your

business upside down

Get out of the Kitchen (and Talk to People) - 7 secrets to

maximise your stakeholder engagement

The Power of Simplicity - lessons from the world's most

innovative companies

Risky business - managing risk in innovation projects


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Find out more

To find out more about our services and how we can tailor a solution

to meet your needs, drop us an email to arrange an initial

consultation. We’re based in Melbourne but we travel within

Australia and internationally for speaking engagements and client

projects.

Jenny Vandyke | Director and Principal Consultant

0412 602 362 | [email protected]

www.zumbara.com.au

We look forward to working with you and your team

to master your own Innovation Recipe.

3 ways to innovate on a budget

Business

percent of customers

budget page

percent of effects

percent of causes

percent of processes

percent of system features

nights budget announcement

nights federal budget