How many of you are really investing in innovation? What percentage of your total budget goes into innovation? What is the correct percentage?
Conventional wisdom is that a 4-6% investment in R&D shows an innovation-driven company. Is your IT investment in โfinding the next killer appโ 4-6% of your IT budget?
Before you get dejected and hit the bottle โ or kick your dog โ please focus on your situation not what the pundits deem โconventionalโ wisdom. If we all lived by convention we would still be walking on all fours if you know what I mean. So let us thank that activist who first dared to walk to her feet and gave us a meaningful life. But we digress!
I have never taken โdriving fastโ versus โdriving slowโ as absolutes. When assessing safety, I focus on the driver, the car, and the conditions. In other words, it is the complete equation, with all the variables, that helps determine the answer.
So, what is the equation for IT Innovation?
What is your industry situation? Are you in a stable and grind-it-out industry like paper and plastics? Then what are you doing trying to compete with IBMโs investment in innovation?
What is your business model? Are you the innovator in your industry or the grunt who collects everybody elseโs intellectual capital and adds value in distribution or manufacturing or some other process? Are you the โwe do not make itโ we โmake it betterโ company? Then what value does innovation investment add to your bottom line?
What is your companyโs competitive situation? Are you leading by a mile and believe this extra โinnovationโ boost will help? Or are you trailing and want to leapfrog the competition?
What is your organizationโs culture? Are you mavericks and have processes that foster this โleading edgeโ entrepreneurial thinking or are these buzz words your CEO uses at press conferences before he goes back to his office to sleep or perfect his putt?
I have named only a few variables. There are more. The issue here โ and in IT investment in general โ is to focus on the โbig pictureโ and see what makes sense. So fold that book that you bought on IT value and use it as a paperweight or a pillow to go to sleep. When you wake up, focus on getting your complete โequation.โ Then and only then make your next move.
