Step by Step Innovation-John Gabrick

remove_riskOne of the most important factors in innovation is funding. Without it, your ideas are worthless, even the small ones. When people think of funding, they initially think money, and they’d be correct. However, money is only one form. Funding might be allowing someone time off of a project to complete an innovation, or providing them a team to divide up tasks. It’s also necessary to talk about funding from the very start of innovation. Whether it’s explicitly stated or not, your innovators will gauge their participation (or lack of participation) based on whether or not your organization has the ability to follow through on the innovations that are created–therefore funding is critical.

Once project have started, funding obviously continues to play a strong part.  While many organizations periodically rank and evaluate projects for either moving forward or abandoning, they typically look at a myriad of factors, such as marketing, manufacturing, and competition.  One way of categorizing all of your analysis factors is on the amount of risk that is removed.  Consider an entrepreneur and venture capitalist.   The venture capitalist invests in the company for the primary purpose of helping the entrepreneur remove risk.  For example, I’m given money to build a prototype to answer the question of “Can it be build quickly and inexpensively”.  When you are managing many projects, the best way to look at a go/no go decision is a) did the funding in the current stage remove risk (and did it remove enough risk) and b) is the funding for the next phase being used to reduce the next set of risks.  This is why venture capitalists are not interesting in “paying salary” they are interested in remove risks.  Try this the next time you evaluate a project.