How to Innovate When the Budget's Tight

The Davos Forum. The Daisy Cutter bomb. Six Sigma.

People use a noise meter to evaluate innovation. The bigger the bang, the more important the innovation is presumed to be.

But innovation isn't the province of just world economic leaders, bomb designers and management gurus. At dynamic companies in competitive industries, innovation happens all the time—and the ideas often originate outside the executive suite. It was, after all, the ideas of a shop-floor supervisor that led to Toyota's production system becoming the envy of the car industry.

"Occasionally innovation is exponential but usually it's incremental," says Kenneth Kraemer, a professor of information systems at the University of California-Irvine and director of the Center for Research on Information Technology and Organizations, a think tank.

Indeed, for internal technology staffs, "think small" may be the mantra for 2002. The thinking still has to serve broader corporate goals, but in an era of tight technology budgets it should aim at making the most of resources already deployed. "It's no longer about coming up with new ideas—it's about refining existing processes," says Craig Williams, senior manager of Internet/extranet networks at Cisco.

Here are the places where low-cost technology innovation can happen.

Within the company: Information technology is a service function; you and your staff exist to make everyone else's life easier. Nine months ago, Cisco formed an internal consulting group it calls Information Technology Enterprise Account Management. The ITEAM supports application development at Cisco—a function where the problems were sometimes coming to the attention of Cisco chief executive John Chambers. "Senior executives no longer have to react to little firestorms," says Richard Cassidy, director of information systems at Cisco. "Everyone is happy with it."

Within the department: The downsizing of corporate technology staffs—and the increased workload for those who survive—have made morale an issue. Hold weekly brainstorming sessions (supplemented by the occasional dinner; see box, below) about how better to service internal customers. The staff will appreciate your soliciting their input.

Outside the company: Technology workers often have no contact with end customers. Encourage your staff to participate in sales calls or go through the experience firsthand of buying your company's products. Your most promising workers are likely already taking this step on their own; make it a requirement for every staffer. 3