Innovation in the workplace

Innovating on a shoestring budget – ILTA>ON

Innovating on a shoestring budget sounds like a smart thing to do. However, be careful that you are not penny wise and pound foolish. That is what Helen Wang of Organizing4Innovation said during the ILTA>ON session KM Innovation on a shoestring budget. Why is it a bad thing to innovate on a shoestring budget? Because it can be really expensive for the organization.


The session on KM Innovation on a shoestring budget started with presentations by Holly Hanna, KM Firm Solutions Manager at Perkins Coie LLP, and Jennifer Mendez, Director of Knowledge Management Innovation at Fisher Phillips LLP. Both gave several impressive examples of how they had delivered great results while using the tools available already in their firm.

Holly Hanna for example used SharePoint Document Library and Metadata to create a probono resource library. Jennifer shared how she had used a SharePoint-based form and list to create an attorney availability tool, and PowerBi to create a COVID-19 Employment Litigation Tracker.

All excellent examples of how to innovate on a shoestring budget.

A shoestring budget

The panel defined innovation on a shoestring budget as:

  • Using tools and technology already licensed by the firm, or using free technologies
  • Leveraging existing staffing capabilities
  • No additional budget ask (though successful mini projects may turn into a full fledged project with staffing, budgeting, etc.)

Why innovation on a shoestring budget is not a good thing

The main objective of any innovation project is to create value for your clients. It is important to note that the focus is on the client and value creation. The solution itself, how you get there, which technologies you used, etc. are all secondary to this goal.

I assume you agree that transforming an idea to practice is challenging and often time-consuming. Helen therefore argued, that no matter how small your innovation project, it should be considered a value creation opportunity and an investment in the firm's future. Even if the costs are minor, it still should be considered and evaluated as an investment. 

You never should innovate or pursue a technology project because it is cheap to do so.  

Pros and cons

There are a few pros and cons that make that as an organization, you probably should not be encouraging innovation on a shoestring budget.

Low costs vs hidden costs

Innovation on a shoestring budget is perceived as cost-effective. You make use of existing tools and avoid spending much on the development.

However, what do you think costs more? The hours spent by employees on their innovation project or the cost of the IT tools that are used to develop initiatives like those mentioned by Jennifer and Holly?

In our experience, the employee costs by far exceed the cost of IT tools.

True, there is a difference. The costs of software are out-of-pocket costs, whereas salaries are often already accounted for. So there is a difference in how these costs are budgeted, but that does not impact the absolute costs.

Neither Holly or Jennifer kept track of the hours spent on their innovation projects. It was just a few hours or days of work in most cases, they shared.

However, we know from the teams that we support, that they spent approximately 2-4 hours per week on their projects in the early phases and up to 20-40 hours in the final phases. So, for most innovation projects we are talking easily about hundreds of hours to bring an idea to practice.

Small projects that make use of existing technology may take less time, but still, they cost manhours. Ignoring these costs doesn't make a project cheaper to execute, it just makes these costs invisible.

No budget needed vs investments in better or new services

As mentioned above, all innovation efforts cost money. So even if, per definition, a shoestring budget project does not require you to ask for a budget, it does not mean that such a project comes for free.

And asking for a budget is not necessarily a bad thing. It forces teams to think their project through from the start, focus on the customer needs, and the problem they plan to solve.

If not careful, innovation on a shoestring budget will resort to undisciplined endeavors and hobby projects because there are no checks and balances.

Self-starters vs no accountability

A great benefit of shoestring budget is that anyone can start. You only need the motivation to make something happen. So it offers a great opportunity for self-starters.

There is however a downside to that. In our experience, it is difficult to make innovators adhere to the innovation process. Why? Because if you execute an innovation project well, it takes time and diligent effort. It is not wise to cut corners.

Yet, inexperienced innovators love to cut corners. For example, they will start building stuff to show their ideas and solution, but without doing the required pre-work to make sure that they are building something that the client really wants, needs, and is willing to pay for. The results of cutting corners in the ideation phase are nearly always disastrous and it is one of the reasons so many innovation projects fail. Unnecessarily, I may add.

One way to make sure innovators adhere to the process and to hold them accountable for their project, is by making their funding contingent upon doing so. We know from experience, that it really makes a difference in the overall performance of your innovation activities.

No bureaucracy vs no oversight

With everyone being able to start a project, everyone will. In larger firms, that can easily lead to duplication of efforts. That is, two very similar projects may be going on in two different offices without each of them knowing about the other initiative.

Worse, often, these smaller projects fail to gain traction, because they are too small and too local. In other words, because no one is keeping track, you may be missing opportunities for which there firm wide support exists. Just because everyone is re-inventing the wheel locally.

Show results versus unnecessary failure

One of the things I like about innovators working on a small budget, is that the successful teams will find a way to prove their worth. That is, they scramble together their project and prove that it works before large investments are needed.

That is what innovation is all about.

However, if you make this path the only avenue for innovators to succeed, there may be a lot of projects that never see the daylight. Not because they were bad or expensive ideas, but because the innovators were too inexperienced to know how to pull off their project on a shoestring budget.

With that, I don't want to say that they need to spend more budget. Instead, I would suggest that you spend more money on the support of each team. It does not have to be much, but by teaching each team how to innovate, how to run low costs experiments, etc. you will ensure all projects are executed cost-effectively and you will avoid unnecessary failures.

Low costs vs sub-optimized costs

Lastly, when innovating on a shoestring budget the team will do everything on the cheap.

That can mean, that a solution is put together that was really cheap to build, but that is extremely expensive to maintain. In other words, the total costs of the solution are not considered when innovating on a shoestring budget, which can lead to sub-optimization of costs and huge expenses down the road.

How can you innovate cost-effectively?

How you can innovate cost-effectively? The answer is relatively easy. You should minimize the risks, minimize the costs, and maximize the return. Yet, that is easier said than done in practice.

Minimize risks

There are a few things that we know significantly reduce the risk of failure of innovation projects:

  • Start with what your clients need, even if it is an internal project. Don’t assume because you can do it, or because you think it is a good idea, that it actually is. Confirm. Can be as simple as a conversation with 1-5 clients about their challenges.
  • Rely on teams and require innovation teams to have a lawyer involved, preferably a partner. Innovation is a team sport and you need someone who will work with you, who can envision how the solutions will be used, and who will be committed to bringing the solution to his or her clients.
  • Have support from senior management. You need buy-in from the organization to see a project through. Every project has its disappointing moments and you need someone high in the organization that believes in the project to help you through these tough times.

Minimize costs

Innovating at the lowest possible costs is a good thing. Don't spend more than you have to.

However, that means that you will have to spend some money. For example, it pays off to invest in the support of your teams, so your innovators know what they are doing and adhere to the innovation process. Innovation training often pays for itself, simply already by the hours a team saves in the course of their project.  And if you take into account the increased success rate, it is absolutely clear that it pays to be more deliberate in your innovation efforts. All of them.

And be honest, track all costs a project makes. Tally all the hours that are spent on innovation projects, whether this time is spent during work hours or in personal time.

Maximize success

And maximize your successes. Once you have implemented something successful in practice, make sure everyone in the firm knows about it, uses it, and shares it with your clients. Sounds obvious, but knowledge management would not be a discipline if that was the case!

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