One of my favourite reads is Strategy & Innovation which is a newsletter run by innovation consultancy Innosight – www.innosight.com.

In their latest edition, the feature article is about innovation in tough times. They suggest what you should and should not do in a situation like this.

With regards to budgets, they suggest you should pre-empt the discussion and voluntarily scale back your line items. Their take is that leadership will appreciate having one less hard negotiation to walk through and that you will likely find that a sharper focus increases your time and freedom to experiment properly. Their suggested ways you can consider “giving back” include:

- Release any part-time team members back to their “day jobs” in the core business — in reality, 2-3 dedicated people will accomplish far more than 30 people assigned to spend 10 percent of their time on a program anyway.

- Prune your portfolio — revisit the concepts in your portfolio, prioritize them based on anticipated time to profit, and temporarily shelve the bottom half of the list or any idea that will not be profitable within 6 months.

- De-feature your concepts — look for performance areas where you may be overshooting the needs of the customer and eliminate them. Remember, consumers are in this economy with you and they will not be paying for performance they don’t need.

- Revisit your research approaches and expenses — entrepreneurs make do with small sample sizes, social media input, and low-cost interviews to get directional information with which to develop their concepts.

- Reduce the cost of your field trials — if you focus on testing one or two assumptions at a time, you will soon realize you do not need a fully functioning prototype or a three-month in-market pilot release to learn new things about your offering and the target market.

Check out the full story on this link: http://www.innosight.com/innovation_resources/strategy_and_innovation.html. You need to register.