What do NASA, a hydraulic fracturing company, and a steel fabricator have in common?

When faced with a problem, they knew they needed to innovate. What’s more, they were able to convince the powers that be—the decision makers that control the purse strings—to invest the needed resources to develop that innovation.

In our last blog, we talked about the ugly secret of innovation, which is that it doesn’t matter whether you are right—it only matters if you can convince others that you are right. 

So now we’ll discuss that all-important skill of convincing others that you are right. We’ll look at three organizations that chose to invest in innovation and why, so you can learn from their example to secure resources for your own innovation projects.

#1: NASA—The Power of Competition 

On July 20, 1969, nearly 600 million people were glued to their television sets as Neil Armstrong stepped on the moon and uttered his famous quote: “That’s one small step for man, one giant leap for mankind.” 

The moon landing was a watershed moment for innovation in America, and it did not come cheap. Total, Project Apollo cost about $25.8 billion between 1960 and 1973 (the equivalent of about $257 billion today).

Why did we invest so much money into something many believed wasn’t possible?

Simple: Sputnik.

Yes, you could argue it was about the advancement of science and exploring new frontiers, but at the end of the day, if Russia wasn’t advancing into space, then we never would have either. This is one of the secrets to innovation in business: most often, only when a company is threatened will they begin to innovate.

Here’s the thing: companies are always under threat. There are always competitors looking to take your market share. Your job is to make that threat concrete for upper management. Think about questions like these:

  • Why do customers choose your competitors over you? 
  • What does the competition have that you don’t? What do they do better than you? 
  • What competitive advantages do you currently have over your competitors? How secure are those advantages?
  • What new technology is on the horizon that could disrupt your business?

Point out the competition and emphasize that the only way to stay ahead is to innovate.

#2: Hydraulic Fracturing—Money, Money, Money

We recently did a brainstorming session with a hydraulic fracturing company. The way their business model works is that they only make money when they are pumping. This company pumped about eighteen hours a day, while one of their competitors had found a way to pump twenty-one hours a day. 

At first, three extra hours of pumping a day may not seem like a lot, but let’s put it into dollars. Note that these numbers aren’t entirely accurate, as they don’t factor in the extra cost of running all the equipment necessary for pumping. But just for simplicity, let’s say each hour of pumping produces $15,000 of revenue. So that’s $45,000 every single day, multiplied by 365 days in a year, and we’re talking about more than $15,000,000 in revenue each year! Given gains like that, investing in innovation to increase the pumping time was a no-brainer.

Even when you can point to a credible threat, the decision makers in a business often speak one language and one language only: money. Everything is about the bottom line, so show them how innovation moves the needle. What’s the predicted return on investment in cold hard numbers?

Keep in mind that businesses tend to fixate on quarterly returns. They often place higher value on money now versus money years down the line. So you have to offer compelling numbers. Think about every potential benefit of the innovation: increased efficiency, fewer accidents, new customers, greater customer loyalty, being able to charge a higher price point, etc. Then translate it all into dollars and cents. 

#3: Steel Fabricator—Priceless Benefits

One of the most rewarding projects we’ve ever worked on was with Vulcraft. They hired us to design a method to prevent their welders from being stuck by a hot tip of a MIG welding gun. If you look at things like lost work time and workers’ comp, reducing injuries has a monetary benefit. But that’s not what this company cared about. They cared about their employees’ safety. In their many years of business, they had never laid off a single person, and they were immensely loyal to one another. These were their friends, and they didn’t want to see their friends hurt.

As much as possible, you want to make the ROI of innovation tangible, but don’t overlook the intangible benefits. These benefits are priceless, meaning (1) you can’t assign a clear dollar value to them but also (2) they have a value beyond price. 

Priceless benefits include things like:

  • Safety
  • Environmental impact
  • Reputation and branding
  • Employee engagement
  • Customer goodwill

The value of these benefits may be obvious to you, but not necessarily to the decision makers. So tell the story, paint the picture, and explain why these things are so important.

Making the Case for Innovation

Getting upper management to invest resources might be the most annoying job in innovation. I’m sure that, as an innovator, you would rather spend your time actually innovating. 

But as annoying as this job may be, it is absolutely critical, and it’s a skill you can build. So the next time you have to make your case for innovation, keep these three tips in mind:

  1. Point out the competition.
  2. Show them the money.
  3. Explain the priceless benefits.

With these strategies, you can better communicate the value of innovation and secure the resources you need to do what you do best: innovate.

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