July 22, 2024

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Eight Ways to Balance Business Innovation With Financial Stability

3 min read

It can be said that all businesses are in the business of making money. Regardless of what product they sell or what service they provide, all businesses need to make money in order to survive and, hopefully, thrive. But there’s another component businesses need in order to thrive, at least in the long term: innovation. If businesses don’t innovate or improve upon their current offerings, they may not ever grow or reach their true potential.

However, innovation can be risky, as not all ideas will be profitable or accepted by customers. To find that balance between making money in order to survive and making room for innovation, business leaders should consider the following eight tips from the experts of Rolling Stone Culture Council. Here, they discuss the key to balancing innovation with the financial need to stick with what works, ensuring business leaders can still pay the bills.

Protect the Core and Innovate on the Adjacent

When resources are limited, focus your innovation efforts on what is adjacent to what is already working well. Bigger bets on wilder innovations should be reserved for times when you can better afford the risk. Always remember that more or bigger isn’t always better — better is always better. Innovate on what makes good great, not net new or risky. – Scott Curran, Beyond Advisers

Ensure Innovation Is in Response to Real Need

Innovation must be based on tangible customer needs. The key is to find out what your customers’ biggest problem is and figure out how to solve it — before you create the solution. That way, you reduce financial risk while ensuring your end product will be well-received by your customers. – Dustin Eide, CanPay

Consider the Opinions of Your Stakeholders

It is critical to maintain the perspective that this work is a collaboration between stakeholders and the organization. Do you have a sense of your stakeholders’ appetite for innovation? The areas of innovation that would be exciting to them? Past that, developing an institutional ability to prove the viability of new concepts before making a major investment is key. – Jed Brewer, Good Loud Media

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Follow the 80/20 Rule for Resource Allocation

Effectively balance your resource allocation to optimize your business with the 80/20 rule. Create an organizational structure that supports innovation by allocating 80 percent of resources to the core business and 20 percent to developing new products. As new projects progress and evolve, remaining flexible to scale and drive new revenue is essential. – Michael Klein, cannabisMD

Start With Your ‘Bread and Butter’

There is something called your “bread and butter” — the incremental money that pays your bills. Start there. Then, analyze your choices for innovation to implement by the approximate cost of time and money. Next, prioritize them based on whether or not you can handle that innovation’s delivery relatively easily if successful. – Susan Johnston, New Media Film Festival®

Take a Portfolio Approach

Have a portfolio approach and make sure innovation brings in incremental revenue and business. If taking a big step, try to make sure there are paying customers who need and want the new service or product. If possible, do some beta testing with targeted customers to increase your chances of success. – Brian Framson, Citrus America Inc.

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Regularly Evaluate New and Existing Initiatives

Businesses should set aside a portion of their budget for innovation, ensuring it does not disrupt their primary income streams. By regularly evaluating both new and existing initiatives, companies can integrate cutting-edge advancements without jeopardizing their financial health. This approach allows for sustainable growth and adapting to market changes while still paying the bills. – Dan Serard, Cannabis Creative Group

Set Objectives, Analyze and Stage Pilot Projects

Balancing innovation with financial stability requires strategic foresight. Setting clear objectives, performing thorough market analysis and staging incremental pilot projects ensure that innovation efforts are sustainable and do not compromise your ability to meet financial obligations. – Matthew Miller, Orlando Informer

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