Step 5: Be resilient to create a cost-conscious culture in your innovation agenda

If you are introducing cost-cutting in your innovation agenda, your ultimate drive is to create a cost culture that sustains itself over time and is not forgotten three months after being announced by the leadership.

Your final goal is that your workforce feels that the organisation’s investments are personal investments, which can benefit all.

Still, organisations are living creatures in changing contexts. So, strategic cost-reduction priorities should be regularly reviewed and updated in the same way as business opportunities are.

And so we find ourselves where we started: needing to map out intervention areas at micro and macro level, both good and bad costs, and clearly define and (re)align everyone with your cost strategy over time. Ensure that you have the best methods in place to address each area in an efficient way, using top-down yet privileging bottom-up approaches in your innovation agenda.

For bottom-up approaches, also review the communication plan at hand to help your employees understand the tweaks and turns. Let them have an active role in the process of building the company’s future together.

It will take time and some effort, since resistance is normal under less favourable circumstances. It will take people’s commitment.

Yet, with strong leadership, a clear and well-defined strategic cost-cutting programme and the awareness of shared responsibilities, an organisation can reinvent itself and learn how to do so continuously, as models are challenged and new opportunities arise.


Andreia Agostinho Dias, Sales Executive
Diana Neves de Carvalho, Exago’s CEO

Access the Five-step Guide to make cost-cutting work within your innovation initiative here

All roads lead to the Lisbon Web Summit

Almost 45 thousand tech enthusiasts, from over 150 countries, are attending the Lisbon Web Summit, taking place in Lisbon, from 7 to 10 November. Exago’s team is also here, to learn about the latest trends and share insights with leaders and managers from all the major industries touched by technological innovation.

Among the speakers are John Chambers, executive chairman of Cisco Systems; Linda Boff, General Electric’s chief marketing officer; and actor Joseph Gordon-Levitt, founder of HitRECord.

Having started in 2010 with just 400 participants, the Web Summit is now one of the most important technology conferences in the world. In the 2016 edition, the summit left Dublin and now reaches new dimensions with 21 independent conferences, each with its own stage in the Feira Internacional de Lisboa.

Know more on the summit here.

Innovation management looks easy – it’s not

Photo: Stokkete

There are some paths that are easy to embark upon. If you want to start jogging, it’s as simple as putting on a pair of running shoes and hitting the road. Starting is easy, but you don’t get to complete a marathon by casually jogging from time to time. The same is true for innovation management: getting started is easy but real, lasting success can be an elusive goal.

Here’s the bad news: due to this it’s likely that your innovation management programme will fail. It’s not because you’re not capable and not because you don’t have the mandate. Odds are you simply missed some important prerequisites.

In this blog, we will take you through the most common causes of failure – thus enhancing the importance of actions such as engaging people in your innovation programme, of getting executive leadership, and using social tools and gamification mechanisms to make it a successful quest.

At first glance, they may seem obvious, but many companies disregard at least a few. While reading, you shouldn’t feel overwhelmed and you definitely shouldn’t wait to resolve them all before beginning. Just make sure you’re keeping these failure points on the radar.

Throughout the following weeks, we will share with you several tips on how to overcome these challenges, based on our experience at Exago, across 4 continents. Tips that we believe will be able to help you build a solid foundation for a long lasting and resilient innovation culture in your organization.

Pedro do Carmo Costa, Exago’s director and co-founder


1. No team, no game
2. How to build a winning innovation team?
3. Ideators, builders, screeners and implementers – which one are you?
4. It’s social, stupid!
5. Push and pull in your innovation efforts
6. Gamification – make work fun
7. Are top leaders tuned in?
8. Lacking resources – how to cook an omelet with few eggs
9. Lacking business relevance – or why there are no sheep in the Artic
10. Four tips to keep innovation initiatives alive
11. What to do when you lack measurable returns
12. How to measure idea management intangible returns
13. How to duck the innovation implementation void
14. Is you innovation effort transparent enough?
15. What are you neglecting in your innovation initiative?
16. The innovation keystone you may be missing
17. For those who know the innovation clock is ticking
18. You’re not Google or Facebook, are you?
19. The checklist for your innovation programme success
20. The time is now. Hit your innovation stride

The inevitability of incremental innovation

In the last post we focused on the difficulties of investing in innovation during crisis times and outlined why it is important to think about the long run.

Typically transformative results come from radical innovation which tends to take time to bring benefits due to its inherit complexity. Nevertheless there are many small innovations that can, when summed up, bring effective results for an organization.

According to Innovation Zen, “There are two dimensions we can use to separate an incremental from a radical innovation:

  • The first is an internal dimension, based on the knowledge and resources involved. An incremental innovation will build upon existing knowledge and resources within a certain company, meaning it will be competence-enhancing. A radical innovation, on the other hand, will require completely new knowledge and/or resources and will be, therefore, competence-destroying.
  • The second dimension, the external one, differentiates the innovation based on the technological changes and on the impact upon the market competitiveness. An incremental innovation will involve modest technological changes and the existing products on the market will remain competitive. A radical innovation will instead involve large technological advancements, rendering the existing products non-competitive and obsolete.”

Therefore, internal and external dimensions allow companies to quickly start cashing in on incremental innovation. Simple efficiency improvement ideas or slight product/service face-lifts or upgrades can help increase revenues and/or reduce costs.

By engaging a large community of people and harnessing the wisdom of the crowd incremental innovation results come quickly and people feel listened to. With a transparent, efficient and interactive process, leadership gets a bidirectional communication tool to improve management-employee relationships and bolster participation.

Our clients experience the approval and implementation of many ideas for a constant flow of improvements with results that make an impact on the bottom-line.

Innovation in times of crisis

Government and enterprise leadership tend to act the same way when facing a crisis: they cut what is seen as non-essential to the execution of their primary objectives. Basically, everything that seems not necessary for survival (in the short term) is cut. Items like culture (with some exceptions like Churchill in the UK during WWII), fixed capital investments or innovation tend to be abandoned or to put in hibernation.

Even though cutting such items helps balance short term P&L, it will certainly compromise future growth potential or, in some cases, long term survival. Many times that is not taken into account by leaders for several reasons:

    • It is difficult and unpopular to explain to people why there is a need to keep (or even reinforce) investment in something that only brings benefits in the long term, and, as Keynes once said, “in the long run we are all dead.”
    • Government and enterprise leaders know they will not be there in the long run, making it difficult to compromise their present position and popularity for some sacrifices that will only benefit their successors.
    • People tend to prefer a smaller benefit now over a much bigger one in the future (time value of money and/or other benefits).
    • We all know that innovation and R&D are essential for differentiating, improving efficiency, increasing growth, and thriving in the market. All reports point out that countries and enterprises that invest in innovation and R&D get better performance and higher growth potential in the long run.

We at Exago, as well as many other innovation management providers, faced in the last few years many prospects hesitating to dive into an innovation program. The reasons for this were mainly the following:

        • “There is a huge economic crisis and we can’t invest in non-core activities.”
        • “We only invest in projects that bring measurable ROI in the short term.”
        • “It is not the right timing because we already have too many corporative programs going on and can’t start another one.”
        • “It is not the time because the company is facing structural changes and we can’t distract people from their objectives.”

These real examples show how companies still look at innovation. They’re really saying, “Innovation is nice to have but now is not the time for it because we have “serious” things to take care of now.”

Our point of view is the following: As long as innovation is seen as a non-core activity it will never be the right time regardless of the economic situation.

Curiously, the most successful clients working with Exago did it during crisis times. They did not concern themselves with short term ROI (even though it came at a very high rate as a consequence of the process used) but with creating, nurturing and implementing an innovation and participation culture.

Innovation by itself does not ensure an organization will thrive but lack of innovation will certainly condemn an organization to a slow demise. Furthermore, it is in times of economic difficulty that more value can be extracted from innovation due to diminished investment and the commoditization of products and services when demand falls and margins are lower.