Strategic Innovation: Embedding Innovation as a Core Competency in Your Organization

TWO MIND-SETS: CREATION VERSUS ALLOCATION

Before we review what Whirlpool did to manage our resources for innovation, it is important to understand a fundamental distinction between resource allocation and resource creation. A disciplined resource allocation process is a central operating process for most firms, but it is not generally innovation friendly in the same way as resource creation is, for three reasons. First, most resource allocation processes begin with strategic planning and annual budgeting. However, innovation usually does not happen once a year or on a schedule, and it cannot be controlled or predicted. Second, resource allocation, except for zero-based approaches, usually starts with the amount of money that the department had ...