How does innovation work without a budget?

No budget? No problem!

Is it possible to innovate without having a budget? We say yes! Because everyone has ideas slumbering inside them. And where there is an idea, there is also an innovation. But what are the possibilities of innovating without a budget? Especially in such dynamic times as these?

If we don’t have money, then at least we need good ideas. 

– Oskar Lafontaine

Der Effectuation Approach

Effectuation makes it possible to actively shape the future when precise planning is not possible due to uncertainties. It is therefore a way of thinking that is particularly popular with companies because it involves deciding and acting. It involves turning simple ideas into new products, services, companies or solutions that are developed together. The term was introduced by entrepreneurship researcher Saras Sarasvathy. The framework, which became known in German-speaking countries through Michael Faschingbauer, is based on the following four principles.
1 Means orientation instead of goal orientation
According to the first principle, Effectuation starts with the means at hand instead of setting goals. In other words, we consider what we have and what we know, and thus determine the path.
2 Enforceable loss instead of expected return
Since effectuation is used in times of planning uncertainty, the focus is not on the return. The focus is on what one can afford to use or lose.
3 Use circumstances and coincidences instead of avoiding them
Coincidences and surprises are welcome, because opportunities can be derived from them and benefits can be gained. For it is precisely then that there are impulses for new ideas and ways forward, as can be seen in Covid-19 times in particular.
4 Partnership instead of competition
Effectuation is very much in the spirit of Open Innovation. Like-minded people are an important component in the process of Effectuation from the very beginning in order to build a network. Having numerous stakeholders increases the possibilities and at the same time decreases the uncertainty.
A related approach is Frugal Innovation.
You can read more about it here.

Der Effectuation process

Effectuation runs in a loop. It starts with the question of the available resources, from which the possibilities for action arise. In this phase, one enters into a dialogue with others and partnerships are formed. Through these new partnerships, new potentials arise through the more available resources and ideas or even new goals, which is why the question about the available resources and the resulting possibilities for action is then answered again. In the end, a new solution, a new service, a new product or even a new company emerges from this.

Conclusion: Innovation without a budget?!

Regardless of whether the Effectuation approach, the Frugal Innovation method or another approach is pursued – the goal is always to create something new with what is already there. And to do so in the “cheapest” way possible, since in times of crisis many people’s budgets are tight. Ideas and partnerships are therefore all the more valuable in uncertain times. It is also clear that innovative organisations are more resilient and can grow more sustainably, all the more reason to get creative and innovative with what you have now.
Would you like to try out the Effectuation concept right away?
Use AnyIdea for free, gather ideas from existing resources, creatively embrace current circumstances and build a network.