Global recession demands cutbacks

The need for innovation has never been more acute. In times such as these, all employees need to contribute to cost reduction, improved efficiencies and enhanced customer service.

Human resources departments can put in place structures and processes to boost this initiative.

While a lot of 'high impact' innovation drivers such as product development or training may face the budget axe, there is tremendous opportunity for incremental optimisation. Such opportunities are all around, and just need HR to structure the effort.

The first stop is to take a closer look at the Individual Performance Measures (IPM). Chances are the IPMs do not have any specific initiatives assigned to each individual. Ask each employee to take up a special project with clear timelines and financial deliverables. Benefits should be realisable in two - three months. Such projects should leverage the employees understanding of her/his current role and not require separate budgets. Formalise the IPMs and ensure they get reviewed regularly.

It is also a good idea to identify four six special focus areas such as productivity and cost reduction which can then be delegated to cross functional teams. Create small teams of three five individuals who are given a project that gets quick wins. Give them the opportunity to present to senior management, which can be a powerful motivator in these times. These teams need to be created and dismantled quickly to ensure flexibility and improved focus.

Most organisations today have instituted budgetary panels - cross functional bodies that centralise budgetary decisions. Putting innovation and cost reduction under a single panel is a good way of having the best of both worlds - the panel brings both view points to bear on the issues at hand. However, do ensure that there are a couple of 'innovation champions' identified within the budgetary panel.

If you do have a product development team, they already must be working on short term product or process improvements. HR can take the initiative to develop a 'skills matrix' that clearly identifies the skills available within the company. This will then reduce the outsourcing component, a clear area for cost reduction. It will also strengthen inherent capabilities, which will prove important once these tough times are over.

The strategic planning department must be a key innovator today. While it is difficult to predict the future, innovative tools are available to prepare for uncertainty. The last year has seen a rush of ideas centred around uncertainty, risk management and mitigation. Strategic planning must go beyond business planning to leveraging these ideas as special projects. HR must facilitate formalisation of such initiatives and innovations.

It is also critical to monitor this entire effort for planned and actual savings. Finally, dust off those 'Best Idea of the Month' and other such initiatives that may have lost steam over the years.

Add that all important element of employee communication through boards, e-mail shots and public recognition of successes and you have a winning recipe to make innovation happen!

- Sanjiv Anand is the Managing Director and Kartik Varma is Engagement Manager at Cedar Management Consulting International.