Product development roadmaps are hard enough to navigate without an end-of-year budget freeze. Discover 7 strategies to keep your product moving forward.
If you’re an R&D leader at a large corporation, you’re sure to encounter multiple budgetary roadblocks in the course of your career. Whether to maximize profits for shareholders or conserve cash in an economic slowdown, it’s fairly common for businesses to announce a budget freeze in advance of a quarterly report or at the end of a fiscal year.
These interruptions typically only last a month or two. But even so, they can wreak havoc on your long-term product development roadmap if you respond by putting everything on hold until your budget is restored.
Yes, canceling project-related travel, enacting a hiring freeze, and/or pausing work with your product development firm seem like logical ways to address your company’s cash flow problem. But in reality, these actions add inefficiencies and cost your organization more time and money in the long run. Worse, they could cause you to miss out on the big-picture market opportunity you’re after.
The good news is if your company is facing budget challenges, it’s likely other businesses are too. So if you’re able to double down and keep your project moving forward, you could leapfrog the competition, beat them to market, and achieve higher ROI as a result.
Here are 7 tips to help you do just that.
Savvy leaders don’t accept a hit to their budget without asking good questions and negotiating alternative ways around the financial challenges that threaten to slow them down. There’s no doubt other senior leaders will champion the need to preserve their departments’ budgets. You need to do the same.
That doesn’t mean you should fight for your own budget without acknowledging the situation your company is in. This is tricky territory, and there are bound to be internal politics at play. Stay calm and look for ways to turn your budget freeze into a collaborative effort to work the problem.
You can make the case to preserve at least part of your product development budget by discussing:
If at all possible, don’t accept an equal, across-the-board cut. Think about the total budget cut your organization requires and work with other departments to identify areas where cuts can be made that don’t affect short-term and long-term revenue plans. Level up the conversation and ask senior leaders to consider alternative ways to save money while also maintaining your team’s momentum. It’s incumbent on you to help your colleagues (and superiors) understand that slashing the product development budget is a surefire way to hamper future returns.
If you’re in the midst of developing your next product and a budget freeze is looming, this next piece of advice might feel like too little, too late. Still, the best way to keep your product roadmap intact is to factor Murphy’s Law into your original development plan.
To that end, make it a habit to think through a variety of “what-if” scenarios at the outset of every new project. This involves asking questions such as:
Effective leaders proactively include their teams in helping them think through the obstacles that might come their way. After all, your designers and engineers are not order takers. They are creative thinkers who are adept at tackling problems from a variety of perspectives. Lean on them to pitch ideas and strategies that will allow you to continue making meaningful progress even if you can’t spend a lot of money.
When a budget freeze is on the horizon, it can seem like a no-brainer to cut long-term development projects that don’t stand a chance of yielding ROI any time soon. But this is a classic example of being penny-wise and pound-foolish.
Why? These behind-the-scenes “skunk work” projects are the very ones most vital to defining your company’s future. Putting them on hold every time you face a budgetary constraint makes it nearly impossible to achieve the kind of innovation that is most likely to catapult your business forward.
Furthermore, skunk work projects are typically not where you’re spending the majority of your product development budget. Therefore, prioritizing these efforts and keeping them going will have very little impact on your bottom line while simultaneously setting you up to hit pay dirt in the future.
Years ago we worked with a client who had six projects going in tandem. When faced with a partial budget freeze, they asked us to put their sixth project — a skunk work invention for a product that did not yet exist in the market — on hold and keep the other projects moving forward.
However, we had made some exciting progress on Project #6. We developed several patent-worthy inventions that had the potential to dramatically increase this company’s market share. Therefore, we asked for permission to finalize key concepts and support patent filings in order to protect our groundbreaking ideas.
Sure enough, had the company not greenlighted our request, their competitor would have beat them to market from a patent perspective.
The lesson is clear: don’t just blindly put entire projects on hold. Make sure you protect your future investment by taking care of critical details that are low-cost but high-value.
Necessity is the mother of invention. And when there’s no money to develop slick, high-fidelity prototypes, you may be surprised to discover just how inventive your team can be.
Creating cheaply constructed, crude mockups is a powerful way to keep your project moving forward, especially if you’re still in the early stages of development. These quick-and-dirty prototypes allow you to:
Truth be told, it can be helpful to use crude prototypes in the early stages of any product development project. Because you’re less likely to get attached to a rough mock-up, your team can more easily accept honest criticism that will ultimately lead you to a superior end result.
Travel and research budgets are often the first items on the chopping block when organizations put budget freezes in place. It’s easy to categorize these expenditures as nice-to-have rather than mission-critical.
However, cutting this portion of your budget could be a serious mistake. You may need to visit a site to understand how your product will function in a particular space. Or, your product may require rigorous user or regulatory testing that’s essential to meeting market and regulatory requirements. In instances like these, you’d be wise to fight to retain a portion of your research and travel budget.
With that said, there are many ways to conduct research on a bootstrap budget if you still need to scale back. For example, you could:
Again, don’t allow a budget challenge to simply stop you in your tracks. There’s almost always a way to keep moving forward if you’re willing to get creative.
Your product development firm has a vested interest in helping you launch a successful product into the world. They’ve also seen what can happen when budget cuts upend their clients’ best-laid product development plans.
That’s why a good partner may be willing to:
Your primary goal should be to keep your project active if at all possible. But if all else fails, a good product development firm can help you minimize the negative ramifications of pausing your engagement.
Your company’s market success depends on your ability to juggle today’s realities and tomorrow’s needs. So when you face urgent financial constraints — whether they are temporary spending freezes or permanent budget cuts — it’s essential to count the long-term cost of each decision you make.
Resist the temptation to simply put projects on hold or cut spending across the board. Doing so will undoubtedly have a serious impact on your long-term product development roadmap. Instead, fight for your product development budget. And look for creative ways to keep making progress in every area possible.