Is Efficiency Innovation’s Enemy?

Pruned treeDoes the push for lean, for efficiency, or for Six Sigma crowd out a company’s ability to innovate? Has the constant striving to strip fat created a corporate “one-trick pony”?

Those questions and others like them were tackled today on innochat, a weekly, fast-paced Twitter conversation on innovation.

It also introduced many participants to a new verb to describe companies that hold on to the past while refusing to innovate. They Kodak themselves (more thoughts on that can be found here).

While personally interested from an organizational innovation perspective, today’s chat also dovetailed nicely with the topic of Business Processes that I taught to undergrads last semester at the National College of Ireland (@ncirl) in Dublin.

In that course, we covered concepts such as lean, Six Sigma, Kaizen, and explored how companies seek to eliminate waste from their processes. But the question then arises if lean, mean processes have any capability to innovate.

As usual, this week’s innochat was framed by a blog post here, and was hosted by Jeffrey Phillips (@ovoinnovation), a popular innovation blogger based in Raleigh, NC. After the talk was over, I pulled all the Tweets from Hashtracking.com using the hashtag, #innochat.

Focus on Efficiency Create Barriers?

Phillips first asked if a focus on efficiency creates barriers to innovation within an organization. Some of those agreeing were Harvey Briggs (@obx_harvey), who said it can make it tough for businesses to focus on new products. Stacy Leidwinger (@stacyleidwinger) said an efficiency on focus can make it hard for outside voices to be heard. “When you are lean and mean, you offer no space for innovation to breath,” according to Paul Hobcraft (@paul4innovating). By taking slack out of the system, he added, there is no room for innovation.

“[A] Laser focus on efficiency will result in an innovation deficit and eventual demise of a company,” said Natasha Gabriel (@natasha_d_g). “The pendulum has swung too far to cost reduction. If you only improve what you do now, there’s no room for the new,” according to Andrew Marshall (@drewcm).

On the other hand, Kevin McFarthing (@innovationfixer) said a focus on efficiency “can suppress radical innovation,” but if done right, can help incremental innovation. I didn’t see McFarthing’s point when I chimed in with an observation that practices like Kaizen usually lead to incremental innovation.

However, the majority opinion seemed to be that efficiency gets rewarded since it is easily measured in costs or profits.

Do Efficiency Tools Limit Innovation?

The second question posed by Phillips asked if efficiency tools like Lean or Six Sigma reinforce a short-term mentality that limits innovation?

Bradley Bendle (@wbendle) called them “customer-centric” processes that address their needs. However, Briggs said customers can be barriers to innovation, too. In his talks on innovation, David Trevitt, often quotes Henry Ford on his customers. The car mogul is reported to have said that if he asked his customers what they wanted, they would have asked for faster horses.

My own take was that Eric Ries (@ericries), the lean startup guru, advocates stripping the fat from startups. Yet these are the very companies most people would see as being many more times as innovative as large corporations.

“Lean can sometimes be helpful,” Briggs said. There are “too many cooks in most innovation projects.” Kris Anderson (@berkshire_ideas) said lean may limit innovation, but the processes they apply to may not be staffed by innovative thinkers anyway. But drawing on the analogy of pruning a tree, Daniel E. Trujillo (@VolcadoDePila) said lean can spur creativity by forcing people to work with less.

But drawing on software experience, John W. Lewis (@johnwlewis) said, “Over-optimisation makes further development more difficult; this is well known in software.”

Others said there should be no conflict. Renee Hopkins (@Renee_Hopkins) said, “If innovation is seen as a separate initiative instead of the company’s core mission, there’s trouble ahead. Saul Kaplan (@skap5) said, “Efficiency vs. innovation is a false choice.” It is “more about tweaks vs. transformation. Both [are] within [the] innovation continuum.”

Innovation Balance

So where is the balance, Phillips asked.

“I see no reason why a company can’t be lean or efficient and and still innovate,” Anderson said. Bendle said he didn’t know where the balance lies, but, “I do believe there can be a harmonious coexistence.”

On a scale of 1 to 10, Paulo Machado (@pjmachado) placed efficiency at the low end and innovation on the high end. Others, meanwhile, quoted Jeff Jarvis who said efficiency can actually lead to innovation.

Innovation as Usual

Finally, Phillips asked if efficiency is “business as usual,” is it possible to build “innovation as usual”?

Continue business as usual, “wait for a crisis and watch the panic for innovation,” Hobcraft said. “Link innovation and efficiency together in one common strategy. Innovate efficiency, simplify innovation,” Hopkins said.

Business as usual is achieved through a use of process and “a reliance on serendipity,” according to Gwen_Ishmael (@Gwen_Ishmael). Creating a process of innovation is possible by saying you want more of the same, just better, quipped Jose Baldaia (@Jabaldaia). In a similar vein, I suggested efficiencies could free up resources that could then be devoted to pursuing innovation.

Machado cautioned that innovation can be short lived. “Tomorrow’s big innovations become yesterday’s efficiency projects,” he said. Innovation must become a continuous process to stay ahead of the competition.

Anderson drew on the recent bankruptcy filing by Kodak, and said that company’s name could become a verb meaning: “The act of holding on to one’s past performance too long.”

Image of pruned tree courtesy Keith Williamson on Flickr.

 

 

8 thoughts on “Is Efficiency Innovation’s Enemy?

  1. John,

    A really worthwhile help for those that miss an innochat but equally for those that get ‘embroiled’ in their innochat market stall, shouting out their wares and views.

  2. Paul,
    I agree. I also find the pace very fast, and that, in going back over the “transcript,” I read a lot of comments I had completely missed during the session.
    John

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