EIGHT REASONS WHY INNOVATION BEATS EFFICIENCY
From Business Innovation Brief
If you are running an organization of any kind then making it more efficient is a key priority. It is important to speed up processes, eliminate waste, improve quality, reduce costs and generally please customers. And if you work hard at it you can do all of these things. But it is also important to prioritise innovation – finding new products and services and new ways to do things. The trouble is that if you focus too hard on efficiency then you can easily neglect innovation.
Sorting out today’s operational wrinkles has an immediate payback but experimenting with new products and methods takes time and effort. It has an uncertain future payback. So we tend to spend most of our time solving today’s efficiency issues. The temptation is always to work on improving current products and systems rather than finding new ones. After all, we know that the current process works so if we can make it work better we will get better outcomes. We can have no similar certainty about the results of innovation efforts. Also innovation involves trying things that don’t work. That looks wasteful – and we all hate waste.
So here are eight reasons why you should prioritise innovation over efficiency.
- Survival. It did not matter how much Encyclopaedia Britannica improved quality and efficiency. Wikipedia was still going to kill it. If you are running a taxi firm then tinkering with operations might help in the short term but it will not protect you from Uber. Ultimately innovation wins. It beats quality and it beats efficiency. Newer systems start off shakily but in the end they come out on top – not all of them but some. So sitting back and making the current business work better and better is like making better gaslights – even when you have already heard about new-fangled electric ones.
- Competitive Advantage. Extinction or survival is a drastic and extreme example of the power of competitive advantage. Innovative products and services give companies an edge. Older products and services become routine amd eventually commodities. Novel products can command higher prices – until everyone else catches up.
- Your People. Some people like to do the same kind of work every day but the most talented people generally relish new challenges. They like to express their creative ideas and experiment with them. It is easier to attract and retain top talent if you empower people to innovate. Google and Apple have no problems recruiting the top graduates – people queue up to work there.
- Satisfaction. Finding a new way to do things; solving the related problems, making it work; these are all intellectually satisfying. We know that trying something new which does not work is frustrating (but educational). Finding and successfully delivering an entirely new thing is very rewarding. It just makes you feel good.
Fun. Doing the same old stuff and fixing the same old problems becomes routine. Experimenting is difficult but it can be fun. The innovative leader makes innovation a game to be enjoyed.
- Fame and Respect. People revere innovative companies. They remember great inventors and innovators – Thomas Edison, Steve Jobs, Elon Musk, James Dyson. They do not remember all the faithful executives who toiled long and hard to make their companies more efficient.
- Learning. Innovation means trials, experiments, pilots with minimum viable products and prototypes. You show them to customers and gauge reactions. It is a learning process. All the experiments that do not work are educational. You have to be out in the marketplace trying to solve real problems. You learn more there than back in the office.
- Leadership vs Management. A manager is a steward who makes the organization work better. A leader changes the organization and moves it to a different place. Innovation and leadership live in the same house. We need good managers – for sure. But we also need good leaders. If you want to be a leader you have to lead people somewhere new; you have to lead innovation.
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