Innovation versus Efficiency

November 5, 2010

I had two depressing conversations today – both with people declaring that innovation is not a priority for them.  The first person’s point of view was encapsulated as “we need efficiency not innovation if we’re to survive” and the second was “if I have to invest in innovation I’d rather avoid the risk and pursue efficiency instead”.

The first person went on to complain that he had achieved all the efficiency savings he could find and from here he would be cutting into corporate capability. Maybe, just maybe, innovation could contribute to the search for efficiency?  Indeed innovation might be the only alternative to cuts that would further damage the firm??  Maybe, but his board colleagues wanted efficiency, not innovation.

The second person was happy to support innovation, but not if it cost anything.  So we explored the costs of cutting instead (redundancy, management attention) and the risks (lost service levels, missed opportunities, increased organisational fragility).  Maybe the cost of innovation wasn’t so high after all?  Maybe, but he’d rather pursue innovation later, perhaps if the next round of cuts frees up some cash.

Innovation is now being seen as an end in itself.  Not helpful.