Innovation vs. Efficiency

Business Week has an article that talks about A Struggle Between Efficiency And Creativity at 3M.  It's a classic problem: tighten down operations (fire 11% of your people, for example) and all the loosey-goosey stuff that happens around new product development can't happen.  A quote from the new CEO, George Buckley:

"Invention is by its very nature a disorderly process," says current CEO George Buckley, who has dialed back many of McNerney's initiatives. "You can't put a Six Sigma process into that area and say, well, I'm getting behind on invention, so I'm going to schedule myself for three good ideas on Wednesday and two on Friday. That's not how creativity works."

And some discussion of recent research that looks at Innovation vs. Efficiency:

There has been little formal research on whether the tension between Six Sigma and innovation is inevitable. But the most notable attempt yet, by Wharton School professor Mary Benner and Harvard Business School professor Michael L. Tushman, suggests that Six Sigma will lead to more incremental innovation at the expense of more blue-sky work. The two professors analyzed the types of patents granted to paint and photography companies over a 20-year period, before and after a quality improvement drive. Their work shows that, after the quality push, patents issued based primarily on prior work made up a dramatically larger share of the total, while those not based on prior work dwindled.

The innovation literature makes it clear that the job of innovation has to be allowed to be separate from the job of operations management.  They are just too incompatible to make them work together.  I've even heard Eli Goldratt differentiate between growing the business by creating a better service model and growing through new products.  Theory of Constraints, from my current understanding, really focuses on existing products and services.  New products have to come through another pathway -- one not managed by the same methods and thinking.

I love the paragraph near the end of this article which talks about required quotas of Six Sigma projects.  Isn't the whole idea of a quota antithetical to what really should happen with improvement projects.  And isn't the idea of a quota kills innovation, such as in the Buckley quote above?  You can focus research on specific areas; you can decide to fund or not fund the R&D department; or you can give people 15% of their time to come up with new ideas.  But none of this will guarantee that you get new ideas "right the first time."  They guarantee you will get new ideas - some of which might become salable products.

[I came across this article via Harold Jarche, who focused on the notion that Process improvement is bad for innovation.]

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