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Efficiency vs. Innovation: Surviving the Epic Battle


Red Sage is growing. That is the great news! We have gone from five employees just two years ago to our current staff of nine wonderfully quirky and talented people. This has called for some major internal adjustments to make sure communications and service quality don’t break down because of business growth and to ensure new team members get brought up to speed quickly.

As a result, much of my time over the past twelve months has focused on putting better business efficiency processes in place. Much of this is thanks to my partner in business and life, Dan Thompson, who brings decades of operations and project management knowledge from GE to our small creative company. There are very few business processes at Red Sage that have not been questioned or adjusted within the past year to make sure we keep the quality we are known for – AND become more effective in ensuring project delivery is smooth.

Will efficiency kill our spark?

The risk I see in process building for efficiency? How do we make sure ideas can still bubble up? Are we taking time to look outside our company to learn about innovations that are happening in our industry? How do we make sure the innovative ideas and opportunities we see get shared and quickly implemented?

How do we balance the need to be efficient, with the need to stay creative and innovative? In the epic battle between the two that is happening at Red Sage, which side should win?

Jack Welch, the former Chairman and CEO of General Electric, said, “If the speed of change inside your organization is slower than the speed of change outside of it… your end is in sight.”

Frankly, with the pace of disruptive change happening in our industry due to social media and mobile marketing, I get concerned sometimes that our very success and resulting busy-ness could keep us from succeeding long term because we simply don’t have time to think! Thus the importance of focusing on processes to hopefully free up some time where we CAN think and be innovative.

When do processes start to get dangerous?

Lisa Bodell, author and global thought leader for innovation, warned against the risk of processes getting out of control in her a book, “Kill the Company: End the Status Quo, Start an Innovation Revolution.” Too much process building can quickly take over a company and kill the innovative spark that made it great.

Can we build a process for innovation?

Perhaps we can start by defining a process to make sure innovation happens, as proposed by Jeffrey Phillips in his Innovate on Purpose blog. This makes a lot of sense to me. If we don’t take the time to do research, brainstorm, and share ideas as a team, it won’t happen. Even if such innovation brainstorming has to be scheduled, does it make it less valid? Is that the approach we should take?

Or should processes go by the wayside altogether?

Talent management thought leader, Dr. John Sullivan, talks about how Best Buy and Yahoo literally ditched efficiency programs that had yielded astounding efficiency gains, in favor of a focus less on efficiency and more on serial innovation. He also shares how companies like Apple and Google really don’t focus on efficiency at all, putting all of their focus on the serial innovation side of the battle. Read his article here. I know I am not a bold enough leader, nor are our margins large enough, to throw out efficiency processes at Red Sage such as Best Buy and Yahoo did. So where is the balance?

Efficiency vs. Effectiveness

Turning to our resident operations management expert, Dan Thompson, I was advised that building a process for EFFECTIVENESS is very different from building a process for EFFICIENCY. Focusing on building a process for effectiveness, while it can certainly impact efficiency (and has at Red Sage), is more focused on maintaining quality while reducing duplication of effort. Focusing on efficiency can certainly speed up everything we do, but may negatively impact how effective we are in delivering solutions to our customers. For instance, we could choose to cut our web development time by 50%, but if we do this by skimping on design or eliminating some of the more time consuming programming approaches that add extra usability, we’ve negatively impacted effectiveness. Dan’s advice: Let’s continue to build processes that make us more effective, and let’s figure out how to free up the time to make sure innovation is allowed into the mix.

Share the Angst

I realize that this blog shares some of my executive leadership angst as I ask these questions while I navigate through business growth. Our entire team will be gathering for our annual corporate retreat on February 6, and we will be talking about this battle between efficiency and innovation at Red Sage. I am hopeful we will determine how we can best make sure innovation keeps its seat at the head of the table in everything we do as a company. Meanwhile, do you have any suggestions that have worked for your business or organization?

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