“The culture, behaviors, processes, measurements, rewards, and tolerance for failure needed to drive operational excellence are fundamentally different from those needed to create innovation, which requires an emphasis on exploration and invention.” — Ed Hess and Jeanne Liedtka, authors of The Physics of Business Growth: Mindsets, System and Processes.
My recent blog about continuous improvement, “Maximizing ROI: Continuous Improvement as a Core Value,” seems to have struck a chord with some readers. In my first tip, I suggested that you take care to deploy continuous improvement (CI) gradually, because in certain circumstances formats it can stifle innovation when applied too vigorously. A couple readers asked for more information on how two positives added together can equal a negative.
Admittedly, it does seem odd that striving for CI can hurt you. Doesn’t a desire for improvement automatically result in a respect of and desire for innovation? Not necessarily, because CI and innovation are different conceptual realities bound by different rules. CI tries to make something better, and innovation tries to find something different.
The 3M Example
Probably the most famous example of the clash between CI and innovation took place at 3M, the company famous for inventing Post-It notes™ and Bondo™. The implementation of Six Sigma put efficiency and innovation at odds at 3M and, according to some observers, all but killed innovation for a while.
The Six Sigma way requires constant honing and refinement of work processes, which I’m all for. However, if it’s applied too rigidly, it can begin to focus on incremental improvements of the same few “best practices,” and in doing so, turns into little more than another narrow-minded bureaucracy. First of all, what happens when you sharpen your pencil too much? Eventually, you’ll grind it completely away. Second, the definition of “best” never remains static; it evolves with culture and technology. You ignore those changes at your peril.
At 3M, former CEO James McNerney’s adoption of Six Sigma—with its insistence on five-year business plans, rigid adherence to hierarchy, and control-consciousness—stopped innovation in its tracks. In the current business environment, where we’re still reeling from the 2008 banking crisis and the lingering effects of the Great Recession, this rigid approach no longer works. I’ve explained why in my latest book, Execution IS the Strategy (due from Berrett-Koehler in March 2014). Nowadays, you can’t be nimble if you’re using stale, outdated strategies.
And here’s an important point McNerney missed: despite its popularity in business circles, Six Sigma’s creators never intended for anyone to apply it to R&D—which lies at the heart of an inventive organization like 3M. Six Sigma leaves little if any room for creativity; at its core, it remains what it started as: a process for scaling up and improving manufacturing efforts. By definition, the R&D process requires quantum leaps of logic on one hand, and the opportunity to allow ideas to develop gradually and organically on the other. Unfettered, innovative thought can’t advance in an environment where you yank up and discard new ideas like weeds as soon as they appear, just because they disturb the tidy, regimented orderliness of a standardized improvement process.
Once upon a time, some observers considered 3M the third most innovative company in the world, after Apple and Google; and having worked with 3M myself, I understand why. They’ve always striven to be relentlessly progressive and cutting edge, and in fact they still are. The leaders at 3M have now loosened the company’s Six Sigma initiative, including (among other things) returning to the 3M tradition of allowing individual employees to spend 15 percent of their work time on independent research.
What would you do if you had access to world-class laboratories and scientists, and almost one day a week to investigate a new idea? You wouldn’t be trying to improve an old one, most likely. 3M scientist Art Fry used his 15 Percent Time in collaboration with other 3M innovators to create the perfect bookmark for his church hymnal and thus created Post-It Notes.
Building in Both Innovation and Improvement
Now, there’s no reason why both CI and innovation can’t work in parallel of course, as long as you recognize they have different goals. In environments where innovation matters as much as improvement, take care when and where you apply any new CI initiative. Keep these tips in mind:
1. Forget “one-size-fits-all.” It doesn’t and never has. If you take on CI, don’t apply it equally to all departments and groups, or you’ll limit your organization’s productivity. You can continuously enhance some bureaucratic and work processes over time, just as you can similarly refine existing product lines. But you can’t easily regiment anything that experiences regular change. Sales and marketing, for example, may require regular shifts to employ new methodologies, strategies, and tactics as campaigns peak and then drop in popularity.
2. Never apply CI to R&D. You can’t constrain R&D if you expect anything new to emerge from the pipeline. When you focus on sharpening the same knife over and over, you don’t have the time or inclination to forge and refine a new knife, even if said knife might represent the best thing to happen to cutlery in centuries.
3. Give ideas room to grow. It’s hard to know where an idea will lead you in the next year, let alone the next five, so insisting on long-term plans for every initiative from the very beginning just doesn’t work. Most ideas require the time and the room to grow to maturity before you start either culling them or forcing them toward production.
4. Step back and check the big picture occasionally. If you focus on the same few things to the exclusion of all else, you’ll have trouble adapting as the overall business environment changes.
5. Make sure the improvement adds value. Sometimes efficiency gains simply aren’t worth the cost in time and money. For example, if your office decides to go paperless, you’re best off just picking up the initiative and moving forward with it from now on, rather than wasting the time and effort to digitize old paper files no one ever reviews anyway.
Don’t Force It
In these days of rapid, in-the-moment strategic execution, continuous improvement has its place. Just don’t misapply it, assuming that Kaizen, Six Sigma, and their brethren will automatically improve any process. They won’t. It’s difficult at best to apply CI to brand-new R&D projects, as we’ve learned from the 3M experiment. Additionally, not every team can fit the CI mold. If you try to force it on some groups, you’ll likely experience resistance; and if you fail to heed their resistance, they may quietly ignore you and, ultimately, disengage. Implement it carefully, with a willingness to scale back in some departments or teams if it begins to stifle innovation. Innovation may well be your best weapon in the post-recession business arena. Simple process improvement isn’t enough. It’s just one tool in your toolbox, and you can’t use the same tool for every task.
How do you and your organization manage the intersection of innovation and CI? How can we better handle this clash of business philosophies?