Accelerating innovation: how companies can escape the efficiency trap

There is no second place for innovation

Innovation alone is no longer enough. Speed is increasingly becoming the decisive factor for new products, USPs and a truly unique position on the market. There has never been a second place in innovation. But never before have there been so many competitors competing at the same time.

Efficient processes in day-to-day business slow down innovation

So why is it so difficult to drive innovation forward quickly? There can be many reasons, but one cause is present in almost all cases: the efficiency trap.

Efficiency is essential in day-to-day business. Serial business requires stable processes, clear responsibilities, clean approvals and reliable quality. Risk avoidance, scalability and stringent optimization are not a weakness here, but the foundation of the company’s success.

The problem begins when this logic is applied to innovation: to new start-ups, fields of learning and the search for new products, technologies and business models.

After all, the early phases of innovation are not about perfect processes. It’s about quickly identifying market potential, finding out which ideas have substance and which target groups and requirements really count. What is technically feasible and how monetization can work.

Compliance, supplier qualification and excessive division of labor

Of course, it makes sense not to be dependent on a single supplier. Second source, supplier qualification and clean compliance have their place. They are necessary in series production. The only question is: is it really necessary to pull out all the compliance stops if an innovation team initially only wants to procure a few sensors, some test material or external expertise for initial trials?

This is exactly where the efficiency trap begins in practice. A quick test becomes a formal process. A small material order becomes a six-week supplier installation. A few expert interviews become coordination on purchasing, approval and budget. Every single step seems reasonable. All in all, an idea becomes waiting time rather than a gain in knowledge.

Then there is the classic division of labor. Everyone only does what is required in their section and then hands over to the next person. This is efficient in regular operations. In innovation, it is often too slow. Because as long as it is not clear where the journey is going, every additional handover costs two things above all: wasted time and dwindling motivation.

Efficiency usually means cost efficiency

The search for efficient innovation is understandable. Resources are scarce, capacities are tied up and the daily business is pressing. Nobody wants to spend what is already scarce with their hands full. However, the last to cross the finish line does not win because they have used the least amount of energy.

This is precisely the crux of the matter. When companies talk about efficiency, they almost always mean cost efficiency: little effort, lots of output. However, this is the wrong benchmark for early innovation phases.

Innovation and cost efficiency are natural opponents

Genuine innovation projects are inefficient. If we look at the costs. They are unique, unprecedented, difficult to compare, uncertain, emotionally biased, motivation-driven and not scalable. As long as the decision has been made that the innovation idea will go into series development, it must not stay that way. Before this decision is made, other rules apply!

Because it is not the most cost-effective innovation team that wins. It is the team that first presents a viable concept for a decision. And then brings it to market as quickly as possible.

Too late at the market

If companies take too long in early phases, internal slowness quickly turns into a market problem. Not because nobody is working. But because the organization is half-hearted for too long before real learning and innovation takes place.

When it comes to innovation, it is not only the quality of the solution that counts, but also the timing. Those who understand later, decide later and start later often lose the actual lead.

While many people talk about “Innovation China Speed”, the obvious question is: Why does it take so long for an idea to become a viable project in established companies?

Three successful approaches for faster innovation

In the beginning was the will. And that is the first secret of success. Without an interested client or an internal sponsor, the acceleration of any process in the company has little chance of survival.

1. top-down and drumbeat instead of secret submarine project

Innovation rarely fails due to a lack of ideas. It fails where the organization should be involved. In purchasing, production, sales or logistics. This is precisely why important innovation projects should not be launched in a hidden manner, but visibly and with a clear mandate from the top. The only way to override existing rules.

• Suspicious inefficiency
  Hanging projects high up ties up supposedly expensive managers in immature ideas and projects. Cooking on a low flame seems economical and is often preferred to avoid confrontation.
• Added value
  Attention creates support. Things move forward with vigor, and company management can help out in the event of bottlenecks. And what the organization does not want from the outset is stopped early on. This creates space and acceleration for other innovations.

2. cooperation within the project team instead of division of labor and handovers

The earlier the relevant functions look at a topic together, the less time is lost later in handovers, queries and correction loops. Development and sales should be involved as a minimum. Depending on the organization and project, product management, purchasing or technology should also be involved. More project and less classic division of labor.

• Suspicious inefficiency
  Many parties appear to make little substantive contribution in the early phase. Before the concept is finalized, Purchasing cannot research suppliers and Engineering cannot assess feasibility.
• Added value
  Time-consuming iteration loops are a thing of the past. Everyone is immediately on board and understands where the journey is heading. Optimization takes place in the first pass. This approach is often not only faster, but also more cost-efficient.

3. high level of personal responsibility instead of many stage gates

Innovation needs orientation, but not another gate, reporting or steering committee at every turn. A few, reliable decision points are sufficient. For example, to assess the market potential and make an investment decision for detailed development. In between, the team should be able to work and make decisions independently within clear guidelines.

• Suspicious inefficiency
  Independent work phases without reporting appear risky, error-prone and feel like a loss of power and control at management level.
• Added value
  Innovation teams enter uncharted territory that very quickly nobody knows as much about as the team itself. The consistent rule must be to allow the team to act freely and make its own decisions within the framework of fixed guidelines. This saves time on preparing reports; decisions become bolder, better and more entrepreneurial.

Get out of the vice – pick up the pace

The acceleration of innovation workflows and related business processes comes with three surprises.

• It is often very easy to speed up established processes. This is because in the last 30 years, the focus has mostly been on cost efficiency, freedom from errors and scalability. Speed played a subordinate role. The upcoming paradigm shift is therefore encountering untapped terrain and diverse potential, some of which is very easy to exploit.
• The accelerated working methods are generally even more efficient than the established processes. Because innovation benefits little from the net and double bottom of corporate processes. And because motivation and personal responsibility unleash forces that are unthinkable in bureaucratic systems.
• Accelerated processes in the completed framework of one or two innovation projects provide positive examples. The organization quickly realizes that the established processes seem efficient, but are actually unnecessarily cumbersome and in some cases pretentious. Best practices from innovation development can often be transferred to other areas.

Accelerating innovation: Pilot project and lighthouse

Changing company processes quickly sounds like process optimization on the drawing board. In practice, a different approach has proven successful: a manageable pilot project in which new working methods are applied directly.

This quickly reveals where innovation is being held back today. And what can be changed in concrete terms before extensive documentation and standardization takes place. The result is a resilient lighthouse: as a learning field, as a positive example and as a template for further projects.

TOM SPIKE accelerates innovation, research and development in complex organizations

Innovation interfaces with almost all of the company’s business processes. TOM SPIKE helps to bring all parties to the table and accelerate innovation. In individual projects, in the design of new company processes and in the optimization of existing innovation processes. With individual innovation consulting or tried and tested workshop formats.