Guest post, by Amanda Kaiser

Kodak, once a $10 billion dollar company, failed. Just when they needed to innovate the most, they focused on optimization instead. Innovation and optimization are at either ends of the spectrum. It’s hard to do both. The most innovative organizations don’t optimize well, and the most optimized organizations don’t innovate well.

Some optimization projects work well for big manufacturing firms. ISO, Kaizen and EMAS help large industry remove inefficiencies from processes allowing them fewer employees, less waste and more profit per piece. We expect this type of thinking will benefit our non-manufacturing organization as well but this is not always the case.

Optimization is a trap.

Optimization projects promise gains in efficiency but in a non-production based environment those gains can be really hard to measure. Was the work to do the project worth the gain in the long run? Optimization projects themselves create a lot of busy work and can make us feel productive even though we’re not getting a lot done. It’s easy to sign up for and approve these kinds of projects; they feel safe. Additionally while staff is working on an optimization project they are not doing the work that adds value to customers, members or attendees. Finally some companies are so single-mindedly focused on optimization they ignore that the very products and processes they are optimizing are going extinct.

Optimization influences culture.

It seems far safer to focus on doing what you are already doing faster, better or cheaper. When staff is in that safety zone for too long getting out of it becomes a monumental undertaking. Hierarchy, processes, bureaucracy are all established and firmly placed in the name of optimization. Optimization creates a special kind of culture, a culture resistant to innovation.

Innovation needs a culture of innovation.

Collaboration and openness are two essential ingredients for innovation. To be able to collaborate you need trust. To trust you need time and some interesting projects for the team to work on. The best innovative teams are able to generate tons of solutions to a problem and together come to a consensus about the handful of ideas that will move forward to be tested. This organic process can feel haphazard and risky – not tolerated well by efficiency-driven cultures.

Moving from optimization to innovation.

You will have to make a choice. Do you want more optimization or more innovation? If you want innovation the way staff think, work, interact and are rewarded needs to change. This will take time and constant determination.

Had Kodak pulled back a bit from optimizing their already ridiculously profitable film business they may have been able to see that all those efforts were futile. That business was going away. Instead they could have spent their resources on changing their culture and embracing innovation while they still had time.

Amanda Kaiser is Chief Path Finder at Kaiser Insights LLC. You can find her at www.SmoothThePath.net