Thursday, June 25, 2009

Operational Excellence - once an enemy, now a friend to innovation?

OK I admit it. I've grown frustrated by the fact that a capability or insight that proves valuable to an organization - operational excellence - is also such a big impediment to innovation. It's strange that something that in some regards is so good for an organization can also be so detrimental as well.

How, you might ask, is a focus on operational excellence a detriment to innovation? Well, individuals measured on operational excellence want consistency, a clearly defined process that people follow closely, the elimination of failures and mistakes, the elimination of variance. These are GOOD things for an organization once it has determined the appropriate mix of products and services customers want. To be able to deliver the products and services at the highest quality and lowest cost is valuable.

However, all that focus on eliminating waste and variation and risk creates mental barriers for innovation that are very difficult to overcome. If a person or team has been evaluated and compensated for making the machine run efficiently and effectively, can they really stop in mid-stream and now work in a very different model - the model that innovation requires?

So, for years operational excellence has been my nemesis. But I've decided to use innovative thinking to turn the problem on its head. Perhaps what we should be asking is how to create an operationally excellent innovation process.

Those of you who follow this blog understand that firms that are successful at innovating have intentional innovation processes that are sustainable over time. It makes sense that if we want people in an organization to accomplish a complex set of tasks, we'd implement a defined process and method within which they can work. This is where the worm turns - if innovation is a defined process, then perhaps our friends who are interested in operational excellence can help us make those processes more effective and efficient.

Imagine changing the mindset of the organization - changing the cultural attitudes of the organization - by reinforcing the "operational excellence" concepts within a innovation oriented mindset. Let's find the best new ideas, and implement them in the best way possible. Suddenly these two concepts, which have been inimical, can now work in support of each other. This attitudinal change is not a simple one, but it is one that could happen. What's required is leadership from the senior executives to explain why innovation is so important, and how the concepts and methods of operational excellence can enable and support the organization to become more innovative.

It's at least worth a try.
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posted by Jeffrey Phillips at 6:50 AM


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