WUOMFM

Standards and efficiency stifle innovation

Feb 5, 2015

The Next Idea

Most descriptions of innovation end up in overreaching hyperbole: groundbreaking, disruptive, radical. This shouldn’t surprise anyone because innovation is basically a type of positive deviance, a form of useful novelty. What separates a new soft drink that has a hint of cherry flavor from a vaccine that prevents the onset of Alzheimer’s Disease is the magnitude and speed at which it deviates from the norm. 

Put another way, it’s how much and how fast the innovation renders obsolete the way we do things now.

Michigan's economy could benefit from a reduced focus on efficiency, says Jeff DeGraff.
Credit BILL PUGLIANO GETTY IMAGES

The trouble is that most people aren’t particularly good at recognizing which innovations will change our world and which ones are simply the latest in a series of enhancements or improvements. 

Your iPhone is a beautifully designed assembly of the latest stock parts made by an integrated federation of East Asian manufacturers. What makes this gadget innovative is the digital ecosystem in which it exists: a family of interrelated electrical devices, an easy-to-use system of content delivery, and an operating system that syncs it all up.

While we swoon about the latest technology toy, some of our biggest innovations are going relatively unnoticed. For example, it’s widely known that 3D printing is a powerful way of prototyping products, yet few realize that the next step is to bypass conventional manufacturing altogether. Boeing and General Electric are already producing large scale parts for highly complex aircraft and turbines. Mass producing one-of-a-kind automobiles can’t be far behind.

Perhaps the most exciting use of this type of additive manufacturing is happening in the field of medicine, where they are creating artificial organs from biological materials. It’s very likely that some time in the not-so-distant future your artificial heart will be a new and improved replica of the one that is now out of warranty. This takes the idea of personalization to a new level.

So what's the Next Idea? 

The point is this:  One size never fits all. And it really never did. Variety is indeed the spice of life and the basis of real innovation. But to get real variety we have to give up a few things, most notably, efficiency.

Efficiency is created by reducing variability and replacing it with replicable standards. McDonald’s has a turnkey formula that functions the same way everywhere. There are no surprises.

The question is: Are we willing to give up some of our efficiency to once again develop industry-leading innovations?

But the hidden cost of doing more with less is the elimination of deviance, or innovation. Giving up the tried and true is the real cost of getting to the new and improved.

The need for innovation, particularly in the manufacturing sector, is a timely subject because U.S. productivity, one economic indicator of efficiency, is slipping. Given Michigan’s economic reliance on heavy manufacturing, this general downward trend is even more alarming.

This data may also suggest, however, that we're at the end of one economic cycle and the start of a new one driven by innovations in manufacturing, supply-chain management, and distribution logistics. The question is:  Are we willing to give up some of our efficiency to once again develop industry-leading innovations in these areas?

Practice looking beyond the marketing and the packaging to see what an innovation really changes and how it does it. For example, at first glance the Khan Academy just looks like the latest version of computer-based training until you realize that the students watch the lectures at home and do their homework in class -- the opposite of what conventionally happens now. This completely changes the teacher’s role and the school’s function.

So the next time you start talking about the need for standards at work or school, ask yourself: “What are you willing to give up to get them?” Look to the past to see the future. The most standardized jobs are easily off-shored or replaced by low-level applications. Talk to anyone who was a telephone operator, a travel agent or worked on an assembly line. The required skills for our innovation economy will require us to purposefully apply our creativity. In your world that is strapped for time and resources, are you willing to deviate from the efficiency of your routine to create something extraordinary?

Let us know you think. Join the conversation in the comments section below, on Twitter or Facebook, or share your Next Idea here

Jeff DeGraff is a clinical professor of Management and Organizations at the Ross School of Business at the University of Michigan.