Our society values efficiency. We use drive-through banking and automatic light switches to save time and energy. Operations managers measure task efficiency to increase production with reduced labor and materials inputs.
But how does “efficiency” impact innovation? Is efficiency a positive metric that drives customer satisfaction? Or does “efficiency” de-humanize the work of product development?
What is Innovation?
First, let’s take a step back and define “innovation”. Innovation is a new way of doing things that results in profit for a firm and increased utility for a customer. Innovations come from the application of new technologies yet are also derived from new combinations of existing products and services. We call the latter case business model innovation.
An innovation may deliver a new technology to an existing market or it may introduce an existing technology to a new market. As product development professionals, we seek to balance risk of technologies and markets with the needs of our customers, the opportunity for profit, and growth. Typically, we measure the success of a product innovation through sales volumes, market share, and financial return.
What is Efficiency in Innovation?
We can define efficiency as how much output we get per unit of input. Waste is the opposite of efficiency ‑ what gets scrapped cannot serve to increase customer satisfaction, sales, or profits. The biggest waste we have in innovation is wasted knowledge. Some examples of wasted knowledge are:
- Lack of technology transfer,
- Too many meetings,
- Project handoffs,
- Poor definition of product requirements,
- Lack of cross functional communication, and
- Chaotic work environments.
In classical industrial engineering studies, efficiency is measured by “stopwatch studies”. Sometimes, people are asked to record the percentage of time they spend on a task. Certainly, for assembly line work, such time studies can be valuable to increase factory throughput, improve production rates, and identify opportunities for automation. However, in a creative process (like innovation) how can we measure task time or efficiency? I recommend the post-launch review and burndown charts.
Post-Launch Reviews (PLR)
Post-launch reviews should be (though often are not) conducted as a new product is commercialized. The PLR-1 addresses team activities, templates, and procedures. If you are using a staged-and-gated new product development (NPD) process, the PLR-1 is the opportunity to record how much time was spent on each stage and how many resources were used for tasks within those stages. Then, the next time you do a similar project (e.g. add a feature, extend the market), you can get a better estimate of both the time and cost of the innovation effort.
While this is not a perfect textbook definition of “efficiency”, it addresses our greatest concern of wasting knowledge. If the discovery stage is taking twice as long as similar projects have in the past, what might be the bottleneck? Check on issues like customer feedback, team member workload, and quality expectations.
Read more about post-launch reviews here.
The burndown chart is a tool from the world of Scrum and Agile. Instead of estimating how far the project needs to go to completion, the burndown chart documents how much is left to do.
One of the disadvantages of Agile systems in new product development is the definition of “done”. When we couple Agile processes with traditional staged-and-gated systems in WAGILE, we are disciplined to define both the product and task completion. Burndown charts are essential to making progress on a WAGILE project without getting bogged down and “gold-plating” the product.
The burndown chart shows how many individual tasks must be completed prior to the next gate review or product commercialization. As tasks are completed, the chart reflects fewer tasks to do in the future. Using our time estimate from historical projects (the PLR), we can estimate a piece of work – or efficiency – to design a new product innovation. Interestingly, teams respond positively to countdown of tasks over consumption of budget which “counts up”.
It’s always a bit tricky to discuss efficiency in the realms of knowledge work and creativity. Yet even the greatest authors and painters set a standard of number of words to write or hours to hold the brush. Efficiency includes dedication to our craft and is measured by a lack of waste – wasted knowledge and wasted time.
Join me in other innovation professionals at the Creative Cafe on Friday, 5 February 2021, at 10:00 am CST. It’s a free and open form to talk about all things innovation. We meet about every other week so join as you are able! Last time our topic was “Setting Achievable Goals” – one metric for efficiency! This week our general theme is “Are You Creative” remembering that creativity requires discipline. Get the free Zoom link here.
You can also catch a discussion of creativity, design thinking, and innovation at the Houston ATD general meeting on Tuesday, 9 February 2021 at 11:30 am. REGISTER HERE.
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I am inspired by writing, teaching, and coaching. I tackle life with an infusion of rigor, zeal, and faith. It brings me joy to help you build innovation leaders. Teresa Jurgens-Kowal is an experienced innovation professional with a passion for lifelong learning with a PhD in Chemical Engineering and an MBA in Computer and Information Decision Making. My credentials include PE (State of Louisiana), NPDP, PMP®, and CPEM, and I am a DiSC® certified facilitator. Contact me at email@example.com or area code 281 + phone 787-3979 for more information on coaching for entrepreneurs and innovators.