Efficiency vs. Creativity

A recent Businessweek article on 3M highlights the trade off between managing for efficiency and managing for creativity.

I read the article on a recent flight and found the debate silly – it’s not binary.

There are two conceptual points that explain why:

  • Creative efficiency. If efficiency is the goal, there are creative ways a company can try to be more efficient.
  • Efficient creativity. If creativity is the goal, there are ways to accelerate the time to get funding, to explore ideas, and for moving ideas from incubation, to production.

Assuming efficiency and creativity are mutually exclusive is foolish.

The article points out universal metrics in large organizations tends to kill some good things you want to keep. In 3Ms case, the former CEO adopted corporate wide six sigma objectives and this apparently stifled creativity (surprise!). For the uninitiated, six sigma is a technique for reducing mistakes & costs that originated in manufacturing, where defects per million are a common metric. As the new CEO points out, this is absurd as you can’t control new ideas in this way.

The last section of the article suggests you can do both, or that projects can be labeled on a spectrum of how aggressive/conservative they should be managed. And of course parts of any project can be ranked in the same way, with some getting efficiency goals and others creative/innovation goals.

So you have at least two more controls to use:

  • Goals per project. If a company has 7 projects, 3 of them might be mature and have primarily efficiency or incremental goals. 4 might be in new markets with more ambitious goals for risk taking and creative change. Every project manager has to be able to define where their project fits relative to other projects in their company.
  • Goals per part of project. Like a fractal, within a given project there are many different efforts. Some will be more mature and conservative, others more ambitious and aggressive. People responsible for parts of projects have to able to see how their area differs from other areas and be empowered to manage them differently.

The problem is never Six Sigma or any specific method – it’s how the method matches the goals and how the method is applied. The mistake 3M’s former CEO made was trying to solve his problems at the CEO level – with corporate wide efficiency initiatives. He’d have been better served by rewarding middle managers for paying greater attention to goal distinctions like those listed above.

4 Responses to “Efficiency vs. Creativity”

  1. Tejkumar

    This was also published last Sunday in The Economic Times. Good Read.

  2. Chris W.

    It’s all about having distinctive goals that aren’t too narrow in focus with solid methods of evaluating performance. Goal-setting is critical because all decisions from the top-down should be made with them in mind. It’s seeing the forest from the trees.

  3. Career Outlook

    Very good post, the battle between creativity and efficiency seems not to be ending soon :)



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