Innovating despite capitalism

The article Lean Prinzip (LinkedIn) is in German and discusses how the need for speed endangers innovation. It is written very much from a “leave me alone to be brilliant” style of engineering that argues that innovation can only happen if the engineers are allowed to ignore prosaic concerns like profitability. Something good will come of their work, trust them. It disparages the notion of “efficiency” espoused by managerial layers. It’s not necessarily wrong but it’s also not really interested in a solution that addresses the realities of the system under which many of us live.

I wrote the following to a group conversation:

Efficiency is not a goal in itself, but a means of achieving the goal of productivity. When a resource becomes more efficient, then it generates the same value as before but with less effort, then it’s more productive. However, you could also increase productivity without increasing efficiency by adding resources. It’s more cost-effective to increase efficiency, which is why there’s generally a focus on that.

I guess effectiveness measures whether the generated value takes us somewhere useful? That is, becoming more efficient at generating ineffective value might feel good but is ultimately not useful.

How can something have value but also not be useful? I think of a farmer who’s grown a field of food that no-one wants to eat—or that no-one is desperate enough to eat. They invested effort to generate value but it’s useless.

Addressing the article, I can’t really argue with most of it. It reflects my beliefs about sustainability and quality, and my experience in building products. It is, however, “preaching to the choir” (with me, at least).

To play devil’s advocate, though, I wonder which environment the author thinks we’re living and working in.

Sometimes slow-but-steady (the process the author proposes) will eventually end up with the better product but the market either isn’t willing to wait or doesn’t think it has to.

That is, if the market sees that it can externalize the costs of deciding to grab the product that is first to market rather than waiting for the quality product, then it will happily do so.

Here’s a completely made-up and perhaps too-contrived example:

If it takes a company five years to develop a device that lasts twenty years, but a competitor takes two years to develop one that costs 20% as much but only lasts four years, then there will be no market available by the time the “better” product comes to market.

The customer will cheerily buy five of the devices over twenty years, amortizing the cost with a much-smaller upfront investment, while completely externalizing the cost of discarding four extra devices because they will just shove their E-waste somewhere for free.

We want to be living and working in a world that rewards slow-but-steady quality, but we have to figure out how to deliver that in the world we have, one that seems to—at least sometimes, if not often—prefer quick-and-dirty. Can we figure out how to not allow hastily and poorly developed products from being cheaper by externalizing their costs? The incentives in our world push the other way.

An interlocutor responded:

“I see a conflict between innovation and serving the (immediate) market needs:

“Referring to the farmer, he has grown food that no one wants to buy, but at the same time he learned how to grow that food and he also learned that this food has no market (assuming he did not know that before). With this additional knowledge (compared to his competitors) he is able to grow another plant now superior to existing ones and successful on the market.

“I think, what the authors of the post mean by requiring time and free space (of thinking) that this is an important enabler for future innovation. Of course, there is a chance for failing and “wasting” resources because it is very difficult to anticipate later market success. But it is an established rule that innovation needs freedom and time to try things out without the “pressure to market”.

“In our vision, we had the term “taking bold risks to keep technological leadership” (probably “regain” would be more correct here). I am wondering, if this is still valid…”

InnovationI agree that innovation is about learning, and that learning takes time. Innovation is as much about learning what not to do as getting it right the first time—it is arguably much more about learning from mistakes. The famous quote from Thomas Edison describes the process as “I have not failed. I’ve just found 10,000 ways that won’t work.”

In an ideal world, the farmer who’d raised a bad crop would be given the opportunity to let society profit from the experience they’d gained. Society would have to trust that the farmer is capable of improving—sometimes a bad year is just the first of many because the farmer is just not competent.

That’s possibly a roundabout way of saying/asking: how do we tell the difference between useful and wasteful failures? Who should get another chance to learn from experience? How many changes? For how long?

To stretch the metaphor even further: Even given that the farmer were good and in a process of valuable learning, what if the farmer who’d failed were not allowed to be a farmer anymore? I.e., they go out of business?

A common answer today would be that society would be preventing a proven loser from wasting precious resources. That is a not uncommon economic answer: that the market will ruthlessly decide.

It’s also very likely a net loss for society because this level of ruthlessness means that we don’t give ourselves time to learn from our mistakes. Instead, we’re told that the “market” will let someone else learn from them. This might be good sometimes, but it is often wasteful. The new innovator doesn’t necessarily benefit from the experience of their predecessor.

We may know how to innovate, and may have the right people, but we can’t ignore the context in which we’re doing it. We want to make sure that we give ourselves a fighting chance of surviving and being able to bring our delightful innovations to a world that seems to be want to strangle anything that thinks farther ahead than the end-of-quarter numbers.

As I noted in my previous comment, we don’t want to capitulate to quick-and-dirty—because we know that’s a dead-end long-term—but we have to acknowledge that quick-and-dirty is a competitor in the short-term and make sure we’re set up to outlast them.

We’re trying to compete by convincing our market that we’re worth the wait. Can we do that by getting our innovation out there more quickly? Is there a way of innovating that is more iterative? So that we move toward the quality product that we want to achieve without losing our audience’s attention?

The hope is that such a process would not only be better-suited to the world we have, but might also help us let valuable outside feedback flow more quickly into our products. Easier said than done but it’s something we have to seriously come to grips with, I think.