Is optimization the enemy of innovation?

Last week I delivered a keynote on the first day of our Premier Business Leadership Series event in Las Vegas. My topic: Innovate and Optimize. People often say optimization is the enemy of innovation. I disagree. Moreover, you can’t have one without the other, particularly right now.

Optimizing for its own sake without considering how you will innovate is foolhardy. Innovating without any thought to how you will improve your practices is the nail in the coffin. It’s like two governing bodies ...

that play off each other. How do you create the balance between the two?

Optimization is not just about cost cutting and doing things on the cheap. Optimization is also about operations research techniques, price optimization, customer profitability, those things that move your business forward.

Don’t let your CFOs drive your optimization focus as cost cutting initiatives. For a majority of businesses, optimization just means cost cutting. While that might help the outlook in the immediate term, it can be devastating in the long run.

Again, innovation and optimization need to work together. What you need is optimized innovation.

That theme resonated well with people at PBLS. It’s what they want their peers and business leaders to hear. I got many comments saying, “I’m glad to hear somebody stand up and say it’s not just about cost cutting.”

I also got a lot of feedback on understanding how innovation fits within an organization. It’s not just about creating something new and cool. Like Peter Drucker (who would have turned 100 this month) says, you need to deal with your current business, what’s core to your business and where your business needs to be. Your efforts to innovate need to make sense in all three phases.

Photo by Casito

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