Doug Toppin's Blog

My thoughts on technology and other stuff

Do You Invest in Saving Money or Innovation?

Since finishing graduate school I have developed a strong opinion on how businesses can very easily fall into the trap of investing significant resources into improving processes with the focus being cost reduction rather than innovation.  I believe that the cause of this is that it is easier to look for changes in process and to convince people that those changes are actually causing cost reductions.   Innovation is much more difficult, unpredictable and succeeds only occasionally.   Developing a culture of innovation means that managers (program and personnel) potentially cannot see the value in what their employees are doing whereas it is easier to observe people commenting on and following some process.   Innovation generally involves not following a process because you can’t innovate when you are following an established path or pattern.   Once a cost reduction process is implemented it begins to become a bureaucracy with the establishment of training programs and certifications. A phrase that I ran across in a podcast months ago was that “you cannot reduce your costs below some fixed level but you can infinitely increase your salary”.  This applies at the corporate level as well and I am convinced that a business that increases focus on cost savings and reduces investment in innovation is on a path that will inevitably head downward.  This has influenced my own career and I intend to continually work with new technology and approaches and not become mired in legacy technology.  It is better to take risks and do something new (and challenging) than to continue in a deep rut.