Innovation & Efficiency: The Right Balance
Part of why I love working at Seer, is that innovation is thoroughly embedded in the culture. Doing the average is not enough. And if you've seen any of our founder Wil's speaking events, you know he doesn't hold back when challenging industry norms. Our innovative marketing strategies through the years - whether it was RCS, advanced Power BI for marketing, and now the power of Supernova and AI's "great reset" - create the unique value that leads clients to choose to work with us.
With all the hype around generative AI, ChatGPT, and the massive marketing disruption that AI is poised to cause - we are entering a time where companies with an eye on these innovative marketing trends will have a real edge.
But, as any growing organization has seen - innovation is hard to get right and keep alive. As a small organization grows, some innovation must be sacrificed for efficiency, which is essential to being profitable. My favorite explanation of this idea is from a 2Bob's podcast episode, called "Innoficiency."
The innoficiency principle states that:
- Principle: Innovation and efficiency are mutually opposable goals in an organization
- Problem: While the principle is not a problem in itself, being unaware of it, and assuming that boosting efficiency won't impact innovation (or vice versa) often leads to unintended trade-offs between the two.
The principle often resonates with folks who are in the trenches of innovation trends at a company, while efficiency seekers reject the notion. There's a tension that must be held between innovation and efficiency. One is not necessarily worse than the other; both are required for a business to be profitable. In fact, innovation can sometimes even lead to important efficiencies. Think about how much efficiency generative AI can bring to an organization!
What Exactly Is Innovation?
When we talk about innovation, 2Bob's hits the nail on the head. Innovation isn’t just about coming up with something new. It’s about crafting ideas that genuinely solve market problems, creating undeniable value for both the customer and your company. Now, that's real innovation – impactful, meaningful, and yes, profitable.
- Innovation is the execution of a new idea that solves a market problem and creates value for both the customer and the company.
And here’s where it gets tricky. Those who focus purely on optimization often mistake any new tweak or adjustment as innovation. They miss the mark. True innovation isn't just about internal gains or streamlined processes. It’s about adding real, tangible value to your customers' lives. Without that customer-centric focus, are we truly innovating, or are we just spinning our wheels?
Remember, innovation that doesn’t enrich your customer's experience is like a car without fuel – it may look impressive, but it’s not going anywhere. Keep the focus on creating real value – that's the secret sauce of true innovation.
Why Innovation Sometimes Dies in Companies
Giants like Google, Amazon, and Apple all grapple with this. To keep the innovative spirit alive, they need to step outside and bring in fresh perspectives. It's why they often have to buy startups in order to keep their teams innovating (see the Google graveyard of projects for ones that didn't work out).
What's missing is the space for slack. This isn't about uninhibited waste. In the context of business, this slack refers to essential pockets of creative freedom, the kind of leeway that fosters out-of-the-box thinking and innovation. You'll have your own graveyard of ideas - but your team needs places to test and fail until you hit gold. As Wil and Larry like to say, you only need a banger every couple of years. It's the pareto principle - 20% of your ideas will generate 80% of the value you create.
In the early days of a groundbreaking company, you have this vibrant chaos of creativity. Everyone's buzzing with ideas, taking risks, and pushing boundaries. By definition, if an innovative company makes it past this stage, they will have had to create real value in the market. Then enters the 'grownup' in the room - the first sign of structure and systems. Initially, they stick out like a sore thumb among the creatives, constantly nudging towards order and efficiency.
As the company scales, this 'grownup' gains more influence. They start building a team, laying down more rules, more systems - and when done correctly, more profits. What happens next? The scales tip. The once-dominant creative chaos dims down as these efficiency enforcers take the reins. Now, the innovators, once the heart and soul of the company, find themselves on the fringes. They become the 'new minority', struggling to keep the original spirit of innovation alive in an increasingly structured world.
This shift isn't just a corporate power play – it's a fundamental change in the company's soul. The innovators, who once led the charge, now fight to have their voices heard. That's the real challenge of big business innovation.
Managing the Innovation & Efficiency Tension
This tension is often mistaken as conflict - but it is not a true conflict, it is a tension that must be managed. Think of this tension as the air in a balloon. The right amount of air (tension) keeps the balloon afloat and stable, while too little or too much can lead to loss of shape or - BAM - there's balloon bits everywhere. The tension keeps the balloon in its optimal state.
For marketing agencies working with clients, this cycle and tension exists as well in a microcosm. Our clients are on a journey with us. They come for the innovation, and after a time, projects streamline with efficiencies. But are we giving clients reasons to stay excited? At Seer, it's an essential part of our offering and a question that our leadership constantly asks.
How to Keep an Innovative Marketing Culture
Seer has a strong reputation as an innovative marketing agency. Often, we see our clients' marketing teams at a crossroads: there's a tug-of-war between innovation and efficiency. As leaders, how do you empower your employees to navigate this terrain effectively?
Understanding the Internal Conflict
When you have passionate and driven marketers, they may face an internal struggle - they are torn between delivering what the client is paying for and what they, as strategic professionals, envision could be done. Because busy clients are faced with internal pressure toward efficiency, good marketers are frequently more invested in the outcomes than their client can be. Clients may see a project as just another task to check off, while the marketing team sees an opportunity to make a real difference, to innovate.
Setting Realistic Expectations
Consider this scenario: There's a client with a budget of $30,000 for an SEO campaign or $50,000 for a comprehensive PPC strategy. Driven by their expertise and creative solutions, their team of marketers might be tempted to go above and beyond these budgets to achieve what they believe is the optimal outcome for the client. They might blend in PPC insights into an SEO engagement, because search results are one experience. Your team, fueled by their creative instincts, might disregard these figures, aiming instead to deliver what they believe is best for the company or client. This is where the challenge lies. They are operating on an innovation model, while the company is investing in an efficiency model. This discrepancy can lead to frustration, both for your team and in terms of financial viability.
Encouraging Smart Innovation
The solution isn’t to clamp down on efficiency - that misses the bigger picture. Instead, the focus should be on educating and transitioning leaders to appreciate and finance the innovation your team is capable of delivering. It’s about shifting the company's mindset from seeing your services as a commodity to viewing them as a valuable investment in innovative solutions.
Equip your team with the skills and strategies to help leaders understand the value of innovation. Encourage them to communicate effectively, showcasing how creative solutions can lead to better results, and why investing in innovation is worth the extra cost.
Cultivating a Culture of Balanced Innovation
Foster a marketing culture where innovation is celebrated, but also tethered to the realities of business. A company has to pay for innovation, and you must have rigors in place that encourage your team to innovate within the bounds of what clients are willing to invest in. But empower strategists to speak the language of value creation through innovation; this approach not only nurtures their creative spirit but also ensures the financial health of the company.
By empowering your employees in this manner, you create an environment where innovation and efficiency coexist, leading to more effective leaders, motivated employees, and a healthier bottom line.
How an Outside Team Can Inspire the Innovation
Your business invests in marketing teams and agencies for a reason - you might see them as exceptional optimizers, counting on them to execute marketing tasks efficiently. Or, you may turn to them as groundbreaking innovators. The real edge an outside agency holds is freedom from entrenched systems. While clients might approach agencies for marketing optimization, what they often truly require – and perhaps don't fully realize – is an injection of innovative spirit. Seer's foundation is innovation - our founder's job title is VP of innovation - and we truly believe that's what clients come to us for.
Efficiency is Not the Bad Guy
Let's be clear as we wrap this up: it's not about discrediting efficiency. We love automation and efficiency - remember, that's often the output of innovation! However, each stride towards efficiency carries a subtle yet significant impact on innovation. It's vital to recognize this trade-off. Embrace efficiency, by all means, but do so with eyes wide open, fully aware of what might be left behind in the realm of creativity. It’s not about choosing one over the other; it’s about maintaining a mindful equilibrium between both. At Seer, we are always looking to go above the average and to question best practices. It's why our clients love working with us - we're always pushing our partners to innovate with us - and more importantly, for their customers.