Last september I posted an Item about process innovation in which I made some cautionary comments about the importance of making process innovations under conditions where the company is operating profitably. The point was that all kinds of external factors can change in an instant, and those process innovations can make a world of difference in the effect that those changes have on the company's bottom line, and in some cases, on the company's very survival.
I had a conversation with a colleague over the weekend that caused me to realize that the negative effects of broken processes can be much more immediate. My friend described his company - good product, good leadership, satisfied customers and a profitable balance sheet. The problem was that the company suffered from poor day-to-day management. As a result, their internal operations were so wasteful and inefficient that my colleague (a very experienced, competent and hard-working team member) is starting to actively look for another position. It's surprising that I needed to see this in someone else, as I've left companies myself in similar circumstances.
Despite the fact that your company is turning out good product to satisfied customers, and that your salaries and benefits are at or above average for your industry, you could still lose one of your most important assets - the intellectual and human capital that is responsible for continued product development, invention and innovation - if the processes that keep the hits coming are seriously dysfunctional. Under these circumstances your employees find themselves working at cross-purposes, wasting efforts, duplicating efforts, and generally working inefficiently. The feelings of frustration only get worse when these employees are ignored when they attempt to help correct these situations, coming as they often do from technical people. (See this post on why technical people aren't listened to when they try to advise us on business processes).
The bottom line is that it doesn't take a major shift in the business landscape to make failure to take advantage of innovation opportunities a costly mistake.
