Latest / The Productivity Podcast with Fexingo: Output, Efficiency, and Long-Term Economic Growth
The Efficiency Trap When Optimization Kills Innovation
Lucas and Luna explore the hidden downside of relentless efficiency: the 'efficiency trap' where over-optimizing for today's metrics crushes the slack necessary for breakthrough innovation. Using the case of 3M—where the famous '15 percent time' that produced Post-it Notes was gradually squeezed by Six Sigma cost-cutting—and Toyota's production system, which balanced kaizen with deliberate slack, they argue that maximal efficiency in a current process leaves no room for the experiments and failures that create next-generation products. The episode also touches on…
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