When we do improvements to a product, service or any other things, we are making an attempt to increase or reduce something related to it. This could be an increase in terms of the product or service's performance or its consistency in delivering its desired outcomes or the value the creation process brings to the consumers. Improvement could also come in the form of a decrease in the externalities the product or service brings to the environment or society, or a reduction in the complexities of moving it through its value chain or in lowering of prices the consumers have to bear for these products and services.
Diminishing Returns of Continuous Improvements
There will be costs in bringing about these benefits and the organisation will continue commit to doing improvement up to the point where the costs of the improvement equals to the benefits derived from it. This means that there are diminishing returns in all kinds of continuous improvement.
However, what is the driver for this and what could we do given this reality? To appreciating these, we have to first understand the natural laws that govern the technologies that create and operate the product and service, bring the product and service to the consumers, and deliver the value in the product and service to them. Let's go through this thought experiment to let me illustrate this driver to you.
Let's assume that there is a big rectangular field near our house. Surrounding this field are barbed-wired fences, and there are two gates facing each other diagonally across. These gates are linked by a L-shaped cement-paved pedestrian walkway. We have to use this walkway everyday because this is the only way to get to the train station from our house. The diagram of the houses, field, gates, walkway and train station is presented below.
Several years later, the local government had decided to improve the walkway by tearing it up and repaving it. The new walkway has shortened the distance one has to travel between the two gates. Since then, there have been no further changes except repaving works because of its wear and tear. You have written to the authorities about the needs for further improvements and they have always told you that this is the best they could come up with. Why is this so?
Constraining Effects of the Governing Laws
This comes about because there are no more ideas capable of shortening the distance. Further changes could only be motivated by a fundamental shift in the natural laws that govern the whole scheme of things. Look at our walkway again and we could see Pythagoras' Theorem (a2 + b2 = c2) as the natural law that is now defining the distance between the two gates. According to the theorem, the shortest distance between two opposing corners is directly across. The construction of all other point-to-point walkways are frivolous and a waste of public funds because nothing is shorter than this. If we could shift this natural law that governs the field, we can find new avenues for new improvements. In this thought experiment, the theorem is capable of being re-expressed to focus the equation at different perspectives but in its simplest form it is incapable of being reconfigured. This explains why the current layout is the best solution given the constraints imposed by the current law.
So, how could we identify new avenues for improvements when we are unable to instrument the natural laws? We do this by examining the variables in the natural laws. In the thought experiment, the law that dictates the length of the diagonals is the Pythagoras' Theorem and the equation is:
a2 + b2 = c2
In this equation, we know that the sum of the length and breathe of the field will always be longer than the route that cuts diagonally across the field. We also know that there is a positive relationship between its length and breathe, and its diagonal. This means, the shortening of the diagonal requires a proportionate reduction in the dimensions in either or both the length and breathe of the field, which will cause the reorientation of the opposing gates. If this is feasible, this wlll become a new source for improvement up to the point where these movements no longer have meaning.
When these dimensional entities are invariable, the diagonal is constraint and nothing could change this. Now, we need to innovate to find a breakthrough in the way we think about shortening the route. We question not about how to reduce the distance to reach the station fast. We ask about how we could reach the station quickly, and we may consider using the travellator, which allows us to expend less energy to perform the task and arrives at half the time. We have leave behind distance and adopted speed as the new mode of thinking for breakthroughs. This means, in breakthroughs, we need to become aware of and avoid being influenced by the current natural laws.
Why is this so important to the innovation practitioners? This is so because the true defining difference between do continuous improvements and creating breakthroughs rests in recognising whether we are working within the confines of a current natural law or transiting out of it to be into another. Without this awareness, we will forever be confined by the current laws and only capable of doing improvements.
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