Efficiency Isn't Innovation

In general, the approach to improving things, products or processes, begins with analyzing the as-is situation and identifying areas in which problems could be fixed or improvements could be made.   That is to say that it begins rooted in present reality and ends with only minor changes.   This is different to, and likely preventative of, true innovation, which requires starting with a blank slate and imagining the possibilities that might exist, independent of what currently does exist.

It is a common, but fundamental error, to regard anything new through the lens of existing processes.  This results not in innovation, but efficiency improvements, as firms seek to streamline what they are presently doing rather than considering whether there might be an entirely new way ("new" being the "nova" in "innovation") to achieve the desired goals - or even to change the way in which the goals are defined if doing so is necessary to achieve a better outcome.

In many instances, efficiency improvements are merely automation.   In the early industrial era, automation merely replicated human motion with machines; and in the present era of information technology, automation merely replaces human thought processes with digital ones - but "merely replaces" means the that task remains the same, it is just performed by a different actor.

For example, a computerized accounting system automates the way in which invoices are processed, in that the very same thing is done with databases and spreadsheets that nineteenth-century clerks did with ledgers and quill pens.   The process is made faster, and less labor is required, but the process itself has not changed.

In that sense, replacing a worker with a machine or a clerk with a computer system is not innovative at all: it's doing the same thing more quickly and efficiently, but still doing the same thing.   To innovate requires asking: what goal are we attempting to achieve by doing things this way ... and is there a different way in which we might achieve it?"

Knowledge of existing business practices is not only unnecessary, but can be harmful.   That's not to say that they can be completely ignored - the inputs and outputs are likely still the same (though one might reconsider whether the inputs or outputs could be improved) - but all the "stuff" in the middle is entirely irrelevant.   So long as the goals of the process are achieved, the rituals by which they are pursued is irrelevant.

As a final note: innovation is not always necessary, and sometimes efficiency improvements are the best that can be done - let's not throw that concept away entirely.  But at the same time, let's not assume that the two are similar or can be accomplished in the same way.  To be innovative in the outcome requires being innovative in the process - and that holds true even when the process is one of defining processes.