This piece on innovation-fueled growth makes an important point. Like the human body, the things that nourish growth aren’t always the things can be measured. Contrasting the ruthless cost cutting of Malaysian Airlines earlier this year with the company culture at Apple, author Lawrence Chong describes why some measures that target future growth are counterproductive.
In medieval Europe, if you were sick, doctors would bleed you in the hope of getting rid of the ‘bad blood’ so that you could recover. This ‘bloodletting’ approach – of simply cutting costs and hoping for growth – is dangerous. Since many companies eventually get cut to the core, they are unable to recover since they have lost critical talent who can generate growth.
….From our point of view, any approach which does not seek to understand who and what creates value in the company should be guarded against. A wrong move or cut will damage the creative engines for future growth and set the company on an irreversible course to ruin.
Can you locate company value in a spreadsheet? Yes, of course. But a truly innovative idea is by definition, untested. It’s an unknown quantity, and no one knows now whether it will succeed. It may or may not show up in some future spreadsheet.
Still, it would be a pity if an employee or manager departed with it.