Balancing Innovation and Cost-Cutting

Why are workers keen to cut costs? In an economy when many companies have abandoned hiring, those who still have jobs find themselves overworked, but keen to keep their paychecks. As a result, many companies have begun using innovation management software to pick the brains of their employees to come up with ways to shorten production time and cut costs. This focus on cost-cutting is beneficial to current workers because it allows them to keep their current jobs, and beneficial to management because it does not require them to hire anyone new.

In the automotive industry, this practice of asking employees and suppliers how they can cut their costs has resulted in profitable gains for management, at least in the short term. However, the longer term result of this aggressive focus on cost-cutting may ultimately be detrimental to the economy at large. Innovation management software is certainly beneficial in cost-cutting; but it should also be used as a way to inspire growth.

Looked at simply, a population that does not produce any new members eventually dies. So it is with business. Without some effort to spur growth, a company will eventually wither away. The economy at large—which has been slowly crawling back to health—is struggling partly because very few companies are willing to risk investing in anything that has not been invested in before. Caution is advisable, but without the occasional risk, businesses will pare themselves down to nothing.

To return to the automotive industry, it is perhaps easy to forget how much investment and labor went into creating motor vehicles in the first place. With our instant search result mentality, our culture has produced a mindset that is not conducive to true, long-term innovation. Without investment and the desire to try unproven methods, we will never reach the heights of our potential creativity. The 20th century was a study in what happens when we collectively allow ourselves to dream. It seems that technology may be providing us with the tools we need to avoid excess; but this does not mean we should steer clear of imagination, too.

Christopher Smith, CEO of opin.ca, provider of enterprise content management systems