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Efficiency Is A Myth That Can Kill Innovation

Updated: Aug 20, 2023

Efficiency is very important to the bottom line of any organization and also to personal life. However, there are thresholds beyond which efficiency can have a negative return. If the white space created by efficiencies is filled to the brim with other activities, an organization can increase stress and limit the ability to innovate, transform or respond to change.

Some slack time needs to be built in to allow employees to step back, reflect and digest the big picture. Slack must be a component of the day-to-day work for individuals and organizations. For example, in an Agile setting, when planning a team capacity in a given sprint, it is common to allocate a portion of time to corporate overhead and another portion of time to slack.

Successful organizations employ strategies to increase employee productivity, like automation and using tools to increase efficiencies. However, top innovative companies go a step further and ensure Slack is built into their R&D execution.

For example, Google popularized the 20% time where employees can take time to explore new innovations, concepts, personal interests, or better ways of doing things. Of course, there is no one measuring the exact percentages, but the concept is used as a way to set the culture and let employees know that this is okay. This has since been adopted by many other companies.

At Microsoft, a program called ThinkWeek that was started by Bill Gates encourages people to have focused time to spend beyond the day-to-day operations and into “Big Think”.

Hundreds of research papers and concepts are submitted yearly. Also, the Microsoft Garage is another grassroots innovation program where anyone in the organization can join and people are not only recognized for contributions but also awarded during their review cycle.

Research from the University of Toronto and MIT’s Sloan Schools of Management reveals insights into the relationship between slack time and innovation. Slack time enables innovators to take care of the time-consuming and mundane tasks that bog down innovation. Another in-depth great read on the topic from Tom DeMarco’s book Slack.

A common trap is when an organization achieves high levels of efficiency and seeks to fill the gain with additional activity. The problem with that is that it takes away some of the much-needed slack, which can, in turn, produce stress, short-sightedness, inability to zoom out and think strategically.

Slack time can be even more critical in organizations that are undergoing a transformation or those who are looking to reinvent themselves with new innovations. Under normal circumstances, companies can achieve competitive advantages by allowing employees some wiggle room to respond to changing circumstances, reduce stress, and evaluate better ways of doing things. Longer-term sustainable organizations benefit from building-in slack time.

About the Author

Hazem has been in the software and M&A industry for over 26 years. As a managing partner at RingStone, he works with private equity firms globally in an advisory capacity. Before RingStone, Hazem built and managed a global consultancy, coached high-profile executives, and conducted technical due diligence in hundreds of deals and transformation strategies. He spent 18 years at Microsoft in software development, incubations, M&A, and cross-company transformation initiatives. Before Microsoft, Hazem built several businesses with successful exits, namely in e-commerce, software, hospitality, and manufacturing. A multidisciplinary background in computer engineering, biological sciences, and business with a career spanning a global stage in the US, UK, and broadly across Europe, Russia, and Africa. He is a sought-after public speaker and mentor in software, M&A, innovation, and transformations. Contact Hazem at


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