Efficiency or Exploration?

Here is a brilliant post from Randall Munroe on XKCD:

There’s a very simple point here – strategy is about making choices. What we choose to emphasise reveals what we think it important.

Here’s a simple business example: do we choose efficiency or exploration?

In most cases, we need to do both. We need to get better at what we’re currently doing (efficiency) and we need to create new opportunities through innovation (exploration). But if we err, most organisations err on the side of choosing efficiency over exploration.

You could also frame this as choosing the short run over the long run.

Is this really what we should be doing?

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

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3 thoughts on “Efficiency or Exploration?

  1. Your reference to erring in this context brings to mind the errors that are an inherent part of exploration (if you’re not making mistakes, you’re not [really] experimenting), and a framing in which exploration aims to increase the probability of errors whereas efficiency aims to decreases the probability of errors.

    I’m reminded of classic quotes of the form “If you’re not making mistakes, you’re not making anything”, and yet your post helps me think about this in a new way. Edison might have been fond of making mistakes on his way to various inventions, but once some of those inventions made their way into production, I suspect that efficiency – and the reduction of mistakes – became a primary driver.

  2. Excellent points Joe. And I think you’re right about that shift to efficiency. That is what I was trying to get at with this. Of course, research suggests that successful firms are able to do both – but I’ve seen too many err on the side of efficiency.