We talk Innovation. We reward Efficiency.
Every boardroom in Swedish manufacturing says the same thing: innovation is critical. Not optional. Critical.
Then decisions get made. Priorities get set. Bonuses get paid.
And efficiency wins. Every single time.
That's not hypocrisy. It's worse. It's what you've systematically trained your organization to believe actually matters.
What you say vs. what you pay for
Your innovation team just proposed a project. Customer research is solid. The opportunity is real. But it doesn't integrate cleanly with existing operations. Margins look uncertain in year one. Implementation is complex.
Finance kills it. Operations doesn't have capacity. The governance process adds six more gates.
Meanwhile, the efficiency project with 200 basis points of margin improvement? Approved in two weeks. Fully funded. Fast-tracked.
Your people aren't stupid. They see what gets rewarded.
Next time you wonder why innovation stalled, check the promotion list. Count how many people got elevated for optimizing existing operations versus disrupting them.
That's your real strategy. Not the deck you presented in January.
When Husqvarna chose differently
In 1992, Husqvarna had the same choice every Swedish manufacturer faces today.
Someone proposed a robotic lawn mower. It challenged existing manufacturing. Dealers hated it. Service revenue models broke. Integration was a nightmare.
Every efficiency metric said kill it.
Leadership approved it anyway.
Not because the business case was perfect. Because customers didn't want to push mowers and someone finally decided that mattered more than protecting margin structure.
Three decades later: 3.5 million units installed globally. Category leadership. Competitors scrambling to catch up.
But here's what actually happened internally: People who pushed for robotic mowers early got promoted. Teams that solved customer problems got funded. Efficiency became the servant, not the gatekeeper.
The incentive structure changed. The organization followed.
The test you're failing
Walk into your leadership meeting next week. Doesn't matter which company.
Count the agenda items about innovation. Now count the actual decisions where innovation won against efficiency concerns.
Here's what you'll find:
Innovation gets discussed for 45 minutes
Efficiency concerns kill it in 5
Everyone nods about customer-centricity
The budget goes to operational optimization
The strategy says "transform"
The rewards say "don't rock the boat"
You talk innovation. You fund compliance. You celebrate customer focus. You promote people who hit their efficiency targets.
And you wonder why nothing changes.
What you're actually rewarding
Look at your last three years of performance reviews.
How many people got rated "exceeds expectations" for:
Optimizing existing processes?
Delivering margin improvements?
Integrating acquisitions smoothly?
Hitting efficiency targets?
Now count how many got the same rating for:
Launching something that didn't exist before
Disrupting internal sacred cows
Choosing customer value over short-term margins
Killing a profitable product because customers moved on
The ratio tells you everything about what you actually value.
Not what you say in strategy offsites. What you reward when nobody's watching.
The fix is simpler than you think
You don't need another innovation framework. You need to change three things:
1. What you measure. Stop leading with "does this improve efficiency?" Start with "does this solve a customer problem we're ignoring?"
2. What you fund. Reserve 15% of your budget for projects that explicitly don't fit existing models. No efficiency business case required.
3. What you promote. Next leadership role that opens? Give it to someone who shipped something new, not someone who optimized something old.
That's it. Change the incentives. The organization will follow.
The choice
Husqvarna made this choice in 1992. They're still winning from it.
Your Asian competitors made it five years ago. Your American ones are making it now.
You're in the room talking about how innovation matters while your bonus structure says efficiency is king.
So here's the question:
When you leave that meeting and someone proposes something genuinely new—something that doesn't fit, doesn't integrate easily, threatens existing margin structure—what will you actually do?
Because that moment is where your real strategy lives.
Not in the deck. In the decision.
