When does efficiency impede innovation? Or does it? Hasn't "kaizen" (continuous improvement) been a key component in creating the dominance of Japanese manufacturing? Isn't every improvement that drives efficiency an "innovation"? Efficiency means delivering more output, faster and/or at a lower cost. Seems pretty good...
Picasso once said, "Computers are useless... All they can do is give you an answers". Interesting, since answers are usually quite useful. My interpretation is that important piece of the equation is in the question. More importantly asking those creative questions lead us to creative breakthroughs.
When we drive efficiency, we automate more. We drive out the need for human intervention. For those cases where we can't eliminate the human aspect, we try to control it. We measure it. We time it. We provide a very detailed script and try to control as much of the process as possible. We program them.
The impact of this is that we treat our people as computers. This robs them of their ability to be creative. Even worse is when we ask them to go and be creative, but please do it while we penalize you for not meeting a performance objective.
Let's do an analogy... Imagine you are a pizza delivery person. But when you get an order, you are given the exact specific directions even timed to the minute. As you're driving let's say you have a countdown alarm timer and for every minute you are late, you lose $1.
Chances are, you're not going to be looking around for new better ways to drive to the destination. You are never asked for your opinion. Even if you see a flaw in the directions do you offer it up? Even glaringly obvious opportunities are missed as the focus is on the script.
Chances are that if something unexpected comes up your ability to respond is diminished. Problem solving isn't in the job description.
Chances are that if the cook asks you to do him a big favour and pick up some ingredients on your trip back, you are less likely to help him. We reinforce silos and boundaries. You are not rewarded for helping others. Even if the most valuable thing you could do was stop what you're doing to help another piece of the organization. You get penalized for this. This is a collaboration killer.
Is efficiency bad? Of course not. Just don't let it be the only focus if you really want to be innovative.