Why Specialization Surprisingly Hurts Business Innovation

specialization in labor

Out of many books I read over the past twelve months, Range: Why Generalists Triumph in a Specialized World by David Epstein was one of my favorites. In his book, Epstein suggests that generalists, not specialists, are the ones who excel. Generalists often take longer to achieve their goals as they try different paths along the way. Yet, it is that trial and error approach that leads them to success.

I am currently writing a book on meaningful work to help CEOs set themselves up for success in the post-COVID-19 world. Through my research, I am coming to the same conclusion as Epstein. Not only is specialization not helpful to organizations, it inadvertently hurts them. Specialization is even more detrimental to employees.

The idea of specialization, or the division of labor, was made popular by Adam Smith in his book, The Wealth of Nations. Smith illustrated that having goods or services divided into several smaller tasks that can be performed by different workers, rather than having the same person do all the tasks, results in higher efficiency and productivity.

The illustration made sense to organizations, such as Ford Motor Company. During the Industrial Revolution, Ford and other companies implemented the division of labor, and as expected, experienced higher productivity.

It was not all good news. Even Smith admitted that the division of labor had mind-numbing effects on employees by eroding individuals’ intellectual capacity. Still, Smith saw the adverse effects of specialization as a mere inconvenience. In his view, that inconvenience was far outweighed by the benefits of productivity and wealth.

While specialization might have served its purpose during the Industrial Revolution, do the benefits still outweigh the damage to human cognitive and psychological development? I believe the answer is no.

When people perform the same tasks in the same way, they stop learning and developing and become disengaged. It is not uncommon to hear people say, "I can do my job in my sleep." This means they know the steps so well that they operate on autopilot. On the surface, organizations might be pleased by this sentiment. Their employees are efficient and diligently following the company's standard operating procedures.

What many CEOs do not realize is that these same standard operating procedures are inhibiting innovation. In a global survey of 740 CEOs, senior leaders stated that developing an innovative culture was among their top three most pressing priorities. They also mentioned that the skill gap was the reason their organizations could not innovate effectively.

Isn't that ironic? Specialization is a deskilling phenomenon. It is a reduction in the variety, complexity, and number of skills involved in completing a task. By focusing so much on specialization and efficiency, organizations are depriving their employees of economic, professional, and intellectual growth. Ultimately, organizations are depriving themselves of innovation.

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