Why Efficiency Is the Enemy of Innovation: Insights from ByteDance, Tencent, and Huawei

Efficiency is often defined as the pursuit of the shortest path or local optimum, which saves time, cost, and resources but can blind organizations to emerging opportunities and valuable changes happening around them.

When a company rigidly follows this shortest‑path mindset, it may miss new markets, better alternatives, or unexpected innovations, because it lacks the flexibility to explore beyond the immediate optimum.

Innovation, however, frequently requires deliberate waste—splitting resources across multiple parallel projects, experimenting with unproven ideas, and accepting short‑term inefficiencies to discover breakthrough solutions.

ByteDance exemplifies this approach: in 2016 it launched three separate video initiatives—Huoshan (short video), Toutiao Video, and later Douyin—each representing a different path. By allowing multiple experiments, Douyin eventually became the dominant product, driving massive growth.

Tencent’s R&D philosophy reinforces the same principle: it avoids “squeezing the last drop of water” by hiring more staff than strictly needed, providing space and time for employees to experiment without immediate pressure, and only allocating larger resources once a project shows intrinsic vitality.

Huawei applies a massive‑scale version of this logic, pouring large numbers of engineers into projects, iterating until a solution succeeds, and then concentrating resources on the most promising outcomes.

The combined lesson is that while efficiency remains essential for scaling and sustaining competitive advantage, early‑stage innovation thrives on controlled waste, redundancy, and the freedom to explore, allowing the most viable ideas to surface before optimization.

Balancing these opposing forces—efficient execution after discovery and purposeful waste during discovery—enables organizations to achieve both breakthrough innovation and long‑term operational excellence.