A Counterview on the Quest for Efficiency

By Anthony, Demangone

Facing a world of tight margins and weak loan demand, finding greater efficiency is on everyone’s mind. To quote Mr. Franklin, a penny saved is a penny earned.

But are there downsides to efficiency?  Perhaps.

Seth Godin touched upon this in his recent post, Eleven Things We Can Learn From Airports.  Number five on his list?

By removing slack, airlines create failure. In order to increase profit, airlines work hard to get the maximum number of flights out of each plane, each day. As a result, there are no spares, no downtime and no resilience. By assuming that their customer base prefers to save money, not anxiety, they create an anxiety-filled system.

And then there’s the article, The Most Efficient Die Early, from the HBR Blog Network.  The authors state the following:

You have to expect the unexpected, yet in retrospect, too many companies and leaders have inadvertently made themselves fragile in their pursuit of ever-greater efficiency. Then when a shock inevitably comes, they are unable to absorb it.

Too much efficiency can be just as deadly as too little, if it leaves an organization unable to cope with change — either because it’s too fragile to survive a crisis or too rigid to adapt to industry changes. So the goal should not be greater efficiency, but rather efficiency where it makes sense.

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