Efficiency will kill you slowly

Our western societies are obsessed with efficiency. Just think about topics like lean production, just-in-time logistics, energy consumption, time management: we are always trying to make things cheaper, to use less resources, to pack more action in less time, you name it. While these considerations are usually driven by good intent, I’d argue that they can pave the path to desaster when efficiency is pursued as an absolute value, when efficiency becomes a false god. What starts out as the right thing to do can become an addiction that poisons your future.

We see efficiency through a near-term lens, focused on immediate results, on direct gains and quick benefits, here and now. We are usually unaware of, and often not even interested in any long-term effects that efficiency might have. At best, we simply think that if efficiency works today, why should it not work in the future? Well, why should it not? How could efficiency be both: your friend today and the enemy of your future? That’s the topic of this post.

A very short story goes like this:

• Efficiency has a purpose: it is intended to minimise the resources used for a specific mission, in a specific organisation or system.
• Efficiency employs an essential tool: it works through control; it seeks to regulate all relations, interactions, interfaces, inputs, outputs that affect the mission.
• In the short-term, efficiency achieves a desired outcome: it promotes austerity and restraint, while it kills any slack, idleness, wastefulness, emptiness, unused space; you might even say that efficiency seeks to eradicate waste.
• In the long-term, however, efficiency accumulates an undesired result: it reduces overall resiliency and thereby increases susceptability to internal failure and external shock events; in the extreme, efficiency unintendedly prepares the system for mission failure and even collapse.
• In summary, efficiency is one plausible explanation for the Paradox of Development: enduring success in one specific domain is the breeding ground for future failure.

Now, this short story might be a overly simplified and bit too quick. So let’s take a look under the hood of the inner workings of efficiency, while keeping an eye on the effects it has. We can create such a story line around the adaptive cycle.

That story starts at the end of the reorganisation phase, when the new complex adaptive system takes shape. It has a concrete purpose (for example, the jet engine that generates thrust for an aircraft; or the tax code that generates the budget required for public services). When a new system is first established, it is likely imperfect, but it’ll get the job done: a newly established system will be effective.

But as we move into the growth phase, effectiveness is not good enough anymore. Efficiency enters the stage, striving to ensure that everything within the system, every little subcomponent of the structure and every little subelement of the process, will contribute to the mission of the system. Why? The underlying logic is simple: try to maintain effectiveness and deliver the same results, but use less resources. The freed-up resources can then be employed for other purposes. So ideally, the system can take on additional tasks within the same set of available resources. Which makes the system more effective. – Sounds pretty straightforward, doesn’t it? But where’s the issue? Is there an issue?

Well, the issue arises from the inner workings of efficiency, which are usually invisible. Efficiency works through control: control of relations, interactions, interfaces, inputs, outputs; control of the internal resource allocation and resource flow; control of the entire set of structures and processes that make up the complex adaptive system. Such control is established through “built-in” routines, which serve as the system’s programme code: in the end, for every conceivable situation, there’s a predefined process in place. – No thinking required, no resources wasted on failed attempts, no time spent on contemplation. Instead everything is set, ready, go to achieve the defined mission. That’s what we want, isn’t it?

As we continue along the front–loop of the adaptive cycle, through the growth phase and into the conservation phase, efficiency definitely delivers the desired outcome. Efficiency promotes austerity and restraint, and along the way, efficiency kills slack, idleness, wastefulness, emptiness, unused spaces. Everything that does not deliver an immediate contribution to the mission is challenged and either brought back into line or eventually expelled. All along the way, the system becomes ever more efficient, ever more trimmed and tuned to fulfil its mission. – All according to plan; but where’s the issue? – Up to now, efficiency gave us exactly what we asked for. We’ve been climbing up the front–loop of the adaptive cycle, slowly but surely accumulating more and more potential (some say: wealth).

But now, as we move over the peak of the conservation phase and realise that we actually start losing potential, we don’t understand what’s happening. We suddenly see the downside, the previously invisible side-effect of efficiency: more and more control created ever increasing connectedness across the system. Loosely connected elements either became more closely connected, or they were disconnected and kicked out. In the end, there are no latent connections left – latent in the sense of “not yet engaged, but potentially available”. There are no spare parts, no fuel reserve, no alternative routes, no fall-back options, no fat for the winter. In that situation, any deviation from the initial mission (any challenge or shock, either internal or external) can shatter the system and trigger its collapse, thus ushering in the release phase.

So despite our best intentions, and notwithstanding the initial success that efficiency delivered, in the end we are caught be surprise: in the long run, efficiency has actually made us vulnerable. – But why? And how? We did everything according to the book, didn’t we? – What we are faced with is the undesired result of efficiency: the continued reduction of resilience, of the ability to bounce back, to stand up after a hit, to sustain functional integrity is invaluable in times of crisis. Efficiency works against resilience. The more interconnected the components of a system become, the more interdependent they become, the more rigid and less flexible a system will be. The more efficient a system becomes, the less resilient is will be.

Taken to extremes, a belief in efficiency as the holy grail assumes that everything can be planned and programmed, and that surprise can be eliminated. However, efficiency only prepares for the known and predictable, while it rejects the possibility of the unforeseen. As such, efficiency has a good likelihood to succeed in the near-term, but no chance to prevail in the long-term.

Simple optimisation for efficiency will kill resilience, so that’s no viable long-term strategy. On the other hand, optimising for resilience will be utterly inefficient (and might not even be effective). This is no question of alternative approaches, of either this or that. Rather, we need to strike a sound balance. That will be difficult to define precisely, but for a start, I’d suggest to keep three objectives in mind. The first would be effectiveness, the need to get the job done. Efficiency would only be the second objective, keeping it subordinate to effectiveness, so that efficiency does not become an end in itself. The third would be resilience, the built-in bounceback-ability to ensure sustainability in the long-term.

Innovation fitness needs a minimum level of resilience, the ability to resource experimentation with alternative ideas, and do that outside crisis situations. We should not leave it to collapse to create conditions that force us to (re-)allocate resources to novel ideas. Instead, we should afford ourselves a little inefficiency, to develop new ideas and to experiment with alternative solutions.