Found, Wasted and Mismeasured Efficiencies

Apart from a few sacred activities or preoccupations that are isolated from measures of efficiency, whether out of a commitment to maintain tradition or because of the emphasis on the relationship or bonds that are formed, efficiency has been sought in countless aspects and realities of life.  We
would not, for example, want to measure the efficiency with which a parent tends to a child's knee scrapes or other matters that are best treated with a reassuring kiss to pass the few moments until that first sting of pain subsides.  In such cases, applying technology or pursuing efficiency would be disquieting.

We keep hoping that improvements in efficiency will help us protect what is left of the environment or what's left of it or that time-saving efficiencies will help us find more time for the things we really want to be doing.  With energy efficiency there is a need to cite the efficiency questions posed by Jevons Paradox, which suggests that improvements in efficiency result in higher amounts of a resource being used rather than less.  In terms of driving think of an instance where a car with better gas mileage induces a driver to use their vehicle more than they would a less efficient car to the point where they actually use more gas in that car than they would in that less efficient car.  Beyond that, think of the new-found time that we actually waste rather than use the way we promise ourselves when new time-saving devices come into our lives.

The advances in the kitchen over the last century mark the turning points in a long narrative about improvements in efficiency but this story is punctuated by a chorus that there still never seems to be enough time and that our days have gotten busier or we are less able to accomplish what we claim we want to do.  The transformation of the domestic work day has redirected it into the workforce and the lament on the domestic front may seem to be that there is - still - never enough time.

I tiptoe into the minefield of assessing women's participation in the workforce versus their contributions in the home to suggest that there is far more bias to the measurement of efficiency than we would presume.  There is not an inherent neutrality to efficiency that is grounded in formulas that would indicate that families or society benefit from the time-savings that have been generated by introducing washing machines or sliced bread to the home.  One possibility is the time saved doing laundry may end up being equal to the time sitting still during the commute to work and the praise lavished on sliced bread entirely overlooks the substantial difference in quality between homemade bread and store-bought sliced bread.  Things get overlooked or excluded from the calculations when "improvements" in efficiency are lauded.

We need to look carefully at what type of efficiency is being sought at any one time and also whether we are looking at efficiency from a short or long-term perspective.  Time efficiency and energy efficiency more often than not are mutually exclusive. If you are using a private jet to get somewhere, you're using up much more energy to get directly to a destination, not to mention avoid much of the pacing and waiting in the airport.  If you are riding a bicycle to work rather than driving a car... well actually that may be one case of achieving both time and energy efficiency, given typical rush-hour gridlock.

It is also misleading to apply a shorter-term perspective when measuring efficiency as well.  In a closed system where the impacts of an efficiency are examined over the course of a short period of time without examining the potential impacts of a newly-found efficiency over the long term.  Claims of improved efficiency are often made (or adopted before the claim is made) without accounting for the long-term consequences in a real life use or application of the efficiency.  The best examples of this oversight (whether deliberate or incidental) stem from the use of chemicals, whether in food, medicine or pesticides that have frequently turned up unfortunate and costly results that did not make it on to the efficiency ledger at the introduction of a discovery and result in the assessment being tossed into the trash.

A further bias beyond that long-term versus short-term perspective is simply the ability or inability to take into account the less tangible factors that are more challenging to measure in terms of the compromises to quality of relationship or preservation of heritage that may be undermined in pursuit of efficiency as well.  Those qualities which are less likely to be quantified are mostly likely to be eroded by degrees and the consequences of such erosion felt in an existential sense but those endangered intangibles are far more important than the efficiencies that we have found and squandered.

Outsourcing Versus Innovation

For many businesses, innovation has been the key to growth and a prime vein for competitive advantage.  For one example, IBM’s range of inventions — including the magnetic stripe that is hard to remember living without, UPC price codes and laser eye surgery — all generated competitive advantages that allowed them to stay ahead of international competition that had the advantage of lower-priced labour.  IBM’s inventions, granted, generated efficiencies, but these innovations have been through the pursuit of creative problem-solving or throwing as many ideas out for consideration and development.

Over the last few decade, however, outsourcing seems to be a more prevalent strategy among larger firms instead than innovation. The immediate perception is that outsourcing is a matter than allows an organization to focus on its core products or services rather than preoccupying itself with functions that are less central to the organization's expertise or mission.  In many instances outsourcing occurred as jobs were created and added within the company due to innovation, but it has seemed over time that outsourcing has become a larger preoccupation in an effort to cut costs.

The perception is that such cost cutting measures will improve profit margins and satisfy one measure of efficiency, however, short-sighted that measure may be.  The cheap certitude that comes from achieving favourable financials for the current fiscal year or the next quarter, however, overlooks the advantages of investing regularly in terms of financial losses in risk and innovation.  The short-term variables that go into that measure of an organization's immediate success bears, however, little relation to the long-term success or health of that company.

A steady of infusion of new ideas to broaden a company's horizons and prospects is far more indicative of a company's future health than a current measure of profit and losses.  Choosing to measure a company's standing by this alone and making decisions based on achieving the temporal ideals is dangerous despite the perceived risk aversion that may motivate it.  Perhaps it is an argument that sounds familiar to those who are less than willing to laud CEOs for maximizing the bottom line for the benefit of stockholders instead of taking a longer-term view that contributes to the sustainability of the organizations beyond a relatively short period of time.  It seems that as a business grows, there is the risk of a stagnancy that occurs when bean-counting becomes a higher priority than entrepreneurship and innovation.  Those larger companies that look to cut costs by methods including outsourcing or more inclined to by a start-up after it has proven to be successful rather than cultivating a culture of risk and, consequently, innovation.  Such an approach to innovation -- one where new ideas or companies are bought for the successes they achieve rather than encouraging it within -- seems a lot like the thinking behind the assembling of a fantasy sports roster.  On paper it may look good, but the reality may be that the fit between the two organizations may not be as ideal as hoped.

Rather than reducing the exposure to risk (as they perceive it), businesses need to indulge in risk by supporting and nurturing innovation within the business.  Adopting a narrow view and over-specializing will ultimately truncate a business's vision, potential and ultimately its future. While Eastman Kodak sowed the seeds of its own demise by not properly valuing the innovations and patents it generated in the field of digital photography, other businesses make the mistake of not investing in the risk and failure cycle that comes with attempts at innovation but ultimately leads to discoveries that mesh with the goals, mission and infrastructure of the company.  Businesses need to maintain the appetite for risk and innovation that marked their launch rather than retreat to the false comfort of short-term measures of efficiency and striving to achieve standards that comply with those snap shots of a company's standing at a given moment and cutting costs as a means of achieving a false measure of health or efficiency instead of investing in innovation.