When too much efficiency kills


We're all striving to eke every possible efficiency out of our workplaces in the name of improving the bottom line. Efficiency is good, no doubt, but too much of it can render a company too fragile or too rigid to survive unexpected change, warn Casey Haskins and Peter Sims in a post at Harvard Business Review.

This is a lesson that's been learned in the military: At war, you don't want to keep all of your ammunition in one place, send everything through a single channel or supply troops "just in time," Haskins and Sims write.

It's also a lesson that was learned at factories in Japan, Europe and the United States following the devastating tsunami that hit Japan in March, 2011. Some auto plants were closed or working at a slowed pace for months after the catastrophe upended supply chains, Haskins and Sims note. When flooding in Thailand further disrupted supply chains, the losses probably totaled more than the savings companies had found in supply chain efficiency.

Too much efficiency can debilitate a business not only when catastrophes strike but also when change occurs gradually. "In complex systems ... both problems and solutions have a disconcerting tendency to evolve," the authors writes. "An organization where everyone does the same things in the same way--an efficient organization, in other words--is often ill-equipped to adapt to a changing world."

Adapting to the changing business environment requires companies to apply trial and error, which is pretty tough if efficiency measures have eliminated all error. To be able to adjust to disruptive change, some companies are taking a "good enough" approach to initiating projects with the goal of rapid improvement. "To succeed, we have to make it cool to fail in the right places, as long as it's recoverable, and as long as we learn from the failures and adjust," they write.

For more:
- see Casey Haskins and Peter Sims' post at Harvard Business Review

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