Tyranny of Efficiency

I stumbled across an old chart constructed for a 1996 proposal to ‘fix’ a major finance organization. This was in the heyday of Michael Hammer’s (MIT) Business Process Re-engineering a “great idea” that swept across American industry in the 90’s. The idea was to look at any organization as a ‘process’ that could be optimized, harmonized, homogenized, pasteurized, etc. As shown on the chart, the three mantras were cost, time and quality1 (i.e., you want it cheaper, faster and better).

Exhibit 1: Bubble chart used to sell Business Process Engineering activities. We'll consolidate, no wait, decentralize. It's a no-lose proposition that gives the management consultant license to walk across an organization wreaking havoc in the name of efficiency
You can see the love and attention put into this chart. Each of the major items (e.g., automation, process simplification) was like an epiphany: this was the first time the world would be exposed to the secret ingredients needed for greater business productivity. We could walk into any operation in the world and look through the lens of each of these items and give the manager and worker insights they were unable to glean from decades of working in their position. We were ‘outside’ daily operations and could see what was happening clearly while those involved were blinded by their situation.

I recall never even giving a second thought to the appropriateness of the chart or to our recommendations flowing from the chart. These were eternal truths that flowed from the pure logic of the proposition. Who wouldn’t want something cheaper, faster and better? Our recommendations were pure and only the innate inertia of the organization could keep them from being implemented. We were true believers.

Time has a way of unmasking a lie. As true believers we would have had dozens of examples and counter-examples to justify our position, and to refute the unbeliever. This same proposal was filled with amazing examples of cost savings realized by other (illustrative) clients. Resistance was branded (and treated) as the rumblings of the uneducated. Resisters came across as obstructionists (i.e., not team players). We would be sure to have the full support of the project ‘sponsors’ to bowl over any resistance. Our ideas were new and even though individuals could sense they were wrong, there wasn’t enough time to more fully articulate a defense.

We now recognize the innate gaps in Business Process Re-engineering; it’s neglect of implicit knowledge+, relationships, flexibility, and future-needs. More important is recognition of the ease with which this ‘great idea’ swept across American industry unopposed. It’s still around in a new quantitative guise (6-sigma+). Instead we now know there is will never be one great idea that is the salvation of business. We learn that top management and the highly educated too often seduced by these slights-of-hand.

...ask any magician (I have asked lots) and they will tell you that there is no better audience than a room full of scientists, academics, or, best of all, members of the high I.Q. club Mensa. Members of such cohorts, by virtue of their intelligence and education, think they will be better at discerning the secrets of the magician, but … they are easier to fool because in watching the tricks so intensely they more easily fall for the misdirection cues. Michael Schermer (2003). Why Smart People Believe Weird Things

Take a lesson from our R&D brethren in the pharmaceutical industry. Run clinical (behavioral) trials. Try your Next Great Idea on a limited scale and if it works, great. If not try something else. Test your theories on a limited basis, having in place protections to avoid killing the patient, and only when you see dramatic results that last can you say your (behavioral) intervention has succeeded and should be considered for broader adoption.

Editor's Picks for October, 2010

  • 1. Quality was measured in terms of reduced errors or rework. It was rarely considered in terms of the value of the financial advice available to the corporation.