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THE INC. LIFE

Let’s Cut to the Chase: The Era of Efficiency Is Over

Efficiency has served us well, but now its returns are diminishing.

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BY Tim Leberecht - 07 Mar 2019

era of efficiency

PHOTO CREDIT: Getty Images

The Italian designer Brunello Cucinelli, creator of the eponymous clothing line, is known not only for beautiful cashmere clothes but also his company's office culture, especially the on-site restaurant where workers can enjoy extended, 90-minute lunch breaks. Alternatively, they may also eat at home with their families. And afterwards, they are free to take a power nap or doze in the nearby piazza, the gardens, or their offices. "Beauty can save the world," the Cucinelli web site quotes Dostoevsky, and it also speaks of the need for "pleasant peripheries"--an almost subversive term in a business environment that usually dismisses anything but the core.

Cucinelli is a family-run and self-described "humanist" business, and its whimsical culture is perhaps less surprising than it would be at a robotics manufacturer. But there are still lessons to be learned here. It's not just the emphasis on quality food and aesthetics, the point is rather to make time for such leisure in the first place and consider it an integral part of the work.

The price for efficiency is too high

Some might scoff at this attitude and label it an inefficiency that one must be able to afford. But the opposite is the case: we can no longer afford efficiency.

To be fair, efficiency once served us well. It was the engine behind the industrial age, and as we have been shifting to the post-industrial one, it has helped us squeeze the last drop out of a tightening system. But with top-line growth becoming paramount for most businesses, it is time to acknowledge that efficiency alone is producing diminishing returns.

There are a number of reasons for this:

  • Efficiency is machine's turf. Soon, companies will automate everything that can be automated, which is everything that can be done more efficiently. Simply put, machines will become unbeatable when it comes to efficiency. Conversely, we humans must become better at everything not centered on efficiency; in fact, we must become masters at inefficiency. It is our one remaining competitive advantage.
  • Efficiency kills innovation. Leaders often demand actionable outcomes. They ask, "What problem is this going to solve?" But creativity doesn't work that way. It is not interested in problem-solving, it is interested in creating another world. It is not interested in actionable outcomes, in fact, it aims for the very opposite: impossible outcomes. Efficiency, however, narrows the space for exploration, for wandering and discovery. There is no innovation without waste.
  • Efficiency is the enemy of trust. The trust researcher Rachel Botsman argues that efficiency deprives humans of their mandate to design their own work; it essentially negates the opportunity for people to decide themselves how to produce work that has value. They feel less trusted, so they will trust less. Intrinsic motivation, the most powerful form of motivation, requires imagination and agency. Efficiency is the opposite of both.
  • Efficiency is the highest possible opportunity cost. Efficiency means you optimize existing processes but lack the time to imagine alternatives from scratch. It therefore undermines your company's ability to plot its own future. This is the problem of all legacy industries. Take the German car makers, who long neglected the need to imagine a new world of mobility and instead sought to improve an already near-perfect system. It took them some time to realize they may have missed out on a sea change, and now it might be too late to catch up.
  • Efficiency hinders learning, because it reduces it to actionable insights that insist on generating short-term returns rather than yielding profound insights that truly transform us (and the systems we operate in).
  • Efficiency is poison to passion, the motor of entrepreneurship. If you burn for something, there will usually be a significant amount of exhaust. Without such excess, it will be hard to sustain the energy needed to achieve something extraordinary
  • Efficiency hurts customer and employer care. Online retailer Zappos famously rewards its customer service reps for spending more and not less time with customers--at their discretion. There's been a lot of discussion lately about the re-humanization of work, that is, putting the human at the center of all company operations, as customer and employee. If that is true, though, efficiency can't be the guard rail. Showing our humanity means exercising discretion. Whether in hospitals, retail stores, or enterprise sales, companies whose care for people is more than just lip service must move beyond efficiency. Efficiency is the enemy of love.

So what comes after efficiency? Clearly, is not desirable to throw the baby out with the bathwater and dwell in limitless inefficiencies. Mindlessly wasting resources is neither respectful to your employees nor your customers, and indeed it is very much the opposite of care.

Let's explore a third way: strategic inefficiency.

Embrace strategic inefficiency

Strategic inefficiency means to identify those touchpoints during the employee and customer experience where you must sidestep efficiency thinking and be generous with your time, attention, and emotions for the benefit of a lasting relationship with your constituents.

Strategic inefficiency means to allow for white or even negative space, for breaks, pauses, and (mind)wanderings, for exactly the kind of "pleasant peripheries" that Cucinelli has instituted. If you want your employees to come up with something, ask them to do nothing.

Strategic inefficiency is also at the core of "moonshot thinking," the secret sauce of many disruptive innovations. At Alphabet's extreme R&D unit, X - The Moonshot Factory, teams are rewarded both for success but also for the projects that fail. By allowing space for failure, employees are encouraged to take risks and experiment.

Furthermore, strategic inefficiency is the hallmark of ecosystems, which have been a much written-about trope, especially "innovation ecosystems." They are popular because they allow for a more flexible allocation of resources, network effects, and "co-opetition" (project-based partnerships with competitors). But they thrive only if what you put into them is a surplus of attention, care, and nurturing, without the need for immediate ROI.

To date we have used digital technology primarily to foster and scale efficiencies, to speed up processes, optimize behaviors, and maximize our time. The big opportunity ahead is to use technology, and specifically AI, for strategic inefficiency.

Efficiency means doing the same with less. The future, however, belongs to those who can make a difference by doing things differently--if not to say, beautifully.

 

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