The Efficiency Trap

Over the past 25 years, digital technology has changed this world beyond recognition. And if there’s one place where this is evident, it’s in manufacturing.

You only you only have to go back 40 years in time to see the tremendous improvements that have been made in i.e., car manufacturing. Today cars are designed and built much faster. They are much more reliable and technologically advanced. They are much safer and environmentally friendly, they last longer and they don’t cost much more than 40 years ago. On top of that, they can be built in very large numbers using robots which prevent humans from being subjected to monotonous and often dangerous and unhealthy work conditions. Nearly all of these improvements can be directly credited to developments in technology, or more specifically digital technology. Digital technology has opened the door to an explosion of efficiency improvements. From a manufacturing perspective, digital technology is the best thing that ever happened, or isn’t it?

Cars have become a commodity product. And when things become commodities, their price becomes a major selling point. Hence the reason why improving efficiency is a priority in manufacturing. It brings down cost and therewith improves the competitive advantage of an organisation. However, improving efficiency has its drawbacks. We can bring cost down but it has a limit, we can never make it zero. We need to recognise that using digital technology solely as and efficiency improvement tool, is a zero-winner game. It is a race to the bottom that eventually leads to disaster. It is called “The Efficiency Trap”.

Then, how should we exploit the opportunities of technology. Efficiency improvement is a form of innovation called “Innovative Building”. It is when we improve our current products, services or business models. Yet we must understand that true innovations can only come from “Innovative Shaping”. This is when we use our imagination to envision a new and better future and use new technologies and insights to create truly game changing products that fulfil human needs in a totally unprecedented way. This happened when the Wright brothers watched seagulls and refused to accept that humans can’t fly. It happened when Dr. Martin Luther King refused to accept that skin colour is a reason to separate humans. And this only happens when people dare to leave the past behind and venture boldly into the unknown with curiosity, creativity and a strong disregard for conventions, rules and risk. It happens when we regain the Hunter Gatherer mentality.

Evidently this not only requires technology, it also requires new thinking, principles, methods and frameworks to organise our companies and society. However, many modern organisations are still stuck in the dogma of hierarchy, structure, process and control. They often succumb to the Efficiency Trap. Such organisations are ill equipped to allow imagination and envisioning. They are in fact the antagonist of the Hunter Gatherer mentality. It is for this reason that we, and with us many other scholars, are convinced a drastic change in our organisations is a vital first step before we can rise to the next level.

SWARM?Organisations?are?more?enjoyable,?sustainable?and?profitable?for?people?and?planet.?They?improve?innovation by?taking?lessons?from?the?self-organising?principles?of?Nature. If you like to know how we do this, just give us call!

Evert Bleijenberg MBA