Organisational or Systemic Waste: Why Waste is Not Wasteful

Waste, in both organisations and systems, is often perceived negatively. We instinctively associate waste with inefficiency, lost resources, and missed opportunities. However, when viewed through the lens of systems theory, waste is not necessarily wasteful—it can, in fact, be a vital part of a larger, adaptive system. Understanding how waste functions within organisational or systemic contexts can provide insights into how seemingly redundant or inefficient elements contribute to the health and resilience of a system.

What is Organisational or Systemic Waste?

Organisational waste refers to any resources—time, energy, materials, or human capital—that appear to be expended without direct benefit to the system’s immediate goals. This includes inefficiencies like unused talent, overproduction, excess inventory, unnecessary meetings, or redundant processes. In systems theory, however, the concept of waste takes on a more nuanced meaning. Systems are complex, interdependent networks, and what appears to be waste at one level may actually be a necessary function for the system's long-term sustainability and adaptability.

Systems Theory and Waste: The Bigger Picture

Systems theory posits that everything in a system is interconnected, and seemingly isolated inefficiencies or redundancies may serve a higher purpose within the larger whole. A system, whether it be an organisation, a biological entity, or an ecosystem, depends on balance and flow between its components. Waste in this context can serve as a buffer, a form of feedback, or even as a driver of innovation and resilience.

In nature, for example, waste is not inherently bad. Fallen leaves in a forest may seem like waste to an outside observer, but they decompose into rich nutrients that feed the soil, fostering new growth. Similarly, in an organisation, what seems like a redundant process or an underutilised resource could be serving a hidden or delayed purpose.

Types of Organisational Waste: Not Always Wasteful

1. Redundancy and Backup

In systems theory, redundancy is often seen as a form of resilience. Having multiple paths to achieve the same goal ensures that when one pathway fails, another can compensate. In organisations, redundant processes or roles might seem like wasteful overlaps. However, these redundancies can serve as backups that protect the system from failure when disruptions occur. For example, having multiple team members trained in a critical skill ensures continuity if one person is unavailable, thus reducing the risk of operational breakdown.

2. Unused Talent and Slack Time

Human resources often have periods of downtime, which may be perceived as waste. However, systems theory suggests that slack—time or resources that are not fully utilised—can be beneficial. Slack time provides space for reflection, creativity, and innovation, allowing individuals to explore new ideas, develop skills, or find solutions to existing problems. Organisations that view downtime as waste often stifle creativity, whereas those that allow for slack may foster more innovation and long-term value.

3. Overproduction and Excess Capacity

In some systems, producing more than is immediately necessary can be viewed as wasteful, but it can also build flexibility into the system. In a manufacturing context, for instance, excess capacity can be a buffer against supply chain disruptions. Similarly, in an organisation, excess capacity in staff or resources might allow the system to quickly respond to unexpected opportunities or challenges. Systems that are tightly optimised and minimise waste at all costs may struggle to adapt when conditions change, while systems with some "slack" can remain resilient.

4. Inefficient Processes as Sources of Learning

In systems, inefficiencies can also serve as signals of deeper issues or opportunities for improvement. Inefficient processes or bottlenecks in an organisation may seem wasteful, but they often highlight areas where the system can evolve. By investigating why certain processes are inefficient, organisations can identify gaps in communication, resource allocation, or strategic planning. This feedback loop is essential for systemic growth and development.

Waste as a Catalyst for Innovation

One of the key insights from systems theory is that waste can be a catalyst for innovation. Many of the world’s greatest innovations have emerged from "waste"—time spent on side projects, materials discarded as irrelevant, or processes initially deemed unnecessary. Google's famous "20% time" policy, where employees were encouraged to spend 20% of their time working on personal projects unrelated to their core job functions, is a prime example. Projects like Gmail and Google Maps were developed during this “wasteful” time, highlighting how unstructured, seemingly non-productive work can lead to groundbreaking ideas.

Waste, when managed properly, can create the conditions for experimentation, adaptation, and creativity. By giving individuals and systems room to explore and make mistakes, new and unexpected solutions can emerge.

The Danger of Over-Optimisation

In the drive for efficiency, organisations often strive to eliminate all forms of waste. However, over-optimisation can lead to fragility. When systems are stripped of redundancy, slack, and excess capacity, they become more vulnerable to shocks. For instance, a supply chain optimised to the point where inventory levels are kept at zero can be completely disrupted by even a minor delay in production. In organisations, over-optimisation can lead to burnout, stifle creativity, and reduce the ability to adapt to new challenges.

Systems theory encourages organisations to strike a balance between efficiency and resilience. Some waste is necessary for the system to remain flexible, adaptive, and capable of responding to unforeseen circumstances. The challenge is identifying which types of waste are productive and which are not.

Reframing Waste as an Asset

The key takeaway from a systems theory perspective is that waste is not inherently wasteful. Instead, it should be viewed as part of a larger, dynamic system where it can play a vital role in maintaining the system's health. By shifting the mindset from seeing waste as something to eliminate to viewing it as a potential asset, organisations can unlock new ways to improve performance, foster innovation, and build resilience.

Here are a few strategies to help organisations reframe waste:

- Identify Functional Redundancies: Analyse whether redundancies serve a purpose, such as increasing system resilience or providing backup in case of failure. If they do, they may not need to be eliminated.

- Embrace Slack Time for Innovation: Allow employees downtime to think creatively, explore new ideas, and reflect. What may seem like wasted time can lead to breakthroughs.

- Use Inefficiencies as Feedback: Treat inefficiencies as learning opportunities. Investigate why certain processes are inefficient and use them as a starting point for improvement.

- Balance Efficiency with Flexibility: Avoid over-optimising the system to the point where it becomes rigid. Ensure there’s enough slack to respond to changing circumstances and opportunities.

While organisational and systemic waste is often viewed as a negative, systems theory reveals that waste can play a valuable role in building resilience, fostering innovation, and allowing for adaptability. Rather than striving to eliminate all waste, organisations should recognise the potential benefits that certain types of waste can bring. In doing so, they can create more dynamic, flexible, and creative systems that are better equipped to handle complexity and change.