Business Strategy: Why efficiency is killing business

by AB19 Mar 2016
Organisations need efficiency and about 80% of the time it has served us really well, said Dr Jason Fox, motivation strategy & design expert, and author of the new book ‘How to Lead a Quest: A handbook for pioneering executives’.

According to Fox, efficiency comes from the ability to recognise patterns, and as humans we are very good at codifying this information so that we can create cognitive shortcuts in the future.

The issue is that one would think with all these efficiencies we would have more time for more thorough thinking, more curiosity, more empathy, and the challenging of assumptions.

“There is this wonderful book by Daniel Kahneman called Thinking: Fast and Slow which talks about the dichotomy between fast thinking (that relies on the defaults that are established), and slower, more thorough thinking (that’s much more curious and challenging of assumptions),” said Dr Fox.

“One would think we have more time for the latter if we have our efficiency set up right, but what’s happening in businesses, particular in larger more mature organisations, is that they are becoming cursed with efficiency.”

Consequently, when senior leaders often get together to think about strategy, everyone is so busy that there is a really tight agenda, there are items that need to be decided, nobody has done any pre-thinking, and everyone is just getting by from “winging it”.

“When we are doing strategy well we need to decide the things that we want to stop doing so we can say yes to new things,” said Dr Fox.

“People avoid that tension by looking at the clock and saying ‘come on guys, let’s get back on track’ and then before you know it everybody has just defaulted to the most familiar and comfortable option that maximises harmony.”

Therefore, at the end of the day we are staring at a set of goals that looks eerily similar to last year’s goals, and calling it “good strategy”, he said.

“This is the same thing that happens when organisations lose touch with their customers. Nobody seeks to become irrelevant but we find ourselves facing irrelevance when we become too busy for meaningful progress.

“The pathway to irrelevance is littered with reasonable decisions. These are safe and prudent decisions where you have got past precedent that suggests this is a reasonable path of action.

“It’s really easy to lock ourselves into a safe cycle of default thinking that is much more efficient, than to pioneer, be curious and to explore, and that is why efficiency is killing business.”