At the End of the Day

Efficiency is overrated, and applied to the wrong things

One of the ways to get fired in short order from a large multinational is to observe – when one of the bean-counters inevitably raises the question of “efficiency” – that you think there are far more important things the company hasn’t got right. When a number-tumbler talks efficiency, he or she means cost control: of raw materials, of product manufacture, of employees, of delivery, of getting distribution, and of office/factory per square foot rent and productivity ROI on it.

If you were to ask me where efficiency sits in the top 10 of important factors for a new business, then I’d say – depending on whether it was in services or manufacturing – somewhere between 6 and 8.

These first 5 things are infinitely more important.

  • A mutualised model and culture
  • A good idea that adds obvious value
  • A clearly defined and quantified target audience
  • Client transparency at all times
  • Staff who agree wholeheartedly with 1-4

Efficiency is a relative thing that comes in many forms – margin maintenance, speed of production, delivery to the customer and so forth. If you get the first five features right, efficiency will follow anyway. It’s one of those things everyone claims and – especially over a certain size – very few people deliver.

Too many businesses spout bollocks nonstop: “passionate about lavatory disposables”. If you have to say it, you don’t mean it.

Equally, too many managers read a book or two at business school, and so insist on having Mission Statements. Nine out of ten of these begin ‘to be a world class’ or ‘to be number one’, ‘to be customer-facing at all times’ etc etc. It’s just more horseshit. Every business in the world should have one simple goal: to be better than the competition at things that matter to the customer.

The problem with ‘efficiency’ in the context of a commercial endeavour is that is contains within it the erroneous assumption of business being somehow divorced from the rest of society, culture and civilisation. It was the useful idiot Friedman who began the floating of this myth – catastrophically, around the same time as the useless idiot Theodore Levitt proposed the entirely false idea of a ‘global village’.

From those two flawed theories came the dehumanised multinational business landscape we see around us today. For Friedman suggested that the only responsibility of a business was to its shareholders (as if they might be taking on the responsibility for healing and educating workforces) while Levitt insisted that the same product formulation should be marketed in the same way everywhere. These two ideas together persuaded large corporations that they were above the law, and had conquered the reality of varietal cultures across the globe.

Efficiency in this context of insane denial went from being the best way to serve the customer to being a foolproof way to force the customer into a compromised choice. From there it was only a small step to demanding the customer buy a poorly designed product or service in order that the sovereign shareholder would remain content in the value-growth of his shareholding.

Microsoft forced the consumer to buy the Windows 8 operating system on that basis. Jobs taken away from Americans to be sourced overseas thus produced (1) unemployed citizens (2) thoroughly dissatisfied customers and (3) colonially forced labour in Asia which in turn made for (4) anger among customers at underperforming products using circuit boards of lousy durability. Only when things looked like being converted into a share-price wobble did Microsoft ditch 8 and move straight to 10.

All these results are to a greater or lesser extent probable outcomes from Bourse-financed globalised neoliberal capitalism that increasingly sees itself as not just separate from but also above the needs of society’s citizens.

It is the age-old difference noted many times before between living to work and working to live. The overwhelming majority of Homo sapiens works to live – and is better balanced as a result of that attitude.

There are only two types of efficiency we should demand: that of the bureaucracy that serves the People (and wherever you go on Planet Earth, it is absent); and that of a socio-economic system that produces the greatest possible fulfilment for the greatest number of citizens (see foregoing observation upon bureaucracy re absenteeism).

A narrow definition of efficiency that delivers untold wealth to the few and misery to the many is by definition dysfunctional, and doomed to fail.

6 thoughts on “At the End of the Day

  1. Total agreement from me, for what it’s worth. I joined ‘management’ from a security perspective many years ago and I applied a simple criterion – Security is the avoidance of loss. A single stupid idea from higher management (and Christ on a bike there were so many) would be extremely costly in so many ways: the idea itself was seldom thought through properly before implementation, with all the consequential loss that this involved; but what was also missed was the sheer quantity of time wasted by staff moaning and dripping on about it. All stood around the copier/coffee machine/water dispenser drawing dark conclusions about the people who were paid daft amounts of money to guide the business, time which could and should have been better employed in more productive directions. All loss to the company … and the buggers who were guilty of this could not have cared less even if they understood, as long as their expenses chitties were in on time. Your humble correspondent harboured v. dark thoughts about these people at the time; I suspect that this may be because I had but recently left a sphere of operations where a prompt and robustly physical explanation of one’s deficiencies was very much the order of the day. I am given to understand that this sort of management technique is largely frowned upon these days.

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  2. Another great piece John. I was in computer operations at the time the beancounters took over and I am certain that the phrase ‘our people are our biggest asset’ arrived at the very same moment that the top business elites decided that payroll was an unwarranted overhead….. And fair pay for a job well done became a quaint idea…

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  3. Great reading- I find it hard to put my finger on the moment when jolly old Personnel became sinister Human Resources- floating up to the surface with the rest of the scum in marketing and sales.

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  4. In the late 70’s the UK Government, through a wholly owned company bought minority stakes into various UK Computer Companies.

    They required all these Co’s to attend frequent management type meetings, one was they were each going to present their individual ‘5 Year Plan’, after a couple of presentations Barney Gibbons the then MD of CAP got up and apologised because he had been to busy running his org to get the Plan developed, silence reigned until Gower of Systime a Northern hardware company chirped up and words to the effect no worries Barney borrow mine!

    It confirmed my aversion to self serving time wasting talking shops.

    No my co was not party to this group although I did have dealings with a part of this government inspired waste of money later.

    Much to my cost.

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  5. I once worked for a company which a chap had started in his garage, & built into a healthy nationwide business.
    When times were tough, prices were trimmed, & competetiveness maintained. When sales were good, bonuses flowed.
    The boss sold to a conglomerate & the bean counters arrived. The effects were swift: product quality dropped, prices were pushed up & became more rigid & the pressures from on high for sales targets became more strident.

    From being a very healthy company, it’s now a zombie: so deep in debt to the banks they can’t let it go broke.
    So deep in debt are the banks, they can’t take the hit to their books, if I understand the situation correctly.
    They phoned me a few years ago to return & sort a department out & I found a management team in place from a completely unrelated, though allied, industry. I worked a fortnight, saw it was hopeless & left.
    I didn’t bother to invoice them.
    They limp along, still a TV advertised national name. God alone & the book keepers know how, just waiting for the stuff to hit the fan.

    A perfect little metaphor for UK PLC.
    JD.

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