Friday, March 27, 2009

Is "efficiency" efficient?

Or is "efficiency" a deficient and insufficient idea?

"Efficiency" is one of the slogan words of today, bandied about by left and right without any real thought about what it really means and what the consequences will be of gaining "efficiencies" in government and business?

On the right, it often means cutting costs to lower taxes without any considerations of what costs will be imposed elsewhere. All over it means cutting costs in business and government with any thought about the long-term consequences. In almost all cases it means doing more with fewer people. Efficiency often means lowest total cost, but at what cost.

Is it efficient for snow plows to go as fast as is safe and throw snow on the sidewalks, guaranteeing that many will not make any effort to clear their sidewalks of the extra, denser snow? Or is it more efficient to go slowly so that more people will clear their sidewalks of the natural snow?

Is the efficient employee the one who brusquely handles hundreds of customers a day who never return? Or is the efficient employee the one who generates repeat business by treating each customer as the only customer? Think Circuit City who laid off its high-paid clerks.

Is it more efficient for postal clerks to serve a maximum number of people or is it more efficient for them to treat each customer as if they are the only customer. At the post offices I visit, postal clerks almost always ask, "Anything else?" Generally, people will say no, but who knows who will say, "Yes, I would like some of the (new commemorative) stamps."

Suppose a call center rates each employee rated on number of calls per day, expecting them to be on phone constantly. What is cost in people on hold who wind up taking business elsewhere. The queuing theory that I remember said 85% capacity is generally most efficient. Think of full, stalled highways.

Whenever we consider getting "efficiencies" from some system, we should ask what will be the hidden costs to an organization, customers, or society. I guarantee that in most cases these costs will "bite" us later, resulting in higher costs than we would have had in the first place.