The Myth of Efficiency

By James Kwak

Planet Money’s latest podcast features an interview with Matt LeBlanc, an efficiency expert. LeBlanc’s job is to observe various processes and figure out ways to make them more efficient. The idea, is that by increasing efficiency companies can save money, which ends up helping everyone through higher productivity and lower prices, even if some people get laid off along the way.

I am as much of a compulsive efficiency nerd as anyone (well, almost anyone). LeBlanc lays out his toiletries in the morning in a specific order in order to minimize transition time. When I lived in Berkeley, I figured out the fastest way to drive to school. The various possible routes were different paths through a grid that included some stop signs and some street lights; the best  route involved slowing down at one intersection, looking to see if what color the light at an intersection was, and making a decision based on that. On one of my previous blogs I wrote a post about the quickest way to get through a security line at an airport. (Tip #1: Don’t unload your bags into the plastic trays until shortly before you reach the X-ray scanner. Your bags were designed to help you carry a lot of stuff with two hands; if you unpack them early, you have to move your unpacked stuff with the same two hands. Tip #2: Put your bags through the scanner before your computer and toiletries bag; that way you can have your bags ready and waiting on the other end so you can pick up the computer and slide it into your bag in one motion.) One of my pet peeves is businesspeople who fly frequently, make faces when standing behind families in the security line, and then slow down the line themselves because they haven’t figured out how to get their stuff onto the conveyor belt immediately after the person in front of them.

But I’ve become very skeptical of the simple argument for efficiency studies. (To be fair, LeBlanc is probably equally skeptical; but the podcast only put forward the simple argument.) The idea is that time has a monetary value (say, the per-hour employment costs of each employee), and if you save time, you save money. One example that LeBlanc mentions is moving printers. It seems to make sense on its face. You spend time walking to and from the printer. Therefore, printers should be located to minimize the total time people spend in transit, which could mean moving the printer closer to the heavy users of printing. Then those people can spend more time at their desks being productive.

But there is a serious fallacy in this argument: the assumption that the constraint on productivity is time at your desk. Let’s leave aside the issue of whether you are productive walking to the printer. The more serious issue is that you aren’t equally productive the whole time you sit at your desk. What if you spend your extra two minutes (in reduced time picking up printouts) at I Can Has Cheezburger?

Well, the efficiency expert may counter, all I need to assume is that a fixed percentage of your desk time is productive. But that’s still a big assumption. Maybe the real constraint on your daily productivity is mental energy, and you only have enough mental energy to do four hours of real work a day. Then your extra two minutes will all go to looking at pictures of cats with ungrammatical captions. Even more likely, maybe the real constraint is your internal sense of what a reasonable day’s work is. Many of us have either left early because we got a lot done or stayed late because we got little done. Maybe the real constraint is how much work your supervisor expects you to do. Maybe the real constraint is how much your colleagues get done, either for process reasons or simply because workplace norms are set by group as a whole. Maybe the real constraint is your motivation level. Maybe the real constraint is customer demand. (Another of LeBlanc’s examples is a cafe where the barista only spends half his time actually making a drink; the most plausible explanation is that you need to staff for potential demand, but actual demand fluctuates and is generally below potential demand.)

All of these possibilities seem much more likely to me than the idea that the limiting constraint is time spent at your desk. And if any of them is true, then moving the printer has gained you nothing.

You might think this is less true of more routine tasks, like moving and unpacking boxes (another LeBlanc example). Maybe, but I’m still skeptical. Let’s say you figure out a way to unload a truck, unpack the boxes, and put the stuff where it should go in half the time as before. Will the same people get twice as much done? Maybe, but I doubt it. Again, this assumes that the binding constraint on productivity is time. What if the work is physically strenuous, and while the old process included a lot of unnecessary pauses, those pauses were necessary to allow people enough time to rest? Then if you try to push them twice as hard, using a more efficient process, their bodies will break down. (If you could actually cut the effort in half, though, you might be onto something.) What if the limiting constraint is boredom: people just can’t work at peak efficiency for eight hours straight, and the old process with its delays gave them time to chat, look around, and relax a bit while working?

In many tasks, there is probably some room for efficiency improvement that can actually result in sustained higher productivity.  But the benefits are only a fraction of the theoretical benefits you get by multiplying time savings by the money value of time.

BlackBerry (and its competitors) have made a fortune off the myth of efficiency. The reason BlackBerry is so popular with corporations is the idea that now people can be working while waiting in lines at the airport.* (Judging from the ads, this is the core use case.) That time is now money, at least according to the efficiency theory. But what are people doing? They are clearing out emails. If there is any benefit to anyone, it is that they will spend a little less time in the evening clearing out emails on their computers; but they won’t be doing any other work, because the length of their workday isn’t set by a clock, but by their sense of when they’ve done enough for the day. (For a lot of people, their willingness to knock off at the end of the day is related to the amount of email left in their inboxes.)

In addition, a lot of the supposed BlackBerry benefit is destroyed by four factors. First, working on a BlackBerry is less efficient than working on a computer (it takes more time to get the same stuff done), so some of your benefit (time waiting in line) is wasted in lower productivity. Second, checking your email constantly causes you to respond to emails and deal with issues that you could have simply ignored had you waited until you got home or to your hotel (since questions or issues posed in email often resolve themselves if you simply wait a few hours). Third, having a BlackBerry causes you to spend more time on email than you need to, because you can. Fourth, the quality of work you do on a BlackBerry is lower than on a computer. For example, with a computer, you can answer a question by finding a specific data source and actually finding the answer; with a BlackBerry, you are more likely to give an unhelpful answer like “try looking at source X,” which you may have misidentified, and which is less helpful to the person asking the question. But people lobby their companies to pay for their BlackBerrys because they want them, and companies often agree because they think they’re getting a more efficient workforce.

In case you’re wondering, I have no BlackBerry and no similar device for checking email while waiting in airport lines. (My dumbphone can, in a real pinch, check my email, but it’s so bad at it I rarely use it.)

* Obviously, there are some professions where constant accessibility is an issue–say, IT support personnel. The vast majority of BlackBerry users do not fit into this category.

Update: I should have emphasized that I agree with the basic point that there are vast, vast inefficiencies in the economy that, if eliminated, could have enormous benefits for all of us. In particular, we could make much more use of automation, especially through the expanded use of software (if we could find software companies that make software that works well, that is). Completely eliminating human touches reduces effort and takes all those other binding constraints I mentioned above off the table. Software can also sift through vast numbers of similar cases and determine which ones require skilled human intervention and which ones can be handled automatically according to some set of rules. We have made enormous advances in automation of manufacturing over the last century; I think we can make analogous, though smaller, gains through the automation of many service industries. What I’m more skeptical of are time-and-motion efficiency gains, especially when it comes to knowledge workers.

54 thoughts on “The Myth of Efficiency

  1. James, you are spot on. I’m an academic these days, but I spent 25 years as corporate consultant back in the days when consulting was actually about improving operations or products. (today it’s only about M&A, finance, and IT). Anyway, the far, far more valuable way to improve productivity is to ask exactly what needs to be done and what doesn’t. Trying to cut a few minutes here-and-there to save “time” doesn’t translate into profits. It just ends up helping folks do stuff faster, but if you’re doing the wrong stuff, who cares if it’s faster?

  2. Additionally, efficiency is not rewarded under most firms’ structures. For example, if I am penultimately efficient and can complete, in 2 hours, the same tasks that other take 8 hours to complete, I still receive equal compensation. For some tenuous reason a critical mass believes that employees who get more done in less time should do more work. As such, this promotes INEFFICIENCY, as employees essentially race to the bottom to do the least. But, IF hyper-efficient, semi-robotic, quasi-humans can complete their tasks such that they have additional time available, they should be allowed to pursue additional compensatory opportunities. That would be a truly efficient market (aka pipedream).

  3. I agree with some of your points, but I think you miss the essential utility of a Blackberry. Most of the time answering emails, is simply a matter of saying yes/no or you need to see so-and-so. I get lots of emails which are request for meetings and simply forward to an assistant and say “arrange.” If you have the type of job where you’re not at your desk, but are running around town to meetings, this works quite well and is better than a phone. Voicemail is a waste of time because of all the time you need to punch in codes, then you need a paper and pen to stuff down and then you usually get their voicemail when you call back and need to explain what your call is about. I refuse to use voicemail (except for my personal cell phone; I can’t make that argument with my wife). An email gives me an electronic record of the interaction that I can review later and retain for archival purposes. Phone calls are lost.

    The saving minutes is pretty useless and I agree with you there. The missing piece is that from a business standpoint, productivity only goes up if you achieve more output, rather than merely saving time (as a sidenote, saving time on personal stuff does improve productivity, because that’s what I want more of when I’m not working – time). So if you shave off 15 minutes a day by moving printers, it only matters if there’s something else achievable in that timeframe. If there’s not, it’s wasted. For most business processes today, most people’s productivity is very dependent on other people’s productivity (who are somewhere else). This requires re-egineering the whole organziation to really see substantial improvement and with so many interacting parts it’s hard to optimize everything for maximal gains. Even then, some new gadget or piece of software available within 6 months will likely make the whole exercise obsolete anyway.

  4. As I write this comment I wish I was writing my dissertation.

    Given the popularity of self-constraint mechanisms, I think that the role of the blackberry, the well-located printers, and the last software I downloaded – Temptation Blocker, which allows me to block whatever programs I want in my computer for any amount of time – is to “remove excuses” not to work.

    My blackberry keeps me from checking email in my computer while I run regressions; the laser jet printer I bought prevents me from walking to the printers of the Department of Economics every time I find a paper I am interested in; and google reader keeps me from browsing the dozens of blogs that I read separately.

    My point is that some of us are more productive when we are out of excuses or interesting alternatives and in that sense, these improvements help.

    P.S. Temptation blocker is free and has had a huge impact on my productivity. Every day, I have 5 2-hour periods in which the only programs that I can run in my computer are some statistical software and a word processor.

  5. All of this seems to miss the point that no system – human, mechanical, electrical or etherial – works best at 100% of capacity. There is a point of diminishing returns in trying to do more with less, even without such factors as distractions and fatigue.

    I find the recent productivity increases in American corporations to be not only unsustainable, but alarming.


  6. I have to agree with James. After 30 years of figuring out how to have the maximum number of balls in the air at once with the minimum overhead, I realized that one of the biggest impediments to actually getting things done is multitasking. Particuarly in the high-tech field, this is in effect trying to make a human work like a computer…a machine. The most productive times for a human are often those times when one can sit back and simply think about one thing…deeply…for an extended period. We after all possess the unique ability of being able to strategize and to imagine. Moving too fast, being “busy”, prevents us from doing this.
    I also wonder if this emphasis on mulitasking is a conceit of the information age. Crafts, for example, emphasize presence in the current task as the foundation of quality.

  7. Absolutely. I used to work for an instrumentation firm that reserved 20% of its employee’s time for their own pursuits and personal growth. Wonderful place to work, wonderful things being created. Then we were bought out by a more cost-cutting organization that regularly expected 120% time from us. Result? Lots of motion, a brief increase in output, but ultimately burnout and departure of key personnel.
    The engineering profession is now recognizing that what appears to be inefficient operation of natural systems is actually the way in which the system retains its robustness and fault-tolerance. Redundancy, incomplete utilization, and fuzzy decision schemes are the way to make reliable complex systems. What we disdain as “bureaucracy” actually has a benefit, within reason.

  8. > Another of LeBlanc’s examples is a cafe where the
    > barista only spends half his time actually making a
    > drink; the most plausible explanation is that you
    > need to staff for potential demand,
    > but actual demand fluctuates and is generally
    > below potential demand.

    Yes .. but that’s where the manager comes in. A good manager will “multitask” the staff, and have them cleaning, restocking, rearranging .. making the place presentable after the last “rush”. Good managers also don’t overstaff, so that there are unnecessary people standing around behind the counter when they aren’t needed. This doesn’t take an “efficiency expert” to figure out .. just a good “old fashioned”, time-is-money, sort of person in the manager’s job.

    > and deal with issues that you could have simply ignored had
    > you waited until you got home

    James Kwak may have this luxury, but lots of real people don’t.

    The issue that didn’t come up in this article, and only hinted at in the interview, is “overstaffing”. Many organizations run at 30% overstaffing for various reasons. A more effective workforce would allow them to reduce headcount, and reduce operating expenses. If you notice, a number of industries have trimmed back staff in thr 30% range. While perhaps not all of these people were “deadwood”, it seems that most of these organizations can effectively downsize and still operate successfully.

  9. Individual “efficiency” is largely irrelevant in most most productive systems (i.e., resources working together to produce a desired result). The constraint in the system is the most heavily loaded resource; the system cannot produce more than the critical resource can produce. From a systemic productivity point of view, increased “efficiency” of any non-constraining resource(s)in the system does not add anything to productivity, or economic benefit. “No man is an island.”

  10. Not to mention that a hidden cost of ‘efficiency’ tends to be increased risk of ‘blowing up’, as pointed out by Nassim Taleb and others…

  11. I guess corporate life has changed since my day. During my three years in a giant media conglomerate, the biggest challenge was making available work last an entire day, week, month. I finally quit because it seemed only a matter of time for the company to cut staff by fifty percent. Ten or fifteen years later, they finally did.

  12. And then there’s the Big Lie of all of this, that every kind of “efficiency”, including how technology was going was going to liberate us from work, would free up all of society for far more leisure time. We’d all be working just a few hours a week.

    That should in fact long since have been possible by now, and that’s what “capitalism” promised. That’s what was going to trickle down if we simply allowed a profit-based system to exist.

    But no, it was all a Big Lie. Nothing was ever meant to trickle down. The wealth, the benefits, the potential time saving, every aspect of efficiency, was never intended to be distributed among those whose work made it possible.

    Rather, it was all to be monopolized by rentiers who had set up toll booths at strategic points. And the efficiency space freed up was used to liquidate jobs completely instead of making it possible for them to pay a living wage for fewer hours worked, the way the original promise lied that it would.

  13. Very interesting point about robustness and fault tolerance oregano. Do you have any links, names, book titles, anything? I’d like to find out more.

  14. Ordinary proles like myself might look upon efficiency/productivity efforts a little less skeptically if the benefits were shared. However, for quite a while now it has meant nothing more than fewer people doing more work for less money.

  15. Yes — it is like visualizing in sports. Everything flows smoothly from the imagination into actuality. For me, taking time to think about my day’s work before I begin is the most productive thing I do.

  16. The point is that moving the printer closer saves you x minutes a day in walking time to the printer. Now you can choose to use those x minutes as you wish. You may choose to spend it doing the walk between your desk and the printer. But if you choose to use it otherwise then revealed preference tells us that you are better off now. And if you choose to use even some proportion of those x minutes working then your employer is better off. And if you instead leave x minutes earlier from the office then your employer is also better off as you have probably completed your tasks earlier so that they can be responded to, and at worst will be turning off your computer earlier and saving electricity.

  17. Austin,
    In my company, that’s how people move up: they digest their initial assignments easily and quickly, take on a bit more, digest that, and then get [more] higher level work and a promotion. That seems to be a reasonable additional compensatory mechanism, no?

  18. Yeah, assuming that’s the way it works. But if you look at his description of an efficient person–semi-robotic, etc–perhaps management sees “an efficient type” and assumes this person is of limited capacity, a cog. You need to be able to see efficiency as a product of intelligence, not the equivalent of blue collar line work.

    The BS artist meanwhile has, I suppose, “people skills.”

    I’ve worked in very pressed environments, where I’ve been asked to do too much, delivered it under duress nevertheless, and think there’s some merit to his interpretation.

  19. I like your arguments.
    I think an interesting one could be put when looking at differences in productivity between different groups of people, nations being the best example. While e.g. Japanese work very long hours, have only short vacations etc., it does not make them that much or at all more efficient, right? Although they can be easily compared (their education level, economy as a whole and so on) with some much more laid back Europeans.

  20. In regards to Blackberrys – people are often so distracted by them in meetings or other engagements that they hamper production by being “out to lunch” as it were.

    But “efficiency” is similar to “economics” in that there are so many interacting factors that essentially you start getting in “chaos theory”…

  21. I can set up a sprinkler to water my gardens. But when I carry the water can back and forth from the faucet, and water by hand, I have the control of watering individual plants. And I gain the work, which I need for physical health. And the joy of knowing the entire garden well.

    I can buy plates on Amazon that have been manufactured in China, or plates made by my potter friend. One is slightly cheaper and supposedly more efficient. But the second adds money to the local economy, helps keep another person employed, and doesn’t depend on the global shipping.

    I’m all for efficiency, as long as the real costs — local jobs, benefits of physical work, etc., are actually included in the calculations.

    Currently, we live in a world where the benefits of more efficiency clash with the benefits of higher employment; and impact on climate from transportation aren’t included in the formulas of real cost.

  22. I thought that this type of efficiency expert was obsolete. This type of analysis was certainly valuable to Henry Ford 100 years ago.

    These ideas still have value in the improvement of performance of computers. The effort to move from one task to another is called a context switch. Reducing the number context switches or reducing cost of each context switch is the focus of many optimization efforts.

    That is design of a machine. Machines do more routine tasks than ever. The value of humans is ideas that machines can’t create. Quantitative measures of efficiency are counterproductive.

    The low cost methods of issueing an interruption (mobile phone, e-mail, IM, twitter) impose a high cost on the receiver of that interruption. These interruptions do not add value. Faster processing of the interruptions are phony efficiency.

  23. what about the benefits of reading each others print-outs? informal communication across silos,etc,etc,etc.

  24. “Let’s leave aside the issue of whether you are productive walking to the printer”
    The one thing that drives me nuts about economists. I am certainly more productive because of my interactions while gabbing to office mates while on the way to the printer. Most offices require a number of people to get things ACCOMPLISHED. If they don’t like you, your stuff goes to the bottom of the tray.

  25. 1) At some point higher efficiency equals higher fragility. Appropriate redundancy and some inefficiencies actually increase resilience. So in the perfect world of the efficiency expert, more efficiency equals more profit. In the real world, more efficiency can lead to higher costs in disruptive situations that cancel out or exceed savings during more stable times.

    2) Slavish efficiency can result in losses related to opportunity costs (the chance discussion that doesn’t happen because I’m stuck at my desk) or externalities (my health declines because I’ve turned in to a pasty faced slug stuck at my desk).

    3) If I’m so busy being efficient that I don’t have time to clear my head and think, what’s the value of my efficiency? Constant upgrades to software or hardware that are supposed to increase efficiency can actually prevent us from gaining sufficient proficiency to take full advantage of the technology in the first place. You’re sold the bells and whistles of the new technology but then have to dedicate a vast portion of your life to mastering it only to have the bloody thing upgraded in the name of efficiency.

  26. “A good manager will “multitask” the staff, and have them cleaning, restocking, rearranging. . . ”

    This will make you a “bad” manager in the employees eyes though. Let me be more clear: there is a fine line between “cleaning up after a rush” and “rearranging” just to look busy or to be “busy”. I really think that, using the barista example, if your coffee shop is slow, and clean, and fully stocked, letting your employees stand around is an essential part to retention and employee happiness, not to mention customer service.

    I used to work in a cd shop, and a lot of time we spent “not working” was talking about Music, and generally keeping spirits up. We were educating ourselves about the “product” we sold, and keeping ourselves in good spirits for customers. Now, we had a good manager who understood this, but he quit, then, we got a new manager who was the “restock/rearrange” style, where if you weren’t doing something with your hands, you were “wasting time”. Morale fell, customer service fell, and keeping the store clean and arranged became a chore, rather than something you did to keep the store easily accessable. A great manager knows how to get employees to do what they are supposed to, while allowing them to relax when it’s warranted.

  27. Couldn’t agree more – in fact, I addressed the issue of multitasking in our own blog a little while ago ( It is a mistake to believe that people can be made efficient by simply loading them down with devices and methods to deliver them everything everywhere. Teaching discretion and prioritisation, and focussing on outcomes not process, is simpler and more effective.

  28. Another thing to consider is that research is starting to show that movement = stimulation for the brain. Anecdotally, a lot of office workers talk of “needing to get up and move around” to keep themselves awake and/or alert. I myself have found that these short trips help me “clear my head” or ponder a project over better. Perhaps positioning everything optimally so people move around less has hidden productivity costs if it negatively affects this phenomenon.

  29. Decades ago I worked at a golf shirt warehousev. The warehouse manager said he’d had time-study people through and they’d set workrates that his older workers could not maintain. So he had to organize work so the older workers were doing jobs that were off the clock. Why did he do this? Because his older workers — while they were not as fast — knew the work, did not make mistakes, and were completely loyal. They made it to work every day, even through snow storms. The young, fast workers made more mistakes, skipped work due to hangovers, quit on him and were in every way less reliable.

  30. Decades ago I worked at a golf shirt warehouse. The warehouse manager said he’d had time-study people through and they’d set workrates that his older workers could not maintain. So he had to organize work so the older workers were doing jobs that were off the clock. Why did he do this? Because his older workers — while they were not as fast — knew the work, did not make mistakes, and were completely loyal. They made it to work every day, even through snow storms. The young, fast workers made more mistakes, skipped work due to hangovers, quit on him and were in every way less reliable.

  31. Well said. The series “Undercover CEO” (I think that’s its name) provides a fascinating example of what Mr. Martins approach produces.

    One of the top execs of Waste Management found out that a major efficiency program he created and implemented had left employees with no time for toilet breaks. He found out the hard way while undercover. He was working on a truck collecting waste. When he asked about a toilet break, the driver, female, handed him a tin can and told him to go to the other side of the truck. He thought she was joking. She wasn’t.

    If you can find this episode on-line or in re-runs, I strongly recommend it. It’s a great example of what the quest for “efficiency” can produce.

    For the recored, I’m a founding partner of a 17 year old consulting firm. I know what it takes to make payroll and what it takes to make it rain. A long time ago I realized that “efficiency” for its own sake is pointless and often destructive.

  32. One can be efficient with things — but one needs to be effective with people. When companies remember that keeping the people working for them happy and productive is what’s important, then they can forget worrying about efficiency — the people doing the work will take care of that. Everyone wants to do their job as efficiently as possible — and will be more than happy to tell you the unnecessary things about it that slow them down.

  33. These type of studies are really useful where someone is doing clerical work like data entry, but other than that, the consulting costs outweigh the benefits immensely most of the time.

  34. Eliminating inefficiency can wipe out benevolent innovation, since thinking long and hard about all aspects of a problem generally kills a budget in the short term with little to show for it. But it might make the next year’s projects more efficient or even open up whole new markets. If efficiency is the goal, innovation has to be eliminated, since not every good idea is feasible.

  35. James,
    again you make a great point. The more we increase efficiency, the more we can make our lives better.
    I think a great example where this has failed, as a policy, is with the offshoring of manufacturing. As we improved manufacturing efficiency, and as we moved work offshore, we should have been investing more in education and taken all that extra human capacity and developed our citizens. Instead, we chose to shift those profits and gains from efficiency into making wall street and other corporate powers more wealthy with the idea it would all trickle down. Which it didn’t.

  36. We rotate managers and directors. So this latest crew is all about counting minutes. Here’s what we got on an employee survey “So, you choose the worst recession to tighten the screws. If there wasn’t 10% unemployment I would be outta here.”

    This from someone who accepted a college-graduate entry-level position that cost us $20,000 to fill and who needs to stay with us a bit over 3 years for us to break even.

  37. That’s the way it worked for me for a while, but then I hit a wall and for years no matter what I achieved, no matter what awards I won or how highly I was evaluated, my compensation rises at pretty much the same rate as everyone else’s. I was promoted to my current level in 2002, it was taken away in a re-org in 2005 and it took 3 years to get it back. Getting it back was so difficult, I doubt I’ll ever be promoted again.

    So I am in the situation Austin describes. I am a very efficient employee and for that I am rewarded with more work, but not higher pay. For years I busted my butt in order to earn Exceeds and Outstanding evaluations and was rewarded with raises that were one quarter of 1 percent higher than those who simply Met Expectations. I got the message finally and stopped working so hard.

  38. Oh sure – just what we need – more efficiency. There go another 10% of the jobs in the USA.

    Here is one vote in favor of inefficiency! :)

    Let’s just all work for 50% less pay. That would be efficient!

  39. I like the cut of your jib here. Efficiency is not so simple. As a computer programmer, there are times when I am 100% focused on a problem and I will sit back and use my brain to put together some information I have just looked at. I am still focused on the problem, but it might look like I’m daydreaming. Sometimes this is not even an active process. I study the code and the output from the failing program. Then I take a break. I come back from the break and I’m off on new path of research that I might not have thought of without that break (this is one thing I miss about being a smoker, I used to solve a lot of problems in the smoking lounge). My point is that walking to the printer or to the bathroom or break room is often *fostering* productivity rather than being unproductive. I might also see a colleague on the way there. I didn’t want to bother that person just yet as they are busy, too, but since they are in the hallway, I say, “hey I’m looking at this piece of code,” and maybe they point me somewhere that is useful. That wouldn’t happen without that “forced” human interaction.

    I wonder how this spying software in the “cubical of tomorrow” will react to my “daydreaming”…:

  40. I posted some immediate comments to Planet Money about ways that they fell short of what could have been a great piece, and the more I thought about it the more flaws I found. For one, the example of the batrista displays an unstated (and perhaps unintentional) assumption that higher utilization is better. Queuing theory, which every MBA student learns in their operations management class. challenges that assumption. What if the barista’s utilization increases from 50% to 75%? A simple calculation shows that the length of the customer queue triples. For another, what type of corporate culture do you foster when you obsess about employees’ efficiency, particularly if you don’t leave time for the types of interactions needed to build a strong culture? And without a strong corporate culture, how likely is it that increased efficiency will last after the initial push is over?

  41. > This will make you a “bad” manager in the employees
    > eyes though.

    The purpose of any business is to make money, by providing desirable products and services at a reasonable price–not to provide a place where employees “stand around” or “talk about music”.

    Coffee shops might not be the best example for discussing this problem of “efficiency”, which is probably more relevant to a manufacturing environment. (My father was involved in a huge project conducted by the Navy in the early 1950s that examined the aircraft repair facilities of the Atlantic Fleet. He was not very popular, but some significant changes were effected that saved the Navy big $$$.)

    Just rearranging things to “keep people busy” is not what was suggested here. What is suggested is that a good manager will staff appropriately to the customer demand, and otherwise assign work that needs to be done in order to pick up “slack”.

    A good manager also “works” with his/her employees to make certain that they understand why various jobs needed to be done. This isn’t always successful, but helps.

  42. You’ve just figured out the problem with government at the Federal (money printing) level: there are no “limiting constraints”. In private enterprise, the limiting constraint is a lack of revenue to pay expenses, including worker’s salaries. Efficiency in this environment is essential AT SOME POINT, or all the customers disappear, along with revenue. Federal workers have no such constraints, however, as the powers to tax (and print money if need be) trump any constraints. This is the source of much of the popular disaffection with government today.

  43. Thank you for writing this! I had many of the same thoughts as I listened to the podcast this morning.

  44. In the 1920s at the birth of industrial efficiency the correct approach was to view humans as one of the machines in the process.

    Amazing, that after 90 years of psych studies we haven’t got beyond that.

    A worker who cares, who loves their work, who wants to get the job done, will get it done in the best and fastest way possible. Loving, wanting, or caring are not things machines ever do.

    Shaving two minutes off a process while annoying the worker will net you a loss in time and money, but nobody can measure it.

    There’s no way to measure what you could have had if the workers hadn’t been annoyed into not caring.

  45. Very interesting! I will have to try this even if it means starting 20 minutes earlier. Simple and I think this will help.

  46. We have huge inefficiencies in the stucture of government itself. Benefit levels could increase if administrative costs drop. Once again, you have t gore someon’s ox. Municipalties should be cnsolidated for starters.

  47. I dislike commenting after a long comment thread, but this is a pet peeve that I would like to air. Discussions of efficiency are inherently imprecise when the type of efficiency is not specified. Efficiency is always a quotient: the number of units of the desired product, divided by the number of units of valued resource expended. Usually, it is obvious from the context what the units are measuring. But not always. And, given the fact that different people have different priorities, it is not unusual for them to disagree about what measure of efficiency is pertinent.

    What is the most efficient vehicle? Upon reading that question, most people would be thinking of miles per gallon as the pertinent measure. But if you are transporting bales of hay, a Prius would be a ridiculous vehicle to use. If you want to move the maximum number of bales per hour, you need a truck.

    Likewise, if you are a buy-and-hold investor, you shouldn’t care too much about profit in any one quarter. The last thing you want, is for the company to take an enormous risk, and go bankrupt. That is true, even if they have a few spectacular quarters. On the other hand, if your bonus is based on your yearly performance, you may very well care about short-term profits. The investor and the manager may both say they are interested in maximizing shareholder value, but they will have very different ideas about what should be done to achieve that end, because they are using different measures.

    So please, when talking about efficiency, take a few seconds to say what is being divided by what. It may seem like an inefficient use of words, but it saves time in the long run.

  48. John’s got it. Fredrick Winslow Taylor’s time and motion studies may have made sense for improving the efficiency of assembly lines but applying such techniques to intellectual work is absurd. Yet it’s a major source of inefficiency in American corporations whose profoundly ignorant managers still think in terms of this industrial paradigm of work.

  49. Time spent carrying water can be spent on other tasks if you use a more “efficient” system like the sprinkler. These tasks include more strenuous exercise than what you get watering plants. Doing work for the sake of doing work seems inferior to doing work efficiently and then choosing an efficient way to spend the leftover time gained.

    Certainly buying plates from your friend has benefits, mostly coming from the relationship you have with that friend. Claims that buying the plates locally “help keep another person employed” are misplaced, however, as you are merely trading labor from one individual to another – if enough people purchased local plates instead of imports, that Chinese worker would be the one unemployed. “Global shipping” is also misplaced, because even if your friend could manage to secure 100% of his raw materials without import, a significant increase in demand for local pottery would make this unsustainable and import would become eventually necessary.

    I agree with you – efficiency can only truly be calculated when all real costs are understood. Unfortunately, as you can see, that is often near impossible due to the complexity of interacting economics in a global environment.

  50. Let’s be clear. There is no evidence that instant messaging (including some emailing) and use of smart phones have increased efficiency and productivity. On the contrary they may have lost effectiveness and people instead of doing the right thing just try to do things right, without thinking too much…With some technologies you stop thinking and organizing and you focus on “reply” and “delete”. Just compare emails to old telefax. It’s amazing on how people measures the amount and importance of their work (particularly coming back from holidays) on the numbers of emails to be read in the inbox and deleted. These people should have tried some more manual work before considering that the number of emails and replies is a proxy of their efficiency and effectiveness at work.
    I just give you another myth of efficiency in the organization of daily family shopping (at work it’s the same kind of thinking). In the old time before going out you would check your inventories make a list and plan ahead for few days of the family needs (including different shops to be visited which is if you do it more environment friendly). Today first thing people tends to do is going out for shopping then calling back home or browsing on smart phones to check what they need and where they need to go. Think also about GPS use by most people. In the past you would plan ahead your trip, study the map at home go out and then if you need some help you just would ask somebody on the street. Today you get into your car without knowing where you are going as you rely on the smart phone with GPS. Then you realize that you are wasting the same time programming the GPS or browsing for hints and tips realizing perhaps that it’s not update. On top of that you are also loosing the pleasure of the trip whose best part, like in the Muslim tradition, it’s not to get quickly to destination but to make the trip (including talking to people to ask for directions).
    I am afraid that there are some misconceptions of efficiency and with technologies like smart phone we are loosing the time and pleasure to think and organize (being yourself smart). Are we sure that smart phones and similar gadgets are improving the quality of our lives and work done?

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