The efficiency obsession - price isn't everything

Ross Hitchenor has written a great summary of a great session on the damaging impact of our obsession with efficiency.

Read it. I do think Professor Roger Martin's call for a switch away from efficiency towards resilience echoes Nicholas Taleb Nassim's valuable concept of antifragility.

And I'm glad that someone from the floor raised the ghost of Marx. Classical Marxist theory maintains that fewer people getting richer faster is a necessary consequence of unconstrained markets. Markets operating with perfect efficiency will always centralise capital. The market's ability to price-in cost should make it the ultimate resource allocator.

But it can only work if the price of each transaction reveals the total cost (including environmental and social impact). 

This requires rapid and insightful calculation and transparency on a global scale - as I wrote in a Linkedin article - Can We Code The Economy To Cut The High Price of Low Cost

Finally we may know the true cost of everything - and even its value.

Building in organisational adaptability

The way in which most businesses organise for value has a fundamental 20th century mass production design flaw. It constrains them from reaching both the capacity and capability to respond to the market at the speed our digital world demands.

It is specialisation.

Specialisation made a great deal of sense in a mass production world - enshrined in Adam Smith's pin factory, through Henry Ford's Model T and beyond.
But it presents a problem of friction for the modern, responsive organisation.

For example - if you have wonderful developers in one silo, and wonderful business leaders in another, you introduce a brake on responsiveness.
While you may have optimised your tech teams to develop, and your business teams to come up with ideas to value, in order to accelerate the generation of value these 'roles' should be more closely connected (as we see in Agile, Design Thinking, Lean Start-up, Holocracy and combinations thereof).
Specialisation made sense when neither party could easily access the skills of the other.

That has changed. Technology now enables business ideation. Technologies that enable one-to-one marketing, for example, can inspire businesses to ideate on the new models this supports. But the friction comes when tech delivery capacity and capability remain a bottleneck.

Those choke-points all too often force businesses back to 'as usual' when striving for new.
What is required is a way of giving business people technology skills and technology people business skills. In this way the organisation becomes more responsive to upturns and dips in  the requirement for both. It becomes built to adapt.

Pipe dream? Hardly - there are already many no-to-low code platforms and technologies which enable pretty much anyone with a laptop to develop their own applications and business process automation with nothing more than the lightest layer of additional coding*.
Business folk can be technology folk, too. At low cost. Minimum Viable Products can be crafted by the people with the vision and the insight - closing the strategy gap through direct and hands-on involvement.

And this cuts both ways. By applying managed innovation as a way of working (Agile, Design Thinking et al) Technology folk can become as enabled to access insight, set vision
and focus on value as their business colleagues.

Bringing both no-to-low code platforms and insight-led, human-centred managed innovation into your org, is a huge leap toward becoming a truly responsive organisation.

*I do not dismiss the importance of technologists. Even the best of these platforms 1. Had to be coded in the first place 2. Create their biggest bang for buck when some customisation is applied.