Leadership Nudge® 354 – Resilience vs Efficiency admin June 23, 2021

Leadership Nudge® 354 – Resilience vs Efficiency

The tensions between efficiency and resilience are highlighted during situations like the Ever Given blocking the Suez Canal. When thinking about your company’s strategic positioning, evaluate if you’re over biased towards efficiency and if you need to buy some resilience.

I love this picture of the Ever Given stuck in the Suez Canal because it lets us talk about the tensions between efficiency and resilience. And it’s been all about efficiency the last several decades. 

The Ever Given gets stuck. The Suez Canal, at this point, is only one shipping lane wide. So the canal goes from 100% capacity to zero, it doesn’t degrade gracefully in the face of disruption. Resilience is the ability to degrade gracefully in the face of disruption. So the Suez Canal is not resilient, but it’s efficient because it saves us eight days of travel time around Africa, if say we’re moving oil from Indonesia, or the Middle East, to Europe. So this is an example of a system which has efficiency, but not much resilience.  

And if you’re like me, my age, when you came up through management, this push towards efficiency was all the rage. And there are a number of systems (Just In Time manufacturing, Lean, TQL) which were really focused on reducing waste. Efficiency is the reduction and elimination of waste. And they’re very successful, and they’re exactly appropriate and great for the time. And now we have power systems, which are incredibly efficient, but they’re not very resilient, as we saw through some of the recent storms down in Texas.  

On the submarine, on the other hand, we needed resilience because we had to suffer graceful degradation in the face of safe battle damage, or just normal wear and tear. So if we needed one pump, we bought two, if we needed two pumps, we buy three. Obviously, this was less efficient, because we’re buying pumps, spare parts for pumps, doing repairs on pumps, maintaining more pumps than we actually need, but we’re buying resilience at the expense of the efficiency.  

Mother Nature is the best example of this. This is the pine cones on a pine tree. Pine trees have been here for 150 million years. So like 3000 times as long as humans have been here. And for the species that propagate, it only needs one pine tree to replace one pine tree. So in the life of the pine tree, it just needs one seed, it could produce one seed. If the lean experts took over the pine tree, they’s say, well, let’s just make one seed and just make sure that it grows. The problem is some get eaten by squirrels. Some get wiped out by the weather. Some land on rocks and in places where they’re not going to grow. And a pine tree doesn’t know which of the trees is not growing, which of the seeds is the one that’s going to be the one to take. So it literally produces millions and millions of seeds over its lifetime, its buying resilience. But it wouldn’t get a high score for efficiency. But the result of this resilience is that pine trees have been here for 150 billion years.  

So as your company thinks about their strategic positioning, think about, hey, are we over bias towards efficiency? And do we need to walk away from that a little bit in order to buy resilience? Because resilience is what allows you to be around for the next 100,000 or 150 million years.  

I’m David Marquet. That’s your Leadership Nudge.