Rory Sutherland: The Trap of Pseudo-Efficiency - when optimising the parts undermines the whole

True efficiency isn't about making every part work better. It's about making the whole work better.

An eminent academic once observed that when he joined the History Faculty at the University of Cambridge, there were more historians than administrators. Today, the balance may have reversed.

It raises a bigger question: are organisations becoming more efficient, or simply creating more processes, reporting and bureaucracy? In the pursuit of efficiency, we risk building systems that consume more time and resources than the work they exist to support.

As W. Edwards Deming famously argued: “A system must be managed. It will not manage itself.”

Optimising individual departments doesn't necessarily optimise the organisation. Teams can hit every target while the bigger picture suffers. Sometimes, making the whole work better means allowing individual parts to be less than perfectly efficient.