Monday, 5 October 2015

When Doing More Starts Making Things Worse

When we make plans we expect that most things will respond in a linear way, that more input will get us more output. If we want more passengers, we add more flights, fly to more airports (even if overcongested), squeeze more seats into the plane, pack more people in, run more ads. We also want to be bigger and stronger than our competitors. The bigger we become the more we are inclined to ignore the critical resource limitations and issues of quality.

In real life however most things don't respond in a linear way (quality in particular). This is why we fail to notice the critical point from which the quality of outcome turns downwards. From that point on, adding more flights or having more passengers only make things worse. This happens whenever the traditional way of thinking and doing makes us wilfully ignorant to what is happening now, when we are unable to understand early signals of this decline and are deluded by the occasional rise in profit. By letting physical limitations and wasteful practices go unnoticed, we unknowingly increase complexity and are later surprised by unexplainable losses, unforeseen disruptions, and loss of reputation.

The following chart shows dependences between growth, quality of outcome, money, and time. These relationships are essential for understanding the current state of business and its future prospects.

I suggest that you draw your own inverted-U curve and mark the point that best describes your company’s position now. Then find out how to do more without giving up on quality.