Managing Your  
Public Risk

July 2000

The Enigma of Efficiency

Who opposes efficiency?  No one – it largely determines our standard of living. But when efficiency displaces effectiveness, risks increase rapidly.  We must also consider if this efficiency is to be achieved through humans or machines.

 The best efficiencies can be achieved without degrading measures of effectiveness like safety, durability, comfort or satisfaction.  This is not easily done. It is much easier to double the miles you drive before changing oil. Yet false economies, like this one, are often a prelude to a major, if not catastrophic loss.

 Nor is it wise to expect too many efficiencies from humans.  We are designed to be more effective than efficient. We need to be engaged, amused and even distracted from time to time.  Most of us find satisfaction only when the job is done right, not just quickly or inexpensively. Machines willingly submit to greater efficiency without boredom, frustration or complaint. Does this mean humans are incapable of improved efficiency?   Hardly - but there is a limit, beyond which risk increases sharply. Drudgery is for machines, not people.

When obsession with efficiency cuts into effectiveness, it can end up in the media, in the courts or in a smoking hole. Such debacles are usually foreseeable and preventable.  Competition forces us to be efficient: good risk managers know how such efficiencies can be made, and more importantly, how they cannot.   

Is Rational Choice Under the Gun, too?

Along with the quest for efficiency, rational choice theory has been a mainstay of our economic philosophy for decades.  Surely, no one dares assail the notion of maximizing personal utility?  Well, for the past 25 years, numerous scholars, citizens and even economists have.  Why else do people wait at red lights, even if no one is around?  Why do some refuse to accept welfare?  People often show an arrational  (not irrational) preference for economic intangibles like family, religion, community, duty, honor, dignity, charity and justice.  Theories, like rational choice, work only if assumptions hold true.  All theories, even accepted ones, lack the certainty of scientific law and are changeable. Unquestioning acceptance of theories is risky business, indeed.

In sum, it’s best not to sacrifice effectiveness for efficiency.  However, under pressure to do so, the added risks must be identified, assessed, managed, declared and accepted by those who bear them.
To do otherwise is to court unnecessary disaster.

Recommended Reading for Risk Managers

The One Best Way: Frederick Winslow Taylor and the Enigma of Efficiency by Robert Kanigel.  Taylor, credited with “scientific management,” has greatly influenced the world since 1900, but his methods drew the ire of management and unions alike.  This account, both fascinating and frightening, describes the quintessential “systems man” whose obsession with efficiency is very much alive today.  

Deming’s Profound Changes
, by Kenneth T. Delavigne and J. Daniel Robertson. While not totally disrespectful of Taylor, the late quality guru W. Edwards Deming was an ardent critic of ‘Taylorism.’  This critique is very relevant in today’s cost-cutting world.


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Mike Murphy has been a risk management consultant for the last four years. Prior to that, he spent 17 years (78-96) with Transport Canada, his last five as Regional Director General, Aviation in Winnipeg.  Originally trained as a professional pilot, he is the author of an internationally acclaimed 500-page report entitled "An Evaluation of Emergency Response Services at Airports in Canada."  He is also the Chairman of the Air Passenger Safety Group (APSG) , a Director of Transport 2000 Canada,  a Director of the Ottawa Chapter of Christian Businessmen's Committee (CBMC) and the Secretary General of the Peugeot Club of North America (PCNA).  

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