The Problem With Efficiency: Why Your Efforts To Move Fast Might Slow You Down

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If you were in marketing and wanted to reach Gen Z this year, what’s your move? The data would suggest that you need to embrace pearlcore, start dopamine dressing, and get down with some hot horology.

WTF is any of that? It comes from Pinterest Predicts, the platform’s annual trends report that it bases off of user data. Instagram has one too. So do many other companies. These are smart products with interesting insights, but a newsletter from a comms agency called Grey Horse got me thinking a little differently about them.

Strategist Kate Gardiner writes:

“As I look at interactive web page after interactive web page, I can’t help but think: What is the use of trying to predict anything?” 

We all desperately want to know what’s coming, and so we turn to the only thing we have available to us — what has already happened. Do the two line up? Sometimes.

But should we rely upon their connection? Well, let me introduce you to a guy named Edward Tenner, who says that when businesspeople over-rely on data to make efficient decisions, they may leave themselves in a worse (and ironically less efficient) place than if they’d just gone with their guts.

He calls it The Efficiency Paradox.

What happens when we use data to predict the future

Edward is a smart guy: He was the science editor of Princeton University Press, and, among his many titles, he is Distinguished Scholar in the Smithsonian's Lemelson Center for the Study of Invention and Innovation. He also wrote a book called The Efficiency Paradox, in which he argues:

“The efficiency paradox is based on the idea that too much efficiency in the short run can make us less efficient in the long run,” he told me, when I spoke to him for a recent podcast about sex robots (because, yes, there is a connection between sex robots and paradoxical efficiency). “One of my points, which is pretty obvious to people who have studied the history of technology or of entrepreneurship, is that innovation very seldom can be done efficiently.”

Innovation requires mistakes and experimentation. If you don’t build in time to take risks and fail, you will in all likelihood be passing up some of your biggest opportunities for discovery.

This is not news that companies always want to hear. After all, organizations are programmed to think that maximizing efficiency is the be-all, end-all to a thriving business. And efficiency is great, of course. Data is exceptionally useful. But the problem comes when we preference efficiency above all else. Because some of the greatest developments in history came about through deeply inefficient paths.

Edward cited Harry Potter as an example: More than 20 editors turned it down because it wasn’t like any other book that had previously been successful. Then one editor showed the book to his young daughter, who loved it, and that convinced the editor that there was something here. Obviously, the kid was right — and their very inefficient insight turned out to be better than the collective data-driven wisdom of every editor who said no.

“The weakness of data analysis is that it's great at pattern recognition,” Edward says. “It's great at seeing hidden relationships. It’s great and seeing who are going to be the best customers, and what people like, and what people don't like — or rather, what people have liked and what people have not liked. But very often, the biggest successes are based on ideas that seem really strange to begin with, but that people later embrace, and that later become wildly popular.”

The difference between past and future

Now let’s apply that insight to all those corporate reports. How useful is it to extrapolate what will be popular this year, based on data from the year that's already gone by? How much can we really bet on the future?

Here’s my suspicion: It’s worth learning from the past, but it’s not worth banking on the past. The marketers who follow predictive reports to a T will end up producing ad campaigns that are indistinguishable from one another. Meanwhile, the teams that really win (and move the needle on public sentiment, however hard that is to measure) will in all likelihood be breaking the mold.

Back to Kate from Grey Horse:

At this stage, we’re learning to live with the pandemic’s twists and turns; we’ve learned to roll with the punches and turn on a dime. That’s a hard-fought reflex, and one that I would argue is quite useful for life on Earth, pandemic or not.

I always say it’s better to live in the moment and react accordingly, especially from a business perspective, and Kate’s note underscores how living through Covid has taught us to do just that. I’m grateful for those sharpened reflexes — and want to remind us all take stock of our silver linings when we find them.

And here’s where Kate closes out her essay:

Instead of wrestling with uncertainty, I suggest we divert our energy toward reacting to what life throws us in the moment… The only hitch is, capitalism kind of depends on planning.

But you don’t have to hinge all your planning on data about what has already happened. Tomorrow is a new day — plan for that, and you’ll keep moving forward.

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Cover credit: Getty Images / Jon Feingersh Photography Inc