Beware the Efficiency Trade-Off

Being efficient with scarce resources like time and money is a vital skill, but we’re not always so good at considering the effectiveness of our choices

Koen Smets
Aug 28, 2020 · 7 min read

I used to travel a lot for work. I remember one year in which I collected 46 car hire invoices (Hertz helpfully gave them a sequence number that was reset at the start of the year). Bearing in mind I had been on holiday for a total of four weeks, you see what I mean. My attitude to traveling has naturally evolved over time.

At first, there had been excitement about flying around the world, seeing foreign places, and eating foreign food. This was followed by a growing, continuous background annoyance with the frequent delays and cancellations, and with the increasing time-wasting as a result of ever more security measures.

In the end, I developed a permanent sense of resignation. There was nothing I could do about all those things, so I figured the best thing to do was just to accept it. But I maintained my view this kind of travel was hugely inefficient. True, I did not suffer the daily commute to work like many others. But, with trips that, door to door, typically took five or six hours each way every week, I was hardly better off than someone whose place of work was an hour from their home. Such a waste.

Time, like money (and the things we buy with it) is a scarce resource for us. Millions of years of evolution have made us, much like all other living organisms, into beings for whom using scarce resources efficiently is essential for our survival. Efficiency is fitness, in the evolutionary sense. Being efficient means being better at finding food and shelter, and securing the best mates, and hence helps ensure one’s genes are passed on. Being wasteful is detrimental. (As always, there are exceptions to this. A male peacock’s tail is hardly efficient, but that is precisely the point. Only a strong peacock could survive carrying this burden, which makes it a strong signal to a peahen of his desirability as the supplier of sperm to produce her offspring — and his, of course.)

Amoebae
Amoebae
We inherited our striving for efficiency from them (image: Jasper Nance/CC BY)

It is therefore not surprising that we see a drive for efficiency, both in our personal sphere and at work. Industrial and administrative processes are relentlessly streamlined, and non-value adding aspects eliminated. Throughput rates are cranked up, the amount of square metres per employee in offices is trimmed down, and anything that can be automated is automated. At home we purchase labour (and time) saving devices, and we buy ready-made frozen meals or get Deliveroo to bring our dinner. And of course, we also tend to prefer a job that pays us more per hour, per week, per month or per year than one that pays less.

Efficiency is, by definition, a ratio. It expresses how much of a scarce resource (like money or time) we need to give up to get some kind of benefit: number of widgets made per hour, sales per month, kg washing per load, hours per journey to or from work, pounds (or euros or dollars) per litre cola and so on.

It can be tempting to look only at the cost side of this ratio. After all, the urge to preserve scarce resources is buried deep in our genetic code. If we can get exactly the same overall benefit while sacrificing less time or money, then focusing on the cost makes perfect sense. But if we begin to believe that doing things faster or more cheaply is a good thing in its own right, unconditionally, and this becomes an unthinking mantra, we may be missing the point.

Among the many anecdotes Rory Sutherland who, as an advertising man, is a keen observer of quirky human behaviour, likes to tell is that of the trip to the airport. Clearly, the most efficient way to get there in time is via the motorway — the average speed is easily twice that of taking the scenic route. So that choice minimizes the time ‘wasted’. But, as he remarks, what if there is some kind of incident? On the motorway you’re stuck. All you can do, while you bite off the last remaining bit of fingernail, is watch the time advance, imagine the gate open call, the final call, and eventually the take off time, while you’ve advanced all of 20 metres. If, instead, you hadn’t optimized for efficiency, but for reliability, taking the A-road would have given you many alternative options to still comfortably catch your flight.

By focusing only on the cost of a choice in our quest for efficiency, we risk overlooking what we will lose as we incessantly seek to reduce it. All else being equal, cheaper or faster may be better — but all else is not necessarily equal. When I started ‘wasting’ less time travelling, I discovered that I spent less time reading. For many years, sitting in a departure lounge or on a plane had been providing me with the perfect opportunity to grab a journal or a book. Now I needed to set aside specific time for this, or it didn’t happen. And we could say similar things about other activities we might consider wasteful, from commuting by public transport (opportunity: exercise by walking to the station and listening to podcasts) to doing the dishes (opportunity: chatting or joking with another member of your household).

Our problem, when we equate greater efficiency with a reduction in the use of scarce time or money, is this: if we are not careful, we pay no attention the effectiveness of a choice — the benefits it provides us with. Think about how you divide your time between work and private life — the so-called work-life balance. You exchange some of your time in return for some money, but is that bargain optimum?

This is not something many of us often consciously think about. If you have a strict 9–5 type job, you may have little leeway, but even then, it’s worth asking yourself whether you might be better off with more money and less time, or with more time and less money. Many jobs involve ‘voluntary’ working longer than your contracted hours, however, where you have more control. If you are self-employed that is even more the case. So, it is interesting to reflect on observations like the one in this tweet:

Image for post
Image for post

External shocks — like a pandemic and the measures imposed to contain it — can force a different perspective on us. But, rather than being grateful for them for the opportunities they offer us to do things we otherwise wouldn’t, we should realize that the work-life balance before the pandemic was, to a larger extent than we perhaps want to admit to ourselves, our own choice. We have more control than we think, and we really don’t need a pandemic to consider choosing differently.

Scenic tree-lined road
Scenic tree-lined road
The joy of the inefficient route (image: RDLH/Pixabay)

Conscious reasoning about what the pluses and minuses are of an activity would definitely reveal some of those hidden benefits. But when it concerns the efficient use of time and money, the conviction often prevails that lower cost, higher income, shorter duration and so on are unequivocally better. If not that, we simply stick with the status quo, or with what others do. We don’t think about it.

Yet it can be done. I recall one day when I was in my then employer’s West London office, and a meeting that afternoon got cancelled. I could have stayed in the office and earned half a day’s wages. But somehow, I figured I’d take half a day’s leave and go home after lunch. Not only that, I decided to enjoy the drive and take the scenic route, rather than the M40 motorway.

I know I do not engage in this kind of reasoning often enough, but the very fact that I remember this very clearly, more than 25 years later, is reminding me not only that it can be done, but also how powerful it can be.

Off to do something delightfully wasteful.

Originally published at http://koenfucius.wordpress.com on August 28, 2020.

Thanks for reading this article — I hope you enjoyed it. Please do share it far and wide — there are handy Twitter and Facebook buttons nearby, and you can click here to share it via LinkedIn, or simply copy and paste this link. See all my other articles featuring observations of human behaviour (I publish one every Friday) here. Thank you!

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Koen Smets

Written by

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

Curious

Curious

A community of people who are curious to find out what others have already figured out // Curious is a new personal growth publication by The Startup (https://medium.com/swlh).

Koen Smets

Written by

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

Curious

Curious

A community of people who are curious to find out what others have already figured out // Curious is a new personal growth publication by The Startup (https://medium.com/swlh).

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