I am clearly aggravated. I have been for a while, and I finally understand why.
In the world of systems thinking, it is called Local Optimization. That is where, in a multivariable system I optimise for one variable at the expense of other variables, and subsequently reduce the overall output of the system.
In more understandable business terms, I am optimizing one or more of the means, without regard to the “ends”. As my seventeen year old son put it I am maximizing one benefit without regard for the overall goal.
In organizational management, in a business with multiple business entities or sub-units – we are trying to maximise the profit of each entity, rather that maximising the profit of the whole. In process optimization, we talk about optimising throughput of one subprocess, without regard for the throughput of the whole.
Here are some examples that should resonate with everyone:
1) I spend so much time working to earn money, that I don’t have time to enjoy my wealth.
2) I build an educational system optimized for a specific metric (standardized tests) but have not taught my students how to learn independently.
3) I construct a business enterprise optimized to grow the stock price quarter by quarter, but do not produce anything of value.Continue Reading