We Too Often Ignore The Tradeoff Between Innovation And Optimization

It’s not how effective individual units are, it’s how effective the system is overall. And maximising the parts doesn’t maximise the whole.

McChrystal realized that in order to defeat a network, his forces had to become a network. So he took a number of steps that actually decreased the efficiency of individual teams, like embedding top special forces operators in intelligence units and vice versa. Liaison officer positions — previously neglected — were now only given to top performers.

At first, these moves inspired resistance in the ranks — nobody wants their team impaired — but as the plan took shape, it became clear that it was working. The individual teams might have slowed down slightly, but the increased interoperability allowed the army as a whole to move much faster, attacking targets almost as soon as they were identified.

Source: We Too Often Ignore The Tradeoff Between Innovation And Optimization

Russel Ackoff said this years ago:

“There are many places where making the performance of the part worse will improve the performance of the whole”.

It’s counter-intuitive that performance decreases improve overall performance. It’s also frustrating to individual teams, who in the short-term feel the downside but rarely the upside. And this is why it doesn’t happen organically, and why good strategy is about seeing the system overall. It’s also why strategy needs to be exercise in top-down power as Richard Rumelt explains in his excellent Good Strategy/Bad Strategy:

Strategic coordination, or coherence, is not ad hoc mutual adjustment. It is coherence imposed on a system by policy and design. More specifically, design is the engineering of fit among parts, specifying how actions and resources will be combined.
Strategy is visible as coordinated action imposed on a system. When I say strategy is “imposed,” I mean just that. It is an exercise in centralized power, used to overcome the natural workings of a system [emphasis mine]. This coordination is unnatural in the sense that it would not occur without the hand of strategy. The idea of centralized direction may set off warning bells in a modern educated person. Why does it make sense to exercise centralized power when we know that many decisions are efficiently made on a decentralized basis?
Left alone, each node of the system will try to optimise its own performance – be that teams in the army, positions on a football field, or functions in an organisation. It takes a strong player to sacrifice their performance for the good of the whole, and it takes a strong leader to say no to those who don’t get this, especially when the system-level benefits are difficult to quantify and only emerge over time. (For another day, but this is why working to a logical theory is more important than prioritising only what can be quantified, as explored here, here, and here.)

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