Post #5 Efficiency – or Why It Isn't
- guyrushton9
- Sep 4
- 4 min read
Maximising the utilisation of your human capital is a terrible idea. Change my mind.
First, that phrase is inhuman. It reduces, as any large system does, the people within it to interchangeable work units, human capital to be applied by human resources. A business cost to be minimised and a resource to be sweated like any other machine in the system, and just as disposable.
Second, maximising utilisation means extracting every last working moment of the day. The hamster on the wheel must run ever faster. Traditional IT ramped up the amount of busy work, to the point of overload. We will make the hamster even more productive by adding AI tools to speed up what it can deliver, then demand even more. We shall measure all this new activity, the emails sent, the meeting times, the documents produced, the cascaded KPIs met. We shall make it clear that dismissal is a moment away should compliance not be total. There is no time in this whirl of activity to consider whether it genuinely does create value, promote well-being or long-term sustainability.
This scenario is not fanciful and, as Dan Davis makes the case in his book The Unaccountability Machine, it is the result of applying economics modelling and thinking to human relationships, in business and politics. This book is fascinating, an investigation of why, by design, big systems, corporate and governmental, make bad decisions. Why they are designed by the people within them, to protect seniority, to control, even coerce the lower levels and avoid blame and personal responsibility for the upper echelons by creating accountability sinks. It explores the stresses of existing within such a system for the majority, where they can be blamed if they don’t follow the rules, even when the rules are patently absurd. It also looks at how the business world has changed, roughly over the course of my lifetime, to privilege and entrench a particular class of people.
Davis is the first person I have seen put in writing something I have wondered about for years. He identifies private equity as the single biggest problem facing capitalism today. Being able to buy out companies with their own money, load them with debt, loot them and then leave them to fail has been lauded as clever for far too long. In the early days private equity provided a necessary service, energising flabby corporations and management teams that had got too cosy. However, these firms optimise for only one metric, cost efficiency, to maximise short term returns. When you optimise for only one metric you are blind to other, vital, values.
Within a wider business culture driven by this thinking, the maximising of human capital is seen as both essential and desirable. It is essential to senior managers engaged in the cost cutting required to receive the share bonuses that are dangled in front of them. It is desirable because overloaded staff, under threat of termination, are docile and therefore relatively easy to manage.
What this culture achieves is the dominance of short-term thinking across the piece. Hard, long-term, decisions are avoided for short-term gain. Which is fine for the people at the top, what Thomas Sowell calls the anointed ones. They collect enough to prosper, whatever the results, while those further down are left to suffer.
Short-term thinking prevents investment in innovation. Overload eliminates the time to think, to develop skills, it promotes convenience over ethics in decision making. It leads to exhaustion and failure, for both the people and the business.
Value. Innovation. Risk. These are human judgements. Senior managers should stand behind their judgement on a project, strategic direction, new products. Many projects do not, by the short-term metrics, make a profit directly for the business unit that created it. In the current culture these projects die. Quite right you might say.
But what if that product has uses among other divisions, that enable them to be more effective and profitable? The business as a whole grows and is stronger. The project has contributed enormous overall value. A management team that stands behind its judgement can see this and make the case to proceed, understanding the risks. If the management are unable to do this, hampered by the culture and the financial language of the short-term, then the accountants would have just killed off a billion-dollar revenue stream for a million-dollar cost. In a cost-centred world, where people are fired for not making the numbers you will never get the kind of altruism that would see one division create something at cost so that others can make big profits. There is no reward for the cooperation of the people involved.
It is time to change the culture. The swell of public opinion is moving against the privileged political class in so many areas and so many countries, their brethren in business will not be different. We need to restore humanity, not the saccharin hypocrisy of HR inclusivity statements, but real human management, of real flesh and blood people in industry. We need for people at all levels to be accountable, to stand behind their decisions, to be able to take risks in order to innovate, to cooperate, and generate real value that they can be proud of. We need to end the era of maximising.
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