Efficiency got us Here, but it won’t get us There.
Why large companies lose altitude and how to build the muscle to rise again.
Think of a company like a bird in flight.
Once it gains enough altitude it can coast on the currents, gliding for miles without flapping. Many large enterprises are already at this stage where the height they’ve risen to over decades sustains their momentum. But when the wind changes or others start to fly higher, the question becomes, can you still keep up and generate lift? Can you flap or have those muscles been lost?
This post explores something I’ve wrestled with since I read this HBR article years ago: Since the industrial revolution companies have been optimized for smooth, predictable systems. But the world hasn’t become smoother, it’s gotten weirder. And the systems we’ve inherited break under this pressure.
Leaders of industry were always the ones who mastered economies of scale. And naturally, that’s still what many C-suites aspire to. If you can keep everything running lean and fast, you win. Simple as that.
But is that still true today? What if the efficiency mindset we were taught to master is no longer the one that will help us thrive? What if the business rules we inherited are now making companies vulnerable?
How do you navigate that? Are you leading teams that can still build altitude? Who can respond and adapt mid air? Or are you quietly stripping away the very things they’ll need when the gliding stops?
Here’s my thesis: In a world defined by complexity and constant change, efficiency alone is like gliding. It feels smooth until the wind shifts. What once gave us an edge now erodes our ability to adapt. Doubling down on efficiency atrophies the strategic, operational, and emotional muscles that organizations need to generate lift again. And leading through that requires a counterintuitive shift: resilience isn’t built through more optimization. It’s built through stewardship.
Efficiency Is Factory Logic in a Wilderness World
Efficiency wins in a world where the system is knowable, linear, and controllable. It’s factory logic rooted in a worldview that seeks to eliminate variability, maximize output, minimize slack. Production lines were a competitive advantage specifically because **to create was literally predictable and linear.
But in knowledge work, there’s more uncertainty than predictability about what will come from your work. Impact doesn’t happen because of controlled environments anymore. The exception here might be applying that scientific method, but that process, as proven as it is, is essentially trial and error. The success rate of science experiments across pharmaceuticals, psychology, animal testing, and general labs is only 18%.
Picture a production line that only built what it intended 18% of the time. Can you imagine an auto manufacturer leaving the final product up to that chance? No way! Process efficiency needs close to 100% certainty.
Knowledge work can’t come near that threshold. It happens in much more unpredictable and evolving ecosystems.
I see a connection between this concept and Kent Beck’s analogy of Forest and Desert. Deserts are sparse and stable. You can see far ahead. You can optimize a path to cut through without changing the desert. Forests are different though. They are thicker, harder to navigate, and you can’t see where the path is ahead of you. But forests are also teeming with life and unpredictable. You can’t bulldoze through and expect it to remain a forest, you have to adapt to it.
There is a very different mindset needed to navigate a Desert vs Forest. My argument is that finding ways to optimize and be efficient, what we have been primed to seek, is a desert mindset. But Desert logic doesn’t build in forests.
Over-Optimization Creates Fragility
I was curious to know if this argument holds up. What are instances of over-optimized systems breaking? Is it true that, at scale, the pursuit of maximum efficiency through elimination of "waste" (buffers, slack, redundancy) creates fragile structures vulnerable to disruption? Outside of small companies disrupting incumbents, has over-optimization within enterprises actually traded resilience for efficiency?
Looking across the past 15 years, it wasn’t hard to find examples. Every buffer trimmed, every dependency tightened, every ounce of slack removed created more failure points for systems to break under pressure.
2008 Financial Collapse: Fragility by Design
In the lead-up to the crisis, financial institutions became masters of optimization by leveraging every asset, automating every trade, removing every “inefficiency.” But by removing friction and distributing risk without truly understanding it, they created a global house of cards.
Throughline: The systems worked perfectly until assumptions broke. The collapse wasn’t just about bad actors. It was about brittle systems built for speed and scale, not resilience.
2020 COVID-19 PPE Shortage
Hospitals and governments adopted just-in-time (JIT) inventory practices for critical medical supplies like masks, gloves, and ventilators. When global demand surged, supply chains snapped. There was no slack, no buffer, no redundancy.
Throughline: In pursuit of efficiency, the ability to absorb shock was optimized away. Lives were lost not just from disease but from the assumption that efficiency was always the right tradeoff.
2023 Toyota production halt: JIT revisited
Toyota’s commitment to lean manufacturing has always been a benchmark. But even they are vulnerable. First in 1997 a supplier parts shortage revealed just how interdependent and fragile supply chains had become. And again in 2023, another parts shortage, this time semiconductor-related, forced Toyota to halt production again.
Throughline: Even a best-in-class system built for continuous improvement can buckle under complexity. Toyota didn’t abandon lean, but they acknowledged that resilience means adding flexibility, not just eliminating waste.
2024 Crowdstrike Outage
A botched update by security software firm CrowdStrike caused widespread outages in 2024, bringing down tens of thousands of Windows systems globally. The culprit? A tightly coupled dependency between a low-level driver and critical operating functions.
Throughline: The system was “efficient” until a single fault cascaded across hundreds of enterprises. When dependencies are optimized for speed and uniformity without isolating failure, resilience vanishes.
The Brittleness Formula
What’s the pattern that supports my thesis? In each case there are 4 commonalities to look for
Optimization Pressure: Efficiency is a key lever enterprises use to reduce cost. In doing so they remove buffers, slack, and redundancy to achieve lean operations and minimize overhead.
Efficiency Gains: In the short term this approach leads to performance improvements as systems become more streamlined and cost-effective.
Brittleness Creation: However, the elimination of these safety nets creates single points of failure and tight coupling within systems, making them more fragile.
System Failure: The increased brittleness results in systems being vulnerable to cascade disruption events, where a failure in one part can lead to widespread system breakdowns.
These weren’t failures of execution. They were failures of adaptability. And as the pace of change increases the frequency of failure does too. We’re entering the age of Forests.
Build resilience with redundancy, reflection, and range
If you realize you are making unintentional short term trade-offs for resilience, what can you do? Prevailing wisdom says become more adaptable and resilient, but those are loaded terms. What’s their guiding principle?
If efficiency is about squeezing out what’s “unnecessary,” resilience is about preserving what might be needed later. I think about resilience coming from three factors:
Redundancy: These are your backup plans, excess capacity, and loose coupling. Redundancy increases your ability to absorb shock. One of my favorites stories about resilience is Teddy Roosevelt famously carrying an extra pair of glasses wherever he went. Or the bus factor.
Reflection: You need space to act intentionally. Even in crises pausing to make sense of what’s going wrong will help you form a better plan of action instead of pushing through it reactively.
Range: You need to be ready to operate in ambiguity. Learn to consider systems that support multiple paths forward and ensure people have context and support so they can act without full certainty. Find areas to become a generalist.
In a Desert mindset with 100% predictability these things are unnecessary, inefficient even. But in a complex world of Forest they’re survival traits.
Complexity-Conscious Leadership: Navigating the Zones
As a leader managing knowledge work, complexity is the new reality. You can still make the sure short time bets of removing toil and optimizing processes, but for long term success you have to make investments with less certain ROI. You have less visiblity into how and what your teams are doing. Your mindsets needs to evolve to be resilient too.
One source on how to applly redundancy, reflection, and range to your organization comes from the Depthfinding framework from The Ready. It starts by slicing organizational dynamics into four:
Sunshine Zone: What’s visible on the surface: org charts, KPIs, strategy decks
Twilight Zone: How work actually happens: rituals, incentives, team dynamics
Midnight Zone: What’s unspoken: fear, identity, culture, trauma responses
Sky: What’s outside: market shifts, societal forces, emerging trends
As a leader, if you work in an efficiency-driven organization, this is probably where you focus most of your energy. The Sunshine zone is also where most transformation efforts (i.e. moving and organization from a Desert to Forest mindset) start. But developing a resilient organization depends on change happening at deeper level in the Twilight and Midnight Zones, which are the messier, more human and emotional parts that resist control but shape everything.
My takeaway for you is: The Sunshine zone is the only layer that can be optimized. If you want to lead resilient teams in a complex world, spend less time refining the surface and more time tending to the roots you can’t simply optimize (e.g emotion, culture, incentives, dynamics, etc) in the twilight and midnight zones.
Learn how to be a steward instead of an authority. Complexity-conscious stewardship isn’t about having the answers or having a system to solve problems. It’s about knowing where to look, what to listen for, and how to ask questions and challenge everyone to make adjustments.
What got us here won’t keep you here
For probably as long as you’ve been alive, efficiency has been the game. In stable contexts, like assembly lines, logistics, or well-defined systems, it still is. But when you’re working in living systems, not machines, the game changes.
Today, complexity is the constant. Change comes faster, systems are more interdependent, and the unexpected is the norm. In that context the qualities we think of as strengths like precision, predictability, and optimization, now create brittleness.
We’ve optimized ourselves into fragility.
As a leader, this does not mean abandoning structure. For large organizations, don’t throw away what works. Keep the processes that provide stability and intentionally invest in what structure alone can’t offer: slack, optionality, sensemaking, and human judgment.
If you’re leading, that means shifting your stance. Less control and more stewardship. Less surface polish and more attention to what’s beneath.
In my view, the future belongs to those who can build for the wilderness.
other sources:
Schintler & McNeely (2022): how efficiency optimization creates brittleness vulnerability.
NIH Research (Dai et al., 2020): highlights "excessive individual-level optimization" without considering resilience.
PlanetTogether Analysis: analysis of how "Lean has very little room for error," leading to equipment failure cascades.