The False God of Efficiency: Why Organisations Keep Sacrificing Their Future

Most organisations are so obsessed with efficiency that they destroy their ability to adapt. What leaders call productivity is often just fragility in disguise.

Modern organisations worship efficiency. They treat it as the highest virtue, the unquestioned indicator of a well-run organisation. This obsession has turned efficiency into a false god. Leaders chase it with such conviction that they fail to notice what it quietly destroys along the way.

Bring in one of the big consultancies, and the pattern is predictable: headcount cuts, efficiency drives and productivity programmes. The story is the same every time. Less cost, more control, fewer people. The promise is that efficiency will create an effective organisation. In reality, it often creates a brittle one.

Why efficiency looks good on a spreadsheet but fails in reality

On paper, efficiency is straightforward. Reduce waste. Maximise utilisation. Get more output from fewer inputs. But real organisations are not spreadsheets. They are living, interdependent, adaptive structures. In adaptive environments, efficiency and viability are not the same thing.

In the military, approximately one-third of the force is held in reserve. It is not idle. It is a capacity designed for uncertainty. No commander would ever plan to operate at 100% utilisation because volatility demands the ability to manoeuvre. The environment shifts. Situations evolve. You need slack in the system to respond.

Yet in business, we do the opposite. We commit 120% of our workforce. We stretch roles until they fray at the edges. We expect the same people who deliver the day job to deliver transformation as well. Then we are surprised when change stalls, decisions move slowly, or small shocks turn into major failures. There was no slack. No buffer. No room to absorb the unexpected.

Efficiency looks productive. What it actually creates is fragility.

The Games Organisations Play

Efficiency has become a performance game. Leaders learn how to play it because the metrics reward the appearance of improvement, not the substance. The result is a set of predictable organisational games that create the illusion of profit while quietly undermining long-term viability.

The Efficiency Mirage

The first game is simple. Cut costs and declare victory. Reductions in headcount, budgets or activity create an instant uplift in the numbers. Margins rise. Profit looks healthier. The narrative becomes proof that efficiency was effective.

But little truly improves. The organisation simply removes the capacity needed for adaptability. Any savings are borrowed from the future as the illusion of efficiency hides the loss of resilience.

Shifting the Work, Not the Load

Another common tactic is rearranging tasks to make them appear more efficient on paper. Work is absorbed into roles already at capacity. Teams take pride in making it work. Leaders celebrate the win.

In reality, complexity is pushed downstream, where it becomes harder to see. The work does not disappear. It becomes invisible until it breaks something important.

The Externalisation Trick

When internal capacity is cut too deeply, organisations buy it back through contractors, consultants or overtime. The books still show a leaner organisation. Profit still looks strong. But the same work is being done at a higher cost, with more friction and less ownership.

This is not efficiency. It is creative accounting.

Artificial Targets and the Appearance of Control

Teams begin shaping targets to look efficient. Project scope is reduced. Risks are deferred. Timelines are shortened on paper. Quick wins are celebrated while the backlog quietly grows.

Efficiency becomes a theatre of certainty. Performance becomes compliance. Strategy becomes a set of promises designed to maintain the illusion.

Utilisation as a Status Badge

In many organisations, being overloaded is seen as a sign of importance. A diary with no space is treated as evidence of value. Leaders proudly claim their teams are at 110 per cent utilisation.

In any other field, this would signal danger. In aviation, engineering, medicine and the military, full utilisation indicates risk. Only in organisations do we celebrate the thing that destroys our ability to manoeuvre.

The myth of individual resilience

Organisations pour money into leadership development that focuses on individual resilience. The message is clear: cope better, recover faster, and absorb more. It is framed as growth, but it often masks a structural issue. When you run the organisation at full capacity, the only lever left is personal endurance.

This is not resilience. It is exhaustion dressed up as capability.

A resilient organisation is not one where individuals learn to tolerate being overloaded. It is one where the structure creates agility. Where scanning, orienting, deciding and pivoting are not luxuries but core routines. Where there is capacity to manoeuvre as the environment shifts.

When efficiency destroys agility

Stafford Beer made the point decades ago. The same resources that run today are the same resources needed to adapt for tomorrow. If they are fully committed, there is no variety left in the system. Ross Ashby’s Law of Requisite Variety states that if an organisation cannot match the variety of its environment, it loses control.

Most organisations lose control long before they realise it. They appear to be ordered, busy, and efficient. But beneath that surface, people are firefighting because there is no spare capacity to sense, interpret or act on change. Efficiency has drained out the organisation’s adaptive capability.

This is why adaptive militaries hold reserves, why nature maintains redundancy in its structures, and why viable organisations maintain the capacity to respond.

Cutting heads is not a strategy.

If efficiency were truly strategic, we would not see the recurring cycle of redundancies followed by rehiring the same capability a year later. The organisation did not become more efficient; it became temporarily cheaper, the workload remained, the environment continued to shift, and the organisation became weaker.

Redundancy cycles are not signs of strategic clarity. They are signs of strategic panic.

When organisations cut without understanding the coupling between capabilities, commitments and environmental demands, they narrow their strategic options, reduce manoeuvrability and make long-term fragility look like short-term success.

The case for purposeful inefficiency

Some call it slack or reserves, I think of it as purposeful inefficiency. Capacity that is not optimised for output but for manoeuvrability. Space to observe, think and act. People who are not fully committed can respond when the environment changes. Structures that allow for adaptation, not just maximum throughput.

Purposeful inefficiency is not waste. It is the price of viability.

If you want genuine agility and a strategy that survives reality, you need the capacity to reorient and redeploy. If you want an organisation that learns, adapts and sustains advantage, you must resist the instinct to over-optimise.

Efficiency is not the enemy. Blind efficiency is.

Sometimes, being slightly inefficient or having fat in the systems can be a strategic advantage.