The subtle threat of efficiency

06/24/2011

The more subtle danger of efficiency is that it can (and usually does) lead to stagnation. There are a lot of great companies that were extremely efficient at what they did – only to have their lunch eaten by upstart competitors.

Blockbuster is a perfect example of the dangers of a focus on efficiency.

In their heyday, their operation systematically put small, mom and pop movie rental stores out of business all across the country. They organized stores to maximize customer spend, added in upsell items like candy, popcorn, soft drinks at the register and they introduced video game rentals and used movie sales.

In fact, they were a great, efficient, profitable machine. Until the morning they woke up and realized that Netflix was eating their lunch. And they were eating it so fast that Blockbuster didn’t stand a chance.

So, maybe efficiency isn’t as desirable as it sounds? Well, what about effectiveness? Join me next time to discuss this.

Thanks for reading – see you soon!

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