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Efficiency and fragility in a changing world

For several decades there has been a guiding principle in the business world along the lines of “one must constantly increase efficiency in order to remain successful”.

Efficiency is an interesting term. Having consulted the dictionary it states efficiency is “the quality of doing something well with no waste of time or money” or “producing more with less”. I think the reference to “waste” is doing a lot of work in the former definition. How does one establish if time or money has been wasted, over what period of time is that assessed? For example, how does one compare the value of the time taken to feed the calves to time taken to contribute to the PR of the dairy industry? In the short term it may be appealing to feed the calves and reduce labour costs in the pursuit of labour efficiency, but in the longer term it will be important to invest in the brand image of traditional dairy produce, to counter the growing cacophony of protesters to it and advocates of the expanding number of substitutes. So why do so few engage in these activities?

Being efficient does usually result in doing more with less, but is that always helpful? The use of email rather than letters is a useful case in point. Writing and replying to letters used to take a lot longer and cost far more than sending an email as we do now. It must be more efficient to send emails? It is noticeable, however, that we now receive far more emails than we would have received letters. We copy in each other in circumstances where we would not have sent a copy letter, getting involved in matters we may have once delegated. It has become so much more efficient to write an email that we get caught up for hours sending and reading lots of them…

There is a well known adage “there is no such thing as a free lunch”, so what is the “cost” of efficiency, and having no “wastage”? Having given this a little thought, I think the answer to this is resilience. There is a fine balance between being efficient and having resilience. Revisiting the dictionary it states that resilience is “the ability to recover from or adjust easily to misfortune or change”. In practical terms, having enough “slack” in the system to enable exploration to overcome the challenges that emerge.

I think the optimum balance between having efficiency and having resilience is being effective. With a final look in the dictionary it states that effective is “achieving the results that you want”, which feels more complete than merely avoiding “waste” or producing more with less.

As knowledge develops and technologies evolve it can be hard to establish if more is actually being achieved, rather than merely perceived. Let’s take a traditional dairy shorthorn as an example. It was once thought of as a wonderfully “effective” animal producing both milk and meat. Wonderfully effective until the market changed and you compare it’s milk yield and daily live weight gain to those of purpose bred Holstein and Limousin cattle. With that in mind, we should perhaps reflect on the current view that land can be used for both producing food and conserving the environment – I wonder whether this will turn out to be like the dairy shorthorn once we are better able to understand the global systems that form the environment? Maybe we will need to more often separate these activities in order to be more effective at both?

So what is the significance of being effective and why the long run up in this article?

We coexist with nature within a myriad of overlapping complex systems, all of which have interdependent emerging properties and outcomes that are hard to understand, let alone predict. There is also much going on across the globe which is changing the world order, what we prioritise, and how we want/need to live our lives. This has an impact on all of us and all businesses, but perhaps more significantly for farming.

Democracies appear to be struggling to hold together the breadth of views now held within our communities. The Conservatives have been in power since 2010 but have had four leaders in that time due to infighting and lack of unity. There are similar challenges in the USA and a number of European countries. This makes for unstable, short term, and ineffective policy making, together with an increase in protectionism across national borders and a breakdown in the global supply chains that we have come to rely on. The events in Eastern Europe this year demonstrate the impact this can have on the systems we have come to take for granted, like the global food and global energy systems.

These things, together with climate change and evermore changeable weather patterns arising from decades of over consumption, result in significantly more volatility, and with more volatility there is a much greater need for resilience if a business is to remain effective. The relationship between efficiency and fragility is never more pronounced than in periods of significant uncertainty and volatility.

So a few questions to ponder. Do your procurement strategies take into account security of delivery, or focus on achieving the lowest price? Do you have sufficient infrastructure, individually or collectively with others, to carry the stocks you require at pertinent times of the year? Do you and your teams have enough time to think about and explore new ways of doing things, or is everyone too busy doing what has always been done? Who holds and owns the data that is being generated on the farm, and how might this be used in the future as technology and new markets develop? Are you more efficient at what was, than you are effective in what will be?

It is a defining time for agriculture, both here in the UK and worldwide. Although it can feel like there are more challenges to face with increasing uncertainty, for those courageous enough to try new things, there are as many opportunities emerging.

As Winston Churchill said during challenging times “The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty”.
Written by Dan Knight FCA CTA MCIArb


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