How to make inefficiency work for us

Who doesn't love efficiency, I do.

Efficiency means more for less.

More miles per gallon,
more light per watt,

more words per minute, more
for less is the next best thing

to something for nothing.

Algorithms, big data, the cloud
are giving us more for less.

Are we heading toward
a friction-free utopia

or toward a nightmare of surveillance?

I don't know.

My interest is in the present.

And, I'd like to show you how the past

can help us understand the present.

There's nothing that summarizes

both the promise and
the danger of efficiency

like the humble potato.

The potato originated in the Andes

and it spread to Europe
from the Ancient Incas.

The potato is a masterpiece
of balanced nutrition.

And it had some very powerful friends.

King Frederick the Great of Prussia

was the first enthusiast.

He believed that the potato could help

increase the population
of healthy Prussians.

And the more healthy Prussians,

the more healthy Prussian soldiers.

And some of those
healthy Prussian soldiers

captured a French military
pharmacist named Parmentier.

Parmentier, at first, was appalled

by the morning, noon, and night diet,

fed to POWs, of potatoes,
but he came to enjoy it.

He thought they were making
him a healthier person.

And so, when he was released,
he took it on himself

to spread the potato to France.

And he had some powerful friends.

Benjamin Franklin advised
him to hold a banquet,

at which every dish included potatoes.

And Franklin was a guest of honor.

Even the King and Queen of France

were persuaded to wear potatoes,

potato flowers, pardon me.

The King wore a potato
flower in his lapel,

and the Queen wore a
potato flower in her hair.

That was a truly great
public relations idea.

But, there was a catch.

The potato was too
efficient for Europe's good.

In Ireland, it seemed a miracle.

Potatoes flourished, the population grew.

But there was a hidden risk.

Ireland's potatoes were
genetically identical.

They were a very efficient
breed, called the Lumper.

And, the problem with the
Lumper was that a blight,

from South America,
that affected one potato

would affect them all.

Britain's exploitation and
callousness played a roll

but, it was because of this monoculture

that a million people died
and another two million

were forced to emigrate.

A plant that was supposed to end famine

created one of the most tragic ones.

The problems of efficiency today

are less drastic but more chronic.

They can also prolong the evils

that they were intended to solve.

Take the electronic medical record.

It seemed to be the answer to the problem

of doctors handwriting
and it had the benefit

of providing much better
data for treatments.

In practice, instead, it has meant

much more electronic
paperwork and physicians

are now complaining that they have less,

rather than more time to
see patients individually.

The obsession with efficiency

can actually make us less efficient.

Efficiency also bites
back with false positives.

Hospitals have hundreds of
devices registering alarms.

Too often, they're crying wolf.

It takes time to rule those out.

And that time results in
fatigue, stress and once more,

the neglect of the
problems of real patients.

There are also false positives
in pattern recognition.

A school bus, viewed from the wrong angle,

can resemble a punching bag.

So, precious time is required

to eliminate misidentification.

False negatives are a problem too.

Algorithms can learn a lot, fast.

But they can tell us only about the past.

So many future classics get
bad reviews, like Moby Dick.

Or, are turned down by
multiple publishers,

like the Harry Potter series.

It can be wasteful to
try to avoid all waste.

Efficiency is also a trap
when the opposition copies it.

Take the late 19th Century,

French 75 millimeter artillery piece.

It was a masterpiece of lethal design.

This piece could fire a
shell every four seconds.

But that wasn't so unusual.

But what was really brilliant was that,

because of the recoil mechanism,

it could return to the exact same position

without having to be re-aimed.

So, the effective rate of firing
was drastically increased.

Now, this seemed to be a way for France

to defeat Germany,
the next time they fought.

But, predictably, the Germans were working

on something very similar.

So, when the First World War broke out

the result was the trench warfare

that lasted longer than
anybody had expected.

A technology that was designed

to shorten the war, prolonged it.

The biggest cost of all may
be missed opportunities.

The platform economy
connecting buyers and sellers

can be a great investment
and we have seen that

in the last few weeks.

Companies that are still losing

hundreds of millions of dollars,

may be creating billionaires
with initial public offerings.

But, the really difficult inventions

are the physical and chemical ones.

They mean bigger risks.

They may be losing out
because hardware is hard.

It's much harder to scale up a physical

or chemical invention than it is

a software based invention.

Think of batteries.

Lithium-ion batteries in portable devices

and electric cars are based
on a 30-year-old principle.

How many smart phone batteries, today,

will last a full day on a single charge?

Yes, hardware is hard.

It took over 20 years for the patents

on The Principle of Dry Photo Copying,

by Chester Carlson in 1938,

to result in the Xerox 914
copier introduced in 1959.

The small, brave company,
Haloid in Rochester, NY

had to go through what most corporations

would never have tolerated.

There was one failure after another

and one of the special problems was fire.

In fact, when the 914
was finally released,

it still had a device that it was called

a scorch eliminator but actually

it was a small fire extinguisher built in.

My answer to all these questions
is inspired inefficiency.

Data and measurement are
essential, but they're not enough.

Let's leave room for human
intuition and human skills.

There are seven facets
of inspired inefficiency.

First, take the scenic route,
say yes to serendipity.

Wrong turns can be productive.

Once, when I was exploring the east bank

of the Mississippi, I took the wrong turn.

I was approaching a toll
bridge crossing the Great River

and the toll collector
said I could not turn back.

So, I paid my 50 cents,
that's all it was at the time,

and I was in Muscatine, Iowa.

I had barely heard of Muscatine,

but it proved to be a fascinating place.

Muscatine had some of the
worlds richest mussel beds.

A century ago, a third
of the worlds buttons

were produced in Muscatine,
1.5 billion a year.

The last plants have closed now,

but there is still a museum
of the pearl button industry

that's one of the most
unusual in the world.

But buttons were only the beginning.

This is the house in Muscatine,

where China's future
President stayed in 1986,

as a member of an agricultural delegation.

It is now the Sino-U.S. Friendship House

and it's a pilgrimage site
for Chinese tourists.

How could I have foreseen that?

(Laughter)

Second, get up from the couch.

Sometimes it can be more efficient

to do things the hard way.

Consider the internet of things.

It's wonderful to be
able to control lights,

set the thermostat, even vacuum the room

without leaving ones seat.

But, medical research has shown

that actually fidgeting,
getting up, and walking around

is one of the best things
you can do for your heart.

It's good for the heart and the waistline.

Third, monetize your mistakes.

Great forms can be created

by imaginative development of accidents.

Tad Leski, an architect of
the Metropolitan Opera

at Lincoln Center, was working on a sketch

and some white ink fell on the drawing.

Other people might just
have thrown it away,

but Leski was inspired to
produce a starburst chandelier

that was probably the most notable

of its kind of the 20th century.

Fourth, sometimes try the hard way.

It can be more efficient
to be less fluent.

Psychologists call this
desirable difficulty.

Taking detailed notes with a keyboard

would seem to be the best way to grasp

what lecturer is saying, to
be able to review it verbatim.

However, studies have shown
that when we have to abbreviate,

when we have to summarize
what a speaker is saying,

when we're taking notes with
a pen or a pencil on paper,

we're processing that information.

We're making that our
own and we're learning

much more actively than when
we were just transcribing

what was being said.

Fifth, get security through diversity.

Monoculture can be deadly,
remember the potato?

It was efficient until it wasn't.

Diversity applies to organizations too.

Software can tell what has made people

in an organization succeed in the past.

And it's useful, sometimes,
in screening employees.

But, remember the environment
is constantly changing

and software, screening
software, has no way to tell,

and we have no way to tell

who is going to be useful in the future.

So, we need to supplement
whatever the algorithm tells us

by an intuition and by looking for people

with various backgrounds
and various outlooks.

Sixth, achieve safety through
redundancy and human skills.

Why did two 737 Max aircraft crash?

We still don't know the full story

but we know how to
prevent future tragedies.

We need multiple independent systems.

If one fails then the
others can override it.

We also need skilled operators
to come to the rescue,

and that means constant training.

Seven, be rationally extravagant.

Thomas Edison was a pioneer
of the film industry,

as well as of camera technology.

Nobody has done more for
efficiency than Thomas Edison.

But his cross cutting broke down.

His manager hired a so-called
efficiency engineer,

who advised him to save money

by using more of the film
stock that he'd shot,

having fewer retakes.

Well, Edison was a genius
but he didn't understand

the new rules of feature films
and the fact that failure

was becoming the price of success.

On the other hand, some great directors,

like Erich von Stroheim,
were the opposite.

They were superb dramatists,

and Stroheim was also a memorable actor.

But they couldn't live
within their budgets.

So that was not sustainable.

It was Irving Thalberg, a former secretary

with intuitive genius, who
achieved rational extravagance.

First at Universal, then at MGM,

becoming the ideal of
the Hollywood producer.

Summing up, to be truly efficient,

we need optimal inefficiency.

The shortest path may be a curve

rather than a straight line.

Charles Darwin understood that.

When he encountered a tough problem,

he made a circuit of a trail,

the sand-walk that he'd
built behind his house.

A productive path can be
physical, like Darwin's,

or a virtual one, or an unforeseen detour

from a path we had laid out.

Too much efficiency can weaken itself.

But a bit of inspired
efficiency can strengthen it.

Sometimes, the best way to move forward

is to follow a circle.

Thank you.

(audience applauding)