Mechanism

The Efficiency Paradox

TL;DR

Optimization for current conditions creates vulnerability when conditions change.

Strategic Risks

Optimize for one cycle, maximize one quarter. Optimize for resilience, maximize a century. The timescale determines the strategy.

In biology, organisms optimized for current conditions (e.g., all-in germination strategies) outperform in favorable phases but face catastrophic failure when cycles turn.

Business Application of The Efficiency Paradox

Optimization for current conditions creates vulnerability when conditions change. Every organization faces pressure to maximize efficiency - eliminate redundancy, concentrate resources on what's working now. But cycles guarantee conditions won't persist. GE optimized for financial boom conditions, generating record profits 2000-2007, then nearly collapsed in 2008. Efficiency and resilience trade off; you can't have both.

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Related Companies for The Efficiency Paradox

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