FSG Blog
April 2, 2021

Strategic Choice: The Efficiency vs. Resilience Dilemma

Joe DuFresne
Principal

As the Ever Given sat astride the Suez Canal, much was said about how vulnerable global commerce is to choke points such as the Suez. To be sure, it is. But like the trade winds, the weather, and the tide, choke points have been a part of maritime commerce since trade took to the sea thousands of years ago.  The Ever Given crisis highlights not only the vulnerability of choke points, but the perils of a strategic choice between efficiency and resilience.

Those who like to backpack may relate to reaching a compromise with ever-complaining knees by lightening the load in the pack.  Looking at a piece of ultralight gear one would note that it doesn’t seem to be made to last very long.  It probably won’t. Being an ultralight hiker means making a choice for lighter weight over durability, which comes down to another strategic choice between efficiency and resilience.

The efficiency vs. resilience dilemma is probably the most common strategic choice that all of us face at some point.  Sometimes efficiency wins out, as in removing the spare tire from cars for fuel efficiency, or increasing a vessel’s passenger or cargo capacity to reduce crewing and fuel costs, or streamlining power grids to reduce consumer energy costs.  The resilience tradeoffs from those choices can be felt when we have to call a tow truck instead of changing a tire and continuing on our way, or when we watch in horror as thousands of passengers have to be evacuated from a capsized cruise ship, or an ice storm takes out power for more than five million Texans. 

Sometimes the strategic choice favors resilience when reliability or security are important.  For example, structural engineers add a design safety factor into strength calculations for everything from bridges to bikes, often strengthening them by 100% or more.  We also protect our data and finances using strong, bulky passwords and two-factor authentication.  All of that resilience, of course, comes at an efficiency cost, too.

Individuals, companies, and governments make choices in this strategic dilemma all the time, but many times don’t realize that they are making a tradeoff in doing so.  Efficiency strategies, in particular, are often very enticing or even necessary, which can blind our imaginations as to what they may cost over the long run. Using foresight and alternative futures allows us to test efficiency-resilience strategies in a range of environments so that we can better understand what tradeoffs we may have to make.  

For example, a shipper considering the next megaship could explore things like:

  • What if war or piracy makes the giant basket of eggs a viable target?
  • What if autonomous vessel technology changes crew requirements (or human failure risk)?
  • What if climate change impacts ports-of-call or trade routes?
  • What if we are in an energy-rich world, or an energy-poor world?
  • What if 3D printing technology or something else dramatically changes the nature of manufacturing?

Asking these questions now will reduce our chances of being blindsided in the future with situations that leave us thinking, “Well, we should have seen that coming.” Foresight can help us make better choices in strategic dilemmas. And when major choices are already made, foresight can help us understand the risks and costs so that we are prepared to mitigate the impacts when catastrophe strikes and the bill comes due.

Major strategic decisions should never be made solely on the basis of efficiency — or resilience. Big decisions require investment in executive time, intellectual energy, critical thought, and creativity. Foresight and alternative futures provide the toolbox for that effort — to make our strategic choices robust and resilient as we navigate into complex and uncertain futures.

And so that we make sure to pack some duct tape along with our ultralight tent.

Blog Sign-Up

This field is for validation purposes and should be left unchanged.

1 thought on “Strategic Choice: The Efficiency vs. Resilience Dilemma”

  1. Agree wholeheartedly that a
    Agree wholeheartedly that a ‘futures’ lens is an effective technique for exploring potential flaws in processes built to maximize efficiency. The Ever Given incident in the Suez exposes the vulnerabilities of complex supply chains and logistics systems. I wonder if shippers and logistics teams are now rethinking their assumptions — and shifting the slider closer to the resilience side of the efficiency vs. resilience continuum. Or has the Ever Given incident already been forgotten?

    Reply

Leave a Comment