By: “Just in Case” Jack, Co-Founder of SkilledSurvival.com
It seems to me; the world has become way too focused on being efficient.
Wait a minute? Isn’t a more efficient system ALWAYS better than a less efficient one?
Efficiencies are one of the best ways to increase profits in business, right? And for families, they help to create more free time and more luxury, right?
But efficiencies come with some hidden costs. As it’s said, “there’s no such thing as a FREE lunch.”
There are always hidden costs – even something as universally appealing as “better efficiencies.”
For example, one popular improvement in a business is “just in time” operations.
Sure, having a low or near zero inventory is a great way to keep prices low, right?
And that’s all good as long as the world is running efficiently.
Holding a large inventory of goods costs money. Often these costs are passed along to the consumers. When a new competitor comes along with low (or no) inventory – they sell their goods at a lower price point and maintain the same profit margin. Thus, undercutting the competition.
If the quality of the goods is equivalent, the lower-priced item should sell better.
In this case, the original business is forced to adapt to the “just in time” business model.
But what both businesses don’t realize is “just in time” operations are more fragile.
It’s just a fact.
If you don’t have an inventory of parts or finished goods, you don’t have any slack. And if you don’t have slack, then any upset situations can severely disrupt operations.
So, when things break down (either locally or worldwide), a “just in time” operation has no real resources available.
That’s usually when all hell breaks loose.
During times of relative peace and prosperity, it is easy to get lulled into moving a business or your own family life from resilient to highly optimized.
Optimization seems always to be a worthwhile goal -BUT the point I am trying to make is – IT’s NOT FREE.
A perfectly optimized system will often come as a cost to resiliency.
The world was forced to face this reality in the aftermath of the COVID-19 pandemic.
For example, before COVID-19, manufacturing and stockpiling medical supplies was NOT a priority.
Much of the world outsourced these life-saving devices with little to no inventory. Why? Because doing so kept costs down and was more profitable.
Outsourcing supplies is one of the best ways to optimize, but it comes at resiliency’s hidden cost.
You should always think hard and long about optimizing ANY critical supplies. Why? Because that sort of optimization can bankrupt a family, a business, or even an entire society if things get bad enough.
The bottom line is this:
If outsourcing (or optimizes) makes you highly fragile to upset future events, then you probably shouldn’t do it.
OR as Nassim Taleb said in an interview related to his book Antifragility –
“You have to avoid debt because debt makes the system more fragile. You have to increase redundancies in some spaces. You have to avoid optimization. That is quite critical for someone who is doing finance to understand because it goes counter to everything you learn in portfolio theory. … I have always been very skeptical of any form of optimization. In the black swan world, optimization isn’t possible. The best you can achieve is a reduction in fragility and greater robustness.”
You see, people make the same mistake in their own lives as well.
For most Americans – storing any extra water or food seems insane. Only about 53% of American’s have three days’ worth of nonperishable food and water in their homes.
Why? Because people who do THAT sort of thing is for crazy preppers.
Sure, IF the water taps product water and the grocery store is full, there’s no reason to stockpile items such as:
- Survival Food
- Water Filters
- Toilet Paper
But as we all know too well, those are dangerous assumptions. The future is truly unknowable, and most predictions are just wishful thinking.
You can extrapolate all you want, but most of these in “projections” are just there to make us feel better.
It’s comforting to see a pretty graph that shows sales or profits going up and to the right well into the future.
BUT as Mike Tyson put it,
“Everyone has a plan until they get punched in the mouth.”
And when you get punched in the face and get knocked out – you’re fragile. But if you take a punch and get back up – you’re resilient!
It’s not rocket science, but it seems like our society has forgotten this sage advice.
Just look how WRONG the Federal Aviation Industries 2020 projections were in late 2019. That’s a perfect example of how future projections are mostly wishful thinking.
We project into the future because, as humans, we can’t help ourselves. The future is scary, and we want to find comfort in a somewhat controllable and knowable future.
The truth is, it’s neither!
And during normal times, these predictions often play out close to the estimates. But that’s just lulling us all into a false sense of security.
When our predictions are wrong – they’re often epically wrong!
Predicting is an unreliable way to measure a company’s or personal performance. So what can we measure and track instead? Resiliency.
It’s possible to measure and track HOW fragile or resilient a business OR a family unit is.
You can look at a business or a family and calculate their:
- Operations costs
- Redundant systems
- Income stream sources
- Cash in the bank
- Worker skill sets
- Industry knowledge
- Brand Awareness
With this ACTUAL, KNOWABLE data, you can figure out HOW robust or fragile a system is.
As a society, we need to stop wasting so much of our time and energy on predictions. And instead, focus more on improving our personal and collective resiliencies.
If you’d like to learn more about personal resiliency – check out these 10 Steps to Basic Preparedness. It’s how YOU can quickly go from being part of the fragile masses to the resilient few!
Company Name: Aegiiz Technologies
Contact Person Name: Prabhakaran M
Website URL: www.aegiiz.com