Why have we humans embedded in our culture the desire to always go further? Increase? And have more?

We accept that “more is better” without proof. What if it was best to decrease? Subtract? Reduce?

We have a tendency to grow and add, this is not only in the Brazilian culture, it is a worldwide trend.

In organizations, the increase in complexity that we are experiencing is exponential. We ask for more and more data and then we don’t know what to do with it. We have a lot of data and little information that tells us the steps to follow. We got lost in the essence of a multifaceted problem.

This phrase attributed to Mark Twain says:

“I wrote you a long letter because I didn’t have time to write a short one.”

How many times less is more! We accumulate tasks, specialties and businesses that simply bring us little. Currently, the obligation to acquire more and more is increasing. We buy many things that we later refuse to throw away.

It is interesting to know George Zipf’s law of diminishing returns, which is very similar to Pareto’s law and applies to many phenomena in different physical, natural and social disciplines. For example, the second richest person in a city would earn half as much as the first and the third only a third as much as the first, and so on.

Too often, hospitals fall into the trap that more is better. If we look at the number of specialties, or services offered, we can analyze the profitability of each one and see what each one is adding to the total.

If we follow the mathematical rule, we will see that if we already have 20 services and we increase them by 50%, that is, we go to 30 services, we will only increase profitability by 11%. Of course, a general rule may not be fulfilled in particular, but it is always interesting to study how much each one contributes in total, with the real numbers in hand. This defines an implicit inefficiency in the increase in services, since we would have a 50% increase in effort that only yields 11% more, that is, 78% less.

But we have other reasons in this case to appreciate less, such as the lack of specialization that prevents us from putting more automated and efficient systems in a smaller number of services. Also from the point of view of marketing, we will continue in the middle ground, that is, in the absence of a singular image and productive efficiency. The loss of specialization is not considered a problem in health establishments.

The ultimate utopia of an efficient hospital system is to have the processes organized as if it were a production line. This has been around for 30 years in the US, for simple surgeries.

If we take a closer look at all these results, we could be willing to share our clients or patients with other institutions to improve the exchange, the specialization of each one and the productive efficiency.

Zipf's law of diminishing returns

Zipf’s law of diminishing returns

Alvin Toffler had already warned us, in the Third Wave, that the problem of the executive in the future would be the increase in complexity. After 30 years, his thinking is more relevant than ever. Developing a culture of simplicity throughout the organization, checking that every increase is good and applying simple methods, can lead us to focus on the best possible strategy.

Victor Basso
Director of Opuspac University (corporate university)