Rory Sutherland

But when you pursue efficiency...

Generally, you start looking at numerical or mechanical factors.

And of course, in the process, you disregard psychological factors where the greater gains may be found.

And so you focus too heavily on cost reduction and too little on value creation.

I mean, one of the greatest forms of efficiency, by the way, is employing a human being who's really, really nice.

Now, this is complete anathema to people in tech who love to define business processes so as to make them susceptible to automation.

You know, person X does this.

We will take that function.

We will replace it with algorithm Y.

And it's a very beguiling message because it usually comes with cost savings attached.

You might have heard of my thing, the Dorman fallacy.

Did you?

I'll remind you.

I'll remind the viewers and listeners, which is simply that, you know, you have a hotel.

It's a five-star hotel.

It has a doorman, someone who welcomes incoming guests.

You know, a combination of, say, McKinsey or Accenture and a tech firm will come in and say, your doorman currently costs you X thousand dollars a year.

We have defined his or her function as opening the door.

We will replace said doorman with automatic door opening mechanism and an infrared human detector and we'll save you $30,000, $40,000 a year.

And then they walk away.