#141 The Importance of Company Operational Efficiency (16/02/2025)

Most of the units in the industrial building in the picture are dark, except for one unit that is still lit up – that's mine. I often work late into the night, so I might go downstairs to eat around 7 or 8 pm before going back up to work.

Because I don't want my own incompetence to cause the company to fail, leading to its stagnation or even bankruptcy, I've been increasingly researching the rise and fall of companies of all sizes in recent years. Of course, every era, country, and company owner is different, but as I've observed more, I've started to see patterns – and the more I see, the less I care about closures. Just as people are born, grow old, get sick, and die, every company has its time of rise and fall – a larger company doesn't necessarily mean it's more resilient and won't disappear. Small companies that have been around for years can also rise again (mostly because they encounter a very dedicated and decisive person, and often their actions aren't accepted by the original employees – but I think – the reason these companies haven't improved much over the years is because their original corporate culture is problematic. So if someone acts unilaterally and does things that the company's own employees don't accept, it's very likely that they're changing the company's course – note that this doesn't necessarily mean for the better, but it definitely means taking a different path).

I've gone on and on, but the reason I brought this up is because I recently had a discussion with some senior colleagues this week, and what I wanted to talk about was "operational efficiency." A lack of "operational efficiency" is a common problem for many companies. It means hiring two people to do what one person could, or hiring people who aren't very capable, resulting in poor performance and requiring others to clean up the mess, wasting resources and effort. This leads to significant waste in the company, and ultimately, these companies are overtaken by other companies and inevitably face closure.

This situation also occurs in the government. One difference is that even if the government is inefficient, it won't go out of business. Therefore, it needs even stronger self-discipline, otherwise it will continue to waste resources and taxpayers' money without a market mechanism to regulate it. Recently, the US government asked Elon Musk to establish a Department of Government Efficiency to cut unnecessary manpower and wasteful procedures, which is exactly what they are doing.

Those of us in business really need to reflect on whether similar situations occur in our own companies, because this is a common problem. If we keep making these mistakes, it's really not worth it, because others have already made them, and it's not worth repeating them.

Keep up the good work!