First Published on Linkedin: https://www.linkedin.com/pulse/compassion-versus-efficiency-david-ducheyne/
In this newsletter, I discuss the “business dilemmas” I encounter as a strategic advisor working for multiple customers. The name of this newsletter is “the two Dragons”, because these dilemmas often lead to fierce debates, difficult decision processes, and often a feeling of failure of not being able to reconcile the criteria, objectives, or values that seem to be in conflict with one another.
If you have a business dilemma you’d like to discuss, get in touch with me through Linkedin or through david@otolith.be .
Compassion versus Efficiency
The first dilemma is Compassion versus efficiency. Until very recently, we did not talk about compassion or empathy in business. Compassion was something one leaves outside of the discussion, outside the organization. And by doing that, an important human aspect was left out of the equation. One could say that this has led to a certain dehumanization in business, the process of denial of human characteristics (1).
The focus in business lies dominantly on being efficient rather than on people’s experience or equity. At the end of the day, it is the bottom line, or the prospect of it, that defines the value of the shares. People are evaluated on the what, more than on the how. The experience of people (customers and employees) is considered as a resource, not an objective. The idea of multiple stakeholder value might be on the rise, at the end of the day investors and analysts look at the economic yields. And many organizations are successful because of an extreme focus on efficiency, chasing, and eliminating waste. Efficiency lies at the heart of productivity and profitability.
But there’s a clear risk. Organizations aren’t the temples of reason. People are not rational. Their thinking is biased. Their implicit motives might not be aligned with the goals and values of the organization. People derail; they engage in destructive behaviors. They are not driven by the logic of things. They have certain needs. And most of all, they have limited capacity and need recovery. And yet, focussing on efficiency requires people to adapt to a common approach, leaving no room for the inefficiency of human behavior and possibly frustrating the psychological needs people have, e.g. for influence and accomplishment.
To what extent does an orientation on efficiency allow for a human-centric approach? Does it allow for kindness and compassion on the work floor? And vice-versa, does a compassionate approach interfere with the economic need for efficiency?
Wishful Thinking in Organization Theory
It may not come as a surprise, but a lot of what is written about the ideal organization is wishful thinking. We all wish for this brave kind world that embraces diversity and inclusion, that is built on trust, and that fosters prosocial behaviors. Yet, we should not be naive. We just have to look around us to see many examples of how humans go about without compassion. Human beings have tendencies towards social behavior and towards competition. That might be the master dragon fight that determines the human condition.
Human beings have tendencies towards social behavior and towards competition. That might be the master dragon fight that determines the human condition.
Take leadership. There are many examples of leaders whose behavior is without compassion. Often, ruthless leaders seem to be successful, to the regret of many (2). Take leaders like Jack Welch (3) or Alan “Chainsaw” Dunlap (4) who introduced dehumanizing practices and initially got away with it. Since their departure from business life, both have fallen from their pedestal. The hagiographies they have written about themselves are nothing more than interesting study material for psychologists who study human narratives (and maybe narcissism). The road to the top is easier for talented jerks. Pardon me the language.
Scientific Management versus the Healthy Organization
Organizations are often compared to machines in which every part needs to contribute to a whole in an energy-efficient manner. This view, one that has come from scientific management, has led to enormous gains in productivity but leaves not much space for inefficiency and humanity. Human beings are part of the machine and should assimilate as “all resistance is futile”. Star Trek fans might recognize this last phrase.
Scientific management still determines the way many organizations work. The quest for the “one best way” (5) is still going on.
However, we have known for a long time that organizations should address the psychological needs of people if we want to make sure they are willing and able to perform sustainably. Concepts like “the healthy organization” reveal that organizations that foster constructive relationships or “organizational civility” contribute to the wellbeing of their employees (6). And we also know that effective leaders need to engage in productive and qualitative relationships with their team members (7) in order to be effective.
So how can we reconcile the need for efficiency with the need for humanity and compassion? And so, I’d like to present you with the first fight between two dragons: efficiency versus compassion.
The Health Care Sector : Cold and Warmth
If there’s one activity that knows about this dilemma, it’s health care. Many people working in health care want to care and show compassion. Patients come to a health care facility to be cared for, to heal, to recover, or to die in a dignified manner. But health care faces many challenges that require a focus on efficiency. In this, they are no different from profit-oriented organizations that also face scarce resources, heavy competition and technological innovations. And they operate in a societal context of “health equity”(8).
Budgets are tight and the health care system is undergoing massive changes (9). The need to be efficient and to handle health care costs parsimoniously has increased. But at the same time, health care itself is changing because of the new treatments, technological innovations.
That is why health care organizations also focus on quality management, lean approaches to health care, and ways to cut waste. This sounds contradictory but it should not be.
“The cold and the warmth of management practices come together in health care”
It happens that nurses and physicians who want to care for their patients are startled by the focus on control and the rigor that is introduced with accreditation systems like JCI (10) or efficiency programs. Some medical professionals do not see the use of these approaches as they seem to limit them in their professional freedom and seems to avert the attention away from the patient.
The Dilemma
Dragon 1: Compassionate Health Care
Imagine there is unlimited compassion. Every demand of every patient is followed. This results in low waiting times, sufficient nurses, customized care, doctors that spend a lot of time with their patients, high costs, and even maybe endless but useless treatments.
If you’ve ever been to a hospital, you know this kind of excessive, individualised approach does not exist. It might exist in certain private health care facilities, but these are not easily accessible. The ultimate level of care is having a nurse by your side who is 100% available and doctors that are available in a blink of a second to deliver personalised treatment.
This is of course a travesty of compassion, but still, as patients seem to think that health care is a service that should be as easy as AirBnB, demands on medical professionals to be patient-centric increase. When my father was in hospital in his final days, he was at a certain moment so much in distress that I did not know what to do. I called for support and immediately 3 nurses were there to comfort him. My eyes still get teary when I think of that. I wrote a blog on it in 2019, with the title Health Care Heroes. That is what compassion is: the empathy to understand what people need and feel and the willingness to act upon that understanding. I did not expect them to cry with me, I expected them to act on the need my father had. This is what Paul Bloom calls “rational compassion” in his book Against Empathy.
Compassion is the foundation of health care. The American Medical Association describes it like this in its code of medical ethics: A physician shall be dedicated to providing competent medical care, with compassion and respect for human dignity and rights. (11). Without compassion, there is no medicine, no health care.
Too much focus on compassion is not without risk. It may even lead to burnout. Compassion cannot be absolute as health care professionals are confronted with the limitations of what they can do.
Dragon 2: Efficient Health Care
Imagine a health care organization that is 100% efficient. Every patient gets the amount of care they need, but not more. Care is standardized and managed according to strict instructions. Deviations from these instructions are undesirable and are monitored. Health care is evaluated on its efficiency: the relationship between the cost and the result. There is little room for personalisation and interactions are kept to a minimum. Nurses only get a couple of minutes to do what they need to do, leaving no time for the occasional chat with the elderly and lonely patient. Nurses dance in and out the room but refrain from talking and doctors are on a very tight time schedule.
Hospitals are brokers of health care services. People come there to be cured. The hospital is a platform that combines the various disciplines into a service. Without agreements, processes, and procedures no organization will get to the point where the relationship between the effort and the output is well balanced. So a focus on efficiency is needed. As resources are limited and the complexity of health care could lead to suboptimal utilization of funds and means, managing the economic side of health care is crucial.
But when exaggerated, the focus on efficiency might hinder the quality of the care. Budgetary concerns could prevent doctors from doing all that is necessary to cure or save a patient. And that is why the general management and the medical professional are independent of each other. This means that economic concerns should not influence the medical decision-making processes in the hospital.
The Dragon Fight in 5 Steps
Extreme compassion makes efficiency impossible and vice versa. However, they need not be the opposite of one another. The idea in dilemma thinking is to try and reconcile sometimes opposing values or positions.
There are 5 steps :
Stap 1 is to consider the importance of each value. Surely we cannot state that compassion and efficiency are from an ethical point of view the same. The discussion on expensive medication for rare diseases is an example of this. There is often an outrage when parents need to gather a lot of money to finance the health care of their children. We might be inclined to see compassion as the more important of the two, and that is OK.
Step 2 is to divide the continuum of each value into three (or more) levels: not enough, the right level and too much. Can one be too compassionate? Of course, when other things are hindered. Can one be too efficient? Of course, when it makes other things difficult.
Step 3 is to put the conflicting values in conjunction. It helps to put them on two axes and discuss the various positions. What about high efficient low compassionate care? Are there circumstances where this is allowed. The invoicing process could be an example of this. When is low efficiency allowed? Maybe the palliative care is an example of that. Where do we need both efficiency and compassion? And are there situations where we have both low efficiency and low compassion?
The purpose of this graphic is to stimulate the debate.
Step 4 is to look for a third value that could be overarching both values. In this case it could be the effectiveness of the care given. It could also be sustainability, or organizational health. One could speak about compassionate efficiency or efficient compassion to describe a level of care that is effective and fulfills the requirements of both values. Too much or not enough of either components of care, will make the care ineffective or less sustainable.
Step 5 is to find ways how both values can reinforce one another in order to become more effective. By increasing the efficiency, health care becomes more affordable and accessible. That is a way to make care equitable. But compassion can also uncover situations where efficiency has gone too far. Through compassion, health care systems can be evaluated and improved as well. And as compassion could be the leading of both values, efficiency gains could be used to give more time to health care professionals to be compassionate.
Eric Topol describes in the last chapter of his book “Deep medicine” how AI can humanize medicine, and to correct the lack of empathy in the medical profession,
Compassionate Leadership
Dilemmas are everywhere. The dilemma between compassion and efficiency might be very clear in health care, it is omnipresent. Business leaders must make difficult decisions and weigh the need for efficiency and the need for compassion. In my book on Sustainable Leadership, I talked about how empathy and kindness should be in balance with reciprocity and fairness. The individual and the collective priorities need to be balanced.
The need to build fruitful relationships with team members and build trust, should not prevent a leader from making the difficult decisions that are inherent to business life. Thinking in dilemmas can help leaders.
And as the balance between compassion and efficiency will always be trembling, there are two additional questions that might help a leader.
1. Is there a good reason to do this?
2. Can I do it in a good way, with respect for the values that are the basis of the dilemma?
When a leader has to answer no to either of this questions, there is an issue. The book “Compassionate Leadership” describes it correctly in its subtitle: How to do hard things in a human way.
The world is full of Dragon Fights.
I focus on helping leaders to achieve progress by developing radically human solutions to business problems. Radical means that we have to go to the source, the radix, of what business is: it’s always about behavior and we need to make sure that people are willing and able to perform sustainably and create value for all stakeholders. As strategy is a matter of making choices, thinking in dilemmas is a great way to progress.
David Ducheyne – Founder and Managing Consultant of Otolith Consulting. david@otolith.be
(1) Gaëtane Caesens, Nathan Nguyen & Florence Stinglhamber (2018). Abusive Supervision and Organizational Dehumanization. Journal of Business and Psychology, 34, pages 709–728 (2019), – https://doi.org/10.1007/s10869-018-9592-3
(2) Pfeffer, J. (2015). Leadership BS. Fixing Workplaces and Careers One Truth at a Time.
(3) Jack Welch was the CEO of General Electrics. He is also the alleged inventor of the rank and yank approach. This approach leads to the annual dismissal of the 10% weakest employees. He is the author of the best-selling management book Winning.
(4) Alan Dunlap was a management consultant who helped businesses turn around, using massive layoffs. He wrote a book “mean business“. He had to settle for fraud.
(5) An interesting book to read is “The One Best Way”, the 1997 biography of Frederick Taylor, written by Robert Kanigel.
(6) De Fabio, A. (2017) Positive Healthy Organizations: Promoting Well-Being, Meaningfulness, and Sustainability in Organizations. Frontiers in Psychology, 14 November – https://www.frontiersin.org/articles/10.3389/fpsyg.2017.01938/full#B21
(7) LMX, or Leadership Membership Exchange Theory focuses on the quality of relationships between the leader and the team members as predictor for many positive outcomes.
(8) Health equity is achieved when every person has the opportunity to “attain his or her full health potential” and no one is “disadvantaged from achieving this potential because of social position or other socially determined circumstances.” Health inequities are reflected in differences in length of life; quality of life; rates of disease, disability, and death; severity of disease; and access to treatment. This definition comes from the CDC and might “sound” American. However, access to health care is a universal challenge, also in other parts of the world. https://www.cdc.gov/chronicdisease/healthequity/index.htm
(9) for a recent overview of the trends in health care, you can review Deloitte’s 2022 Global Outlook on Health Care.
(10) JCI or Joint Commission International is the international branch of The Joint Commission, a US-based nonprofit tax-exempt organization that accredits more than 22,000 US health care organizations and programs. https://www.jointcommission.org/
(11) See https://www.ama-assn.org/about/publications-newsletters/ama-principles-medical-ethics
