Three years ago today, a quirky KPop video came closer to breaking the Internet than any Kardashian selfie or cat mashup by being the first to break the billion view milestone – Gangam Style (2,374,140,084 served and counting). It has grown into one of those touchstones of monstrosity like elephants and double-deckers buses (as in “the Space Shuttle weighs as much as X double-decker buses”). The Economist did a light-hearted piece on the sheer scale of Gangham viewing using other classic benchmarks of human endeavour (see above).
“Synergy” has become a hackneyed buzzword for essentially modern business magic – “The whole is greater than the sum of the parts” (voila!). Not surprisingly, it has become popular board-room magic potion in hockey-stick strategic plans by conjuring executives.
Less celebrated is synergy’s antonym. The Atlantic Forum had a good thread about just the appropriate name for such a thing – eg. antinergy, dysergy, lessergy, unergy, obsergy. My favourite is “antergy” (with the parallels to the words “synonym” and “antonym”). Every good buzzword also needs a TLA-ready academic-sounding name. I call it “Aggregated Diffusion Fallacy” (ADF). . With my focus on scepticism (ie. failure of prevailing wisdom), I often explore failure’s cousin – the fallacy.
But what is the “opposite of synergy”. Quite simply – “the whole is LESS than the sum of its parts”. This dynamic imposes itself inconveniently into more business cases than people care to admit.
One might think that “antergy” is nothing worthy of attention. One might assume that it’s just poor execution or weak management of the component parts. But I find that it creeps into large number of misguided and miscalculated business cases. In short, thinking something is bigger than it is through the addition of myriad of small parts. The fallacy is very seductive because it employs the language of small inputs with the outputs of large results.
I first encountered the ADF problem working for the US Postal Service’s automation initiative in the 1980s. So many small productivity enhancements were advocated on the premise that they would save a postal worker, let’s say, 5 minutes a day. When you took into account the hundreds of thousands of workers, one quickly came up with million dollar savings. The fact was that there was no way to realise these “savings”. You couldn’t layoff 1 out of every 50 workers and hope the rest would chip in with their 5 minute windfalls. You couldn’t change the work day to be 7 hours and 55 minutes and pay proportionately less. What tended to happen, in fact, was that the workers just got a windfall of 5 minutes less work and more break each day.
Other examples of Aggregated Diffusion Fallacy include…
- Solar Power – “The amount of solar energy that falls on the earth’s surface in 40 minutes equals the total annual energy consumption of all the world’s people.” – Texas Solar Energy Society
- Ocean Gold – “[There is enough gold in the ocean] for every person on earth to have nearly nine pounds each.” – Gold Rush Nuggets
- Internet activity – “Had people not been watching PSY—the South Korean pop star who released the [Gangham Style] song in July 2012— they could have built more than four Great Pyramids of Giza, or another Wikipedia, or six Burj Khalifas in Dubai (the world’s tallest building).” [see graphic above]
So why aren’t all our energy needs sorted while we laden ourselves with gold bling? Why don’t we take Gangham Style off the web and use the savings to build some pyramids? Some of the reasons for these dis-economies of scale are concepts familiar to any business school graduate such as the Aggregation Problem and Diseconomies of Scale. Some more specific drivers include…
- Transaction Cost – Getting the resources required both prepped and located to a condition and position where it can be used.
- Complexity Overhead – Complexity often grows geometrically with each new element adding many new permutations.
- Apples and Oranges – Not all resources are created the same. “Money” is not just “money” (there are different “types” of “money”…for starters, whether the value sits on a P&L or a Balance Sheet). Even, “time” is different (as Einstein famously illustrated, “Put your hand on a hot stove for a minute, and it seems like an hour. Sit with a pretty girl for an hour, and it seems like a minute.”). In economic vernacular, not all resources are fully fungible (fancy word for “interchangeable”, but more fun to say).
Be wary of big claims based on aggregations of small things. It is a very popular device for the “Petty Preservationist”. People who advocate tiny token gestures to “save the planet”. The two most common are the crusades against plastic shopping bags and plastic water bottles. Using ADF, the campaigners produce an apparently gigantic number indicating the waste. The logic then proceeds “for a small act, one gets a big result”. What’s not to like? For starters, it preys on the innumeracy of the general public who don’t easily handle big numbers. Secondly, it saps political will for serious changes as people feel their small gesture has done enough and ticked the box (“Why should I conserve on gasoline when I am already saving the planet by not using bottled water?”).
“Don’t be penny wise and pound foolish”, that’s ADF.