Gothenburg · Wednesday, July 22
Jan Bosch

Jan Bosch

Accelerating the adoption of digital — software, data and AI — technologies in industry and society.
reflection

The perils of local optimization

One of the topics that I struggle with is the balance between local optimization and end-to-end optimization. In the companies I work with, I see many examples where individuals and teams optimize based on their local circumstances at the detriment of the company at large. We see the US giving up on the decades old collaboration in the western world and focusing on their own priorities at the detriment of both Europe and themselves. At the same time, seeking optimization beyond the boundaries of your circle of control requires coordination if it concerns your circle of influence. It even is a complete waste in case it concerns your circle of concern. In that case it is better to focus on yourself and what is best for you. In his book from 1776 Adam Smith, the father of capitalism, wrote about the invisible hand, meaning that if everyone focuses on their personal interests, everyone would be better off. That may be true, but only if the incentives at the personal level and at the societal level are closely aligned.

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