Irrational Exuberance!

Startups and Assembly Lines

September 5, 2008. Filed under entrepreneurshipessayframing

What time do you wake up? Is it the same time everyday, or does it fluctuate with the day's ebb and flow? For some time I have been focused on building good habits and reliable patterns. WIth a focused intensity I tried to alchemize the unusual into the routine with--well--routines, but I have begun to suspect I've been mistaken. This essay will explore why structured schedules do not optimize productivity, and examine how the flawed mental model of businesses as assembly lines incorrectly emphasizes predictable schedules.

Habits play an important role in our lives, and here we'll consider how routines can help or hinder maximizing utility in our lives. Our approach will be two-pronged: first the economist's notion of maximizing utility, and then the Csikszentmihalyi perspective of maximizing flow.

Building on that discussion, we'll segue into examining how assumptions implicit in the assembly line frame of doing business (which has been so broadly applied as to now be thought of as the way of doing business) has misaligned our daily schedules in such a way that we are neither maximizing utility as individuals nor as a society.

Maximizing Economic Utility

From an economist's perspective, maximizing utility is a rather mundane task. You have a list of tasks before you, where each has a utility function of some sort, and you pick the task among them that returns the highest utility. For example, lets consider doing laundry.

If you don't have any clean clothes, then doing the first load of laundry is a Good Thing. You get a lot of utility from that first load. Doing the second load is still a good thing (you can wait longer before doing laundry again), but it isn't quite as useful as the first load. When it comes to a third load, you might not have any laundry left to clean, and you're consuming quarters and detergent to watch the machine's hypnotic whirling.

F(X)F(1)F(2)F(3)F(4)
Value10050250

This downward sloping utility curve (generated by plotting F(x) against time spent performing the task) is typical of most tasks. The first few hours are the most efficient, and utility decreases as the number of hours grows.

To maximize your utility, you look at all your various tasks you may perform, and pick the one that will return the highest utility. Then next hour you update your utility ledger, and again choose the one that will return the highest utility. You continue updating your utility ledger and picking the maximum utility until you run out of time.

Living in this world of numbers, planning a routine and sticking to it is the easiest way to maximize utility. Design utility functions for all your activities (working, eating, sleeping, exercising, reading news feeds, socializing, etc), grab some paper and a pencil, then crunch those numbers. After determining the optimal number of hours per task, then create a daily or weekly schedule with the appropriate number of hours for each activity.

Making this schedule will make you even more efficient, because you'll no longer spend time considering what your next step should be. Instead, you'll glide methodically from optimal task to optimal task.

Maximizing Flow

On the otherhand, the method for maximizing Flow is a different matter1. While the economics concept of maximizing utility treats your life as a process to be managed for optimal output, Flow is attempting to optimize experience (which in turn leads to optimizing happiness, which leads to optimized utility in a roundabout kind of way).

The Flow approach to utility optimization introduces elements of human psychology into the mix. One high-level way of considering the relationship between Flow and economic utility is that the concepts of Flow are a way of deriving one's utility functions.

There are a number of specific criteria that Csikszentmihalyi defines as guidelines for acchieving Flow, but you might summarize them like this: you must be engaged and undistracted to attain the Flow state. While in the Flow state you work at an elevated level, where you are exceptionally productive.

Thus maximizing utility (and experience, and happiness) is a function of maximizing one's Flow. Planning a schedule around this concept is an elusive feat, because entering the Flow state is a complex function with nigh uncontrollable inputs.

It's harder to enter Flow when you have financial worries, harder to enter Flow if a close individual passes away, and harder to enter Flow when you're waiting for the delivery truck to come with your mattress. One of the reasons why Professors have rigid class schedules and are reasonably well paid is to shelter them from the mental entrophy caused by unpredictable circumstances2.

If you do happen to enter the Flow state, then you'll be much more productive if you remain in that specific task (i.e. your utility function will change such that continuing the specific task is your optimal decision). But if you can't reliably predict when you'll enter the state, then we lose the ability to plan an optimal schedule.

Instead, with this approach to maximize utility, one must continually reappraise the utility of their current situation. Which brings us to the most plan hostile philosophy imaginable: do what seems best at any given time.

Thus, while we were content to create long term schedules when relying upon the simple economic model of maximizing utility above, combining this with the concept of maximizing Flow we find that schedule creation requires a predictable utility function.

Although we can do our best to minimize fluctuations in the inputs in our utility function (hunger, sleep, exercise, friends' wellbeing, weather), we can hold them neither constant nor entirely predictable.

In volatile settings, a strict scheduled interferes with maximizing utility. Instead, maximizing utility requires an agile responsiveness to the situation at hand3.

The Assembly Line Model Doesn't Maximize Utility

Perhaps the oddest thing to consider is that the standard workday stands in conflict with both the simplest scheduling approach to maximizing utility, as well as our second approach refined with the concepts of Flow psychology.

For the prototypical workday, the individual comes to work at a designated time, and leaves at a designated time some eight hours later. This is because modern workplaces and work practices were designed around the assembly line concept. An assembly line with a missing piece is an assembly line where none of the pieces can move. Each place along the line is a chokepoint; inefficiency anywhere undermines the utility of the entire process4.

Even though the 9 to 5 workday doesn't optimize an individual's workday, most businesses believe it is a necessary prerequisite for productivity, as they are implicitly modeling their businesses' structure after assembly lines with their numerous productivity chokepoints. But it's not just a problem of big businesses, this bias extends to almost all of us; when we think of businesses, then the assembly line model is sufficiently entrenched in our minds to be unavoidable. We cannot easily imagine an alternative working system, because the mental model of the assembly line in our head rejects incompatable alternatives.

Looking at our relatively recent historical past, before industrialization swept through America and the world, the primary source of employment was self-employment. You owned a store, you provided a service, or perhaps you were a farmer. Work was not parceled into bite-size chunks to be fulfilled by replacable and interchangable parts (the inevitable continuation of the assembly line frame which casts human beings as tools), but instead individuals were responsible for taking tasks from concept to conclusion.

The farmer didn't necessarily mill their own grain, but the vast majority of the process from planting to selling were under their direct control. Specialization existed, but often was not the specialization of skills, but instead the specialization of capital. The miller milled grain because they had invested their resources into a mill, whereas the farmer had invested their capital into farming equipment.

In this entrepreneurial society, the limiting factor was not ability, but capital. However, looking back we immediately assume that the limiting factor was ability. Why? Because we've grown entrenched in the assembly-line frame of production, and unthinkingly accept it's restrictions as immutable.

Return to A Successful Model

Fortunately, there is a small but real reframing of productivity currently underway, which celebrates the economic concept of maximizing utility and Flow concept of maximizing experience, instead of promoting the narrow industrialist premise of humans as interchangable parts of a greater machine.

This movement consists of a number of overlapping groups, which are best united under the term entrepreneurs. Freelance writers, professional bloggers, independent contracters, small programming shops, and early-stage internet startups all fall into this small but vibrant community.

One uniting aspect of these entrepreneurs is they have greater control over their schedules, and use that to optimize their personal and professional utility. A tired hacker will take a nap and do her programming later. A writer stuck on a plot point will go for a jog to clear his mind. Small operations have the flexibility to facilitate optimizing decisions. This flexibility also ties into maximizing experience, because an entrepreneur is better able to adapt their scheule to the unpredictable whims of Flow elevated productivity.

An important key to these changes is that these small entreprenurial operations do not partake in the assembly line process. This is not necessarily an explicit choice--its hard to intentional disown the assembly line frame as it is the dominant mental model of how to run a business--but when there is a huge amount of work to be done, and only a few people to do it, then each must individual does what needs to be done, and the model is forgotten. (Until they begin to consider how to grow their company, as which point the assembly line model takes hold once again.)

Over the past hundred and fifty years in American society the dominant model of business has shifted away from a sensible model that fit with both economic and psychological notions of maximizing utility, towards one that maximizes a different kind of number: profit. To the detriment of everyone, in the transition we lost track of a concept which defies numerical measurement: quality.

The quality of experience for the individual worker has decreased5, and so has the quality of the things produced. Profits are a harsh mistress, which demands continual sales, and are ill-served by when a consumers needs are too fully met (although they are adept at convincing us we need to continue consuming)6. Yet another accepted assumption of the assembly line model is that producing more is Good. All too often that premise can reward quantity over quality, and mimicking over innovation.

To build better lives for ourselves, and to build better lives for everyone, we must retune our internal models of business to the entreprenurial model.


  1. The concept of Flow is developed and explain in Csikszentmihalyi's Flow, which is an excellent book. For those interested in a briefer introduction, the Wikipedia entry on Flow may provide a basic introduction.

  2. Indeed, you might say that--on the surface--being a Professor is the situation most condusive to attaining Flow. This is no mistake, as much of what Professors do is research, and the creativity and performance involved in research is tightly linked to routine acchievement of the Flow state. I say "on the surface", because inevitably there are other unavoidable detriments to acchieving Flow, among which faculty politics seems primary.

  3. Although this essay cannot maintain its focus while exploring all the implications and discussions inherent to the included ideas, there is a key one here worth its own discussion at a later point. Businesses that forgo this agility are not necessarily making a foolish choice. Instead, as businesses grow the percieved opportunity cost of making changes grows as well, often growing faster than the percieved value of making those changes. Short of putting risk-loving individuals at the helm of your business, this seems like a difficult fate to avoid as a business grows.

  4. Those who have read George Lakoff's Don't Think of an Elephant will recognize his concept of framing in this essay. Elephants has given me a new tool for understanding conflict, and not just political conflict (where Lakoff is most interested) but in the business world as well.

  5. Actually, the term 'individual worker' seems to draw its meaning from the business as assembly line model. When we say individual worker we are emphasis the contrast between the entire work organism and the individual who is a member of it. A possible reframing would be to use the term entrepreneur or rework the sentence to use the word everyone.

  6. This is an area where the Software-as-a-Service model makes complete and total sense. Instead of focusing on creating yearly upgrades to facilitate planned obsolescence, instead you are rewarded for totally satisfying your customers. SAAS is a great move forward towards balancing the inherent motivational flaws in the assembly line model.