When Rational Decisions Create Irrational Organizations

01

A familiar caricature of modern business

We have become very good at finding shortcuts — and increasingly bad at understanding where they lead.

A light movie about fashion, AI, consultants and cost cutting unexpectedly captures something very contemporary. Every individual action may appear sensible. The deeper question is what those actions create when combined.

02

When technology becomes the answer before we understand the question

We have quietly moved from asking “What can AI help us do better?” to “What can AI replace?” These are not the same question.

Technology can generate an image, create thousands of designs and optimise a process. But does it understand why one design should exist, or the system to which a process belongs? And, perhaps most importantly, do we?

03

The spreadsheet can be right — and the organisation still wrong

Experienced people, travel, drivers and traditional processes are expensive. Technology, automation and external benchmarks can make the alternative look obvious.

What if every individual decision is rational — but together they create an irrational organisation?

04

Local optimisation, systemic consequences

Cutting an experienced employee may improve this year’s cost base. But knowledge, relationships, judgement and organisational memory may disappear with that person.

None of these decisions is inherently wrong. The problem begins when efficiency becomes the strategy rather than one of its parameters. Organisations are not collections of independent cost lines. They are systems, and the consequences of changing one element rarely remain in one Excel row.

05

Understand the system you are changing

Use AI. Automate. Challenge existing structures. Optimise costs. Bring external perspectives. Replace things that no longer create value.

But first understand where value comes from, which capabilities are strategic, what technology should augment, and which apparently expensive elements quietly hold the organisation together.

06

No function sees the whole organisation alone

Finance sees cost. HR sees people. IT sees technology. Sales sees customers. Operations sees processes. Consultants see benchmarks. The board sees strategy.

Each perspective may be correct. None sees the whole organisation alone. The ability to connect these perspectives, question assumptions and adapt may become one of the most important organisational capabilities of the next decade.