Balancing Efficiency and Resilience in Business Operations

While high return on invested capital is important, companies can go too far by focusing solely on eradicating variance and making their systems hyper-efficient. Jack Welch's statement 'Variance is evil' highlights the danger of prioritizing predictability and safety to the extent that it stifles creativity and innovation. Overly efficient systems can become fragile in times of crisis, as seen during the COVID pandemic with supply chain disruptions. The balance between efficiency and resilience is crucial for sustainable long-term success.