Does the speed of production matter?

Patrick Collison has pointed out that past production often was very speedy, for instance the Empire State Building went up in 410 days, start to finish.  These days, it took the government almost fifty years to open the 2nd Ave. subway line in NYC, with a lot of the speedy production being relegated to China.

But how important is speedy production?  More generally, how should we think of the speed of production as a variable of import?

I can think of a few reasons why the speed of production might matter:

1. Because if you don’t act now the status quo is terrible.  (Often a factor in China, especially in earlier decades, or in earlier American history.  They really did have to put up those bridges at Remagen very quickly.)

2. Nominal interest rates are high.  You can think of the nominal rate as a rough measure of the opportunity cost of locked-up funds/resources.

3. Speed is a signal of urgency, and other positive qualities, but speed per se is not actually so valuable.  Speedy institutions and societies, nonetheless, might be better at setting priorities and accepting trade-offs, big gains above and beyond the value of speed.  Who wants a dawdler!?  And perhaps the speedy are especially good at signaling, a valuable skill.

4. Patrick himself suggests: “speed matters because frontier people like it and will go to the places where speed is possible. It maximizes their comparative advantage.  If your field ceases to support speed, you’ll lose frontier people and stagnate.”  [In turn you might wonder if speed today simply has shifted into other areas, say payment companies and the like, and out of construction, rather than speed having declined per se?  Amazon will try to shift to one day delivery, car production is speedier, Netflix gets you a movie more quickly, and so on.]

5. In a speedier world, recontracting happens more frequently.  Quantity-based resource logjams are cleared up more quickly, and the more rapid contracting sends off price signals, to the general benefit of the market, on a more regular basis, leading to generally superior resource allocation for Hayekian reasons.  For these reasons, perhaps the social value of speed is higher than the private value, thus implying we are underinvesting in production speed?  There are positive external benefits to pushing more liquidity into those spot markets!

So how much should we be worried about the (possible) decline of speedy production?  Should currently low nominal interest rates be taken to mean this simply isn’t much of a problem?

Your thoughts would be most welcome.

Comments

Recently Vermont had huge damage to Rt 100 from Hurricane Sandy Flooding. Mountain communities were isolated and cut off. The then Governor Shumlin, an otherwise doctrinaire progressive, declared an emergency waiving environmental impact statements and other permits for repair work. I remember he was astounded about how fast the work was done and how little it cost. Today most speedy construction is a combination of reduced red tape as well as some advanced techniques. All of which reduce the costs and bring the economic benefits to bear more quickly.

Yep, the problem with slowness is not (only) the speed; it's the reasons why things are slow.

Los Angeles had the same experience rebuilding freeways after the 1994 Northridge earthquake.

Assuming that the thing speedily produced is worth producing, then speed of production correlates directly with economic growth. I think somebody around here may have written about how important that is.

Hernando de Soto talks about how having identity, property, and other assets documented have greatly speeded up transactions and the pace of business. Instead of bringing your cows to market, we can sell thousands at a time at the Chgo Bd of Trade. Property cadasters and documented identity (passports, drivers licenses, credit ratings, etc.) enable us to buy and sell homes far more quickly. Paper moves faster than the real assets. And verified digital info moves faster than paper.

Speed increases the chances of those responsible for the early phases of a project also being responsible for finishing it. In projects that drag on, there is always your predecessor to blame, and / or the public loses interest in the matter and starts tolerating cost overruns and sloppiness.

I think production is the key word here, as it denotes a tried-and-true process. Exploitation of current knowledge should be speedy. Expanding the frontier of what's known perhaps shouldn't. Are the most creative and best solutions to problems found under intense time pressures? Not always.

Um. Under assumption it costs the same to build, just spread over time, of course it matters to present value of the project. I think the zero social discount nonsense is affecting your thinking. Let's delay it infinitely. Let's not go to work. Have sandwich. Both you and Irish guy.

It matters when speed correlates with cost. I would guess more labor hours went into a project that took 50 years than one that takes 410 days. When a project takes longer, there is more total turnover in workers increasing information transfer costs.

It may matter for the consistency of materials used. If technology/regulation/materials changes midway through a project, does maintaining it become more complicated later?

Projects often have negative traffic congestion externalities. This cost likely scales with time.

Midway through building the World Trade Center, they decided that using asbestos to fireproof the steel beams wasn't such a good idea. They stopped using it at the 40th floor of the North Tower, and didn't use it at all in the South Tower. [NY Times, Sept 18 2001]

The beams notoriously melted.

The North Tower took six years to build, presumably the South Tower took the same. A pity they didn't do it in 410 days.

Overheads like management, rent of project buildings, rent of construction equipment and so on all scale linearly with time and can add up to huge fractions of the final project cost.

Speaking as someone in the business of building large infrastructure projects around the worl, the biggest factor in how fast your project can be delivered is the number stakeholders you have to keep happy. The more people who can influence the slower it is. The problem is one of decision making, once you overwhelm the decision making capability of a single project manager you create a big coordination problem. The older projects were much simpler and thus a single PM could oversee it all and keep the whole thing in his head. Now the projects are just too complicated.

What are the "slower production" examples for the US aside from construction? Seems like the US is still fast in manufacturing, it just doesn't come particularly cheap when it is.

Construction seems not fast because of a combination of cost cutting producers leading to unattractive, stagnant, wages (capacity just isn't there) and the re-expansion of a rentier Upper-Middle Class (following a postwar contraction when the landlord business was not very profitable).

Claiming that construction isn't fast because of cost cutting is insane. US construction costs (particularly in transit) are incredibly high as well, also by an order of magnitude. Construction is much slower in things that have nothing to do with landlords-- the Chesapeake Bay Bridge-Tunnel took only 42 months.

Construction is slow because of inefficient techniques and outdated excessive amounts of labor and management and consultants leading to low productivity. The individual wages of labor are neither particularly low nor particularly high in an absolute sense per worker compared to other countries that are much faster, including in Europe; they are high in the sense of compared to productivity. Comparing between these two issues will have people running around in circles, arguing about whether labor costs are the problem. In aggregate they are, but in a high wage, high technology country like the US the solution ought to be (and likely must be) using fewer people more efficiently at a similar wage to now, not continuing to use the same number of people at lower individual wages.

Capacity is easily there for construction. Poor work rules, caused by everything from tradition, refusing to learn from best practices elsewhere, old union contracts, the profitability of change orders, poor government procurement practices, and ridiculous regulation (e.g. NYC's insane nowhere else scaffolding law that doesn't even help safety records.)

Cost cutting in labor I would speculate to cause problems in supply - not a very attractive job for young men. Being neither high nor low in an absolute sense compared to countries with very different job opportunities and lower incomes isn't really the issue there. Cost increases everywhere may be greater than this and construction costs may rise overall. Perhaps the solution to wages must be to use more technology but this seems easier said than done and hard to demonstrate in practice.

"Cost cutting in labor I would speculate to cause problems in supply" -- but on government projects, the problem is not so much the hourly cost of labor but the low productivity that results from a political pressures to use as much union labor as possible, regardless of actual need (aka "featherbedding").

"Construction is slow because of inefficient techniques"? Well, maybe, but New York would be doing unbelievably, fantastically well to match the (inflation-adjusted) cost per track-mile of subway construction in 1900-1904. Which would seem to be a huge hint that maybe the problem is something other than outdated, inefficient construction techniques.

Public works projects have their own demons but generally building construction is much faster and efficient than it's ever been. Changes in materials, like no-hub drain piping, pre-cast decking, laminated wall-sheeting, etc. are much faster and less labor intensive than their prior counterparts. Scaffolding has in large part been replaced with hydraulic equipment. Cranes are much better. The biggest differences in building construction are design issues and mechanical systems. Not so long ago the mechanicals in a building consisted of water supply and waste, heating, and electrical service. Now space between the ceiling and decking is stuffed with piping, air handlers, electrical and comm cables. No more opening a window for some fresh air, hugely expensive HVAC systems regulate indoor temperature and humidity to design numbers. Buildings are radically more sophisticated than in the recent past. It takes longer to build them and it's more expensive. And that ignores the regulatory and administrative hobbles.

+1, this matches my experience

Boeing speeded up production of the 737 Max by combining the old low to ground design of the 737 combined with much larger more efficient engines, and by doing so, beat Airbus to market and gained a large advantage in sales. There have been a few hiccups. One might conclude that speed kills.

That's one example, but think about the Nyquist sampling theorem, you know, the old movies showing the chariot or wagon wheel going backwards? Clearly speed matters. OT, what do you think of Ralph Nader --Mr. Speed Kills--going after Boeing because his attractive niece was on the doomed Ethiopian Air flight? I hope he wins, she was a babe.

I forgot to add that it may matter for taxation. Under progressive taxation, it can be better to receive X/2 for 2 years than X in one year. This may incentivize contractors to have multiple slow moving projects rather than volatile income they might receive from rapidly completing one and looking for the next.

I wouldn't just see this as a between-industry question. Speed of production is a big within-industry differentiator - look at the speed to market of innovations within industries that come from startups versus incumbents. Two companies can built software products of similar complexity on time / cost scales that are orders of magnitude apart!

Like the old adage says: do it right, do it fast or do it cheap, pick two.

In the context of software systems I have often heard this quote but I think reality is more nuanced. With capable people at the helm work tends to go quickly and be executed correctly. Given the same people, there are choices that can increase speed somewhat while perhaps decreasing correctness, but in the average case people are first order and choices are second order effects. Alternately, a target of cheapness usually leads to neither speed nor correct work nor cheapness. There is important idea behind the quote, though, and its that trade offs are real, nothing is free, and more speed necessarily has costs, in some form, somewhere.

On speed itself, two aspects have importance: the time expended to get something done and then the continual time and effort to maintain and enhance that something. Software can consume huge amounts of time to maintain and enhance, and yet it is often speedy to build initially. I do not know if public infrastructure has this same characteristic, but I have noticed that in parts of the world which have experienced large, relatively recent building booms, building slows down after 20 - 30 years or so and infrastructure becomes visibly less new, more rundown. I've often wondered if that slow down is because maintenance limits resources available for the new as time passes. In software, some companies dont bother to maintain software long term because the maintenance becomes too slow. They just accept that software has a lifetime, to be thrown away, replaced by the next generation. Infrastructure is probably harder to throw away once it has outlived its youthful solidity and people are depending on it. I'm thinking of the NYC subway situation here, apparently a maintenance hole at any speed.

On a more speculative note, it's counter intuitive but large, complex, coordination dependent projects may be difficult to accomplish well without speed. Examples are the complex software systems of large US web companies. In these systems deployments of new software happen multiple times a day, and that daily speed forces systemic changes that in turn allow these companies to produce those same complex, large scale systems. Speed disciplines the production of the system by weeding out the people and procedures that weaken the system. In humans these stress effects are called hormesis, and also have beneficial systemic effects. Unfortunately the only stress effect I can identify that operates on the public sector is war; speed would be better if it could be injected somehow and it would probably help with war as a side effect.

Since hormesis is internal, maybe anti-fragility works the same way, but externally? Many small stressors increase the strength of your system.

Why is it slow?

Two cliches. Billable hours, and what I learned when I worked for government; Rule 1 it doesn't matter. Rule 2 If it matters, see rule #1.

I'm watching a small infrastructure project get done. A village sewage treatment pump building. Nothing complicated or exceptional except the project is taking two years to complete.

There are four groups. The village, which is funding the thing and operates the sewage plant. They hired a construction management firm to run the project, and an engineering firm to design it, with various engineering disciplines involved; structural, civil, mechanical. Then there is the contractor, a mechanical contracting company that I know and do work for. They are the general contractor on the project.

It is weird. It seems that the incentives are to generate billable hours. There was an issue with the roof trusses. The manufacturer engineered a design, which was submitted and approved by both the construction manager and the engineers. The trusses were installed, and inspected by an engineer. He decided something was inadequate. It took a month of pulling teeth, back and forth between the manufacturer, the general contractor, the engineering firm and the construction management firm, a ridiculous game of what do you want, I want you to design a fix for a problem that only I have discovered, but there isn't a problem, and round and round it goes. The time involved and consumed over nothing was worth and likely billed out to more than the trusses were worth.

Every step of the way was the same, making a very simple and tiny job into a two year long saga. The village needs the blasted thing to work, likely the job was initiated from some problem with the existing process, and there are likely legislative requirements attempting to be met.

Just remember it will be these same fucking jackasses who will be pushing 'solutions' to global warming, with the same results; over budget, taking three times longer than necessary to implement and likely to not work or even make the situation worse.

But it doesn't matter. Even if it does, it doesn't matter. They get paid no matter what, and can pontificate on their own superiority on someone else's dime. All products of the best educational establishments.

The speed of production matters for government projects as well as others because:
1) It is bad for most prospective projects to only be completed when the current leaders will be out of office, that does not lead to good performance nor good ability to judge performance.
2) The slowness that the US sees in construction does not safe money but is the reflection of inefficiency; adopting modern techniques as seen in Europe or East Asia would see many more projects completed in a given time at the same total costs as currently. The entire political argument about infrastructure spending nationally or at the state and local level is a sideshow compared to inefficiency.

Speed is inversely proportional to the amount of reviews / approvals / red tape. While red tape is typically viewed as a bad thing, it is almost always in response to something bad that happened in the absence of said red tape. For example imagine if the entire length of second avenue collapsed after the subway went online.

One could argue, the mark of a mature successful organization is continuously re-evaluating how much red tape is enough. In the US it seems like there is almost always too much or not enough.

Tyler, it's just standard discounting--something done today is worth more than that same thing done tomorrow. What am I missing here?

If the rate is negative, do we prefer completion tomorrow?

What discount rate to be used though? Many people assume debt costs are the right rate to use, but that is incorrect. For private projects we use cost of capital, which is the alternative project return if you like. If you are funded by a blend of debt and equity then you need to use a blended equity and debt rate. Although debt rates have fallen implied returns on equity especially for riskier projects, have risen, so cost of capital for many building firms is probably more than 10% nominal even today. So Tyler is correct, there are big incentives to bring projects online as soon as possible. Of course this is only true of privately done projects, agency factors mean that Government project managers are incentivised to make their projects as expensive and long as possible, after all their compensation depends on it.

Speed in execution shows project and spec clarity and agreement, specs are frozen, management execute without interference. It’s a reflection that the disruption or inconvenience to others is low. It may signal the cost of non-execution is high.

Wait... I thought big businesses are good and underrated?

We're talking about public infrastructure here. Unless tied up by regulatory approvals, businesses in the U.S. don't have trouble putting up new private-sector buildings quickly.

No we are not talking only about public infrastructure.

"... payment companies and the like.... Amazon... Netflix..." are not public infrastructure. Nowhere in the post does it say the words public or infrastructure. In Patrick's list only five of the ten items are public goods (P-80, Apollo 8, The Alaska Highway, Shenzhen and Marinship). Saying, "unless tied up by regulatory approvals" is an excuse because one can always claim government interference.

In some cases legislative fiat speeds construction, for example, One Vanderbilt. The building was mired in a conflict between Argent Ventures (owner of the land under Grand Central Terminal and therefore air rights) and SL Green Realty. Without the Bloomberg administration pushing through a rezoning, the project would have been stalled in the civil court system.

for construction: Several have mentioned red tape. In addition, I would argue that slowness is due to (and is a marker for) incompetent management. Speed should always be beneficial, all else equal. For a subway, the 50 years of construction were years no one could ride that subway. For opening a new store, any delays mean no income.

The Navy commissioned the first Ford-class aircraft carrier, the USS Gerald R. Ford, in July 2017, three years behind schedule and billions of dollars over budget. The Ford cost about $13 billion.

Speedy projects give less chance to accumulate opposition, both internal and external. The originating decision makers see the project through to the end, and the project doesn't need to get buy in from new people. They might not even have time to have doubts. External people don't have time to understand the project, coordinate opposition or lobby the decision makers. The positive externality would be that existence proofs of successful or failed projects might cause quicker and more profound learning than bigger, more debated, more reviewed projects. It may even be the case that no amount of debate can answer certain questions, and that only by trying will any learning/productivity gains occur.

My thoughts are long these lines. Production time, in and of itself, is opportunity cost, but maybe more meaningful is uncertainty that the project will be completed at all, or in the same scope originally imagined.

Most public infrastructure projects that I'm aware of spend as much time or more in permitting and approvals, not just the build time. During that phase there are any number of factors that could kill off a project, especially for straight up political reasons. For instance, as I understand it, in the 30s in NYC you could ignore the urban planners and build what you liked, and simply pay a fine. You can't do that anymore, anywhere - projects built without planning consent can be torn down (see the castle in southern France, or every six months there's another stealth house in the UK torn down).

For IT projects, these planning/scoping phases can be fatal if requirements move beyond original scope during the build phase. In mining projects delays may mean a project imagined in one boom cycle doesn't get up until the next boom cycle. The type of design is highly influential for mining projects as well (I can recall talk of offshore LNG extraction and processing to minimise onshore footprint and impacts - though uncertainty on approvals over time killed that one too). In transport projects changes in government during approvals can kill projects, though usually once they're commenced they're not practical to cancel. You could make an argument that delays and the associated uncertainty killed the Amazon NYC deal, where a faster sign off could have just made it happen, and then dealt with arguments after the fact.

To some extent delays and increased approvals offers more opportunities to trade off other stakeholders views, like environmental or heritage value. Avoiding tearing down a cherished cultural icon may be preferable, and you may not realise how valuable it is until you try to tear it down. That said, not building a new cherished cultural icon is equally unfortunate, even though you don't see it. Nobody mourns the Eiffel Towers not built.

I can't remember, did Marginal Revolution cover California's High-Speed rail "death by consultant?"

https://www.cato.org/blog/californias-high-speed-train-has-done-lot-more-good-big-consultants-taxpayers-or-riders

Someone should do a US comedy series on this, along the lines of W1A. That would provide the teaching moments.

Yep, management consultants killed the high speed rail project in California due to their fees.

And Trump is a self made billionaire.

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And there were WMDs in Iraq.

And Clinton didn’t intentionally destroy her emails.

And Bill Clinton didn’t have sex with that intern.

And Jared Kushner earned his way into Harvard.

And Chelsea Clinton earned her way into Stanford.

And Obama child #1 earned her way into Harvard.

Any other bullshit you’d like to shill?

If I remember an L.A. Times story correctly, the state of California had only 11 full-time employees working on the rail project as it launched.

That is obviously ridiculous, and I am quite certain that all those successful rail projects around the world that people point to for their lower costs have 1000s of civil servants specialising in rail.

Government f'd up, by trusting business that they could do it "the easy way" without building institutional knowledge and hands on management.

Why would they have anyone who specialises in rail? They have none, and there is no intention of building any.

Let's be clear here. We can divine intention by results. The intention of the whole thing was to line pockets of connected people. The intention was (and still is) to waste money, using it to buy the bona fides as an enlightened progressive in favor of a rail project that will save the environment.

Remember these same people want more money and more power to solve a real problem, global warming.

So I guess the answer to the question is "yes speed is important and our consultants are talking to their consultants about this."

"It may take some time to gather information from the consultants consultants consultants."

Speed matters, because the people working on the project are paid per unit time worked, not per unit output. Comparing the 410 day project with the 50 year project, it is _not_ the case that the 50 year project had 410 days worth of work spread out over fifty years. Rather, it had on the order of 50 years' worth of days of work, which means paying people daily wages for that entire time.

The faster a construction project is completed, the cheaper it is to build, all else equal, because of lower labour costs

Seems very obvious, doesn't it, but somehow it didn't make it onto Tyler's list. Should have been even more obvious when you consider that a mile of the Second Avenue subway cost 3-4 times as much as subway projects in other cities.
Add to that the signaling effect of speed. What does one expect of a government that can't get anything done in time?

If your project is viewed as the solution to a particular problem, speed lets you solve the problem while it still exists.

The Empire State Building has survived but the Tacoma Narrows Bridge, built less than a decade later in only 19 months, did not.

In comparing [things built faster in the past] to [things built slower now], one should be careful about what is considered data.

An amusing aside: do we also respond to disasters slower now? There was a catastrophic fire in the Holland Tunnel in 1949. It reopened to traffic the next day. I feel that would be impossible today.

Production speed surely matters if you're working in a field where technology is rapidly improving. For if it had taken IBM fifty years to deliver its 7090 mainframe computers it might then find little market for such a thing in the 21st century.

But even if one is building transportation infrastructure, needs change over time as people and workplaces move. With the result that not only was the infrastructure not available when it was badly needed, but, by the time it became available there was little need for it.

But in general, a crude view of markets is that they form a negative-feedback system in which increased demand produces a rise in prices which then act as a signal to producers to produce more. But, negative feedback systems don't work so well when there are huge time delays in the feedback loop.

A negative feedback loop compares output to input and creates an error signal, which is then used to correct the output. But you probably wouldn't much care to drive a car that took 30 seconds to apply a twist of the steering wheel (the feedback) before it could change the car's steering.

In economics, price is usually the feedback signal (but sometimes it's political demand) but, if it takes too much time to react to it the demand that generated it may no longer even exist. At a minimum, there would seem to be a huge productivity drain due to the lesser value of whatever was produced, as it would reflect what people wanted years (or decades) ago but likely would not longer do so.

In engineering, speedy teams that operate with a sense of urgency create a culture that drives further success and speed, in part by attracting and selecting for team members that match that culture. I was part of a team that took a major avionics package from contract to flight in 7 months. It was all about culture.

Its important that the project duration be shorter than the organization stability duration, i.e. the project needs to be done before the organization (decision makers, goals, etc.) changes.

Its not unusual for software projects to have 1-3% requirements creep - per month. It can be really hard to ever get large/long projects to completion.

"Its not unusual for software projects to have 1-3% requirements creep - per month. "

Frankly, that strikes me as trivial. As long as the creep doesn't require code re-write, then it's really just going to add a day per month to the length of the project. Requiring, re-write, re-engineering, replacement of finished construction is where the costs and time escalate.

after 2008, the CFPB created campaigns to teach students about taking debt, as many that had in the 1990's should not have. same with opioid prescriptions, with facebook behavior, perhaps we will see this with marijuana production. why aren't there anti-drinking commercials? Perhaps because speed in consumer protection is entangled with tacit public policy, and advertising is often tacitly understood as the "public interest" when it logically cannot be.

Changing transaction rates (speed) incurs a infrastructure cost. People walk the grocery aisles at some typical pace, your transaction rates match that pace. And everywhere you will have the transaction rate vs inventory cost trade off.

Banking, having a fair traded deposit to loan market will set the transaction rates for you. In our abstract algebra model, setting that rate determines how vertical the flow through the trunk, and the accuracy of the pricing hologram. Good currency banking make trunk round get good hologram.

In Switzerland, there was a large movement in the 19th century called the "trains and democracy" movement that extended the Swiss railway system to every town and village. It was supplemented by a large postal bus network. The end result was far less crowding into cities and large towns than in other nations. Speed of production was the point, as was preservation of town and village heterogeneity.

Speed is correlated to cheap too because speed is a characteristic of efficiency and efficiency is correlated to cheap. This is an obvious point.

This might sound obvious (or stupid) and is related to #1, and the status quo being 'terrible', with a reference to transport infrastructure.

I'm assuming that the infrastructure investment is being made because the status quo is not just 'terrible', but also a drag on productivity, i.e. the investment is being made to solve a problem, and productivity lags will be in place until the infrastructure can be used.

So, you just want any productivity/growth lags to end sooner, and you want productivity gains/growth sooner, right?

Or did I miss something less obvious?

The question of speed is related to economic dynamics. Market systems are feedback control type systems where market changes, say an increase, will feed-back to the supply system which then responses at a certain speed and satisfies the increased demand.

If you actually look at the dynamic equations of these market systems (look at solutions to the differential equations that control dynamics) you will note that where the supply functions have added delays that make the overall supply cycle comparable to the normal cycle of the demand side (often linked to the business cycle decade time scales), the new supply doesn't arrive until the demand and prices are on the way down. This creates an oscillating system that crashes and results in abnormally high prices. This is California real estate with high prices, decade long supply delays (7+ years is common just to get permission + 2 or so years to build) and vast price oscillations even when the population isn't increasing very fast.

It is time economists learn something about the dynamics and instabilities of feedback control systems. That will show the value of speed. If the control system response time and the dynamics of what is being controlled are the same, the system is mathematically unstable and will oscillate and crash. If the system response is fast relative to the demand variation rates, the system is stable and the economy works. This is where speed becomes critically important.

Equilibrium type mathematics that economists like, doesn't describe the instabilities, but dynamics do. It does require complex math (imaginary numbers and all that stuff), but economist claim to be good at math. In any case the control system engineers have worked out most of the solutions.

"This is California real estate with high prices, decade long supply delays (7+ years is common just to get permission + 2 or so years to build) and vast price oscillations even when the population isn't increasing very fast."

Right. I felt a little sorry for the Texans of the Bush Administration who were blindsided by the California Housing Bubble/Bust, in part because those kind of cycles don't much happen in Texas, where an increase in demand for housing leads to an increase in supply in 2 or 3 years, not 7 or 10.

California homes make up an important part of the national wealth, but their prices go up and down in nationally destabilizing waves in part because of the slowness of approvals for new construction.

6) Zergling rush.

Me, I like the Chicago way. A Sisyphean struggle for years and then changing the laws of nature.

Did I miss something? Isn't this obvious?

If you're building something that generates economic returns, you don't get the returns until it's useful. The slower you build it, the lower your returns.

James J. Hill sped construction of the Great Northern Railroad from Havre Montana to Seattle in under four years: so he could start making money!

Seattle's Sound Transit, after nearly 20 years of operation, has less than 20 miles of track! OMFG, think of all the ridership revenue lost by this infernal dawdling! Worse yet, ST was used initially as a welfare project, so the first leg was built through an "underserved" community, where it duly underperformed the already meagre ridership estimates. Had it been built on a high capacity route first, the ridership would have probably paid for the route to the underserved community, who in reality had little need for the project.

Speed is everything. It's everything. Going slow is just blowing wealth, flushing it down the toilet.

Thank you! I made a similar comment above. I was beginning to doubt my sanity.

Ha, yes, I saw that! Excellent!

In general terms, you're doing something to create a return or a benefit. The slower you do it, the longer it takes before you have your benefit.

I'm sure there are lots of other carrot shavings out there that are poz and neg, but the benefit from the project itself is most of the carrot, right?

Speed kills. US production of war material was unbelievable in WWII. As Hitler learned.

YES. I feel we've been in a medieval squeeze on the roadways (I'm in LA) for 40 years and it's time to UNSQUEEZE. THE ROADS MUST ROLL! Let's do for roads what the hipsters have been doing to Brooklyn for the last 20 years!

Speed is good because it reflects a society that can develop consensus quickly and cheaply on how to distribute interests.

Developed societies are slow because everyone are trying to maximize their interest all the time, and are unwilling to satisfice on interests. That's mostly a zero sum, if not negative sum, competition that drains vast amount of resources. It's not having to fight that battle which makes frontier societies feel faster and freer.

Artificially speeding up developed societies won't bring the same benefit. Everyone still has to fight tooth and nail for their full share, but must now do it in even less time. It'll just amp up the anxieties and make that battle even more urgent. People would rather cut corners on the substance of the project than on the fight for credit.

Faster learning of good and bad practices.
Easier to remain focused.

I look at it from a distributed systems perspective: One of the few things that we have that is complicated enough to resemble an economy, but is truly centrally controlled. Tens, if not hundreds of thousands of self-regulating actors, which do thing at different speeds, and have basic communication speed costs. Any kind of regulation of the system relies on signals that are slow, and on costs of things like spinning up new actors.

In that environments, the effect of speed, of lack thereof, on either item processing, communication, or new actor spinup, is not linear for either of the three axis, and each axis itself will have a different curve. There are critical barriers where entire retooling of how a system has to work are required, because otherwise you see shocks of work that is not done, or 'actor unemployment', not unlike real economic shocks. There's also the important effect of lack of time reliability: It's sometimes better to make sure that something takes X, +-5%, than to take Y, when said Y is on average lower than X, but has a performance variation that is 20 times that of X. Predictability improves control, and sometimes lack of control has disastrous, system wide consequences that require human operators to just increase total spend for a while.

It's not strange that Patrick cares about this: His own company has quite the large system that has all this characteristics. The trick is that turning it into an actual economy requires most of the computations be relatively closed, while in practice, performance characteristics have more to do with the daily and seasonal demand changes for payment processing (first of the months are no joke), as opposed to internal factors like in a real economy.

What is our speed of consumption, presently?

I am a project manager and I would like to scream these three things to the heavens:
1) When a project is anything other than the top and sole priority, many of the departments, agencies and people working on it are splitting time with other projects. Every person who is available only half-time or a third of the time slows down the work of everyone else on the project. This leads to the phenomenon that the slower a project moves the more it slows down as everyone involved picks up more other projects from their superiors since they have time due to the primary project going slowly. Once this process starts it is auto-catalytic and can be fatal.
2) Due to point one, every manager, supervisor, and agency participating in a process wants to get value out of their staff that is stuck on a project where work (and revenue) are only coming in slowly; so they rationally pull resources away from the slowing project, thus making it take longer and increasing costs for all departments and agencies involved in the longer run. As a project becomes less urgent or profitable in the short run it is driven by the individually rational actions of various parties to become much, much less profitable in the longer run. Again, this process is self-catalyzing and frequently fatal.

The need for speed can certainly have negative effects and project managers need to have the discipline to be aware of the risks of rushing; but once the disease of continuous partial attention and partial commitments take hold any budget, timeline and product can be ruined. Focus is a the most powerful thing any team can have and once its lost the project manager is probably f**ked.

Very insightful comment.

"; so they rationally pull resources away from the slowing project, "

Also, they take their best people off the project. You don't waste your A players on lackluster projects, they get bored and their efforts are wasted. Your B players are competent but probably not as self motivated, without any A players around and a project that is stretching the sense of urgency goes away and it becomes one giant meeting fest with little productive work happening.

Exactly. Once a project is reduced in priority by any contributor the most productive staff are reassigned and every other contributor's progress is slowed as the new and likely less productive team member gets up to speed which leads to other departments concluding that this is not a productive use of their best staff etc.

At the kick-off meeting for a project ask everyone at the table where this ranks in their priority list. If eight departments all regard it as their sixth most important job then collectively it will be treated as the 48th (6x8) most essential project. Once anything is about fifth on multiple department's or agency's priority list it's at the event horizon where it may be visible in perpetuity but has already been consumed by the black hole. At this point, you the project manager should rationally try to get yourself reassigned to protect your reputation as someone who delivers results because you won't be able to on this job.

And so it goes.

Speed is essential for feedback loops. Not all production is as good as it could have been. The cycle of iterative improvement is only as fast as the production cycle.

Software production is obsessed with speed, no so much with completing the whole thing quickly, but with completing "something" quickly, over and over again, that the customer can evaluate to get the improvement cycle rolling. (Search for "Minimum Viable Product")

Toyota is known for implementing quick and dirty changes to their processes in favor of waiting for carefully engineered ones, in order to evaluate them before investing in expensive re-engineering. (See "Toyota Kata")

With big, discrete infrastructure projects, iterative improvement may either be conducted outside the completion cycle with construction material experiments, computer modelling, or it has been entirely abandoned and is almost completely stagnant.

Good points, but in software and manufacturing, you can keep producing and selling product while you're iterating and while you might not be getting the optimal solution, you're likely getting something better with each iteration.

In construction you're often doing model iterations because you can't do real iterations, which means your *losing* money while you iterate, even if you're coming up with a better product. So in construction - and I'm sure this not news to people in the industry - your decisions about where to push the envelope and where to use off-the-shelf technology are much more important.

If speed does 't matter, we should dig the next subway tunnel with teaspoons.

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