Productivity of do it yourself

Today I am thinking about the do-it-yourself sub-culture for our lives outside of work and how this sub-culture influences our work and government.

The do-it-yourself subculture takes advantage of new technologies and businesses that have grown to support this culture.   Conversely, these businesses are taking the opportunity to build this culture to drive their business.  It is a cooperative and probably win-win kind of venture.

I’m tying together several heavily marketed themes for home owners:

  • Big houses with room for bulk storage permitting a miniature warehouse operation, and with areas to store and operate tools for large projects.
  • Big houses that can host large gatherings and provide entertainment rooms approximating cinema quality large video screens, rich audio, and comfortable seating.
  • Big kitchens with capacity to practice commercial quality culinary arts either in the preparation of fine dining or in the preparation to cater to a large gathering
  • Large vehicles with large capacity for cargo and passengers, once separate vehicles (one a truck, another a van) now a single multi-use vehicle, permitting home delivery of bulk items or home taxi services
  • Retail stores with specialized merchandise once only available to professionals either in professional quality or a scaled-down retail quality (for home use only).   Many stores that once catered only to contractors have reinvented their business to sell directly to consumers, often at great costs due to the additional burden that consumers present.
  • Construction material and tool stores with retail floor plans and large parking lots to accommodate consumers in addition to contractors
  • Bulk commodity stores that offer substantial costs savings by buying large quantities that can be stored at home

The home is often in the distant suburbs where large houses are affordable.   The home is still presentable as a suburban home that just happens to be large.    However, inside the home are many aspects of a business.   An ability to host large parties, an ability to prepare catering for such large parties, an well-stocked warehouse to supply operation for a period of time, a factory floor to perform modest to large projects, a garage a variety of powered equipment for grounds maintenance, an ability to deliver bulk items from stores, an ability to provide transport for multiple families, etc.

Looking at this combination from a distance, it looks like a miniature business.   It reminds me of a family farm as it existed in the 19th century and eventually disappeared in the mid 20th.   The difference is that back then even modest family farms had plentiful labor to operate their little enterprises either through extended families or through readily available and affordable hired hands.   The suburban home starts to look like a vertically integrated business except for one thing: labor.    A suburban family is typically two parents who have full time jobs outside of the home and a small family size of usually two children.

I look at this in two ways.

The obvious is that that the ready availability of all these resources allows the owners to get the most value of their free time.   For example, a well stocked warehouse means fewer trips to the stores.    A well stocked warehouse of tools and raw materials means less preparation for undertaking major projects, particularly for routine maintenance.   Also all of this offers opportunities for incremental savings (ignoring the initial capital investment costs) of avoiding contract labor: saving money for not paying for labor but also avoiding the disruption of scheduling to accommodate an independent contractor to perform some duty.

This overlooks the issue of opportunity costs.   The monetary and scheduling convenience savings is offset by the fact that the home-owner has to do the actual labor.   Unlike earlier farms, there is no large family, hired hands, or even live-in maids are foremen to do the work.   Also, like a business, there is a management overhead of managing the inventories, maintaining tools, budget accounting, etc.   All of this work has to be done by the home owner on top of their full time jobs and commuting.

The other way to look at it is in macro economic terms of production capacity and utilization.   There is a macro economic cost of excess capacity or low utilization.   If these large houses are measured as small businesses, in aggregate they represent a huge capacity that is highly under utilized.    Most of the time, all of that capital expense simply depreciates without being used at all except for rare and brief periods.   Macro-economically, this arrangement appears to be very inefficient.

Of course in macro economic analyses, homes are considered separately from business capacity.   This has the contradictory interpretations of excess capacity as being very bad when it is found in businesses and very good when it is found in homes.   We want excess capacity in homes but not in businesses.

This do-it-yourself attitude is propagating back to businesses and government.   People who manage businesses often go home to manage these houses.   Inevitably, they will see similarities in the two spheres.  One of the ways is the awareness of the incremental cost and disruption of hiring short-term specialists compared with doing the job in house.

My experience is in office environments where cubicle-occupiers are given a wide range of unrelated tasks.    Sometimes these involve specialized skills and lead to the burden of being multiply trained.   More often a specialized skill position is burdened with many low skill tasks.    In either case, the additional duties could be done by other people but the workload is not sufficient to support full time positions.  Instead of out-sourcing the task to an independent contractor, there is the option of doing it in house with existing staff, just like we do things at home.

I believe most commercial companies will demand more rigorous economic justification for not using out-sourced labor for tasks.   Often there is a cost benefit of using contracted services instead of using in house resources, contrary to what seems to work at home.  Also, in contrast to a home, a business has continuous operating hours that can more easily accommodate short term contractor visits.

The economics case is different for government where contracting services is a huge burden, and nearly impossible for quick short-term tasks.   In government bureaucracies, there is more latitude to run the office like running a suburban home.   This is further enabled by service contractors that provide full time on-site staff who are few in number but work under a contract that is broad in scope.

I suggest this leads to the same kind of micro-economic implications of inefficiencies found in suburban neighborhoods with broad range of duties, and redundant and under-utilized capacities.

Imagine an entire subdivision of large houses each equipped with large and well-stocked kitchens, large entertainment rooms, well stocked storerooms and with all of the possible tools and equipment for most home projects and grounds maintenance.    Disregarding the under-utilization of these capital investments, there is the lost opportunity to specialize.

Why not instead have one neighbor do grounds maintenance for several houses, another neighbor maintain an entertainment center that can be rented out to neighbors, another neighbor catering for gatherings or preparing gourmet meals, another neighbor for maintaining gather rooms for large occasions.   Obviously can’t work in a neighborhood.  I’m describing a town of businesses where there is the opportunity to specialize skills, keep busy with practicing those skills, and to optimize utilization of capital expenses.

Returning to my point about government bureaucracies.  The organization of bureaucracies into mission-specific departments is analogous to organizing a neighborhood of family specific houses.   Like the family limited by the parents and a small number of children, the departments are limited by full-time dedicated government and contractor staff.    In both cases, there is a mission that requires a multitude of individual skills and tasks that must be performed by the staff dedicated to the department.   In both cases, the neighbors are doing the exact same thing, redundantly and inefficiently.

It seems natural because that’s how we do things at home.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s