Efficiency and Beatty

I have been asking senior executives how they expect organizational goals to change after the shock of COVID-19. Mark Summers, Senior Director of Quality at Northwestern Mutual and Vice President of TMMi America, started his response with a single word, “efficiency.”  Mr. Summers went on to say that efficiency meant doing the right things and doing them well. He concluded by suggesting that leaders would need to improve delivery — make it faster, more efficient and deliver more value. Efficiency is a measure of how much-wasted effort there is in a process or system. The concept is highly charged in a profession that still views itself as more of a mixture of art and craftmanship then of engineering practices. All value chains and the process they are made up of must:

  1. Deliver something of value to someone outside the organization. Individual processes are a microcosm, needing to deliver something of value to someone outside the process.
  2. Create value for the organization operating the process.  This is true for value chains and specific processes. Measurable value should not be a debate but rather be demonstrable over an agreed-upon time horizon.
  3. Align with corporate values and strategy. This attribute is not limited to value chains — all processes must align to corporate values and strategy.

Efficiency is a ratio of output to input. The specific inputs depend on the output you are creating and can include effort, knowledge capital, physical capital, and money. Nearly every CIO and CTO I know translates inputs into money and money’s relative, budgets. The Forbes online article, Five Things To Expect From Cuts In CIOs’ Tech Budgets Due To COVID-19 stated, “tech leaders are hitting the brakes on spending.” Even though they have to reduce spending, demands and needs will not go away. Getting more done with less, something we have all heard before will become less of a saying and more of a necessity. Understanding the attributes of an efficient process matters because we all have control over some part of our work, even if it is just how we comport ourselves.  Attributes of efficiency include

  1. Low waste – Doing work more than once is as wasteful as having too many managers and not enough people doing the work. Doing more only matters if you do the right work and do that work with the right level of quality.
  2. Simplicity – The more complex any process or piece of work is, the higher the probability of errors. Break work down into small digestible chunks that can be built, tested, and shown to generate feedback as fast as possible.
  3. Repeatable – Any process that is going to be repeated (why have a process for something that will never happen again) needs to be repeatable.  Repeatable suggests words like documented, robust, and controlled, which can be trigger words.
  4. Communicated – Processes that exist in someone’s mind or inside a walled garden are hard to access and cause interference. Work entry processes (how work gets to teams or value chains) cause no end of trouble when they are not communicated.

Efficient does not mean overbearing or brittle but what it does mean is how we work must serve the needs of both the customer and the business. When organizations are battling to maintain some semblance of profitability and stability, leaders need to measure and improve efficiency.