A crash course in efficiency

Many people use the word “efficiency” without really understanding what the term means. Even fewer understand how efficiency works – the dynamics of efficiency, if you will. So here’s a crash course. You can thank me later

In an earlier post I outlined the difference between efficiency and economy. An economy is spending less money (making a cut, in other words, which often results in doing less in order to make ends meet) whereas efficiency is the ratio of productive output in relation to the inputs to the system. An efficiency could therefore mean producing a similar quantity of productive output with a reduced input, or it could even mean doing more for less – which is more difficult. Anyhow, that’s what it is. Now to talk about how it works, because I worry that some people don’t understand some simple facts of efficiency life

Efficiency and the simple facts of life

There is one golden rule to appreciate if you are to fully understand the dynamics of efficiency

Efficiency never happens by accident or without a reason

What I mean by that is that systems are NEVER accidentally or naturally efficient. A system will ALWAYS gravitate (given the choice) to the easiest possible life. Efficiencies will never fall out of the sky and on to your lap. You have to go and find them and drag them kicking and screaming from their hiding places. Systems generally resist efficiency because it means a hard life. That means that you seldom find real efficiency in uncompetitive markets, and the most efficient systems you will find will always have competitors just half a step behind them snapping at their heals

My eureka moment

I was once at an event where a man called David was describing a recent and dramatic turnaround where his company managed to rescue itself from a seemingly terminal decline. In the Q&A that followed a member of the audience asked “How did you deal with resistance? How did you manage to get staff buy in? That is usually very difficult”. David paused for a moment and then responded “There was no resistance. We did not give them the option. Nothing polarises your strategy more than a lack of alternatives”. As I write this, I heard those words 7 years ago and it was a eureka moment. Maybe my biggest eureka moment. In that instant I understood how efficiency worked. I realised it was not about culture change models or quality management tools, it was more like an evolutionary event, obeying very simple evolutionary rules. A certain set of circumstances existed that allowed survival under certain conditions, and you either found a way of meeting those conditions, or you die. David’s company accurately assessed their options and found they only had one option remaining. So they followed it, and anyone who didn’t like it was told they could lump it.  They learned, and they lived to pass on their wisdom. Others are not so fortunate

Anyway, to cut a long story short, if you are a quality manager with a passion for your job, tearing your remaining hair out asking yourself how your system can be so inefficient, and why other people can be so ambivalent towards it, I give you this word of comfort. It isn’t your fault. There may not be that much you or anybody can do about it. The simple fact is that your system is most probably the way it is, and your people are the way they are, because they can be. The real fun will only start when that option ceases to be available – when things get tougher

So be careful what you wish for …


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