The Effective vs Efficient Factor. How to avoid being disrupted.
Is your organisation maintaining a healthy balance between efficiency (am I doing what I am doing in the best possible way?) and effectiveness (am I actually doing the right thing?), or is your organisation obsessed with pursuing efficiency? As the economy is slowly but surely again being unlocked, the natural response from many organisations is to protect the core at all cost, and in most cases the fight for survival is focused on forcing ever intensifying efficiencies on the business. Unfortunately, this often comes at the expense of being effective. And what was once effective, might no longer be effective in the new-normal.
The hard reality however is no matter how efficient your organisation becomes; it only translates into value if you are doing the right things efficiently. Effectiveness with little efficiency has value. Efficiency with no effectiveness is worthless. The challenge for the organisation is to “Do the right things right”, in other words, doing work that aligns with the goals of the company and doing it efficiently.
Another flaw with the relentless obsession to pursue an efficiency agenda is it being a zero-sum game. Each round of efficiency gains will offer reduced value. In contrast, a focus on effectiveness, simply means that the sky is the limit.
The exponential growth in digital technologies is opening a wealth of new opportunities:
- Opportunities to deliver new innovative products and services,
- Opportunities to deliver these in new innovative ways, and
- Opportunities to change the way that the organisation is operating.
The stark reality is, if you do not seize those opportunities, somebody else will, and they are doing so at increasingly speed. The message is clear, become effective or become disrupted.
Therefore, the need to become an effective organisation is more important that what it has ever been. But this is difficult. Starting at the age of mass production, and as organisations grew in size and complexity, management systems adopted over the past few decades obsessed with efficiencies. What organisation does not get excited by a proposition to save costs? Faster, cheaper, better.
The shift in the market and the growing need for effectiveness simply forces organisations to continuously scan the environment for opportunities and threats, and to rapidly shape appropriate responses. As such, the pursuit of effectiveness spans all parts of the organisation. Leadership needs to drive the change, and foster a culture where employees are regularly asking “Why are we doing what we are doing? How does it support our strategy and business objectives?”. It also needs to translate into the ways of working that enables the organisation to continuously innovate, experiment, test and learn to achieve the requisite effectiveness validation.
However, this must not be done at the expense of efficiency. The organisation must achieve the balance between these two business demands. This can only be achieved by adopting and scaling agile practices in conjunction with establishing a lean mindset across the organisation.
Please connect with us to explore how we can assist you in fine tuning your Effective factor by scaling your lean agile efforts.