I am NOT Against Efficiency!

There, I said. I hope everyone is happy now.

Once again the subject of effectiveness and efficiency has created some buzz among the friends and follows of VeraSage especially in the legal world. It began when VeraSage Fellow, Michelle Golden, replied to a tweet by Valorem Law’s Patrick Lamb. Patrick responded with a blog post. To which newly minted VeraSage Fellow, Jay Shepard replied.

I will try, once again, to clarify my position on efficiency.

  1. Efficiency does not kill innovation per se, rather an over focus on efficiency kills innovation. Too many people and firms worry too much about efficiency at the expense of thinking about being innovative. That is the problem. Also, efficiency happens naturally. It fact biologist call it parsimony. We humans call it, “the learning curve.” You need no efficiency expert to tell you the best way to load the dishwasher. After you do it a few times, you get better at it.
  2. RescueTime (Automated Time Tracking Software)Efficiency is a personal judgment. Thomas Sowell says it this way, “There is no such thing as generic efficiency.” He is right, but I think understanding it as a personal judgment is easier to understand. Peter Drucker never said, “If you can’t measure it, you can’t manage it.” He did say, “Reports and procedures should be the tool of the man who fills them out. They must never themselves become the measure of his performance.” For example, I came across this tool yesterday called RescueTime. I have no problem if someone thinks this will help them, personally, be more efficient. However, I draw the line at allowing to be used by management in any way. And, by the way, I would not use this tool personally. I prefer to just make a judgment.
  3. Efficiency is always a ratio of outputs over inputs and is always a measurement. Effectiveness is the quality of the output itself. Therefore, improving efficiency cannot, by definition, improve effectiveness. Since efficiency is doing the thing the right way. The thing (result) is always the same. If you change the value of the result or the result itself, you are changing its effectiveness, not its efficiency.
  4. Efficiency gains are never a competitive advantage. Despite what many experts opine cost reduction is not a sustainable competitive advantage. In fact, even efficiency gurus, Michael Hammer and James Champy authors of Reengineering the Corporation, believed that the only sustainable competitive advantage is out innovating the competition. True innovation is customer (outwardly) focused. Efficiency gains are always inwardly focused.
  5. Focusing on effectiveness (or more precisely efficaciousness) ALWAYS and EVERYWHERE trumps focusing on efficiency. I used to think this was only true of knowledge work, but the more I think about it, the more I believe it is true about everything. Think about farming. Improving the efficiency, perhaps the speed at which you sow the seed or harvest the crop, does not increase the yield. Developing a seed that would allow for the reduction in distance between seeds, might actually reduce your efficiency (it will take you longer to sow and harvest). However, it will increase your yield, that is, it will be more effective.

Let me try to close on a statement that upon which I hope we can all agree – The only way efficiency helps you become more effective is if you invest the efficiency gains into being innovative.

Your thoughts?

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