Effectiveness, value then efficiency

All of us have a responsibility for achieving more with less. To be more efficient, we experiment to see what works for customers, what nearly works and what does not work.

Organizations should start by studying themselves as systems. Once their leaders understand how their system helps employees to fulfill their mission or not, they think and work differently. They start their efficiency improvement cycles by developing their management system to drive their processes through the walls of silos to focus on customers. Then they can focus on improving the system to deliver what customers value.

Given an environment that supports such thinking, together with our colleagues, we start the experiment by studying customer demand, what customers’ value and waste. We may then set ourselves a hypothesis to test the best way to satisfy value demand and reduce failure demand. We carefully work to our new or updated procedure to see if it is effective. We try again until successful. We institutionalize the successful new process so others in the system can depend on it. This also enables us to improve efficiency further with another cycle of improvement.

Improvement often starts by eliminating the local causes of problems from a process. Perhaps by mistake-proofing the riskiest processes too. But, after several improvement cycles, we find the wider system has the greatest impact, both adverse and beneficial, on our process. System-wide impacts come from other processes in the system. These impacts include the shared organizational beliefs (or culture) that leaders reinforce or weaken with their processes.

When the continual improvement cycle is effective it continues to make the system and its processes more efficient. The speed of this investment should be a result of the calculation of risk and reward on behalf of investors who share the mission for customer value. The management system should deliver the information needed for these risk-reward decisions from the data collected on what customers’ value.

Conformity is necessary for effectiveness and predictable effectiveness is necessary for delivering value and improving efficiency. Predictable outcomes are a mark of effective processes and systems. “Luck” best describes an organization happening to fulfill a requirement with an unknown process or system.

Start by understanding your organization as a system. How does it help your organization to fulfill your mission? What are the leadership processes? Be prepared to think and work differently. Start your efficiency improvement cycles by developing your management system so it is process-based leaving no silos. Then focus on improving your system and its processes to deliver what your current and future customers value.

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