Ever since business became an academic study, and MBAs a thing, talk about efficiency has been on the up and up. Yet for all the talk, I never cease to find it surprising how something can be constantly on people’s lips yet rarely discussed. The challenge for organisations is recognising when people are merely mentioning efficiency and when they are actually achieving it.
Achieving meaningful change in the efficiency space is going to be very hard for most organisations. This is because a little under half of CEO direct reports do not have responsibility for P&L. Perhaps even more alarmingly, in the efficiency space, middle managers and key employees who are the engine room of an organisation can be separated from the CEO by up to 12 layers of management. Meaning that unless a CEO ‘walks the floor’ and finds ways to connect with front line workers, they will end up an archetypal boss in an ivory tower, perplexed as to why the senior leadership is unable to achieve meaningful efficiencies despite a sound organisational strategy.
But the depressing news does not stop there. COVID, while ushering in a new age of working from home, has also caused bloat in organisations with tremendous growth experienced in Teams/Slack messages, emails, unending Zoom meetings, and utterly futile interactions. The result is that organisations, particularly in the technology sector, who have swelled their ranks over the last few years, are punching below their weight due to the inefficiencies introduced by the new ways of working. A situation that is compounded by the concurrent unlocking of latent GenMe attitudes in a wider section of the workforce than was originally believed in the popular approach of ‘blame it on the Millennials’.
Efficiency At All Levels
The trap for managers in getting the most out of the efficiency lifecycle is that over the years, efficiency has gotten a bad rap — particularly among front line workers. This is because when the average employee hears ‘we’re focussing on efficiency’, it usually translates to more work with fewer resources. Picking up the responsibilities that were previously done by a colleague who was just let go or finding that the supplies in the kitchenette have vanished and been replaced with the opportunity to ‘bring things from home’. And we wonder why our teams are cynical when we start talking efficiency.
With inbuilt scepticism toward efficiency baked in, beginning work on enhancing efficiency will seldom work simply by looking at the balance sheet and pushing a five percent saving quota on all teams. Poor managers eager to meet their latest KPI may find the savings, but merely cutting costs does not for a more efficient team or organisation make. Rather, it can be a sign of organisational contraction and even systemic decline. Making it imperative that efficiency not be a mere weasel word for ‘cost saving’ and that it always be paired with the transformation life cycle. Thus, the first element considered should be the organisation’s foundations. Some questions to start unpacking this space are:
- Do team members find they are often locked into meetings when their time would be more productively spent writing code, answering customer queries, or delivering products?
- Are opportunities lost because they are raised in instant messaging channels and then buried by the flurry of messages?
- Have meaningful key results been set to achieve organisational objectives or are managers ‘showing’ improvements without really achieving them? False positives in the data set.
In short, improving role clarity is positively correlated to enhancing employee accountability and accountability is positively correlated with efficiency. So strongly correlated in fact, that role clarity is one of only four management practices that are known to directly impact organisational health scores (the others being leadership, execution, and market focus). But to get the most out of role clarity, it needs to involve understanding the role in relation to the wider organisational structure. In that if you have an employee whose work it essential to the organisational strategy, and that employee is removed from the CEO by 12 layers of structure, chances are that key information is being lost in translation and the CEO does not have all information available for them to achieve their efficiency goals. It also means, in the unlikely circumstances that nothing is lost in translation, that time is wasted in conveying the decision back to the key worker or business unit. As Stephen Scheeler observes, it is not that great leaders have more time in their day, it is that they make better use of the time they have. An efficiency that cannot be achieved if the signal (information or decision) has too far to travel.
This synergises nicely with the second key element in the efficiency process; getting the right resources to the right place. Once role clarity is achieved and signal travel is optimal, little will be achieved if the human resources are not deployed to where they provide the most value. Organisations often focus on this with financial resources, ensuring not too much money is spent where there is little return, but regularly fail to manage this feat with people.
Because wages are often dismissed as a sunk cost, whether Sandra is working on Project A or Project B, either way she is allocated and therefore ‘productive’. But if she is not yielding optimal value in her placement because she is in the wrong place at the wrong time, the organisation will likely experience efficiency leak. Organisations that reallocate resources on a regular basis to ensure they are where they can provide the most value, gain on average a 4% higher return on investment than organisations that are complacent with human resource allocation.
Signal travel between key worker and CEO puts me in mind of signal to noise ratio. This is experienced in teams where there are a lot of meetings, instant messages, a deluge of emails or Confluence pages, and yet little communication. In such an environment, the axiom that the mistake people make about communication is that it has actually happened is writ large in post-COVID work environments because of the proliferation of unneeded interactions. This situation is compounded the higher up the organisational chart you go. With senior managers devoting as much as 70% of their time to decision making, there is potential for considerable time waste if instead of creating decision making frameworks that empower individual leaders, organisations lean on decision by committee. An approach that doubles down on the unneeded interactions experienced by more junior staff.
While this has been the briefest of discussions of organisational efficiency, there are some takeaways that leaders can use to see change this quarter — the caveat being they are empowered to do so.
- Meeting Deluge: Empower your staff, respectfully of course, to let you know if a meeting is a waste of their time. Their manager you may be, but they are, or should be, the subject matter experts and have a good sense of where they can be of most value. In the era of remote working, this needs to be closely monitored as there is a line between a meeting being a waste of time and a manager not being able to get the time necessary to perform their role and plan for the quarter because team members are collecting children from day care or putting on the next load of washing.
- Be Clear About Roles and Responsibilities: A key driver of accountability is staff knowing what they should be delivering. Without this understanding, it is unlikely you will see efficiency gains as team members will have to guess what is required of them.
- Redundant Activities: The Effective WIP can be a vital tool in the management and development of an organisation or a complete waste of time. This reality applies to many other aspects of the daily grind. Ensure that interactions and activities do not correlate with first point regarding and become a waste of employee time. There will always be a fine line here as some tasks that provide invaluable data or outcomes for a manager or organisation may feel redundant to an individual employee (they know how the project is tracking so why waste their time producing and publishing a schedule). In such instances, be clear on roles and responsibilities and that value of their work. If an activity cannot be shown to have value, consider cutting it.
- Convoluted Organisational Structure: Because the practice of management is a job, and in some cases a very lucrative one at that, it is inevitable that some people in the absence of driving real value will seek to create pseudo-value. This can take the form of overly convoluted organisational structures which generate a whole host of roles just so they can be managed. This can create unnecessary layers in an organisation that act as a drag to efficiency because either information flow to the senior leadership is slowed or blocked, or because planning and decision outcomes are delayed in their journey to the employees responsible for delivering the key results.
- Slow Approval Mechanisms: Often as a result of point four above, organisational structures, or simply poor leadership, can result in slow approvals. While there is much to be gained from a considered approach, and opportunity turned to chaos with people ‘jumping in’, when projects or teams are kept in limbo for no reason other than the approval mechanism is inefficient, poor organisational health and reduced outcomes are likely to be the result. Not to mention trust in the leadership undermined.
- Poor Governance: Although there is a time and place for progress over perfection, caution is needed as organisations or processes scale. Examples of this can be found in the way Facebook signed up developers en masse to leverage the Facebook platform with little to no governance or oversight. An approach that sowed the seeds of the Cambridge Analytica Scandal.
By tackling some of the common problems listed above, teams and organisations will be well placed to achieve aspirational efficiency objectives. When this happens, we can get one of those virtuous circles in which the approach sticks and compounds over the years.
Good night, and good luck.