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Efficiency and/or Effectiveness

by Tom DeMarco

Adapted from Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency. Reprinted by permission. All rights reserved. See below for copyright notice.

The overstressed organization is so busy making itself efficient that it has clean forgotten how to be effective. The two are not at all the same. You're efficient when you do something with minimum waste. And you're effective when you're doing the right something. It's possible to be one without the other: efficient but not effective, or effective but not efficient.

Of course, it is also possible to be both. Possible, but not easy. You ought not to be obliged to choose strictly between the two, but suppose you were. Which one would you choose? Efficiency or effectiveness? That's pretty easy. An effective but not efficient organization moves steadily (though maybe not quickly) towards its real goals. How much progress it makes in that direction is a matter of how inefficient it is. An efficient but not effective organization, on the other hand, is moving in the wrong direction. The more it optimizes, the more progress it makes away from its real goals. Such an organization could say of itself, in Yogi Berra's words, "We're lost, but we're making good time."

Why Achieving Both Is Not Easy

Let's face it, the implicit goal in all organizations is to be both: to make effective choices about what to do and then carry those choices out efficiently. That presumption is so strongly built into organizational cultures everywhere that their executives sometimes can't see when it isn't happening. It's absolutely supposed to be happening, so it must be. The fact that the organization is moving in a given direction is strong a priori evidence that it must be the right direction. Executives are annoyed when anyone in the organization challenges direction. "We wouldn't be doing this stuff at all if it weren't right; now what we need is for everyone to get on board to help us do it as efficiently as possible."

Unfortunately, momentum in some direction or other does not necessarily imply carefully thought-out strategic thinking. A company can begin to move (or be moved) by a process that is more or less drift. The Brownian motion within the company asserts a net force in some direction and "By God we're moving." The difference between strategic thinking and drift is a matter of whether the key choices are made mindfully or mindlessly.

It may sound like a harsh charge that organizations are setting directions mindlessly, that they're prone to get their tactics right but not their strategy. But tactics are a lot easier than strategy. Tactics can be handled in isolation. You as head of a single department in your company can optimize that department to make it more efficient in what it does, but you can't unilaterally redirect it to do something different. That change would have to be effected above you, where the issues are an order of magnitude more complex. And it would have to be done in such a way as to build wide consensus among disparate interest groups. This requires both powerful vision and charismatic leadership. The idea that drift is often substituted for strategic direction-setting is no more surprising than the observation that visionary, charismatic leaders are few and far between.

All this suggests that a lot of companies are not really led at all. If that's true, why isn't it more apparent? Why don't they seem leaderless? That is the direct result of what I call the Easy Executive Option:

Directing an entire organization is hard. Seeming to direct it, on the other hand, is easy. All you have to do is note which way the drift is moving and instruct the organization to go that way.

It was the Easy Executive Option at work, for example, that caused General Motors to cede the small-vehicle sector to foreign competition and to lag behind during the Eighties and Nineties in energy-efficient engines and nontraditional fuels.

In addition to being flat-out hard to do, building effectiveness into an organization often comes into direct conflict with increasing efficiency. This is an unfortunate side effect of optimization, first noted by the geneticist R.A. Fisher, and now referred to as Fisher's fundamental theorem: "The more highly adapted an organism becomes, the less adaptable it is to any new change." Fisher's example was the giraffe. It is highly adapted to food found up among the tree branches, but so unadaptable to a new situation that it can not even pick a up a peanut from the ground at the zoo.

The more efficient your organization has become, the more it's going to need the steps laid out in the next few chapters to improve effectiveness. Taking those steps is not going to be trivial, but the alternative is to proceed more and more efficiently away from your real goals.

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COPYRIGHT NOTICE: This excerpt from Slack [0-932633-61-7] appears by permission of Dorset House Publishing. Copyright © 2001 by Tom DeMarco. All rights reserved. See http://www.dorsethouse.com/books/slack.html. The material contained in this file may be shared for noncommercial purposes only, nonexclusively, provided that this Copyright Notice always appears with it. This material may not be combined with advertisements, online or in print, without explicit permission from Dorset House Publishing. For copies of the printed book or for permissions, contact Dorset House Publishing, 1-800-342-6657, 212-620-4053, http://www.dorsethouse.com, info@dorsethouse.com, New: 3143 Broadway, Suite 2B, New York, NY 10027 USA. Additional rights limitations apply, as presented in the Legal Disclaimer posted at http://www.dorsethouse.com/legal.html.



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