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.
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."
Achieving Both Is Not Easy
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."
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
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.