Efficiency is the path to bigger profits. Efficiency is good. Everyone needs to be efficient. Right? Wrong!
Efficiency sucks! For knowledge workers – you and me – the case against efficiency is overwhelming.
‘Efficiency’ is one of the weasel-words of management-speak, constantly misused and we are all worse off for this. In an effort to be or to become more efficient, people end up looking the wrong way, focusing on and doing the wrong things. Part of the shell game called ‘management,’ efficiency has everyone
focused on results, usually in the form of numbers, rather than the work they are doing. The consequences, sometimes, are disastrous. Those numbers, which are often hugely problematic and, in many cases, just wrong, don’t tell us whether we are doing good work. Far from it. These are some of the things people do in the name of efficiency and to produce results – numbers – to make themselves look good – efficient – to management, shareholders, or some other group. They
- cut costs without considering the human, social, and environmental consequences;
- take action that is highly questionable, irresponsible, possibly unethical, and, at times, immoral; and
- deliberatively fudge or misrepresent ‘the numbers,’ which is remarkably easy to do.
‘Find a way to measure this.’ ‘Just give me the data’. ‘What is it going to cost?’ ‘What is the ROI?’. Management’s reliance on numbers to get things done is closely tied to the mindset of efficiency. You can trace the whole efficiency movement to Fredrick Taylor and a small bunch of acolytes and imitators, the first generation of management consultants and the first ‘efficiency experts’.
Efficiency, along with the emphasis on data, made sense in factories but, today, practically everyone is a knowledge worker and the mindset no longer makes sense. Contrary to what business books, MBA programs, and most ‘experts’ tell you, there is neither a right nor an accurate way of measuring knowledge-work. It is hard to find anything to measure but, when you do, it generally has little or nothing to do with work. Remember the adage ‘what gets measured gets done’? Well, in the interests of efficiency, looking for something that can be measured, people end up focusing on matters that are peripheral to work. (Remember that budgets, deliverables, lines of code, the number of calls made, or the number of records processed isn’t work. Work is what people say on telephone calls, the content and quality of the code, what they do when they are processing records, or how well they spend the money in the budget… and what happens as a result.)
In case you think I’m overstating the argument that efficiency is a problem, look back just a couple of years to events that are still having repercussions; the financial crisis that shook the foundations of the global financial system and the explosion of the oil rig ‘Deepwater Horizon’, which spewed millions of gallons of crude into the Gulf of Mexico. Before the crisis in which many, many people lost their life savings the financial firms responsible for it, including Lehman Brothers, Goldman Sachs, AIG, and many others argued as they continue to do today that trading unregulated derivatives and other securities enable them to be ‘more efficient’. Banks could reduce risk while expanding lending. This, they said, made everyone better off. Oh yes, at the same time the financial institutions were able to rake in billions of dollars and pay their executives and brokers outrageously large sums. Why? Because they were so efficient.
While it takes a concatenation of events to bring down a financial system or to cause a pipe to rupture deep below the ocean’s surface, when it comes to assessing causes we make a necessary and practical distinction between accidents, which happen in spite of everyone’s best efforts, and carelessness or negligence. Then we try to get to the bottom of things and figure out how much one, or the other, played a part. As investigations continue it is increasingly clear that, in large measure, people’s carelessness and negligence are to blame for both these sets of problems. Lured by the mantra ‘efficiency, efficiency, efficiency,’ and ‘better, faster, cheaper, more,’ motivated by greed and ego, executives of companies that ought to be conservative and careful because they are dealing with other people’s money and the earth’s precious ecology, rewarded themselves and their employees for being unscrupulous, reckless, and imprudent.
Efficiency is a technical, not a human-oriented concept. It has to do with input-output ratios, such as miles per gallon and cost per square foot, rather than with human values like care, consideration, and responsibility; or even just ‘good’ and ‘bad’ work. Efficiency belongs with engineering and technology. Asking how to make work more efficient is the wrong question. The right questions are, ‘what is good work’ and ‘are we doing it’. When you use efficiency in the wrong context, as a guide human action, there is a real risk that, possessed by a technical frame of mind, you lose sight of people – human beings: both those doing the work and those for whom the work is being done.
The mindset of efficiency permits and even encourages inhumane working conditions. Stories of cruel and miserable working conditions are an everyday phenomenon. They stretch all the way from the lives of agricultural workers in Florida to Chinese firms producing Apple’s products. Apple makes technological magic I love to use, but its executives are responsible for contracting out production of the clever technology to firms whose management policies, including the amounts they pay workers, test the limits of human endurance and dignity. Why? Because, when it comes to management practices, in these firms, like most organizations, efficiency is uppermost. Their strategies are driven by a desire for ever-greater efficiency.
So, too, is the Veterans Affairs Administration (VA), which is why I was saddened, but not surprised, when I read the following in the Seattle Times about testimony to the Senate Committee on Veterans Affairs.*
VA practices “greatly distorted” the waiting time for appointments, … enabling the department to claim that 95 percent of first-time patients received an evaluation within 14 days when, in reality, fewer than half were seen in that time. …. Nicholas Tolentino, a former mental-health administrative officer at the VA Medical Center in Manchester, N.H., told the committee that managers pressed the staff to see as many veterans as possible while providing the most minimal services possible.
“The plan that was ultimately developed gamed the system so that the facility met performance requirements but utterly failed our veterans,” said Tolentino, a former Navy corpsman who went to work at the facility in 2009.
One manager directed the staff to focus only on the immediate reason for an appointment and not to ask the veteran about any other problems because “we don’t want to know or we’ll have to treat it,” according to Tolentino.
“We fully embrace that our performance measures need to be revised,” William Schoenhard, deputy undersecretary for health for operations and management, told the committee.…..
Put these problems down to the desire for greater efficiency, rather than better care.
Efficiency and care are not the same. At best there is a weak correlation between numbers and care. One is a technical consideration (How many patients do medical and administrative personnel see or talk to each day? How long do patients have to wait for an appointment? How long does a doctor spend with a patient?) the other is a matter of human feelings, attitudes, emotions, relationships, including the capacity and desire to do good work.
Short of keeping a very close eye on what is going on between administrators and patients and doctors and patients, and asking patients about their experiences, there is no simple, and certainly no unambiguous way of assessing the quality of care that veterans receive. Under the misguided assumption that a few numbers will convey to people ‘higher up,’ who are not involved in the work, whether the those doing the work of providing care are doing it efficiently, someone sets performance targets. This puts the ‘machine’ bureaucracy into motion and initiates a bureaucratic response. (Remember that bureaucracies, where employees follow rules and cannot use their initiative, are archetypes of efficiency.) Employees tasked with providing the numbers (mostly clerks and administrators) are going to be judged not by the quality of the care they provide and not by their patients, but, based on data they receive, by their superiors who are also administrators. Neither health nor care really feature in this process.
Don’t get me wrong. I’m not arguing against the importance of doing good work or of encouraging people to do good work. Good work – here, the kind of care that helps veterans and their families as much as possible and is aimed at healing – is exactly what we do want from everyone involved. But, as long as a mindset of efficiency prevails, starting at the top, everyone, all the way down the chain of command, will be looking in the wrong direction; at the numbers, not the work. Revising performance measures probably won’t make any difference. As long as these take the form of numbers, data providers have every incentive to make them look as good as possible and people will busy themselves with whatever makes the numbers look good, not with taking care of patients.
Efficiency has more to do with exercising control than doing good work. ‘Efficiency’ is a way of ensuring compliance. Compliance is a means to an end. Because knowledge-work is complex, creative, and challenging (as well as cooperative), to do it well, those doing it need to be focused on the ends: the work and whether it is good work. They need to pay close attention to what they’re doing and have the authority to decide what to do. Efficiency plays a major role in preventing people from doing either. Efficiency puts all authority at the top (with ‘the experts’). ‘The top’ determines what is or is not efficient and, when efficiency is the goal, instead of looking ‘out’ to their clients and customers and asking, ‘are we doing a good job,’ everyone looks ‘up,’ waiting for approval from the top. Here is one major reason why management practices are dysfunctional.
I explain in my book Beyond Management that If we are going to get rid of the dysfunctional practices and change the way we do our work – something we badly need to do – we have to change the way we talk and think about work. If I had my way I’d banish the word ‘efficiency’. I’d start by making it a punishable offense to talk about ‘efficiency’! From top to bottom, highest to the lowest, no would be exempt. For the first three offenses they’d pay a fine, with the money going to charity. After this it would be a month without coffee and every lunch hour spent in detention, under supervision, researching and writing an essay on the “E” word: ‘why I must not say “efficiency” at work’.
I’m serious about this. It is not a trivial matter. Talking about efficiency is bad for work – for all of us.
Originally published by Mark Addleson at Management is Dead: Taking Charge at Work
*Thanks to Mark Leheney for sending me the link.
A balancing act, to be sure. I have often felt the way I presume you do, Mark.
As a contributing member of the Military Health care team – one who has delivered care and experienced the intimacy of the patent/provider relationship – I even get and appreciate the medical references you made.
I’ve also come to value the use of measurement as a management tool. It’s not the only tool and measurements are distorted and abused WAY too often, but it’s our own weakness that makes them a problem.
The challenge with operating in a world where only “good” and “bad” govern our decisions is that the idea of what is “good” and “bad” are not universal – or even relevant for all perspectives. Measurements give us definition for what we’re trying to achieve, and they help us to communicate the same. They give us a sense of where we are and if change is occurring. These are often short sighted, rarely serve everyone involved, they often don’t tell us why change is occurring, and are eventually “gamed,” but again, that’s our weakness.
The Military Health System placed a strong emphasis on medical surveillance when it developed its electronic medical systems. Medical surveillance requires a lot of data gathering and analysis. Lots of data input was good for showing trends, tracking disease processes, and GIS enabling the spread of disease, but it was murder on the patient/provider encounter. Docs spent a greater amount of time with their backs to patients – entering data – than they should have to produce “good” patient/provider visits. Was the project a win or a fail?
Perhaps the problem occurs when people pursue their idea of “efficiency” at all cost. We become myopic and entirely focused on the number – our number – without regard to the human cost of this kind of focus. History is full of examples.
I’m not convinced the solution is to avoid efficiency or to eliminate measurement. I think I agree with you when I say that there is more to life and to creating a quality experience that efficiency measures.
It really adds time to my morning routine to write a happy note and hide it in my kid’s school bags. If we were watching the clock exclusively, one might conclude that I am an inefficient father. Looking at the bigger picture (as I think you’re saying we should do with work), one might conclude otherwise.
You might appreciate a piece I wrote that sort of parallels this discussion titled “Love and Courage Makes Leadership Work.” It’s not exactly about measurement and efficiency focus, but I tried to bring out the other side – the human side – of leadership when I wrote it. Let me know what you think.
As an HR Performance and Development Specialist it is always my goal to optimize performance, by systemizing the organization to do so. For example, determine competency gaps and fill them, don’t just make everyone complete Consulting 401. Its counterproductive to make employees complete training in which they are already competent. Let them take communication class or just sit and comlete their work instead. We also need to remove barriers to performance such as 8 sign offs to obtain permission to conduct and advertise a training class. (When was the last time the wrong class was offered? If you don’t you trust you training officer then replace him or her so you don’t need 8 sign offs to conduct training.) Maximize seating in training so we train the greatest number of students. Some people on the other hand conduct 20 classes or 2 students each, so they can brag about their “high numbers”, regardless of the fact that what htey actually did was unnecessarily burned out the production capability (the trainers) which isn’t in the taxpayer customers’ best interest. One wouldn’t burn out the copy machine making 20 copies seperately, they would just punch the 20 in the number of copies and get start. If we wouldn’t treat a mere machine like that, why would we treat human beings that way? One answer is for leaders to only accept effective and valid measures of performance such as reports of economies of scale achieved in training. An example would be “provided 80 training hours (4 classes of 20 students in a 1 hour class) on performance management”. Conducting 20 classes to achieve the same training hour delivery rate is fraud, waste and abuse of the taxpaying customers dollar and should be treated as such.
The Triple Constraint Theory is chirping to me… lol… I think, the manager has to correctly identify the cost drivers to reduce costs; thus, creating better quality… (unfortunately, due to poor planning, some programs ARE overlooked)… 🙂
David
Thank you for your comment. You make many great points. I love your analogy of an ‘inefficient father’. There are people who might chide you for being inefficient. I’ve heard ‘management experts’ say we should apply the principles at home. Saying ‘have a nice day’ is quicker, saves resources (paper, ink), and is just as effective. All round, it is more efficient!
I do think we’re basically on the same page. I’m not saying don’t measure anything. I am saying that – contrary to what we say, do, and seem to believe – in practice there is not a lot you can measure which is very useful and if you make measurements the basis of organizing work you end up with poor measurements (that don’t mean much) plus bad work. Putting efficiency on the back burner isn’t a simple matter. The way we do things at work (and in schools, for example) is intimately connected to a mindset which sees work-problems in mechanical or technical terms – tame problems you can solve by having more data, more rules, or better plans – and they aren’t like this. They are complex, wicked problems that, first and foremost, have to do with people interacting; with values, attitudes, responsibilities, relationships…..and with different values, attitudes, ….
Putting efficiency aside means redefining our priorities, working differently, and treating one another differently. It is a matter of values. To my mind the question isn’t ‘is this necessary’. We don’t really have a choice. We are managing – organizing – for a world, work, and problems that no longer exist. The practices are dysfunctional. It’s the old story, now cliched (Einstein’s): we aren’t going to solve our wicked problems – from health care to education to climate change – with the same tame-problems mindset that created them. I look forward to reading your piece.
Agree – It doesn’t matter how fast you climb the ladder if it’s against the wrong wall.
However – Disruptive innovation shows up as fewer features, much less cost, and greatly increased use from people who didn’t have access at the previous cost. The course I’m seeing for the future of retail, education, medicine and many other industries is more of the grunt work being done more accurately by computers. That means some business practices have to be adjusted.
I had one friend say he wouldn’t trust a computerized medical diagnosis…as he was recovering from a doctor’s misdiagnosis. Different doesn’t mean necessarily mean worse, it means different.
Two examples of the misuse of performance metrics I was told about many years ago while briefly at a military thinktank:
1. Maximizing tons of explosives dropped: During the Vietnam War, this metric was used as an argument against attack plans that risked fewer pilots, often with a subjectively greater chance of destroying the target.
2. Minimizing the circular error probability of a mortar round: At first glance a reasonable metric. But there was a very strong reaction among combat officers when DOD initially planned to discontinue a particularly “inefficient” motar rocket. They liked it because It was easy to use, but most of all because it made a very loud boom, making the enemy spend more time with their heads down and less time shooting back.
The good news about these two old examples of bad metrics is that they were (mostly) sucessfully resisted by military personnel with strong incentives to do so. The bad news is that there is a lot less incentive for a Federal employee to challenge a bad performance metric when “getting shot at more often” is not a personal consequence of a bad decision.
And if we track the amount of revenue from the fines, we can project how quickly we are becoming more efficient at eliminating the word & concept from our vocabulary … of course you could just call it something else (achieving goals, meeting performance metrics, monitoring expenditures, surveying customer satisfaction, etc, etc).
I once heard a General talk about how he would often visit the maintenance shops & troops when he travelled. Usually he was escorted by a senior NCO with years of experience. He would always ask “So Chief, How are things going?” The answer would always be “Things are going great!” It was the followup question that was telling – “How do you know?” and the usual response was something about vast experience and time in the profession, only a subjective feel for performance.
We have all heard “What gets measured, gets done” The trick is in measuring the right things. Too often, we look for the things that are easy to measure and don’t really identify what things are the right things.