In the recent past (i.e. last century!!!) efficiency in business operations used to be the sole focus of a company’s improvement efforts. The logic was that if we can control our costs we can improve our profits.
Efficiency focuses on how something is done in order to avoid waste in converting a physical input to a physical output. It is a yield based measure.
This was a sensible approach when applied to repetitive operations which could be systematised with a high degree of predictive repeatability. Work Study and Organisation & Methods improved efficiency. Factory automation and computers enabled the approach to be carried even further with outstanding success.
Not surprisingly, this was found not to be enough as more and more industries became increasingly cost focused, and highly skilled in managing efficiency. The competitive edge gained by high efficiency was weakened when it became a commonplace and well understood approach.
In the process of introducing efficiency - which was often accompanied by significant changes in work practices - the labour force began to shift away from being composed of manual workers to being increasingly composed of people who were not bound by rigid procedures and processes. These people tended to be required to exercise judgment in their work based on their knowledge and experience. This became increasingly true as organisations changed rapidly to keep pace with transformations in the global marketplace. Doing the old job in the old way was not possible.
A number of major issues emerged: there were no easy ways to systematise the work of these knowledge workers and no existing tools to aid them in exercising discretion in their work. In response, soft skills training became the focus for many organisations: people skills, management skills, communication skills, problem solving skills - and so ad infinitum.
This all helps. But it does not completely solve the problem. What is lacking is a more general skill for knowledge workers which enables them to quickly focus on what is really important, to take numerous daily decisions (whether simple or complex) with confidence, to connect with others who can help them or they can help, and to work in a way that supports colleagues, customers and suppliers in fulfilling the organisation’s objectives. In short, a way to home in on doing the right things almost as a motor-skill: a process for improving effectiveness. What is needed is effectiveness, not just efficiency. Further, an approach to effectiveness is required at many levels in an organisation and across many jobs. We examine this in more detail in Range & Reach and Effectiveness Maturity.
Effectiveness, then, focuses on what is done in order to maximise the contribution gained from people resources. It is a results based activity.
If a person exercising discretion 'does the wrong things', however well, one hundred percent of their effort is wasted! With so many conflicting forces acting in an organisation it is often not easy to be effective without some sort of framework.
Many individuals lack a systematic way of improving their effectiveness. Many organisations lack a corporate approach to effectiveness. The Six Key Practices Of Personal Effectiveness help fill this void with practical, behavioural solutions for the individual. Personal effectiveness will be the next competitive advantage that enlightened companies will exploit to enhance their market position and financial worth. Almost all companies have a policy about efficiency (even if unwritten), but no organisation we know of has a policy about effectiveness.
Innovation focuses on introducing something new into a situation in order to create 'a new order of things'. It is an alternatives producing activity - it creates new species of things.
People who are effective tend also to develop their ability to innovate.
Few organisations have a culture which nurtures innovation at all levels, or systematic approach to innovation. Innovation is the engine which transforms organisations and industries. When effectiveness has become quite normal in the majority of companies the focus will switch to being innovative at all levels in an organisation and then it will be innovation which becomes the next competitive advantage.
