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Too Much of a Good Thing? The Challenge of Achieving Efficiency

Efficiency is a key ingredient for an organization to achieve peak performance. Efficiency is all about achieving your goals with the least amount of input or resources. But there is a cost to driving too far down the efficiency road.

Let’s Start with How You Find Efficiencies

There are generally four main areas to focus on to achieve efficiency in an organization: people, process, technology or policies.

If you boil it all down to its essentials, generally speaking in any of these areas you would find efficiencies by:

  • Investing a little up front to seek improvement from what you have now

  • Swap out what you have now for something better,

  • Reduce impediments, or

  • Focus on upgrading the outputs

A great example is moving from a manual paper-based system to using technology. A question often asked at that stage is “what if I buy an even better IT system? Will I achieve even more efficiencies?”

Nope. Not necessarily anyways: you can actually invest too much, and in the end, you can end actually causing a decrease in work output or quality.

Can You Keep Finding Efficiencies?

Let’s take the “people” factor as an example. You can increase efficiencies in your organization’s services or activities if you can find a way to make your staff more efficient. A more efficient staff is one who can produce more or higher quality services/products with the same or fewer inputs (hours of work is a common easy-to-find metric).

The typical ways to do so include:

  • Train your staff to be more skilled/faster/better at what they do

  • Hire new people with better skills

  • Give your staff better technology that allows them to achieve higher quality and/or faster outputs

  • Remove impediments to achieving improved services

  • Change policies that may be outdated and slowing things down

The challenge with going too far on achieving efficiency with staff, is that you can only achieve so much. After a while, you will get less payback: there is a declining slope of improvement after a while.

  • Training – People can only improve so much from training. Although studies find that increased training leads to improved productivity, employee engagement, profits, workplace satisfaction and many other benefits there are limits. It depends on the initial level of skills your staff already have (a highly trained staff person isn’t going to get the same benefit), how many of your staff are being trained (training one staff person who is involved in service output won’t have the same effect as training everyone) and whether you give them better tools to use after the training. In fact, McKinsey has learned that only 25% of organizations have found that training improved employees’ performance.

  • Technology – Information technology doesn’t necessarily make someone more efficient. If you procure a system that is too large and cumbersome for your needs, it will actually slow your down. And it can take years to fully achieve the productivity gains you seek – its not typically a “plug and play” situation. And you can also overwhelm staff with too much technology – Deloitte reports an increasing trend of employee productivity and efficiency being undermined by such negative factors as increased cognitive load and diminished employee performance and well-being.

  • Maximized Output or Decrease Quality – Even if you do train all of your staff, and provide them all the right amount of technology, you can still reach a situation where they have maximized their output. At that point you will have to hire more staff and invest significantly more on your “inputs”. I worked with one Community Health Center that was looking to improve the number of patients they saw in any given hour. After a lot of Lean Six Sigma workshops and re-arranging of flow, they realized the only way they could continue improving the number of patients they saw was by decreasing the amount of time each patient spent with a doctor – but for many of their existing patients that means a decrease in quality.

It’s a Fine Balance

In the end, you can go too far on any one way to achieve peak performance, including efficiency. Its all about balance (focusing on all of the elements to achieve peak performance), and gradual improvements over time.

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