Methods of Efficiency and Effectiveness

Veteran, new and aspiring executives need methods to be successful in their organization. There are 1000s of leadership podcasts, videos, blogs, and articles but few authors address what to do or how to do it.

We have witnessed many executives who are efficient (doing things right), but few executives are effective (doing the right things). We believe this is misguided and aim to remedy the shortfall with executives.

This is the 77th episode of the Mind Your Noodles podcast. In this episode, Tripp will discuss methods of efficiency and effectiveness. Download our FREE Effective Executive Starter Kit.
Resources mentioned in this episode:

Show Notes

[00:00:00]
Mind Your Noodles – Episode 77

[00:01:30]
Methods of Efficiency and Effectiveness

[00:01:50]
Methods of Efficiency

[00:05:27]
Methods of Effectiveness

 

 

Transcript

Tripp Babbitt: [00:00:00] This is the seventy seventh episode of the Mind Your Noodles podcast, and this week I want to talk or continue to talk about efficiency versus effectiveness, and I have put additional videos that are available on YouTube out on my ninety five method YouTube channel. That I’ll put a link to from this particular podcast episode if you haven’t already been there. The subject of the two new videos I put out since the last episode of the Mind Your Noodles podcast have to do with more specifically efficiency versus effectiveness and analytical versus synthetic types of thinking. And this is where I want to continue down this path to define what it is that I mean by being effective and synthetic versus being efficient and analytical. And so to continue down that path, one of the phrases that was uttered to me years ago by the late W. Edwards Deming was, “By what method?” And this really changed my attitude and thinking about how organizations should improve themselves and be run and things of that sort.

 

Tripp Babbitt: [00:01:30] So let’s talk a little bit about methods of efficiency versus methods of effectiveness. And I’ve touched upon this a little bit and some of these YouTube videos that I’m referencing and also in the previous episode of the Mind Your Noodles podcast.

 

Tripp Babbitt: [00:01:50] So methods of efficiency or if you will remember doing things right, are things like technology, I.T. systems, automation. Those are things that can make you efficient, but they can’t make you effective. They could be you could be automating something that that is completely wrong to do. And matter of fact, a lot of times when I dig into into organizations, I find that to be what’s happening. So then there are also methods of efficiency like Six Sigma and Lean. And I’m not going to argue the merits of those particular things, but they are focused on being more efficient as opposed to being effective. So mergers and acquisitions is another method of efficiency. People talk in terms of economies of scale all the time when they’re buying out another company. And usually I see this as a play in larger organizations to increase their revenue because bonuses and rewards and stock prices and everything have a tendency to go up when you have a merger and acquisition.

 

Tripp Babbitt: [00:03:08] But but the truth is, is that mergers and acquisitions, I’ve really found them to make you either more effective or efficient because of diseconomies of scale, the bureaucracies involved in two different organizations with two different purposes and and things of that sort. And despite all the hype associated with it, mergers and acquisitions more often than not, or failures. And Merfolk, I would say probably upwards of 80 to 90 percent wind up being failures. And it doesn’t necessarily have to be that way, but it’s just the way it is. And they’re missing opportunities to grow organically. It’s kind of a shortcut in organizations because it’s very difficult to grow an organization organically. But regardless, it’s a method of efficiency measures that you use.

 

Tripp Babbitt: [00:04:01] You know, how many do we put a lot of volume out? Did you take a lot of calls today? Very results, focus types of measures are measures of of really efficiency as opposed to how effective you’re being in the marketplace. And then there I would go so far as to say even a lot of the leadership types of training, you could be very empathetic and say, oh, well, you know, sorry, we’re going to have to lay off from this organization. But we made the wrong decisions as executives. And so there’s a lot of efficiency associated with layoffs and in making the balance sheet and income statements look a little bit better or the financials, as I like to call them.

 

Tripp Babbitt: [00:04:50] But it doesn’t have anything. If the executives are ineffective, then they have a tendency to play it out in order to cover their mistakes by having to make drastic actions. And sometimes that requires downsizing the organization. So I think the important thing to take away from the methods of efficiency is that even with an increase in that knowledge increases our efficiency, but it does not affect our effectiveness.

 

Tripp Babbitt: [00:05:27] So let’s talk a little bit about methods of effectiveness. Well, if it has to do with design, it has to do with doing the right things. And often executives, because they’re so focused on the efficiency of an organization, it may not see it that way. And that’s one of the reasons why I’m defining it in here, is that they don’t look at the design that’s required in their organization. And I’m going to talk about the things that I believe that need to happen in an organization to have a good design.

 

Tripp Babbitt: [00:06:04] But design requires synthetic thinking. So this gets back to the two videos that I have out right now that I put in since the last episode on YouTube, talking specifically one video talking about efficiency versus effectiveness and the other talking about analytical versus synthetic. And to me, they’re inextricably tied together. And so design comes from synthesis and the types of design that I believe are the leverage points in organizations or I found to be the leverage points in the organizations. Are in your decision making, how have you designed your your the way you think? What is the method that you use in order to make decisions? The another one is innovation. We have to innovate our thinking. We have to innovate our products. We have to innovate our services. Also the way our executive data analytics, what do we look at? Are we looking at measures of how many around the lines of efficiency or are we looking at things that will affect the effectiveness of things? Going back to the question of by what method will we achieve? Do does it support a particular method that you’re using in order to look at your measures and then design in your organizational structure? How are you structured? These to me are the huge leverage points. But the first step to all of this is getting you to think in a synthetic way. And this is the subject, obviously, of the executive education program that I’ve been promoting for organizations to go through. And there’s a free video at the ninety five method dot com forward slash starter kit where you can go through and kind of see, OK, what’s this about and how does this fit into my thinking. And it gives you a kind of a chance to test drive before you get into making an investment and not only your own time, which is the biggest that’s going to be the biggest piece of your own time and becoming a synthetic thinker, but kind of the fundamentals associated with it. So you get an idea of if that investment makes sense for you.

 

Tripp Babbitt: [00:08:29] So there are other things that are involved in these methods of efficiency and methods of effectiveness that can influence them. And one of them is, is constraints to organizations. And, you know, for years, the United States has been the place where you’d want to go because we didn’t have a lot of regulation and things of that sort. But it creeps back in all the time. And we have a lot of regulations here in the US and the government sets constraints on the system that you work in, in your organization or certain things you have to follow. And do they make sense? And all those times their intentions are correct. The way to go about it is typically not through government. At least that’s my opinion. And we also have to be aware of what’s happening in the larger systems. So if you’re in a division of a larger company, which I’ve worked with multiple companies that have been divisions of, they’re under the constraints associated with the corporate office, if you will, that can lay constraints on you regardless. All of these are trying to do the right thing, but doing the right thing requires effectiveness and not efficiency. And again, most organizations are focused on the efficiency, whether they realize it or not. One other thing that you want to consider with regards to methods of effectiveness is that this is a never ending improvement. When you when you get into when you talk in terms of methods of efficiency, people often say, oh, you know, the one best method to do something, what’s the best practice? Well, there isn’t any.

 

Tripp Babbitt: [00:10:30] And that’s what you get when you start to think in terms of methods of efficiency or excuse me of effectiveness, is that this is a never ending improvement. There is always a better way to do something. And you do it through designing or redesigning your organization in such a way. And I’m not talking about just moving the deck chairs on the Titanic using that metaphor, but it’s more associated with looking at the design of the organization and what it needs to do around the things that I talked about decision making, innovation, executive data analytics and your organizational structure. So that’s what I wanted to share with you this week. I will put the links to some of these videos that I’ve completed. I’m trying to make them in that kind of that four to six minute range. And sometimes they’re a little repetitive about the things that we’re talking about here. But I think they’re important when we’re talking in terms of the way that we think and changing the thinking in such a way that we need to and taking those steps. And I’m trying to provide you both with both an operational definition as well, as well as a method to become a synthetic thinker. Talk to you next week.

 

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