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805. When Efficiency Becomes the Enemy of Effectiveness · Daily Influence

• 0:10
  [SPEAKER_01]: Welcome to Daily Influence, your daily dose of positive influence.
• 0:14
  [SPEAKER_01]: I'm Brian Smith founder of IA Business Advisors and co-author of the Iain team series.
• 0:19
  [SPEAKER_01]: Each day we share stories and insights to help you find be and build your influence in a positive and responsible way.
• 0:27
  [SPEAKER_00]: And I'm Greg Clino, partner at IE Business Advisors, and co-host of Daily Influence.
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• 0:48
  [SPEAKER_01]: Hey, everybody, Brian Smith here with the Iain team series and your daily influence.
• 0:53
  [SPEAKER_01]: And there is tremendous pressure on businesses right now to become more efficient.
• 0:59
  [SPEAKER_01]: Do more with less, automate what you can, reduce unnecessary costs, improve productivity, using AI, which we've talked about a lot lately, and eliminating waste, and generally just moving faster.
• 1:16
  [SPEAKER_01]: I often don't talk about the fact that I am a six sigma master black belt and I'm certainly not going to argue against efficiency, but I have spent a significant part of my career helping organizations improve processes and eliminate waste, but there's an important distinction that I see that I think sometimes gets lost.
• 1:38
  [SPEAKER_01]: efficiency and effectiveness are not the same thing efficiency asks how can we do this better faster or with fewer resources effective as asks are we doing the right thing in the first place and when when leaders become so focused on efficiency that they stop asking whether they're actually being effective.
• 2:01
  [SPEAKER_01]: efficiency can eventually become the enemy of the organization.
• 2:06
  [SPEAKER_01]: Technology has made it possible for us to accelerate almost everything.
• 2:12
  [SPEAKER_01]: AI can write something in seconds, automation can eliminate steps from a process, software can produce dashboards instantly and we can communicate with hundreds or even thousands of people at once.
• 2:27
  [SPEAKER_01]: It's pretty remarkable where we've come with technology, but speed doesn't determine value, at least not all the time.
• 2:34
  [SPEAKER_01]: Doing the wrong thing faster simply gets us to the
• 2:40
  [SPEAKER_01]: bills of foundation of problems.
• 2:43
  [SPEAKER_01]: This is where critical thinking becomes so important.
• 2:47
  [SPEAKER_01]: Before asking, how do we make this faster, leaders need to start asking, why are we doing it in the first place?
• 2:54
  [SPEAKER_01]: Who benefits from it?
• 2:55
  [SPEAKER_01]: What outcome are we trying to create?
• 2:58
  [SPEAKER_01]: And is this still the best way to accomplish that outcome?
• 3:02
  [SPEAKER_01]: That's one of the reasons we emphasize clarity so much within smart management.
• 3:07
  [SPEAKER_01]: You don't optimize a process simply because process is exist.
• 3:12
  [SPEAKER_01]: You first understand its purpose.
• 3:15
  [SPEAKER_01]: Then you determine whether the process supports that purpose.
• 3:19
  [SPEAKER_01]: And only then should you begin optimizing it.
• 3:22
  [SPEAKER_01]: This becomes even more important when we're talking about people.
• 3:27
  [SPEAKER_01]: Businesses understandably look at labor costs, productivity, utilization rates, margins and output.
• 3:34
  [SPEAKER_01]: Those things matter, they're extremely important, but people aren't simply units of production.
• 3:41
  [SPEAKER_01]: Think about what happens when an organization continually removes what appears to be excess capacity.
• 3:48
  [SPEAKER_01]: One person leaves and their responsibilities are divided among three other people.
• 3:53
  [SPEAKER_01]: Or less, then another position isn't replaced.
• 3:57
  [SPEAKER_01]: Meetings get shortened, training gets reduced, development gets postponed, managers take on more direct reports.
• 4:06
  [SPEAKER_01]: On paper, the organization may appear more efficient, but what happens to the people?
• 4:12
  [SPEAKER_01]: What happens to communication?
• 4:14
  [SPEAKER_01]: What happens to institutional knowledge?
• 4:17
  [SPEAKER_01]: What happens to creativity and what happens at the end to customer service?
• 4:24
  [SPEAKER_01]: Eventually, what looked efficient on a spreadsheet can become incredibly expensive in reality.
• 4:31
  [SPEAKER_01]: This is where the INT becomes especially relevant.
• 4:35
  [SPEAKER_01]: Every organizational decision eventually reaches an individual, and every individual affected by that decision influences someone else.
• 4:46
  [SPEAKER_01]: Responsible leadership requires us to understand not only the immediate financial outcome of a decision, but the ripple effect that decision creates throughout the organization.
• 4:57
  [SPEAKER_01]: One of the fundamental principles behind smart management is that good management requires more than measurement.
• 5:04
  [SPEAKER_01]: It requires understanding what should be measured.
• 5:08
  [SPEAKER_01]: We can create KPIs for almost anything, but if we aren't careful,
• 5:13
  [SPEAKER_01]: People eventually start managing the metric instead of managing the business.
• 5:18
  [SPEAKER_01]: That's when leaders have to come back to purpose.
• 5:21
  [SPEAKER_01]: What are we trying to accomplish?
• 5:24
  [SPEAKER_01]: What does success actually look like?
• 5:27
  [SPEAKER_01]: What do our customers need for us?
• 5:30
  [SPEAKER_01]: And what do our employees need in order to deliver it?
• 5:33
  [SPEAKER_01]: And what systems, processes, and resources allow them to succeed consistently?
• 5:40
  [SPEAKER_01]: then efficiency becomes incredibly valuable.
• 5:44
  [SPEAKER_01]: Because now we're making the right things more efficient.
• 5:48
  [SPEAKER_01]: That's the difference.
• 5:49
  [SPEAKER_01]: Efficiency system poor effectiveness.
• 5:52
  [SPEAKER_01]: Effectiveness should never be sacrificed simply by the appearance of efficiency.
• 5:58
  [SPEAKER_01]: So here's something I'd encourage you to consider today.
• 6:02
  [SPEAKER_01]: Look at one area of your organization where you've been pushing for greater efficiency.
• 6:07
  [SPEAKER_01]: Maybe you've reduced cost, maybe you've automated something, you've increased someone's workload, you've introduced AI, like most of us.
• 6:17
  [SPEAKER_01]: You've removed a step from a process and ask yourself one additional question, do we actually make the organization more effective?
• 6:27
  [SPEAKER_01]: The answer is yes, then just keep going.
• 6:30
  [SPEAKER_01]: Keep doing what you're doing until you can't answer that question.
• 6:34
  [SPEAKER_01]: But if you're not sure,
• 6:35
  [SPEAKER_01]: spend some time understanding the influence that decision is having on the people, on the process, the customer, and ultimately the organization.
• 6:46
  [SPEAKER_01]: Because good management isn't about doing everything faster.
• 6:50
  [SPEAKER_01]: It's about understanding what matters, doing the right things consistently, and then finding better ways to do them.
• 6:57
  [SPEAKER_01]: The efficiency is a tool, effectiveness is the objective.
• 7:03
  [SPEAKER_01]: This is Brian Smith, with the Iron Team series, and this has been your daily influence.
• 7:08
  [SPEAKER_01]: Listen to us every day and don't forget, visit us and sign up for our newsletter.
• 7:14
  [SPEAKER_01]: Have a great day.