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Such a well-used word! What’s not to like? So clean, so direct, so cost-effective! A well-oiled machine. The best-possible practice.

Maybe, like me, you have seen this word on a thousand slide decks. Usually it’s teamed up with other gems such as Effectiveness and Excellence. Unlike the latter two, however, Efficiency does at least have a definitive meaning (in maths and engineering at least). To be efficient is to trim the waste out of a system. To hone it to produce maximum output from minimum input.

Surely there’s nothing wrong with stipulating Efficiency as a performance requirement? Being more efficient can only be a good thing, right? Well, as always, it depends.

There are a few common traps around seeking efficiency.

  • Quality can suffer if you are measuring efficiency by cost.
  • A focus on short-term efficiency can cause an accumulation of debt (technical, organisational etc).
  • Running without any spare capacity means any problems can dramatically slow down your system (as per the Kingman Formula).
  • Not all work can be made to be efficient. If work is relatively variable or the environment in which your business operates is variable then flexibility will be needed and efficiency ruthlessly strips that away (see the First Law of Cybernetics).

So, efficiency is something to be understood and applied with care – in the right places.

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