Progress in any organization can be achieved in two ways: being more efficient and being more strategic.
In the former instance, progress is achieved by reducing the rate of product or service breakdown, eliminating software bugs, reducing outstanding collectibles, reducing cost to increase operating margins, reducing inventory turns, reducing the rate of customer attrition and reducing employee turnover.
These efficiency gains are targeted to improve operations by a process or procedural change that simplifies the way things are done, reduces cost and improves productivity.
The most common method employed to be more efficient is to benchmark a “best in class” organization and copy their methods.
Followed to its ultimate conclusion, the copycat method results in all participating organizations gravitating to the same internal operational methods and approaches; they don’t bestow any uniqueness whatsoever.
Efficiency driven programs are tactical; they seek to make the organization “machine” work better; progress is measured by assessing the output of a process both in terms of time and quality – delivering the intended outcome right the first time.
Efficiency gains will not move the organization to higher levels of performance in the long run. They may boost operating results in the short term through a period of continuity, but they cannot be relied on to deliver long term success over multiple cycles of economic and competitive change.
Sustainable progress can only come from being strategically efficient;
Achieving strategic breakthroughs as opposed to applying the efficiency formula to the way business is currently conducted.
Efficiency gains should only be considered AFTER strategic objectives – based on taking the organization to a “new place” – have been set. Determine the strategic progress needed first and THEN look for the efficiency gains necessary to make the journey as productive as possible.
There should be a single focus of strategic progress – inching ever closer to being the ONLY organization that does what it does.
Specifically, creating a customer value proposition that answers the question “Why should I do business with you and no one else?”
This is the real measure of whether or not an organization is making progress strategically; the ability to craft and fine tune over time their ONLY Statement that declares what they uniquely do to serve their customers.
More resource time is spent in organizations pursuing efficiency gains rather than starting down the path of uniqueness.
Because it’s much easier to copy best practices and achieve incremental progress than it is to seek a “special place” in the market that you and only you own.
The thing is, “if there is “no pain”, there’s likely to be “no gain”.
Focus your efforts on being unique in a compelling and relevant way and being efficient in THAT world.
If you’re successful your progress will be measured by product and service innovation, disruptive technology introduced, revenue growth and market dominance, not systems throughput.
Leave “blind” efficiency to the herd.
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