Effectiveness: Producing output that conforms to consumer requirements, or in essence, ‘doing the right thing’...
Efficiency: Producing the right output at the lowest possible cost, or ‘Doing things right’...
The Challenge? The assumption that experience equates itself to being effective and efficient.
The reality? We have entered an era in which consumer expectations are at an all-time high and we are all competing for the same group of customers – making market differentiation a massive priority. What all this surmounts to for many organizations is a requirement to develop products that not only of quality, but that are produced quicker, better, faster, cheaper and that places a demand on efficiency of resources, whether financial, technological, or people. We have seen businesses move through patterns of evolution over time, and progressing through the introduction of new brands and services with new features. But if you look at most industries today, the automobile, the electronic, even the fast food – the same type of products are readily available everywhere. Differentiation is the only way companies are going to capture a majority market. Organizations have to completely transform their business models in order to do so.
The difference? The era in which we reside brings a mix of generations and thoughts. Doing things because that’s the way they’ve always been done is like investing in the ‘Money Market Fund’ – safe, conservative, and barely yields any growth, which simply won’t suffice if you’re looking to make significant strides in building wealth. On the other hand, like the driver entering a race car for the first time – if he hits the gas and looks for speed on the first round, chances are he will miss his lines and spin out.
So what? Organizations are infiltrated with Money Market Fund investors who need to win the Formula 1 race in order to stay up top. Only, the drivers are entering the races for the first time, which is uncomforting for many.
We accept that we need to transform, for example, through process improvement initiatives. At the same time, it’s difficult for most organizations to embrace the change and consequently, they are plagued with fear of moving too fast or upsetting the norm. We want to do what is comfortable, and that has been “tried, tested and true”. Implementation takes longer because we worry about every single finite detail and need to ensure that everyone is comfortable before we move on.
The result? The race car drivers are moved to the front seat and told to watch the experienced Money Market Fund investors drive and thus, we race, we avoid accidents, we do well, but we don’t make it to the top.
The race car drivers have all the elements necessary to move their team to the top of the race. They are agile, quick thinkers, and motivated to be the best. They have to be innovative, and are constantly searching for ways to move quickly and shave off a couple of seconds on their lap time. One could say, they are driven by efficiencies.
The Money Market Fund investors are aware of their surroundings. They take their time to understand the environment. They understand what needs to be developed and gather requirements. They move towards their goal, and may have to make a few attempts before they actually get there. One could say, they are driven by effectiveness.
The problem? The face of business today is completely different. We constantly fear the new drivers, so we throw the investors in the driver seat and just because they’re experienced at something, assume they will be successful. The drivers become observers, and then attuned to doing things just because that’s the way they were always done. As a result, organizations remain stagnant and do just enough to make it through.
The need? The practices, experiences and lessons developed by the Money Market Fund investors need to be passed onto the race car drivers because we are doing business by racing today, not by investing. The race car drivers can then apply the lessons to their existing skill sets and enter the races. Now we have enabled the drivers to become experienced race car drivers. Essentially, we start achieving a true balance between effectiveness and efficiency that is driven by the exchange of knowledge as opposed to the enforcement of “experience says you must”...
The same can be said for our organizations. Generation “Y” has been brought up in the same world that demands greater efficiencies. By leveraging those skills, and integrating traditional elements to their thought processes, organizations can still safely move through the ranks in the races, but can still come out on top.
As Mario Andretti states, “If you think you have it under control, you are not going fast enough”...
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