The Rise of Effectiveness

In the last century management’s overwhelming focus was efficiency. An industrial mindset influenced our definition of effectiveness to be driven largely by delivering more for less.

The influence was straight forward. The efficiency of a machine is how well it turns inputs into its fixed outputs. If a machine’s quality is stable (a risky but common assumption), then a focus on efficiency works as a proxy for effectiveness. Effectiveness slipped from sight in a period of unmet consumer demand, long growth and expanding global markets. We focused our organisations almost solely on efficiency. When changes in effectiveness were required, they came in the form of new disruptive innovators and innovations that rewrote the quality definition and a focus on efficiency resumed.

Human effectiveness cannot be defined as simply as that of a machine. Our traditional industrial machines turn simple inputs through process steps into fixed outputs. Humans can be reduced to that work too. For many organisations it became the goal of human work to make it fixed, repetitive and predictable. It is not a surprise that they discovered that the quality of this repetitive work was rarely stable. 

Humans are capable of more than machine work. We are also capable of turning complex and diverse inputs into a simple open-ended output, like an action, a decision, a sentence, a service, a piece of knowledge or a song. Suddenly we can’t assume that inputs are consistent, quality is stable and that outputs are known. Our proxy has broken down and we need to return to a more direct focus on effectiveness.

The last decade has seen the slow rise of effectiveness as a management challenge and management grappling with new skills:

  • quality movements, continuous improvement and other disciplines have revisited the assumption around stable quality and even stretched to query whether the predetermined output matches what customers need
  • customer experience, design and similar disciplines have begun to look at the potential to shape new and better effectiveness of our products and experiences. 
  • increasing focus on disruptive innovation has raised the challenge of why the traditional model must break and new strategy models query the narrow focus on efficiency vs other ways to achieve greater effectiveness (see Blue Ocean Strategy, Roger Martin, etc)
  • realisations about the shifting nature of work has caused many to reflect on whether efficiency is the best or at least only model for connected knowledge workers or any other role.
  • consumers questioning the need, quality, sustainability, morality, environmental and social impact of the products of industrial machine models 
  • examining new models of leadership, organisation and development of people that encourage the development of true human effectiveness and realise untapped human potential.
  • rearguard actions to find ever more efficient machines (robots, big data, management algorithms, etc) that can replace humans in increasingly complex roles and work.

Responsive organisations recognise that the proxy of efficiency for effectiveness is fundamentally broken. The skills of efficiency remain relevant but they can no longer replace a focus on effectiveness.

The rise of effectiveness is on us. Our challenge is to adapt our approaches to work to make the most of our opportunities, not just to minimise our waste.

The Inefficiency of Relentless Efficiency

Any efficiency measure applied relentlessly ultimately becomes inefficient

Business loves too much of a good thing. Relentlessness is a characteristic widely admired in business leaders. Efficiency is a classic area where the impact of a relentless focus on a single practice can be self-defeating. Engineers know this, but managers have not yet learned the lesson.

The first clue to this outcome is the Pareto principle which is widely misunderstood. Pareto highlighted that in many phenomenon a small part of the population has the largest impact i.e. 20% achieves 80% of the impact. Applied to efficiency it highlights that the cost of achieving incremental efficiency using the same measure will increase over time. 

Nicholas Taleb has highlighted in Antifragile that slack in a system is often the source of its Antifragility.  Slack is what enables systems to effectively respond to shocks. We can’t remove the shocks but we can ensure the system does not collapse when a shock hits because it has no capacity to change and respond.

Business practices are widely copied. People develop expertise in a single practice and become like those described by the phrase “to a man with a hammer every problem looks like a nail”. We over-apply efficiency measures because they worked before or they worked elsewhere. We rarely consider their systemic impact on effectiveness

Consider a few of the efficiency measure applied relentlessly in the corporate world that have created new inefficiencies and damaged effectiveness:

  • Time Management: ever waited for a meeting to start because someone is so scheduled that they keep everyone else waiting? Our relentless focus on managing the efficiency of time at an individual level creates collective inefficiency. 
  • Outsourcing and Offshoring: the labour arbitrage and other efficiencies of these measures are often overwhelmed when pushed too far by the inefficiency of the system with fixed processes, misaligned performance standards and poor communication and collaboration. Too many organisations have discovered they no longer can respond effectively to customer needs when they overstepped the efficiency measures.
  • Expense control: Organisations that ruthlessly manage employee ability to spend in a low trust approach often discover employees are far more creative and also spend what they can to retain budgets. New constraints and processes just create new wasteful behaviours because trust has broken down.
  • Specialisation: Similar to outsourcing and offshoring, removing people from connection to customers and fragmenting processes unnecessarily in the name of efficiency creates its own lack of accountabilities and inefficiencies
  • Scale: We live in a world where big likely means too big to sense, decide and react.
  • Performance Management: Employees can calculate expected average returns too. Even with that purpose, autonomy, mastery and relationships are more likely to shape their effort than a relentlessly redesigned reward scheme. The relentless focus on efficiency of performance management schemes and the sense that the rules will be changed to suit the corporate is ultimately ineffective. 

Responsive Organisations recognise that efficiency is not the only goal. Efficiency does not deliver on the purpose of the organisation. It merely ensures resources are well applied. Effectiveness delivers the purpose of the organisation and needs to be a greater part of the management toolkit.  Efficiency measures need to be tempered to reflect their effectiveness and their impact on the effectiveness on the organisation as a whole.

Killing the Golden Goose: From Waste to Potential


The origins of management have embedded a fixed mindset of human potential in management practice. The resulting efficiency narrative leaves us fearing volatility and battling the threat of waste. We need to embrace the opportunity of a growth mindset and lead the development of human potential.   

Golden Goose Co Limited

Imagine you were entrusted management of 12 golden geese. Because the eggs they produce are all golden they won’t breed. As the manager of the golden geese all you can manage is their efficiency of production. Achieving the daily maximum of eggs is all that is possible.  

The manager of Golden Goose Co Limited lives in fear of any volatility in performance, any change in circumstances or any threat to the geese.  The most likely outcome from that change is a drop in production. The golden goose manager’s job in life is fight the geese’s inevitable extinction and deliver maximum efficiency of production in the meantime.

Which Management Narrative: Waste or Potential?

Human potential is not a golden goose. We are intelligent & creative, we can improve, learn, innovate, collaborate and grow. However, early management thinkers like Frederick Winslow Taylor viewed the challenge of management of maximising the efficiency of the labour resource, treating employees as a golden goose with a maximum limit of contribution. Time and motion, performance management and other tools were developed to maximise the fixed contribution from a resource that wasn’t expected to develop beyond a limited skill set of contributions.

The idea that management faces a threat of lost employee productivity and must do battle to maximise efficiency of production is a major narrative of management. As John Hagel has outlined, threat based narratives can build a strong unity of culture, but at the cost of conservatism and a focus on preservation.

Tim Kastelle recently highlighted that management is often deeply concerned at any sign of volatility of performance.  As the manager of Golden Goose Co Limited, volatility would get you fired. We go to enormous lengths to embed our desire to eradicate volatility from management, even to the extent where often the implicit purpose of our organisational structures and practices is to embed execution of only the current business model.

The management mindset of efficiency with an implicit fixed mindset of human productivity is akin to Carol Dweck’s Fixed mindset of intelligence.  The consequences for management behaviour are similar avoiding challenges, ignoring valuable feedback and feeling threatened by competitive success.

United in their battle against waste, managers with this traditional mindset are battling the extinction of the golden goose under the forces of disruption. Nothing more.

Growing Potential is the Work of Leaders

The rapidly changing and disruptive environment in which we work means we need to start managing the ability of human potential to grow.  We need a new growth mindset and to develop a new opportunity narrative for management that embraces human potential.

Any work that can be automated will be automated, including more and more sophisticated knowledge work. The role of leaders is increasingly less about the focus on managing waste as the golden goose approach is being disrupted by the innovation of others. Increasingly Harold Jarche argues leaders should manage talent. Leadership is the technology of human potential.

Managers need to start embracing this leadership and focusing on the opportunity narrative that is embedded in human history. We have shown consistently that human creativity is the best source of productivity improvement. Focusing on improving effectiveness, defined as success in producing an outcome, allows a far greater contribution from the people involved in the work and keeps our attention focused on best ways to realise the goals, not the processes.

The productivity improvement from creativity and potential far exceeds that of human management. Ongoing experiments like scientific learning, our global networks and our start-up culture prove the human potential to improve outcomes through learning, creativity and innovation. The Toyota Management System shows that human potential can and will grow in the exact industrial manufacturing context that Ford and Taylor helped invent, when given the opportunity by the management system.

When managers focus on growing human potential to improve effectiveness, this growth mindset redefines the game and pushes changes in the other systems that define our modern organisations. Purpose and goals come first. Engagement is no longer an after thought. Experimentation is a core practice. Collaboration and cooperation are seen as human opportunities to work and not sources of waste & distraction. Volatility is embraced as a source of potential learning. Most importantly of all the new narrative respects and embraces the potential of all in organisations to lead and to contribute.

That is a future of work worth seeing. So let’s kill the golden goose mindset of management and focus instead on leading the potential of people.


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A Poem as Knowledge Work

A poet’s work is to name the unnameable, to point at frauds, to take sides, start arguments, shape the world, and stop it going to sleep. – Salman Rushdie

The moment of change is the only poem – Adrienne Rich

Genuine poetry can communicate before it is understood – TS Eliot

Poetry is pure knowledge work. Poets take their art, sensibilities, training and deep domain expertise to create a work of pure knowledge, a piece of literature.

We accept that a poet might use elements of the following processes to create their work:

  • Engaging with the world
  • Taking time for reflection & seeking inspiration
  • Working drafts, experimenting, throwing away failures, restarting often and trialling different approaches and ideas
  • Building on patterns, influences, themes and ideas shared by others
  • Collaborating with others, seeking the guidance of colleagues, peers, editors and audiences to improve the work
  • Creating new forms, practices, breaking rules and pushing the discipline of the domain
  • Questing after perfection and never quite realising it. Paul Valery famously said “Poems are never finished, just abandoned

Poetry in this way is an example of knowledge work’s pursuit of effectiveness, over efficiency. The best poems are the result of distilling human experience, creating a leap forward in capability and dazzling in their rich human value.

As much as we may joke about a roomful of monkeys with typewriters writing Shakespeare, we know it cannot happen. Yet many organisations seek to manage knowledge work as a monkey business, concerned solely with the efficiency of the process of knowledge production. This mindset rejects the potential of the elements above and seeks to apply industrial process management to knowledge work. An example is the concern that collaboration in organisations might be wasteful or time consuming.  That concern misses the engaging and creative potential of collaboration.

There is much knowledge work that can be improved. Even poets quest for better more impactful creation.  However, they focus of their improvement is increasing the value of the output and not reducing waste in the process.

We can minimise down time. We can reduce errors and waste in the process.  We can turn the process of knowledge creation into an algorithm. But like poetry created by monkeys, we must acknowledge that the great human potential for connection, emotion, creativity and innovation has been lost in that process.

Poetry is nearer to vital truth than history – Plato

Poetry is the art of uniting pleasure with truth – Samuel Johnson

Always be a poet, even in prose – Charles Baudelaire