I saw an old Peter Drucker quote today which really got me thinking:
“Efficiency is doing things right. Effectiveness is doing the right things”.
Efficiency versus effectiveness. Doing things right, versus doing the right things. Two deceptively similar modes of working, which are in fact miles apart. One means doing something well, with quality, with skill. And the other simply means choosing what to do in the first place – i.e. the very essence of strategy.
It strikes me that the confusion between these two concepts – and the fact that for most people they are basically the same thing – is the root cause for the lack of strategic thinking found in organisations across the world.
When you think about it you’ll find that almost every job in the whole world is a “doing things right” job, rather than a “doing the right things” one. Most people are trained and employed to do a discrete thing which can be done well or badly. Most people are educated that way too. Are you “good” at maths, are you “good” at English, are you “good” at physics. Most of us are trained, first and foremost, to be quality operators. People who are skilled at the task that’s put in front of us.
This is fine of course, as ultimately doing things well is crucial. But it always assumes the presence of someone above us to give us the task in the first place. To give us the order. To make the decision. And so we are never really prepared to take on that responsibility for ourselves when it finally arrives.
You see it is not natural to mature from being an “efficiency” operator to an “effectiveness” operator, and yet we act as if it were. People are promoted on their ability to do tasks well until suddenly they find themselves in a position where their job is to choose what tasks to do, and they stumble – because there is no linear relationship there.
This is one of the reasons for the so-called “Peter Principle”, whereby everyone gets promoted to their level of incompetence. There is a moment where a job suddenly jumps from the operational to the strategic, and nobody is prepared for it, because it represents a fundamentally different way of working. As a result most simply ignore the change; neglecting their strategic responsibilities as if they didn’t exist, and “managing down” to the operational level where they feel comfortable.
Entire companies – including some very successful ones – are run this way.
This silent chasm between efficiency and effectiveness probably explains why so many business leaders make the error of assuming that “doing things well” and being “better than their competitors” will make them succeed in the market. It stands to reason right? After all, they’ve spent their entire lives in an efficiency paradigm, where quality is what counts. It’s how they got their degree, how they got their job, how they got promoted. So why wouldn’t it be how a business is run too?
But it isn’t. Businesses succeed on the strength of their choices far more than the skill with which they execute those choices. The variance in executional quality between competitors is negligible, but the variance in decision making can be gigantic, and hence this this is where leverage lies.
It’s the most important part of the game, and yet one which is barely noticed; running almost exclusively on autopilot.
The only solution to this dilemma I can think of is to emphasise the reasons for your decisions throughout the whole organisation; top to bottom. To share your thought process. To share the thinking behind everything that everyone takes for granted.
This doesn’t mean giving everyone decision making responsibilities – at a strategic level there are only so many decisions to make – but it does mean making it clear that the things you are doing are not arbitrary, and weren’t chosen lazily, but rather were carefully selected from many other potential options.
It’s a good test for you too, because if you can’t share your thinking then there probably is no thinking!
Most won’t care about the decision making process one way or another, and will be happy to simply crack on. And that’s fine. But those that do show an interest? They’re the ones who need promoting – whether they’re good at executing or not.