Image: ipic.ai
In the past, like most people, I used to use the words efficient and effective interchangeably. Until I realized how different they are.
Is efficient good?
Most people think that when something is done efficiently, there is little waste. And that is partly true. There is no waste of time. Well, of the time of the resource that is being measured. The waiting time of the product or worse, the customers or the patient, increases enormously.
OEE (Overall Equipment Effectiveness).
Let’s look at a machine. We measure efficiency (OEE) by looking at how long a machine can produce something of value in the total time. If a machine only runs for 6 hours in a whole day (24 hours) because the employees only work 8 hours and they first have to warm up the machine, fill it with raw materials and maintain it at the end of the day, then the efficiency is only 25%. 75% of the time the machine is not producing. Increasing the OEE is usually pursued by accountants, so that the OEE comes closer to 90%. However, this is only useful in certain cases. In most other cases, this increase leads to additional costs, but no additional turnover.
Efficient employees.
This thinking in terms of efficiency is also seen among employees. An employee who occasionally has nothing to do is not efficient. And since accountants do not want to pay employees for doing nothing, this must be prevented (in efficiency thinking) above all!
Burnout.
The result is that we have set up ERP and booking systems in companies to ensure that employees always have enough work to do. As a result, many employees never have a natural period with less or no work. There is no time to reflect on how things could perhaps be done smarter and better. There is always work waiting! There is no time to improve things, which means that there is no relief from the workload. This can easily lead to hopelessness and possibly a burnout.
Improving.
And the scary thing is. If an improvement is implemented, and the work becomes lighter and easier, then the work goes faster and the employees finish sooner. The accountants immediately see an opportunity to save on manpower. So making the work better, lighter, easier and faster does not lead to a reduction in workload, but only that you now have to do the same work with fewer colleagues. The workload remains exactly the same! There is now one colleague who has to look for another job. Are you the next one who has to look for a new job? Why would you actually still cooperate in those improvements?
Eliminating queues?
But it is much worse. To ensure that every employee always has enough work and never sits twiddling their thumbs, queues and buffers are created everywhere. And as we have seen above, nothing changes if you make the work easier and faster because efficiency thinking benefits from queues.
Queues.
This is of course painfully visible in healthcare, but once you understand this concept you will see it in many more places. And the problem is that there is not just one queue, no, for every person these queues arise. Queues at the counter, queues for the examination, queues for taking photos, queues for discussing the results, etc., etc.
Systems thinking.
Here we immediately see an example of a lack of systems thinking. The employees are now deployed efficiently, but because there are queues everywhere, extra employees are needed at the counters, the waiting rooms need to be much larger, more parking spaces need to be created, etc. And then you have not yet included the social costs of all those people who, sometimes with supervision, have to wait for hours for an examination or treatment. Yes, we have tried to increase efficiency in one place and unintentionally, and sometimes invisibly, increased the costs by a multiple elsewhere. This is called sub-optimization or point optimization.
Can it be done differently?
Effectively.
Yes, of course. Then we are talking about effective. Now you look at whether the employee can really do the work effectively. Together you investigate what unnecessary actions are, what could actually have been done better somewhere else, and how you can do what remains as easily as possible. Sometimes you can do the same work in half the time without having to work harder. In this way you are continuously improving to make the work as good and easy as possible. But what if you make the work of four people so much easier and better that only three employees are needed?
Which exit do you take?
Most accountants will immediately think of dismissal. Strange actually. You are now doing more work because the work has become easier and better, and you do not have more costs, no, you finally have someone extra who helps you spread this fire.
Fire that one redundant employee? You can only do that once.
After that, everyone subtly works against process improvements!
No, you deploy the best employee who becomes redundant elsewhere in the company. This employee already has experience in how to make the work more meaningful and easier and now goes to work elsewhere again. In this way, you create more and more capacity that you can use to provide better service, to be able to deliver faster, etc. And if someone leaves the company because he/she retires, or moves to another city (nobody at such a company goes to work somewhere else on their own initiative anymore), then you have enough capacity to fill that vacant position. Incidentally, other roles will also arise, such as the permanent contact person per supplier. Yes, over time, relationships with suppliers and large customers also change and are based on continuous improvement, and you need people for that.
Two Second Lean.
For fun, watch Paul Akers on YouTube and his FastCap Lean videos. His employees have about one and sometimes two hours on normal days for a joint information round and improving the work. If it is busy, that improvement time is surrendered to run production. Paul has expanded his company many times, but has not hired many more employees because they are stimulated to become smarter and faster, and they are rewarded with security, a lot of freedom and autonomy. That hour in the morning is a time buffer for Paul for busy days and on normal days the employees use that time to become even better and more handy.
The Anglo-Saxon accountant.
If you now put an Anglo-Saxon accountant in Paul’s company, you will have about 15% of the employees on the street within a very short time “Because all those people are not productive for one to two hours a day” according to the accountant. The result? The remaining employees are no longer motivated to improve. But, you cannot stop improving. Due to continuous changes around us, productivity will slowly decline without those daily improvements. Then you suddenly have unmotivated staff and an increasingly lower productivity. After a while you will have to hire extra employees again. Ultimately you will even need more employees than you originally had when they were “loitering” for one hour a day.
From 40 hours to ten minutes a week.
I myself once shortened a bottleneck process (ToC) that took 40 hours a week to 10 minutes together with the employees. Not only did it go 240 times faster, the quality was unparalleled, there was more peace in the work and we became much more flexible towards our customers. This created so much more demand that we had enough work for everyone.
The breast clinic.
A long time ago, there was a breast clinic (breast cancer population screening) in Sweden where women were sent if their GP had found something suspicious. There were an average of 42 days between the first visit and the last closing visit. 42 days of uncertainty! The women had to go to the clinic several times for different tests. Taking a day off each time, travelling there, etc.
Then they decided to let go of the efficiency thinking and focus on the visitors. What did those women want? Quick results and not having to come back 4 or 5 times. The clinic was set up differently. Doctors and X-ray equipment were not fully booked but were waiting. The women received an intake, were immediately referred to one or more follow-up tests such as X-ray or puncture. The doctors were already waiting there. At the end of the day, the women received the results and a treatment plan. After a while, this went so smoothly, each woman only had to go there once, not 4 or 5 times as before, that they could do with LESS staff and they no longer had to be open every day. However, the experiment was terminated. Why? Because it did not connect to the rest of the healthcare system in Sweden, which was based on huge queues and multiple appointments.
And we in the West are always surprised that the philosophy of Lean/Dr. W. Edwards Deming does not work well in the West…