BDD Part 2: You are not as efficient as you think you are
The Efficiency Paradox
In a previous post, I introduced the concept of Bonus Driven Development (BDD) as an illness that affects organisations with silo mentality. One way to treat this illness is to align each silo’s individual goal under a common vision. To achieve strategy alignment between the silos, I proposed the use of OKRs (the Jeff Gothelf way).
Establishing a common vision is only the beginning of an organisation’s journey towards agility. Aligning goals between silos does not magically give teams the capacity to work together to improve flow efficiency. Remember that silos (efficient islands) work to maximise resource utilisation. What are the implications of “keeping everyone busy” if we want to move towards faster value delivery?
What is the goal?
If an organisation wants to pursue faster value delivery and higher flow efficiency, the goal is to move to the right in the efficiency matrix.
Reaching the perfect state means having high levels of resource efficiency and flow efficiency at the same time. This is easier said than done.
To strive for flow efficiency is to pursue Agile and Lean thinking. To pursue flow efficiency means to think critically about the meaning of the phrase: “We use our resources efficiently”.
“Don’t be absurd! We have really high resource utilisation, we’re being efficient!” — Every manager, ever
As it turns out, there is a paradox hidden in that statement.
The Efficiency Paradox
Niklas Modig and Pär Åhlström describe the Efficiency Paradox in their book This is Lean.
“The paradox is that a greater focus on utilising resources efficiently tends to increase the amount of work there is to do.” — This is Lean
How can this be?
There are three negative consequences to focusing too much on resource efficiency:
- Things take too long to complete, so there is a lot of waiting time.
- There are lots of things happening in parallel. This implies productivity losses due to context switching.
- Things need to be reviewed constantly. We have so much to do that we forget the details (“What was this about again?”).
Focusing too much on resource efficiency creates new needs that demand a lot of additional resources, work and efforts. This is known as superfluous work.
1. Things take too long to complete
When things take too long to complete, waiting time generates superfluous work.
From a customer perspective, having to wait for a long time to receive value results in dissatisfaction, frustration and worry. These secondary needs trigger more interactions, such as calls to customer support, constant tracking, etc. These interactions with dissatisfied customers generate superfluous work.
Within an organisation, long waiting times result in superfluous work too. It takes the form of:
- Status reports. Things are not moving forward, but we need to show we are working hard.
- Expectation management, either through meetings or via email.
- Loss of important windows of opportunity:
- “We had to replan because issue XYZ is still blocked” .
- “We have to reschedule the meeting because someone took too long to respond and the meeting room is unavailable now”.
- “We couldn’t launch in time for Christmas because something wasn’t ready”.
These are hypothetical cases. The important thing to remember is that when things take too long to complete, a chain reaction of secondary needs arises.
2. There are lots of things happening in parallel
Having lots of things happening in parallel is closely related to the previous point. For example, the longer we wait to answer our chat messages, the more messages we will have to answer. The longer we have to wait for a dependency, the more tempting is to start more work.
When there are multiple ongoing initiatives, having to handle many things at the same time generates superfluous work:
- In manufacturing, inventory requires additional resources such as storage space (which in turn requires heating, administration, security, etc.). Large volumes of inventory and work in progress make it more difficult to have a good overview of the entire process. Finding something specific becomes an arduous task. To have a lot of things as work in progress or as inventory also means that some problem is hidden from plain sight. Pinpointing the problem becomes more difficult because of the large volume. Eli Goldratt’s “The Goal” offers a brilliant example of how inventory can damage an organisation.
- In knowledge work, inventory and work in progress take on multiple forms: email, tasks, calls, reports, meetings, etc. Having to juggle many things simultaneously triggers stress, makes people lose control, and creates secondary needs like:
- Tagging, classifying and sorting emails.
- Ordering and grouping tasks.
- Scheduling reminders.
- Attending status report meetings.
- Extensive documentation.
- Many others.
Handling many things at the same time forces individuals and organisations to invest in additional resources and develop structures and routines. These “solutions” exist because we have to handle a lot of things.
3. Things need to be reviewed constantly
Having to revisit the same tasks over and over again is a direct result of having too many ongoing things.
Every time we come back to something after some time, we need some mental set-up time. This is closely related to the cost that context-switching has on productivity:
Restarts occur when you have to start over on the same task. Restarts generate superfluous work. Some examples could be:
- If you have a large email inbox, chances are that you will need to read messages more than once. Some are too complex to deal with immediately, so you come back to them later.
- If you have a long list of ongoing tasks, you will need to review them several times. This reviewing process can happen daily or with a different cadence. Still, you will need to familiarise yourself with every one of them to understand what is the most important thing to do right now.
“What was this about again?”
- When you are asked to make changes to something you delivered a while ago. Depending on how much time has passed (days, weeks, even months), the time you will need to get up to speed on the topic will vary.
- If you have lots of handoffs, chances are you will have to work on different aspects of the same thing more than once. A large number of handoffs is a symptom of a culture of lack of ownership. Most of the time, handoffs occur because of blame culture: nobody wants to do something because they fear the consequences of it going sideways. Handoffs sometimes look like a badminton match:
- “You do it!”
- “It’s out of my scope.”
- “You’re the expert.”
- “You are closer to the issue!”
- “I don’t have capacity.”
- “I don’t have the money.”
This exchange goes on for months until someone is forced to tackle the issue.
The uncomfortable truth
Focusing too much on high resource utilisation generates superfluous work, or work meant to deal with secondary needs.
We create even more work to manage the work we already have.
The dangerous thing about superfluous work is that we think we are adding value, when in reality we are not.
“Superfluous work is a very sophisticated form of waste, since we often fail to realise that it is waste.” — This is Lean
The efficiency paradox is explained by superfluous work. It exists at an individual level, as well as at an organisational level.
People may think they are efficient because they are busy, when they are actually wasting a lot of resources.
“How much time that you spend at work is spent on fulfilling secondary needs? In other words, how much of your total working time is dedicated to superfluous work?” — This is Lean
From this perspective, “efficient islands” are not really that efficient, are they?
Endnote
Organisations with silo mentality believe they are making an efficient use of their resources. In reality, focusing on high resource utilisation is preventing them from moving towards flow efficiency. The first step would be to acknowledge the fact that silos create a lot of waste, in the form of superfluous work. The Efficiency Paradox describes this reality.
By focusing on flow efficiency, organisations can start reducing superfluous work.
“More specifically, any decision that decreases throughput time, the amount of flow units in the process, and/or the amount of restarts will eliminate superfluous work.” — This is Lean
Aligning individual goals under a common vision using OKRs can help get rid of silo mentality. Actively looking for ways to reduce superfluous work will get organisations closer towards flow efficiency and, ultimately, towards agility.
Would you like to continue reading? Here is Part 3.
Thank you for reading.
