All business owners want operational efficiency: inputs/outputs. Find out where it is desperately needed in your work. Avoid misapplication of efficiency as this can destroy you.

Your boss wants you to be more efficient. He wants your team to be more efficient. The owners of your business want everyone in the company to be more efficient. Efficiency means reduced expenses, increased productivity, and shorter times to market. But efficiency is not often found in today’s service economy the way it is in manufacturing. In fact, some find it so difficult to measure and apply that they are no longer even try to succeed in this area.

Efficiency is the number of outputs divided by the number of inputs - if you are a business PhD geek working on your next algorithm that predicts statistical anomalies in manufacturing predictive indexes. For the rest of us - efficiency is mileage. Efficiency tells us how far we can go on a gallon of gas. It’s that simple.

Your car processes gasoline and turns it into energy that makes the engine go. That is the basic definition of any process:  input → processing → output.

If your truck gets 10 mpg, and you put in 10 gallons of gas, you are going to go no farther than 100 miles. If gas costs $3.00 a gallon (OMG! It costs more than that now!), then you will spend $30.00 to go 100 miles. Wouldn’t you rather only spend $1.00 to go 100 miles in your car? I know I would.

So would the shareholders of your company - or the owner if it is privately held. Your boss wouldn’t mind being able to tell his boss that he was getting more from what he already had. Almost nothing looks better to management than a statistical report with hard numbers that say “Last year we needed three full-time employees to accomplish this task. This year, we did it with only two full-time employees and no loss of quality.”

If you aren’t the sort of person who thinks layoffs are a good idea, then how about this example: “Last year, our three employees required $10,000.00 in travel expenses to accomplish their work on company ads. This year, we were able to produce the ads with only $5000.00 in travel expenses.”

Improvements in efficiency boil down to fewer inputs and more outputs.

All business owners want more efficiency. Great efficiency saves money. Businesses that improve efficiency are able to operate much more… efficiently! What are some potential benefits?

• Reduced expenses on components, parts, or raw materials
• Reduced numbers of employees (reduced salary, benefits, and office expenses)
• Faster delivery to market (better competitiveness)
• Increased production without increased costs (guilt-free expansion)
• Lower maintenance costs on machines in shorter process with fewer steps

You get the idea. Efficiency is a particularly desirable principle to operate your business or just your job by because it involves hard numbers. Numbers do not lie. So many boards go in, and so many houses come out. It is simple math. The fewer the boards, and the more houses, then the cheaper houses are and the more you can compete on price with those other companies.

I am convinced, from my limited and narrow world experience, that most people in most businesses do very little with efficiency. It’s math, so it looks hard. It involves measuring, and people hate counting and measuring things because that is inefficient in itself and may ironically lower productivity to undertake. Most business managers are not math geniuses to begin with, and they recoil in horror at the idea of having to process 40,000 cells of data in a spreadsheet.

However, you should know that efficiency works great for more than just distribution networks, supply chains, manufacturing plants, and other easily measured, tangible operations. Efficiency also works wonders in project management. It helps in coding software. It helps in lots of places you might not expect.

The trick to ensuring that efficiency is your friend is to figure out how to measure it and then to figure out a way to improve it. Show improvements in efficiency, and management will love you for it.

Misapplication of Efficiency

There is one place where efficiency will not help you: People. Trying to get more done with people with less interaction with them is, well, paradoxically inefficient. The fewer inputs you give of yourself to others for them to process and produce their outputs, the more their productivity will fall by orders of magnitude.

Or, as Covey writes, “With people, fast is slow, and slow is fast.”

Be careful with your new friend efficiency. Efficiency is awesome when you apply it to a process. When you try to make managing your relationships efficient, those relationships will be slowly - or not so slowly - destroyed.