"The enemy of efficiency

    “You’re efficient when you do something with minimum waste. And you’re effective when you’re doing the right something.”

Many organizations are obsessed with efficiency. They want to be sure every resource is utilized to its fullest capacity and everyone is sprinting around every minute of the day doing something."

This is what's called productivity. Efficiency is how much the productivity align to a certain goal. Depending on which goal you measure the productivity against the efficiency will be different.

In the case of Tony "Every minute of his time goes on the most important part of his work—making decisions—and not on dealing with trivial inconveniences like waiting in line at the post office."

does he take the -right- decisions for the company benefit? Could he think up good strategies at the waiting line? or get inspiration from the surrounding? or just rest at the waiting line to perform better in action?

To make it more trivial: Imagine a worker that's really good at making shoes. This worker can output 60shoes a hour (with good quality). But now this worker actually works at company making computers. The computer company does not really now what to do with all these shoes. The worker is really good at making shoes and have high productivity compared to his fellow friends at a shoe company. But it does not help the computer company to sell or produce more computers. This shoe maker would probably be a better fit in a shoe company. (But who knows, maybe the shoes are so good that the fellow computer makers need less time at the doctor by wearing them. And them seeing the shoe maker creating shoes with such determination and productivity, that they get inspired to make computers with same determination and productivity.) Only the results can tell.

So what is the goal? That is probably the most difficult question. As to be able to measure efficiency the goal needs to be measurable. And probably there is not only one goal that a company strive for but many. And these goals can compete with each other. These goals can also be divided into smaller goals, for different parts of the organization.

Efficiency isn't so easy to measure but productivity is. Therefore most tend to stick with productivity as a tool to improve.

There's often a mix up with productivy and efficiency which makes the messages confusing.

A good read: M Goldratt, E. and Cox, J., 1993. The goal - A process of ongoing improvement.