Saturday, June 14, 2014

On Productivity: What versus How defines Effectiveness versus Efficiency and Strategy versus Tactics

What versus How defines Effectiveness versus Efficiency and Strategy versus Tactics. They are not to be confused. The first is the "crawl", the second is the "walk" and without them both you will never "run". Following baby steps works for business as well as for nature.

What do you produce? Is it what the customers need or what you think they should need? Being effective means to do *what* is required, no more, no less. Have a solid strategy to be effective.

How do you produce it? Are you focused on predictable delivery with high quality or on resource utilization? Being efficient means to focus on "how" to do the whole job on time and on budget. Being efficient means to create tactics that align completely with the strategy.

Mastering these concepts is crucial for any leader. The great leader is a strategist who creates and oversees the tactics being used so that they comply 100% with the strategy. Defining "what" to do (the goal, the mission, the end), is step number one. Determining "how" it will get done (the effort, the actions, the means) is the second step. This means your second step must never overtake the first.

Productivity is the ratio between the production of "what" we do versus the cost associated to "how" we do it. It is a result of how effective and efficient we are. It is ultimately the leader's performance review. You need no review performed by a supervisor to know where you stand as a leader. Have a strategy and constantly monitor that your tactics comply with it. If the productivity goes up you are a great leader. Be proud of yourself and sell that as your greatest skill.

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