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I believe that I've had an incorrect
00:00:09
view of what true efficiency is during
00:00:12
my life many times I've said I want to
00:00:15
be more efficient and I've taken
00:00:17
different actions and I'm taking
00:00:19
different decisions trying to be more
00:00:21
efficient but if I view my life I think
00:00:24
that many of those decisions and actions
00:00:27
have been really counterproductive and I
00:00:33
can see similar patterns in the world
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companies organizations individuals or
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even countries we view official see in a
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way which I believe can be extremely
00:00:44
counterproductive even if we feel or we
00:00:48
believe that we are becoming more
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efficient we are in fact decreasing
00:00:54
efficiency and I'll try to explain why
00:01:01
imagine that this cute little guy was
00:01:05
your son let's call him EMM he's 10
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years old he's full of energy he has a
00:01:11
lot of different interests he's a
00:01:13
popular guy he have different hobbies
00:01:16
and he still is a little crazy one he's
00:01:21
your son then one day you get the phone
00:01:24
call from his teacher saying we're
00:01:27
worried about the millah we can see that
00:01:30
he has severe concentration problems and
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he cannot really participate in the
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regular class
00:01:37
he has concentration problems and we've
00:01:40
been discussing this and we have a
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hypothesis that he might have ADHD ADHD
00:01:45
what is that attention deficit
00:01:48
hyperactivity disorder that means that a
00:01:51
person have difficult to focus he or she
00:01:56
is impulsive and has full of hyper
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energy that's ADHD can you imagine if
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you got that message how would you react
00:02:06
as a parent maybe you would agree said
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well let's make an investigation because
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ADHD is considered to be a handicap so
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then one can question what happens when
00:02:18
you do an
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PhD investigation well there are seven
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different steps the first step is that
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the parents they meet with the
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professionals and discuss the situation
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after that step then you have a chat
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with the child and get his or her
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perspective after that you do a
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functional investigation to see what is
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working what is not working after that
00:02:45
you do a psychological investigation and
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then after that you go to the medical
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investigation in the psychological
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investigation you see how they react if
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they cannot if they can concentrate in
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the medical investigation you see how
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they react on different medicines then
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you can compile all the information from
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the different tests and you do a lot of
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different questionnaires and then you
00:03:07
can settle
00:03:07
he has ADHD or not so it looks fairly
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effective seven different steps the
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problem is this is not the case in the
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real world it doesn't look like this a
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fast sequence of seven different steps
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rather it looks like this there's some
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green part where they in fact do the
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investigation but there's a lot of red
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part as well where we wait because the
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way we organize organ organizations and
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companies today is in two different
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islands different functions where each
00:03:39
function has one sort of responsibility
00:03:41
so it's like taking a boat to different
00:03:43
islands like when you go to Thailand you
00:03:45
travel to all these different islands
00:03:47
and that's exactly how an ADHD
00:03:48
investigation looked like and then one
00:03:51
can question if you are travelling to
00:03:52
these seven different islands how long
00:03:55
time does it take well this is a real
00:03:57
example from the southern part of Sweden
00:03:59
and it took in fact four months and then
00:04:02
one can question is that efficient what
00:04:04
would you say if it was your kid would
00:04:09
it be efficient to wait for four months
00:04:12
well if we look at this picture we can
00:04:15
compare the green part with the red part
00:04:17
and then maybe we could have a
00:04:18
hypothesis maybe it's like 20% well
00:04:22
valuating time and the rest 80% is is
00:04:26
non value-adding time that's not the
00:04:30
case the real case is this
00:04:33
if we come if we combine all the 17 or
00:04:38
the seven steps we all have 17 hours and
00:04:40
contrast that to four months that is
00:04:43
2880 hours so that means that our level
00:04:47
of efficiency is 0.6 percent during
00:04:51
99.4% we are out in the ocean and no one
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really cares about us when we're up on
00:04:57
an island then we get full attention
00:04:59
full attention of all the doctors there
00:05:01
fantastic
00:05:01
but when we are in the middle of two
00:05:03
different islands no one really takes
00:05:05
care of us the problem however is that
00:05:11
we cannot get this picture on a regular
00:05:14
basis we don't see the big picture
00:05:16
rather our unit of analysis are only
00:05:20
these different islands and we don't
00:05:23
really analyze them together we're
00:05:25
analyzing separately this is what it
00:05:27
looks like from a company or
00:05:29
organizations perspective but the real
00:05:31
problem if we take a customer or patient
00:05:34
or citizens perspective this is what it
00:05:36
looks like ok email might have ADHD what
00:05:41
is happening then all of a sudden well
00:05:43
it's the first step we have to go there
00:05:44
and you go there and then it's the next
00:05:46
step it's a chat with the kid and then
00:05:49
it's a functional investigation and then
00:05:51
it's a psychological investigation and
00:05:53
then all of a sudden well I mean the
00:05:55
medical investigation is tomorrow but we
00:05:58
don't have time so we have to reschedule
00:06:00
and reschedule and then the third time
00:06:02
yes we nailed it medical investigation
00:06:04
and then we gather all the information
00:06:05
and then all of the sudden we can settle
00:06:08
this is the case but the problem is we
00:06:12
don't see the big picture because we are
00:06:14
travelling to different islands and each
00:06:15
Island they have like a tent over it
00:06:18
when you're inside that on the island
00:06:20
then it's fantastic to be there and one
00:06:24
key question is this okay we can
00:06:27
recognize this within healthcare within
00:06:30
companies and organization even in the
00:06:32
integration process of new Suites we are
00:06:34
developing organizations and companies
00:06:36
that are considered to be different
00:06:39
islands and each Island have different
00:06:41
responsibilities some years ago it was a
00:06:46
fantastic
00:06:46
his name is under Chevalley he was
00:06:49
working with ADHD investigations at
00:06:51
school at University Hospital and he
00:06:53
said this is not okay
00:06:55
it's about our children we have to think
00:06:58
in a completely different way so he
00:07:00
gathered all the personnel working on
00:07:02
the seven different islands he said we
00:07:04
need to develop a new way of working
00:07:07
so the question he said what is a good
00:07:10
ADHD investigation everyone had to come
00:07:13
up with their perspective and they said
00:07:15
well it's about seven steps seven
00:07:19
different steps seven different islands
00:07:20
and then he said but okay if you have
00:07:24
seven different step how can we develop
00:07:26
a way of working where we're working one
00:07:30
team instead of seven different teams
00:07:31
one team where we really take parents
00:07:35
perspective and a child perspective so
00:07:37
we can deliver a good ADHD investigation
00:07:39
how can we do that where we have a
00:07:41
common goal where we first deliver
00:07:43
quality we want to make a good
00:07:45
investigation but we also want to
00:07:47
deliver speed four months is not okay we
00:07:49
want to do it faster then they sat down
00:07:52
and talked what is our best way of
00:07:54
working if we are going to work together
00:07:56
seven different steps and they could
00:07:59
decrease and decrease and decrease and
00:08:01
over time everyone could start to see
00:08:04
the big picture
00:08:05
everyone was not only an island they
00:08:07
said we are one island or one efficient
00:08:10
ocean with different responsibilities
00:08:12
but we have the same goal so with the
00:08:16
visualization and continuous meeting
00:08:18
they could control the investigation
00:08:20
process and in fact they could decrease
00:08:23
throughput I'm down to three weeks so
00:08:25
four months down to three weeks and then
00:08:29
one can question how do they do that
00:08:30
well it's fairly simple three weeks
00:08:35
instead of four months they had numerous
00:08:38
positive effects on the organization
00:08:41
first of all it was faster but then they
00:08:44
recognized it's so much easier to handle
00:08:46
this why because we only have to take
00:08:50
care of five children at the same time
00:08:54
when it takes three weeks when it takes
00:08:56
four months
00:08:58
we have to handle 35 cases at the same
00:09:01
time think about if you're a if you were
00:09:04
to answer your emails once a week
00:09:06
how many unanswered emails would you
00:09:08
have in your computer if you were to
00:09:09
answer two times a day you would have
00:09:12
much less little slower that's
00:09:13
mathematical laws which can explain that
00:09:15
so if we go from four months down to
00:09:18
three weeks we go from 35 cases down to
00:09:20
five cases then it was a very creative
00:09:23
secretary said well if it's only five
00:09:25
kids let's take a picture of them we put
00:09:27
them up on the wall and put the names on
00:09:29
them and then we meet in front of this
00:09:31
wall every day so we can make sure that
00:09:34
we control control the progress this is
00:09:37
what looked like this is just a fictive
00:09:39
picture but approximately five different
00:09:42
kids and a standardized process in three
00:09:46
weeks three steps first week three steps
00:09:50
second week and one step the third week
00:09:55
and what they did was that they gather
00:09:57
in front of this board everyone they
00:09:59
said have we done step one yes have you
00:10:00
around step two yes
00:10:02
have we done step 3 yes good we are on
00:10:04
track after first week have we done step
00:10:06
four years step five yes step six no we
00:10:09
haven't gotten their questionnaire yet
00:10:10
why and then they could put in extra
00:10:13
resources to handle that case so in
00:10:17
order to be able to secure that this in
00:10:20
fact happened they could control the
00:10:25
progress so they had perfect progress
00:10:27
controlled by seeing the big picture so
00:10:29
there were a lot of positive effects
00:10:33
first of all it was faster second of all
00:10:37
they could increase and have stable
00:10:38
quality which in turn delivered a great
00:10:41
experience for the parents furthermore
00:10:44
this reduced the stress of the personnel
00:10:46
and which in turn made the personal rate
00:10:50
really really proud but the most
00:10:52
interesting part here is that it
00:10:55
increased productivity more than hundred
00:10:57
percent and what I think is interesting
00:11:01
here is how is this possible we have a
00:11:04
win win win win win win situation
00:11:05
everyone is better off and if we look
00:11:08
into micro economic theory this is not
00:11:10
possible we talk about trade-offs
00:11:12
I mean we cannot deliver high quality at
00:11:13
the same time as low-cost it's
00:11:15
impossible so for instance if we have a
00:11:18
five-star hotel then we can be good in
00:11:20
high quality but we want delivering in
00:11:23
terms of low cost or we have a budget
00:11:25
hotel we are good in low cost but we
00:11:27
won't be delivering high quality and
00:11:29
theirs we can have a five star four star
00:11:32
three total just different type of
00:11:34
customer needs but this case here we
00:11:37
were beating the trade off we were
00:11:39
increasing quality at the same time as
00:11:41
lowering the cost increasing
00:11:43
productivity and what I think is really
00:11:45
interesting is the question how and
00:11:49
that's why I want to talk about
00:11:51
efficiency because if we look into
00:11:53
systems today we define efficiency from
00:11:58
a resource perspective we define
00:12:01
efficiency from a functional perspective
00:12:02
it's like we take an organization here's
00:12:05
the customer need and we cut the need on
00:12:07
the customer up and we say you this is
00:12:09
your responsibility this is your
00:12:10
responsibility and this is your
00:12:12
responsibility and if I were the
00:12:13
president I need kpi's to make sure that
00:12:16
everyone delivers so we measure
00:12:18
efficiency on an island level with this
00:12:21
is what we called resource efficiency so
00:12:23
one can say that if this was a doctor
00:12:25
how much time available does the doctor
00:12:28
have and how much value can she deliver
00:12:33
during that time and this is what we
00:12:35
call the resource efficiency we try to
00:12:37
measure value from a certain function or
00:12:40
a resource another type of perspective
00:12:43
that is to put focus on the patient in
00:12:48
this case it's like putting up a film
00:12:50
camera think if we had a GoPro and we
00:12:52
could put it on EML shoulder and press
00:12:54
record once the need was identified
00:12:56
until the need was fulfilled then we
00:12:59
would have a forty or four months long
00:13:03
movie I will tell you that 44 months
00:13:07
long movie it wouldn't be an action
00:13:09
movie we know that there's only 0.6%
00:13:13
that's action imagine that you enter a
00:13:16
cinema sitting down waiting and it's
00:13:18
only one minute out of two hours that is
00:13:20
action you would leave in a couple of
00:13:22
minutes because here we have competitive
00:13:24
pressures
00:13:25
we don't have that especially not in the
00:13:27
public sector we just have to wait so
00:13:31
when it comes to flow efficiency then we
00:13:34
measure efficiency how well can we
00:13:36
fulfill the need of a customer totally
00:13:40
different so we have two forms of
00:13:42
efficiencies either we drive a resource
00:13:45
efficiency making people work more
00:13:47
utilize people's competence or we drive
00:13:50
flow efficiency meaning that we fulfill
00:13:52
the need our customers and of course
00:13:55
it's not about either/or we want to
00:13:57
reach the star but the question is if we
00:14:00
want to reach star which of these two
00:14:02
forms shall be prioritized first we can
00:14:06
compare them with each other well flow
00:14:08
efficiency and resource efficiency in
00:14:12
resource efficiency we focus on the
00:14:14
resources the bad thing is that we'll
00:14:16
have long throughput time because all
00:14:18
the islands are busiest so there will be
00:14:19
queues and waiting times in front of
00:14:21
each Island the good thing is that we
00:14:24
have high capacity utilization flow
00:14:26
efficiency here we have focus on the
00:14:29
need instead we focus on how fast can we
00:14:34
fulfill the need but the bad thing is
00:14:36
that we have low capacity utilization
00:14:39
which one of these forms
00:14:41
shall we take flow efficiency great from
00:14:46
a customer perspective resource
00:14:48
efficiency great from economies of scale
00:14:50
perspective but what we research can see
00:14:53
is that we shall always always always
00:14:56
drive flow efficiency why I'll think
00:15:01
about it
00:15:01
what kind of indirect effects will these
00:15:04
two forms have on our organization if we
00:15:07
fell over focus on resource efficiency
00:15:09
then we will develop efficient Islands
00:15:12
where each island do not see the big
00:15:15
picture they only focus on what they are
00:15:17
supposed to be doing and after a while
00:15:19
they develop a subculture a subculture
00:15:23
which after a while get a king or a
00:15:24
queen saying this is my Island don't
00:15:27
come here and disturb our way of working
00:15:29
and when we have these kings and queens
00:15:32
on the different islands what happens
00:15:34
then
00:15:34
well everyone are doing a fantastic job
00:15:37
but if you look from
00:15:39
more perspective how much of the total
00:15:41
time do we really take care of the
00:15:43
customer well we have a Kenya or a queen
00:15:46
taking care of the customer during 0.6
00:15:49
percent of the total time during 99
00:15:52
percent 0.4 percent of the time in this
00:15:54
case no one takes care about the patient
00:15:58
or the customer because they've done
00:16:00
their part of the work so if we drive
00:16:03
resource efficiency we will go to
00:16:05
situation where we have 0% percent time
00:16:10
where we care about the customer but the
00:16:12
indirect effects of low efficiency is
00:16:14
that we go towards full focus on
00:16:16
customer satisfaction or customer focus
00:16:19
and that's drives effectiveness we're
00:16:23
doing the right thing here drives in
00:16:26
effectiveness we're doing the wrong
00:16:27
thing because we're making decision from
00:16:29
an island perspective so what happens
00:16:32
here what would you do if it was your
00:16:35
son email well you would probably sit
00:16:37
there and after a while when you feel
00:16:39
that you have been waiting enough you
00:16:40
will start a call that's a new need
00:16:43
because you're upset and the doctor have
00:16:45
to take care of you and I can promise
00:16:47
you if it was your son you wouldn't be
00:16:49
so nice to the doctors is that I've been
00:16:50
waiting now for three weeks what is
00:16:53
happening then they have to take care of
00:16:55
that so that's a new need so the
00:16:57
organization develops new needs when we
00:17:00
don't focus on the flow and that's what
00:17:03
we call the efficiency paradox when we
00:17:05
don't see the big picture we will become
00:17:09
ineffective we cannot see the big
00:17:10
picture we make incorrect decisions we
00:17:12
develop new needs and organization will
00:17:14
become an engine of waste and errors so
00:17:18
if we look at this what happened really
00:17:20
with ADHD example well it took first
00:17:24
four months then they took they could
00:17:27
decrease throughput time what happens
00:17:29
with a number of cases from 35 down to
00:17:31
five which is the easier easiest one to
00:17:34
handle 35 volts or 5 volts it's so much
00:17:37
easier to handle but those are the
00:17:39
indirect effects that we do not measure
00:17:41
when we measure Island efficiency
00:17:43
because that can only be measured on a
00:17:45
system level so number of cases
00:17:47
decreases number of handle decreases
00:17:50
number of restarts decrease that
00:17:51
complexity decreases and
00:17:53
so much easier and that's the kind of
00:17:55
situation we want to be in here we need
00:17:58
to take care of things that do not add
00:18:00
any value at all but when we can have
00:18:03
over capacity to always make sure that
00:18:06
we have efficient processes then we
00:18:09
derive deliver true value from a system
00:18:11
perspective and from a customer
00:18:13
perspective so prioritizing flow
00:18:17
efficiency drives effectiveness we do
00:18:21
the right thing so my question to you is
00:18:28
where do you put up your camera on your
00:18:31
employees or on your customers the
00:18:37
citizens or your patients good luck
