Monday, July 15, 2013

Doing the Right Things vs. Doing Things Right

By Pascal Dennis

Effectiveness versus Efficiency - an eternal challenge.

Those of us who've grown up in manufacturing naturally lean toward to latter.

We know how to do things right - how to reduce waste & thereby, Lead Time.

As Taiichi Ohno famously said, "All we're trying to do is reduce Lead Time."

It takes a lifetime to learn how to do this, (at least for me.)

Efficiency - (Execution, Operational Excellence, call it what you will) - often trumps everything.

But not always.

What if Efficiency is not the constraint?

Can you think of any examples of value streams that are inefficient, but still fabulously successful?

(Hint: IPod, IPhone, IPad...)

Are Apple's value streams the most efficient? Is the IPad, for example, as well built, as, say, a Toyota Corolla?

(If you have teenage daughters, as I do, you may already know the answer. Try dropping your IPad a few times!)

But Apple's design is so transcendent, it doesn't matter. When Steve Jobs unveiled the IPad, everybody wanted one.

Price and robustness were not an issue. In other words, here, Effectiveness trumps Efficiency.

Don't want to be misunderstood. I am not saying that Efficiency is of no consequence. Quite the contrary.


In fact, Samsung's combination of strong design plus robust manufacturing is challenging Apple.

The combination allows Samsung launch multiple products, cull the losers, and double down on the winners.

Please reflect on these ideas - in Strategy, above all.

(As I said, manufacturing mental models tend to lean in one direction.)

A common, subtle failure mode is focusing on Efficiency, when it's not the constraint.

Best regards,

Pascal

PS Reflections of a Business Nomad - the audiobook is in progress!

We're in the recording studio now. Keep you posted. Thanks for your encouragement.

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