By What Method? Effective or Efficient

I want to continue down this path to define what it is that I mean by being effective and synthetic versus being efficient and analytical. And so to continue down that path, one of the phrases uttered to me years ago by the late W. Edwards Deming was, “By what method?” And this really changed my attitude and thinking about how organizations should improve themselves and be run and things of that sort.

So let’s talk a little bit about methods of efficiency versus methods of effectiveness. Methods of efficiency – or if you will remember “doing things right” –  are things like technology, I.T. systems, automation. Those are things that can make you efficient, but they can’t make you effective. You could be automating something that is completely wrong to do. And a matter of fact, a lot of times when I dig into organizations, I find that to be what’s happening. So then there are also methods of efficiency like Six Sigma and Lean. And I’m not going to argue the merits of those particular things, but they are focused on being more efficient as opposed to being effective. So mergers and acquisitions are another method of efficiency. People talk in terms of economies of scale all the time when they’re buying out another company. And usually I see this as a play in larger organizations to increase their revenue because bonuses and rewards and stock prices and everything have a tendency to go up when you have a merger and acquisition.


But but the truth is, is that mergers and acquisitions, I’ve really found them to make you less efficient because of diseconomies of scale, the bureaucracies involved in two different organizations with two different purposes and things of that sort. And despite all the hype associated with it, mergers and acquisitions more often than not are failures. I would say probably upwards of 80 to 90 percent wind up being failures. And it doesn’t necessarily have to be that way, but it’s just the way it is. And they’re missing opportunities to grow organically. It’s kind of a shortcut in organizations because it’s very difficult to grow an organization organically.

Measures become problematic too. Did you take a lot of calls today? Very results-focused types of measures are measures of efficiency as opposed to how effective you’re being in the marketplace.

And with regards to leadership types of training, you could be very empathetic and say, “oh, well, you know, sorry, we’re going to have to lay off from this organization.” But we made the wrong decisions as executives. And so there’s a lot of efficiencies associated with layoffs and in making the financials look better. Lipstick on a pig?If the executives are ineffective, then they have a tendency to play it out in order to cover their mistakes by having to make drastic actions. And sometimes that requires downsizing the organization.

So I think the important thing to take away from the methods of efficiency is that even with an increase in knowledge increases our efficiency, but it does not improve our effectiveness.

So let’s talk a little bit about methods of effectiveness. Well, if it has to do with design, it has to do with doing the right things. And often executives, because they’re so focused on the efficiency of an organization, it may not see it that way. And that’s one of the reasons why I’m defining it, is that they don’t look at the design that’s required in their organization. And I’m going to talk about the things that I believe need to happen in an organization to have a good design.

But design requires synthetic thinking. I have two videos on YouTube right now  one video talking about efficiency versus effectiveness and the other talking about analytical versus synthetic. And to me, they’re inextricably tied together. And so design comes from synthesis and the types of design that I believe are the leverage points in organizations or I found to be the leverage points in organizations. are:

  • Your decision making, what is the method that you use in order to make decisions?
  • Another one is innovation. We have to innovate our thinking. We have to innovate our products. We have to innovate our services.
  • Also executive data analytics, what do we look at? Are we looking at measures of how many around the lines of efficiency or are we looking at things that will affect the effectiveness of things? Going back to the question of, “By what method?” will we achieve our measures.
  • And design in your organizational structure? How are you structured? These to me are the huge leverage points. But the first step to all of this is getting you to think in a synthetic way.

And this is the subject of the executive education program that I’ve been promoting for organizations to go through. And there’s a free video at kit. Where you can go through and see what’s this about and how does this fit into my thinking. And it gives you a kind of a chance to test drive before you get into making an investment of not only your own time – which is the biggest piece – your own time in becoming a synthetic thinker.


There are other things that are involved in these methods of efficiency and methods of effectiveness that can influence them. And one is constraints to organizations, like government and regulations. And we also have to be aware of what’s happening in the larger systems. So if you’re in a division of a larger company, which I’ve worked with multiple companies that have been divisions of, they’re under the constraints associated with the corporate office. All of these are trying to do the right thing, but doing the right thing requires effectiveness and not efficiency.

One other thing that you want to consider with regards to methods of effectiveness is that this is  never-ending improvement. When you talk in terms of methods of efficiency, people often say, oh, you know, the one best method to do something, what’s the best practice? Well, there isn’t any. And that’s what you get when you start to think in terms of methods of effectiveness, is that there is never-ending improvement. There is always a better way to do something. And you do it through designing or redesigning your organization.

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