Following your various responses to my previous blog, I shall attempt an explanation……….
To be busy is to fill the day with activity, any activity………..
To be productive is to undertake activity that makes the product or provides the service……….
To be busy AND productive is to fill the day with activity that makes the product or provides the service……..
So, we can be busy without being productive and we can be productive without being busy, we can be neither or we can be both!
I watched, another coffee shop, (No, I don’t spend my whole life in them!), as four people succeeded in being so busily unproductive, so inefficient, that they managed to create a queue where there was almost no demand – they were ALL doing something, but none of it contributed to making a cup of coffee or serving a customer. (Of course if they intended to form a queue they were very good at it!)
But hang on, what is ‘inefficient’ where did that spring from? It’s not in the title!!
Ok, I said one could be busy and one could be productive or one could be both or neither. So also one can be efficient (or not!)
To be ‘efficient’ is to be making full use of all the resources (factors of production – land, labour, materials, money) available, maximising yield (the amount of production or service) and minimising waste (the leftover materials or unused labour)…..
So, if we are either not busy, not productive or not making full use of all the resources available (or all three of those) then we are being ‘inefficient’. But, can we be efficiently doing the wrong thing?
In a paper mill (See, I told you I don’t spend ALL my time in coffee shops), working with the management to improve performance, a daily operations meeting showed that on the previous day there had been an over-production of one product and consequent under-production of several others. Challenged, the Operations Manager explained that ‘the paper machine was running well and we didn’t want to disturb it, we have put the extra in the warehouse’. In order ‘not to disturb’ the machine they produced 5 additional hours of output for which there was no order, meanwhile product which HAD been ordered had not been made because ‘we didn’t want to disturb it’.
So, where are we now?
They were busy (the machine kept running);
They were productive (they made the product);
They were not efficient (product placed unsold in a warehouse for an indeterminate period of time ties up capital AND materials in stock AND reduces or delays income – so does not maximise yield or productivity AND requires additional handling and administration).
Worse than that, they were not effective. To fully comprehend efficiency we must understand the extent to which output contributes to effectiveness. No, wait, we haven’t seen effective before:
To be effective is to fulfil the legitimate purpose of the organisation.
The legitimate purpose meets the expressed desires, needs and expectations of all the stakeholders – proprietors, customers, employees and wider society. They were not effective because they were not meeting proprietor expectations (making a profit?) and not meeting customer expectations (product which had been ordered had not been made).
An organisation, to be survival worthy, must be:
Effective: fulfil purpose
which defines:
Efficient: fully utilise all resources with minimised waste;
which in turn defines
Productive: do those things which contribute to output;
And of course, it will be busy because it will be so good at what it does that everyone will want to trade with it!
So, next time you are being busy, think about whether you are also being productive, efficient, effective?