Many restructuring efforts, perhaps process re-engineering (whether these days you call them like this or not) and a great deal of ‘corporate initiatives’ focused on ‘doing a better job’ (product development, R&D processes, decision making and decision rights programmes, ‘innovation projects’, structural changes, etc) may be just be focusing on the wrong goal: efficiency.
Hey! What’s wrong with efficiency? Who can blame the leaders who want to lead a more efficient organization?
Efficacy, efficiency and effectiveness are the triplets of management. Easy to mistake. But subtle and not that subtle differences. Here are easy prompts:
Efficiency: think ‘no waste’.
Efficacy: think ability to do what it says (a diet?)
Effectiveness: think successful doing, achieving.
Efficiency is linear: those inputs always (always) produce those outputs. Work done, no waste. But, for example, an efficient team is not necessarily, automatically, an effective team.
See this line: ‘An efficient system is not necessarily effective if the output of the system is not what is needed or it does not make use of the inputs available. Creating an effective system can sometimes reduce its efficiency’.
This is from ‘Team of Teams’, by General Stanley McChrystal’, a great book, essential reading in leadership.
I wish reorganizers and redesigners of organizations had that little line in front of their eyes: ‘Creating an effective system can sometimes reduce its efficiency’.
So in the quest for a ‘better’ (you qualify as you wish) product development organization, for example, you may want effectiveness (I hope you do) but you may end up with a very efficient machine. Don’t ask a very efficient machine to cater for the emergent or the unexpected. Don’t ask a very efficient machine for innovation.
Months ago I wrote about ‘The slack advantage: ‘The minute the future becomes unpredictable, efficiency can become your enemy. 
You see, you invited Effectiveness for a date but you ended up taking Efficiency for dinner. Wrong sister. And you did not notice until too late.
Be careful what you ask for, you might get it. Or not.