What, there are different Types of Efficiencies?

Indeed and they play a major role in your organizational design.

Agile Transformation anyone?

Flow efficiency and resource efficiency are two key concepts in the management of operations, systems, and processes, often discussed in the context of system optimization.

Flow Efficiency

Flow efficiency focuses on the efficiency of the work process itself, emphasizing the smooth and uninterrupted progression of work items through a system. The goal is to minimize the idle time of work items and ensure that they are moving or being worked on as much as possible. This concept is often visualized in terms of the value stream, where the aim is to reduce any non-value-adding steps (waste) that delay the delivery of the end product.

• Key Focus: Produce customer outcome as quickly as possible. Learn as fast as possible.
• Metrics: Customer happiness, release frequency, lead-time.
• Strategies: Implementing pull systems, reducing batch sizes, removing bottlenecks, and streamlining overall process.
• Belief: the performance of a system depends on how the parts interact, never on how the parts act taken separately.

Resource Efficiency

Resource efficiency, on the other hand, is concerned with the optimal use of resources (ie. people) to produce the maximum output. The emphasis is on maximizing the utilization of available resources to reduce waste, cost, and inefficiencies in the production process.

• Key Focus: Maximizing the productivity of resources to reduce waste and costs.
• Metrics: Measured by the output produced per unit of resource used (ie. Velocity, Story Points completed, ...).
• Strategies: Narrow specialization, local optimization, narrow focus, enhancing worker skills and optimizing resource allocation.
• Belief: Performance of the system the a sum of the individual performances of its parts.

If you want to make your organization more agile, the first efficiency you need to focus on is Flow Efficiency. In Scrum this means having a Done (integrated and releasable Increment) every Sprint. This is how customer outcome is realized. Once you figured out how to do this reliable over and over again ....

Just then should you focus on Resource Efficiency.

Cesario Ramos and Ralph Jocham are running a Designing Agile Organizations Training in Zürich on April 4-5 2024. If you are interested you can find out more here: https://effectiveagile.com/creating-agile-organizations-training/designing-agile-organizations/