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The fallacy of efficiency

        Dan North
      ThoughtWorks
Dear Michael...
“So here's the thing, I don't believe in efficiency.
  It's our obsession with efficiency that has got
  us into the current technology mess, and
  which has led almost directly to heavy
  waterfall processes.

“Efficiency is how you let the big vendors sell
  their bloated technologies to the poor CIOs.”

                    © Dan North, ThoughtWorks          2
Efficiency (n)
1. The state or quality of being efficient;
   competency in performance.

2. Accomplishment of or ability to accomplish a job
   with a minimum expenditure of time and effort.

3. The ratio of the work done or energy
   development by a machine, engine, etc., to the
   energy supplied to it, usually expressed as a
   percentage.

                     © Dan North, ThoughtWorks      3
How do we measure efficiency?
           Budget/revenue targets

                Effort targets

                Time targets

               Activity targets

What does % complete on a Gantt chart tell us?

                 © Dan North, ThoughtWorks       4
A brief history of efficiency
Pre-industrial
Industrial revolution
Rise of capitalism in America
Frederick Winslow Taylor
Management Science
...You are here...


                                 Richard Durnall – the IT Division Refactored
                   © Dan North, ThoughtWorks                              5
Meet Mr. Taylor
“It is only through enforced standardization of
   methods, enforced adoption of the best
   implements and working conditions and
   enforced cooperation that this faster work can
   be assured.
“And the duty of enforcing the adoption of
   standards and enforcing this cooperation rests
   with management alone.”
                         Frederick Winslow Taylor

                   © Dan North, ThoughtWorks    6
Effectiveness (n)
1. Adequate to accomplish a purpose;
   producing the intended or expected result.

2. Actually in operation or in force; functioning.

3. Producing a deep or vivid impression;
   striking.


                   © Dan North, ThoughtWorks         7
A brief history of effectiveness
Blah blah capitalism in America
W. Edwards Deming
Lean
  begat TQM and some other monsters
Systems Thinking
...You are here...



                     © Dan North, ThoughtWorks   8
Meet Mr. Deming
“All anyone asks for is a chance to work with
  pride.”

“A bad system will beat a good person every
  time.”

                                         W. Edwards Deming


                   © Dan North, ThoughtWorks             9
Systems Thinking – “thinking in circles”
Factors influence one another in loops
   balancing or reinforcing, feeding back or forwards

 The shower
being too hot                              Being addicted
 or too cold                                  to drugs                      Committing
                                                                          crime to pay for
                                                                               drugs

                The amount I
                move the dial
                                                            Being in prison
                                                               with easy
                                                            access to drugs

                                © Dan North, ThoughtWorks                               10
You get what you measure



“Everyone is trying to help” – Virginia Satir




                © Dan North, ThoughtWorks       11
Let’s game!
Exam pass rates in schools?

 Test pass rates in builds?

    Prison inspections?

      Test coverage?

        © Dan North, ThoughtWorks   12
How can we measure effectiveness?
Understand you are working with a system
   in fact a system of systems, of systems, of turtles

Identify the goal of the system
   which is sometimes just its own survival

Step outside the system to observe its effect

      How well does its goal align with yours?

                       © Dan North, ThoughtWorks         13
How can we measure effectiveness?
Throughput accounting
  investment, operating cost, profit


Cycle time for end-to-end customer journey
  “From concept to cash”


Cost of end-to-end process
  including opportunity costs, factoring in time

                     © Dan North, ThoughtWorks     14
Effectiveness is often inefficient
Cross-functional teams
Pair programming
Promiscuous pairing
Parallel spikes
Experimentation (aka Innovation)
Theory of Constraints

    Efficiency is the enemy of effectiveness!

                  © Dan North, ThoughtWorks     15
But it gets worse...
What influences your organisation?

                   Competitors
                     Markets
                   Technology
                      Staff
                    Customers

    These are all changing outside your control!

                    © Dan North, ThoughtWorks      16
Change happens
               x                     x’
Performance




              Choice
                                                   John Roberts – the Modern Firm
                       © Dan North, ThoughtWorks                               17
If you focus on efficiency...
You get better at being increasingly less effective

                  until one day

                    you notice

          about 2 years down the line

   so you have your next corporate overhaul

                   © Dan North, ThoughtWorks          18
Ouch!


“Those who cannot remember the past are
  condemned to repeat it”

                                             George Santayana



                 © Dan North, ThoughtWorks                  19
Some vendors feed off this
Product vendors
  have tools that hog the spotlight
  want you to buy bloatware

Services vendors
  want you to outsource, ideally off shore

Process vendors
  want you to buy their rigid methodology

                    © Dan North, ThoughtWorks   20
Some would rather help you
Product vendors
  tools that keep out of your way... and your wallet


Services vendors
  want to co-source, and Share Knowledge™


Process vendors
  want to sell you self-sufficiency and adaptability

                     © Dan North, ThoughtWorks         21
If you remember one three things...
You get what you measure

Not all the vendors are bad guys
  Figure out whether they are helping or hindering


             Efficiency isn’t effective



                    © Dan North, ThoughtWorks        22
Thank you


      Any questions?



dan.north@thoughtworks.com
     http://dannorth.net

        © Dan North, ThoughtWorks   23
Bibliography

The Art of Systems Thinking – Joseph O’Connor

      The Modern Firm – John Roberts




                 © Dan North, ThoughtWorks      24

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The Fallacy Of Efficiency

  • 1. The fallacy of efficiency Dan North ThoughtWorks
  • 2. Dear Michael... “So here's the thing, I don't believe in efficiency. It's our obsession with efficiency that has got us into the current technology mess, and which has led almost directly to heavy waterfall processes. “Efficiency is how you let the big vendors sell their bloated technologies to the poor CIOs.” © Dan North, ThoughtWorks 2
  • 3. Efficiency (n) 1. The state or quality of being efficient; competency in performance. 2. Accomplishment of or ability to accomplish a job with a minimum expenditure of time and effort. 3. The ratio of the work done or energy development by a machine, engine, etc., to the energy supplied to it, usually expressed as a percentage. © Dan North, ThoughtWorks 3
  • 4. How do we measure efficiency? Budget/revenue targets Effort targets Time targets Activity targets What does % complete on a Gantt chart tell us? © Dan North, ThoughtWorks 4
  • 5. A brief history of efficiency Pre-industrial Industrial revolution Rise of capitalism in America Frederick Winslow Taylor Management Science ...You are here... Richard Durnall – the IT Division Refactored © Dan North, ThoughtWorks 5
  • 6. Meet Mr. Taylor “It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions and enforced cooperation that this faster work can be assured. “And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.” Frederick Winslow Taylor © Dan North, ThoughtWorks 6
  • 7. Effectiveness (n) 1. Adequate to accomplish a purpose; producing the intended or expected result. 2. Actually in operation or in force; functioning. 3. Producing a deep or vivid impression; striking. © Dan North, ThoughtWorks 7
  • 8. A brief history of effectiveness Blah blah capitalism in America W. Edwards Deming Lean begat TQM and some other monsters Systems Thinking ...You are here... © Dan North, ThoughtWorks 8
  • 9. Meet Mr. Deming “All anyone asks for is a chance to work with pride.” “A bad system will beat a good person every time.” W. Edwards Deming © Dan North, ThoughtWorks 9
  • 10. Systems Thinking – “thinking in circles” Factors influence one another in loops balancing or reinforcing, feeding back or forwards The shower being too hot Being addicted or too cold to drugs Committing crime to pay for drugs The amount I move the dial Being in prison with easy access to drugs © Dan North, ThoughtWorks 10
  • 11. You get what you measure “Everyone is trying to help” – Virginia Satir © Dan North, ThoughtWorks 11
  • 12. Let’s game! Exam pass rates in schools? Test pass rates in builds? Prison inspections? Test coverage? © Dan North, ThoughtWorks 12
  • 13. How can we measure effectiveness? Understand you are working with a system in fact a system of systems, of systems, of turtles Identify the goal of the system which is sometimes just its own survival Step outside the system to observe its effect How well does its goal align with yours? © Dan North, ThoughtWorks 13
  • 14. How can we measure effectiveness? Throughput accounting investment, operating cost, profit Cycle time for end-to-end customer journey “From concept to cash” Cost of end-to-end process including opportunity costs, factoring in time © Dan North, ThoughtWorks 14
  • 15. Effectiveness is often inefficient Cross-functional teams Pair programming Promiscuous pairing Parallel spikes Experimentation (aka Innovation) Theory of Constraints Efficiency is the enemy of effectiveness! © Dan North, ThoughtWorks 15
  • 16. But it gets worse... What influences your organisation? Competitors Markets Technology Staff Customers These are all changing outside your control! © Dan North, ThoughtWorks 16
  • 17. Change happens x x’ Performance Choice John Roberts – the Modern Firm © Dan North, ThoughtWorks 17
  • 18. If you focus on efficiency... You get better at being increasingly less effective until one day you notice about 2 years down the line so you have your next corporate overhaul © Dan North, ThoughtWorks 18
  • 19. Ouch! “Those who cannot remember the past are condemned to repeat it” George Santayana © Dan North, ThoughtWorks 19
  • 20. Some vendors feed off this Product vendors have tools that hog the spotlight want you to buy bloatware Services vendors want you to outsource, ideally off shore Process vendors want you to buy their rigid methodology © Dan North, ThoughtWorks 20
  • 21. Some would rather help you Product vendors tools that keep out of your way... and your wallet Services vendors want to co-source, and Share Knowledge™ Process vendors want to sell you self-sufficiency and adaptability © Dan North, ThoughtWorks 21
  • 22. If you remember one three things... You get what you measure Not all the vendors are bad guys Figure out whether they are helping or hindering Efficiency isn’t effective © Dan North, ThoughtWorks 22
  • 23. Thank you Any questions? dan.north@thoughtworks.com http://dannorth.net © Dan North, ThoughtWorks 23
  • 24. Bibliography The Art of Systems Thinking – Joseph O’Connor The Modern Firm – John Roberts © Dan North, ThoughtWorks 24