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