The second most powerful word in delivering new economic value (aka innovation) is effectiveness. Peter Drucker wrote extensively on effectiveness and the subject is worth reflecting upon when determining how and where to find growth opportunities an embarking on any innovation program.
Let’s begin by clearly stating what effectiveness is NOT:
- Cost reduction
- Time management
- Any other number of words describing task-oriented business.
Effectiveness is a measure of the match between stated goals and their achievement. It is adequately accomplishing a purpose. According to Peter Drucker, effectiveness IS:
- Doing the right thing, not just doing things right (i.e. problem framing and strategic intent)
- Derived through hard, systematic work
- Converting intelligence, imagination, creativity, and knowledge into results
- Concentrating on important decisions, not by making a lot of decisions
- A habit born through repeatable practices
- In the end, observed as competence.
How does one make the right decisions and become effective?
First understand the strategy and intent of the organization:
- The desired future state and the business you are truly engaged in
- Focus on the customer who the business wishes to create and serve
- Define the best offerings to meet the unarticulated/unmet needs of the customer.
Then set and deliver the goals, actions, resources and time frames (i.e. strategy) to grow the profit and competitive advantage of the organization.
This may sound a bit theoretical, but in reality that is all a business is: its intent, its plans to meet the intent, gathering resources and applying them to gain a customer and deliver value to that customer (desirable, feasible, viable). Yes, being effective and executing is complicated because people need to co-operate along the entire chain of events to get from intent to delivery.
It seems that a great dilemma created in today’s business world is that the total number of people employed have been reduced, but not the complexity of their work or the amount of work they are supposed to deliver. One can only wonder how many tasks could or should be eliminated with the concomitant reduction of people. There does appear to be a disconnect within many organizations between the reduction of people and what the remaining people should be focused on in order to deliver the right thing. Without focusing on what is effective, people will scurry about busily but not actually meet the intent of the organization.
In order to be effective, people should be working on the right things, not everything. They need to be working on the right things in the right order, not trying to keep up with a growing to-do list comprise of many things that are not important to providing value to the customer and growing the profit and capabilities of the firm.
Innovation is the delivery of something new to the market that generates economic value. Without focusing on effectiveness, in the long run an organization will fail to consistently deliver new things that customers value, and subsequently will fail to grow. A buyout by another firm or bankruptcy is then sure to follow.
image credit: austinpost.org
Roy Luebke is an innovation expert focused on discovering new, customer-driven opportunity areas to help define the future of a company. He is inspired by knowledge and learning, and applying structured tools and methods at the crossroads of strategy and innovation to achieve business growth.