The obsession for efficiency is killing our productivity

Photo by Natalya Letunova on Unsplash

Some time ago, I went to a small town in Bulgaria to visit a nearshored team of consultants. One evening, Andrey, one of the consultants, invited me to get a drink at a local bar. While we were enjoying the view on the towns square, Andrey was telling me about the countries recent history and the economical challenges they were facing.

Andrey recently became proud father of a daughter. He and his wife had moved out of their appartement and bought a nice house just outside of the city. The suburban environment seemed more convenient to raise their newborn. However, it hadn’t been easy to find a new place. Housing prices in Bulgaria had been increasing at a steep rate over the last years, while salaries didn’t entirely follow the same trend.

Andrey found himself lucky to work for a foreign company. Compared to many of his friends, his salary was a royal one. Although Andrey had the opportunity to relocate and escape from his countries economical challenges, he even worked in the US for a couple of years, now that he was settling down, he preferred to live close to his friends and family. And then he said something that totally got me by surprise:

“Salaries are higher in Western countries because the people there are more productive.”

While a very logical explanation, it struck me because it was completely wrong. In this specific case, the company I was working with had both local and nearshored consultants that were doing exactly the same job. In no way it could be said that there was a difference in productivity. Beyond that, we might like to think that salaries reflect our level of productivity or to what extent work equals value, but in reality this is hardly the case.

The idea that our paycheck somehow reflects the value of work is deeply ingrained. For Andrey it was a way to accept why he was making less compared to his foreign colleagues. Some engineers I work with are somewhat frustrated because they live near the bottom of their companies salary scale. They’re doing the actual work, in contrast to managers and roles alike, who spend their time to meet and just talk a lot. Which seems, from their perspective, not as valuable.

The biggest mistake is however made by organizations. To optimize their workforce, organizations tend to divide work and allocate it to minimize cost. While this approach is very appropriate when talking about machines and tools, when it comes to humans and teams, there is more at play. Optimizing human resource cost efficiency will have no impact on the value of outcome created. Let me rephrase, no positive impact.

A very common syndrome created by organizations is the multi-project environment. However, multi-project is killing productivity.

You’re working on 3, no 5… wait 9? projects concurrently. The team is really busy. But are they really?

By trying to keep everyone busy, to optimize cost efficiency, focus is lost. And loosing focus is exponentially magnified when it impacts entire teams. Work hours are drained by overhead communication and switching contexts. But more importantly, nobody knows what’s going on. Ultimately, everyone is busy, but little value is created.

Busyness as usual

Multi-project teams often use backlogs and sprint planning. The backlog is just a pile of work, a safety stock to maintain everyones workload. Utilization of work hours is maximized.

Planning is based on xMD development, 30% analysis, 40% testing and 15% PM, or something in that sense. The Team Lead calculates the resource need based on the expected workload and staffs teams accordingly.

A scheduling tool is usually needed to align who’s supposed to do what. The use of daily standups is not uncommon to ‘help’ with the spaghetti of work and projects.

While some might be confused by the agile echo, multi-project teams operate according to rigid practises. There are developers, analists, scrum masters (well…project managers), testers… Sometimes there are more, sometimes less roles. But everyone has a clear role description, aligning strictly how to engage towards the ‘teams’ work. Team members get assigned to the same project, but related work never happens at the same time.

At any given time there is a huge amount of WIP on everyones todo-list. Work gets queued and lead times explode. Everyone is waiting and it’s absolutely not clear where actual work is done and where Parkinson just fills the hours in the day.

From management perspective, everything seems fine. Sales has strict targets on how much work is brought in, Finance knows very well how much money is invoiced and the Team Lead defends the need for more team members by the size of the work pile in between.

A lead time of months or even years between Sales and Invoicing is not uncommon. The work pile can contain over 100MD of inventory per team member, accumulating to tens of thousands of hours ‘in stock’ for the whole company.

At one company I worked with, management decided to start billing customers upfront to deal with the ‘inventory’ problem. While they clearly identified an issue, the solution was completely wrong.

In multi-project environments 2 days of work transform in 15 days of ‘team work’, spread out over 6 months. It is typical for work to take longer and longer until it’s no longer acceptable. There is no common understanding on how much time something should take or even why tasks take the amount of time that they do. But more on that later.

Command and control.

Instead of focusing on value, the main concern is to make sure that everyone is busy. It’s an attempt to maximize resource utilization. However, if 2 days of work turns into 15 days, it’s hard to state that work is effective.

I had a professor once who was trying to explain the difference between efficient and effective. His explanation came down to — “Effectiveness has no value, it’s all about how efficient you get to the result.”

While economically this seems to make sense, the problem is that ‘the result’ is not a given. If the goal is maximizing resource utilization -efficient right?- but it increases work with a factor 7, you’re neither efficient nor effective. But sure, the team is generating 90% of billable hours…

Which is great, until you reach the limit of hours that a customer wants to pay for the value you’re delivering. At that point the ‘process’ is so much out of control that it’s impossible to determine how to improve and generate more value with less input.

Typically, managers then start looking at what tasks can be delegated to cheaper resources or how to add additional control mechanisms, which just makes everything worse.

Factor out communication.

Multi-project environments typically have a low work/duration ratio. Async communication is a major cause. As such, it’s often a target for improvements. Unfortunately, all too often, this happens at the expense of customer value.

The idea is that the root cause is out of the control of the team, the external factor. So, goes the reasoning, any async communication with customers needs to be minimized and condensed. Intake and specification procedures are introduced, test and acceptance is condensed at the end of the line. The goal is to acquire and enforce all customer input before and after work is done by the team. Two-way communication is seen as evil.

This way of working has no relation what-so-ever to customer value. The customer is not entirely able to provide final requirements and specs — “but that’s ‘not our problem’. As long as we get them to ‘sign off’, we’re covered (to send the invoice).”

Factoring out customer input is also an ideal excuse to further split ‘team’ roles. One team member, or sometimes no team member, is in contact with the customer. The rest just needs to execute based on instructions. This eventually leads to a complete alienation from customer needs and absence of a basic understanding of the value and purpose of work.

Customers tend to be moderately to absolutely disatisfied and teams have the idea they need to ‘protect’ themselves and their procedures from the customer. Customer value is nowhere to be found. Finishing tasks is prioritised over customer input.

At this point, the manager will probably come up with the idea to bolt on a ‘Customer Success Consultant’. Which is again great. It means we realised we lost touch with our customer. Unfortunately it’s an additional role to cover for something else. The added customer value, if any, will not cover for the added cost.

Communication gets even more complicated and there is another gate between the customer and the people doing the work. Instead of bringing team decisions closer to the source of truth, you’re moving towards command-and-control.

The cost of delegating.

Splitting work has a cost. Transferring information between team members requires time and effort, the more team members, the higher the cost. If the amount of work is small, the overhead of passing information outweighs the need to scale.

As the team is concurrently working on multiple projects, there is a huge disconnect between team members. Everyone is working on different things at any given time. This means that, even if we called a group of people a team, communication is async. Questions get delayed answers, problems don’t get the needed focus and misunderstandings are all around. Each team member is encouraged to blindly execute ‘their’ tasks and looses touch with the team, the project and the overall goal.

Again, the manager looking to improve, tries to understand the issue. Additional processes and tools, gates and controls are added. But optimization is defined as finding the balance of improving one island at the cost of another. The isolated team members focus solely on their own work. The island that inflicts the biggest issues or burns the most money gets attention, but customer value is nowhere to be found. Nevertheless customer value is the only thing that might provide common focus to steer everyone in the same direction.

Gathering work and team.

The (communication) overhead, diluted focus and obscurity caused by concurrently assigning multiple projects to a team outweighs any benefit of keeping everyone busy. Workload is a vanity metric that brings no value. However the problem is very real. Idle time within a project is often economically not justifiable. That’s why you got into multi-project in the first place.

Solving project idle time is usually not an easy task. It requires organizational and technical changes that often impact large parts of a company. However it has a huge impact on productivity, customer satisfaction and team member motivation. Definitely, any multi-project organization should look into ways to reduce, as much as possible, the need to schedule teams on concurrent projects.

Instead of filling the gaps with other work, idle time should be reduced. There can be many reasons why teams and team members are facing idle time, which can be broadly divided in 3 categories: team, organization and customer.

Team interaction. Part-time roles are the biggest issue. While the project might require some expert roles, in many cases team members can (be trained to) combine multiple roles. This makes them full-time available for a single project. Next to training, technological improvements can remove the need for technical expertise by enabling easy configuration and automation (eg. Devops).

Organization interaction. Supporting departments offer services or require validation gates for project teams. These interactions are organized in a scheduled way on periodic basis or with an approximate lead time. If these interactions trigger idle time in projects, the service level should be reviewed. Most of the time a pre-defined and dependable lead time, which is acceptable in terms of project timing, will help to avoid idle time for the project teams. Often this requires a change of mind from internal efficiency KPIs to service levels.

Customer interaction. Customer availability and response time is hard to manage. In some cases, requiring high levels of customer interaction, the best option might be to co-locate together with your customer. In other cases you might be offering too many options and choices. Based on the value proposition you’re making, be rigid on what interactions are really adding value. Some questions get the best answer by not asking.