Manage-Wise

Analysing orientation

Many people have a stronger orientation towards one of the three: output, input or efficiency. Efficiency is the ratio of output and input. Let us categorise people, based on what they are oriented towards, from a process perspective.

Let us look at these varieties, before we get deeper into the concepts of efficiency.

Output-oriented people

These are people who are driven by the outcome of any activity. They consider themselves as being result-oriented and try to achieve the results “at any cost”. Their definition of success is achieving results. In the basic process model, output-oriented people always try to maximise the output. Since output is a derived and dependent variable, they do whatever they can, to the input and to the process, in order to maximise output. However, since they are willing to maximise output at any cost, they often incur more than a reasonable cost, without realising it. This higher cost may be evident in terms of lower efficiency and overall sub-optimal performance of the process.

Input-oriented people

These people are driven by working on the inputs and efforts. Somewhere in their thought process, they feel that by maximising input, the output will anyway, go up proportionately. This thought makes them input-oriented. They are seen as workaholics. They enjoy working and consider working hard as a sure way to success. They tend to maximise the input. They run a risk of not achieving proportionate output, implying low efficiency, and overall sub-optimal performance of the process.

Efficiency-oriented people

These people are driven by concepts like “return on investment” or “value for money”. They get their quota of happiness by maximising efficiency. They either try to get higher output for a given input, or else, they tend to minimise the input and yet achieve the same output. As long as they obtain an output, which is commensurate to the input, they are happy. Unlike output-oriented people or input-oriented people, efficiency-oriented people have two different options which can help to achieve their purpose—increase the output for the same input, or decrease the input for the same output. The brave-hearted ones may have one more option, which is a combination of these two—decrease the input and yet, increase the output.

Just as individuals are oriented towards one of the three factors, so are organisations. The organisation culture adopts one of these three orientations, depending on how senior people within the organisation are oriented. While there are advantages and pitfalls in each of the three orientations, from the optimisation perspective there is a lot of merit in organisations orienting themselves towards efficiency.

Since we will bring in the concepts of utilisation and effectiveness, we will avoid missing out on the strengths of output-orientation and input-orientation. In fact, utilisation will fill in the strengths of input-orientation, and effectiveness will fill in the strengths of output-orientation, but without the pitfalls of either of them. However, it is important to tie the output levels required to achieve the end results, when you work on improving the efficiency of the process.

At an individual level, the orientation is intrinsic, and comes from one’s upbringing and years of working and thinking in a set pattern. It may not be easy to change the orientation fast. However, at an organisation level, it is possible to consciously position the organisation towards efficiency-orientation. This is one of the initial steps in the optimisation journey.

Utilisation

The concept of utilisation is about putting to productive use the resources, infrastructure and capabilities and not missing out on opportunities. It is about discovering what possibilities exist and making the best use of them.

Utilisation and efficiency are complementary concepts. While efficiency is a measure of how well your efforts (and resources) are generating results, utilisation is about the efforts not applied or resources not used, discovering them, and putting them into the high efficiency engine. Also, at times, a process may need reduced levels of input, as its efficiency is improved, such surplus input can now be fed somewhere else, thanks to the utilisation focus. If handled well, efficiency and utilisation can co-exist and aid each other. But, if these are viewed independently, one may be achieved at the cost of the other, without a significant overall achievement.

Excerpt from ‘Optimizing the Organization’ by Subhash Khare. Reproduced with permission © 2006, Tata McGraw-Hill Publishing Company Limited. E-mail: vishwanath_mum@tatamcgraw-hill.com