Two Kinds of Efficiency

If you haven’t read it already, I really recommend This is Lean; a brilliantly succinct look at how we understand and trade-off between two kinds of efficiency: flow and resource. This short post will summarise this trade-off for you.

There are two kinds of efficiency in organisational systems: resource efficiency and flow efficiency. Every system is calibrated somewhere on this axis – balancing the degree to which reducing the cost of operating impacts the speed and quality of change.

In a resource efficient system, everyone is utilised, with plenty of work queued up to ensure they are always working on the most important tasks. Think of the doctor in A&E. She is always busy; but now consider the patients – the majority sat around waiting and queuing. This is the trade-off.

In a flow efficient system, we don’t care as much about the utilisation of people, we care most about the utilisation of the work itself. 

In other words, we worry about it sitting around in queues, or blocked because no-one is available to work on it. 

When we think about Agile teams we are talking about teams organising to maximise flow efficiency at the expense of resource efficiency.

Screenshot 2018-04-12 20.51.00

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