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🦉 10x curiosity - Slack — Resource vs Flow Efficiency


🦉 10x curiosity

December 18 · Issue #237 · View online

🦉 A weekly sample of links that made me think 🤔

Also published in 10x Curiosity

I heard someone on the Tim Ferriss show once say that “busy is a choice”. But is it? With so many demands on our time in all aspects of our lives it can seem that it is everyone else’s choice but ours. How often do you wish for some time, just to step back and take a breath, review what is happening and have the space to decide if you are heading in the right direction. Slack time, being the opposite of busy.
He highlights how the removal of slack through a business is the eternal aim, driving all inefficiency’s out until left with a utopian vision of capital perfection — no waste to be found.
The implied assumption in this drive is that having resources sitting around with slack time is wasted, they need to be put to work, realising the productivity gains as technology and improved systems allow more to be done. More work, with fewer people equals more profit. A guaranteed formula for success, striving for resource efficiency. In many areas however this is misguided as what you really should be striving for is flow efficiency.
Writes Demarco:
It’s possible to make an organization more efficient without making it better. That’s what happens when you drive out slack. It’s also possible to make an organization a little less efficient and improve it enormously. In order to do that, you need to reintroduce enough slack to allow the organization to breathe, to reinvent itself, and to make necessary change
Does the addition of the additional tile in the figure increase the efficiency and productivity of the system? Ref Demarco
Does the addition of the additional tile in the figure increase the efficiency and productivity of the system? Ref Demarco
Rasmussen boundaries of failure model captures this concept we see every day in business to push out every inefficiency we can find — removing cost, removing people, removing waste. Pushing as close as leaders dare to the point of failure, as it is right on this boundary that the highest profitability lies.
Until something goes wrong and it doesn’t.
Rasmussen’s System Model
Rasmussen’s System Model
Demarco’s hypothesis is that not only is slack necessary to improve work performance, it is actually essential for a business’s survival:
Slack at all levels is necessary to make the organization work effectively and to grow. It is the lubricant of change. Good companies excel in the creative use of slack. And bad ones can only obsess about removing it.
For business to survive they need find new ways to reinvent themselves, the need inspiration, they need to be able to change
writes Demarco
Slack is the way you invest in change. Slack represents operational capacity sacrificed in the interests of long-term health.
[Failure to reinvent] is often the result of a failure to set aside the resources necessary to let invention happen. The principal resource needed for invention is slack. When companies can’t invent, it’s usually because their people are too damn busy.
Cal Newport (A World Without Email) explores how technology has removed support roles such as admin assistants from workplaces with very negative impacts on productivity,
When you eliminate support staff, the skilled professionals become less intellectually specialized, as they have to spend more time on administrative work that computers made just easy enough for them to handle on their own
Because the professionals have much higher salaries than the support staff, replacing the latter with more of the former can be expensive… the organizations … studied could immediately reduce their staffing costs by 15 percent by hiring more support staff, allowing their professionals to become more productive
Demarco highlights how support staff are often seen as overhead that can be easily removed as Mckinsey come through on the next round of efficiency cuts,
We have become so obsessed with getting rid of people who are burdened with the characterization overhead that we have ended up with organizations where many high-priced knowledge workers and managers are spending as much as a quarter of their time being their own overhead.
The Theory of Constraints help explain why flow efficiency drops as slack is removed from a system. Production Systems (including knowledge work) naturally have a bottleneck that determines the throughput of the system. You want this bottleneck to be clearly identified so the focus can remain on ensuring that it is operating at capacity. By definition however this means that resources around the bottle will have slack. Frequently the slack is taken advantage of, either by introducing more work that is not helpful to the overall flow of the system (throughput actually goes down as WIP increases!), or resources are removed to “balance the line” creating a situation where the bottleneck might become starved of work from upstream variation, or forced to reduce work output due to limitations downstream.
Busywork through the organisation inevitably impacts the bottleneck
Busywork through the organisation inevitably impacts the bottleneck
A company where everyone is busy working is terribly inefficient. The only way that’s possible is if everyone is optimising their own productivity, at the expense of the bottleneck’s productivity. And it is only the productivity of the bottleneck that matters to the throughput of the company. Tiago Forte
It is critical to maximising the productive work of a system that slack is allowed to remain in it.
Leaving the final word to Shane Parish (Efficiency is the Enemy (
Amos Tversky said the secret to doing good research is to always be a little underemployed; you waste years by not being able to waste hours. Those wasted hours are necessary to figure out if you’re headed in the right direction.
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