Efficiency = the ratio of the output to the input of any system.

In the public sector:

Inputs = money + staff + buildings + IT equipment + materials

Outputs = services (usually).

So improving efficiency means reducing the inputs to achieve the same output.

Mr Gradgrind would have loved the utilitarian equation implied by these relationships. If you can only reduce the inputs – get the staff to work harder, occupy less office space, eke out the IT kit for another year or two, ration the pencils.

The great and counter-intuitive truth is that the way to reduce the inputs is to devote the organisation entirely to serving the customer (Tomas Bata, whose quote I included in my last post, understood this instinctively: Serve! – he said – If you serve as best you can, you will not be able to escape money).

It works like this.

All work should add value for the customer. Any work that does not is waste and should be eliminated (NVA or non-value added)

Think of your own work (if you don’t do paid work think of your own house). What, no waste that cannot be eliminated? Hmmm…

How you eliminate that waste by focussing on the customers’ needs is another matter but I have typically seen 20% – 25% NVA identified by a lean or systems thinking approach to work.

[Readers in the public sector bridling against the notions of “profit” and “customer” in their context– there are still some – are invited to contact me for a quick corrective lesson]