Defining Productive Efficiency

Efficiency is a futile pursuit when not pursued in the context of effectiveness, i.e. in the context of achieving worthy goals. But how effective can we be if we are not minimizing wasteful efforts? How much efficiency is desirable? What is the optimal level of efficiency that maximizes our overall effectiveness?
What is Productive Efficiency?
Being effectively efficient would describe the goal of achieving optimal efficiency, that is, efficiency which maximizes our overall effectiveness. We can call this optimal level of efficiency “Productive Efficiency”.

Productive Efficiency is therefore defined as that level of efficiency which minimizes waste, but without compromising the value of the goals pursued, without increasing to an unmanageable degree the risk and complexity of the work process, and without producing any negative externalities.
Negative externalities in this context can be defined as negative byproducts, as pollution to the system itself or other neighbouring ones. These negative externalities may (or will) reduce the value-creation potential of the systems they pollute, therefore indirectly decreasing the overall efficiency instead of increasing it.

In other words, Productive Efficiency is that optimal level of efficiency, the healthy mean between deficiency (waste) and excess (false efficiency). Any of the two extremes results in a reduction of our overall effectiveness.

“The waste side story: examples of waste are, information waste, knowledge waste, wasting relationships, wasting skills, wasting creativity, and high opportunity costs.”

Excess in efficiency results in efficiency gains which are simply “too expensive”. Over-optimizing efficiency in an unbalanced, narrow, non-holistic way, accounts only for the reduction of effort without careful consideration of the effect it may have to other known (or unknown) value-creation parameters. This results in an unproductive level of efficiency, or false efficiency.

“What a waste! He is strong in the details and weak on the fundamentals.”

Deficiency in efficiency is characterized by lack of efficiency considerations, allowing for too much waste in our efforts or in the definition of our goals. This may have a direct (negative) impact to our ability to optimally allocate our capacities in the various activities and goals. The result is frustration, fatigue, burnout, and compromises in the quality of our work and its outcome.
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Note that a productive level of efficiency allows for some waste (a productive type, and amount, of waste) in both the defined goals and the selected process. This “productive inefficiency” allows us to increase the effectiveness in re-evaluating and redefining our goals in an agile and dynamic manner, hence increasing our overall effectiveness.

“Waste is anything other than the minimum amount of input resources which are absolutely essential. The seven types of waste are: waste from overproduction, waste of waiting time, transportation waste, inventory waste, (over)processing waste, waste of motion, rework waste.” – Fujio Cho

Exercise: How can one achieve Productive Efficiency in the process of learning, where the goal is (obviously) knowledge?
How to achieve Productive Efficiency?
As mentioned above, our goal is to reduce waste (which is not the same as eliminating waste completely), but without compromising our overall effectiveness. In fact, we should look for actions that result not only efficiency but also effectiveness gains.
Here are some more ways to help you achieve more with less effort :

  • Place yourself in “flow” conditions (see flow theory by Csikszentmihalyi)
  • Explore synergies
  • Form productive habits (free up intellectual capacity on decision making)
  • Create partnerships

The aim is to free up capacity by reducing wasteful goals and activities, while increasing our investment in worthy goals as well as in activities that also result in positive byproducts (positive externalities).

Positive externalities are “good pollution”; they are byproducts of work processes that have direct or indirect value to our system or to neighbouring systems. These can be worthy goals in themselves (e.g. developing a new competence, gaining experience or wisdom). They can also be rendered useful as inputs to other work processes, and/or contribute positively to the achievement of other worthy goals, thus indirectly resulting in an increase in our overall efficiency and effectiveness.
Concluding Thoughts
The concept of productive efficiency reminds us that the concept of achieving a holistically defined optimal level (a productive amount) of a variety of things (such as qualities, competences, behaviours, virtues, etc.) has a positive effect on our lives and work. This productive level is the healthy mean between unproductive extremes (see also “Aristotle and Effective Intelligence“).

The application of the concept of the productive mean on a variety of critical success factors, can result in the concept of Productive Balances. The achievement of the latter contributes to our overall effectiveness. Examples of such balances are first and foremost the Aristoteleian virtues of courage, generosity, honour, fairness, friendliness, temperance, humour, magnificence, magnanimity, etc.
One can think of a number of other productive balances, which may not be independent but rather subordinate ones, and contribute to other cardinal balances (such as virtues). For example, such balances are: productive introspection, productive confidence, productive insecurity, productive challenges, productive optimism, productive exploration, productive action, productive ambition, productive enthusiasm, productive contribution, productive caring, and many more.

See also “Essential Balances” – by Ivo Velitchov

These productive balances become dimensions of our Effective Intelligence (FI), which means that by achieving these balances we increase our Effective Intelligence (FI) and therefore our capacity to achieve our goals (either secondary or ultimate ones, such as success and happiness).


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