The competitiveness of German companies currently suffers from high energy costs and high non wage labour costs, from excessive reporting requirements and from slow approvals and bureaucracy. Admittedly there is little scope to influence these factors. Companies must instead focus on improving efficiency in order to achieve the results they want with minimal use of resources.
That brings organisational efficiency into focus. Organisational efficiency is the efficiency of the system as a whole and works above all at the interfaces across departmental boundaries, which is why we speak of the efficiency of working together.
Why organisational efficiency beats looking at parts in isolation
In mid sized companies what matters is
- how quickly demand becomes revenue,
- how reliably revenue becomes margin,
- how quickly margin becomes cash.
These results arise from the end to end characteristics of the system, not from a single department. Processes have to be efficient across departmental boundaries.
Organisational efficiency is therefore the ability of a company to deliver the value it intends, repeatably and scalably, with minimal use of resources and minimal management effort, so that results, cash flow and delivery promises can be met predictably.
Why interfaces matter
In a process context, and therefore in terms of efficiency, interfaces are not simply handovers from A to B. An interface always has four dimensions:
- The object handed over: what is being passed on? (data, an order, a specification, goods, a ticket, a decision)
- The quality criterion: how does the recipient know it can be processed? (completeness, accuracy, standard)
- Responsibility: who is responsible for what? (case owner, process owner, RACI, escalation)
- Cycle and channel: when and how does the handover happen? (system workflow, email, ad hoc, pull, push)
As soon as one of these dimensions is missing, further processing loops, waiting times or rework arise.
The interface as efficiency killer
At every interface the organisation translates information. The CRM to ERP interface, for instance, represents the handover of a quotation into an order, possibly with specifications and a resulting work plan.
Every translation of information carries a probability of error, so queries, corrections, duplicate entries or wrong priorities can arise. Where media breaks occur, every one of them is a potential rework factory.
The heart of organisational efficiency
Processes only improve for the long term when efficiency in the organisation improves alongside them. That includes defining roles, assigning responsibility, the flow of data and information, and the IT and tools available. The focus is therefore always end to end, thinking clearly in value streams rather than in departments.
To achieve high organisational efficiency, a company needs the right mindset, a culture of reliability: meeting deadlines, staying focused on the matter at hand and consistently questioning the status quo are essential for raising competitiveness and holding it at a level that promises stable earning power.
In summary
Efficiency means output with minimal input. Organisational efficiency means building the whole company, its processes, roles, structure, steering and culture, so that value is created reliably, within the given timeframe and with little friction. Transparent steering through key figures secures that success systematically.
THE MAK'ED TEAM develops effective approaches for mid sized companies across all sectors to improve efficiency for the long term. We understand organisational efficiency as a process management system for steering the company as a whole. Combined with the strategic direction, it makes a valuable contribution to lasting competitiveness.
You can read more about process management and digitalisation here.
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