Managers Move from Resource-Efficiency to Flow-Efficiency Thinking

Too many managers were trained to think of “resources” as a term they can apply to people. They use terms such as “FTE,” which is a full-time equivalent. They think of productivity, as if knowledge-work productivity can be measured with any kind of certainty. They think of percent utilization, which doesn’t make sense for collaboration.

Great managers knew the words and measures were wrong. And they often saw no alternatives. Agile culture provides many alternatives.

When managers think of people as “resources,” managers think they or the teams can split work to make people more efficient. We split this work by work type, creating experts. The name for this is “resource efficiency,” as shown in the following figure.

When managers think they can ask a team to work on several projects at once, or see 100% utilization, or reinforce narrow expertise, managers are victims of resource-efficiency thinking. High utilization makes no sense for knowledge work. People need time to think and to innovate. (See This Is Lean: Resolving the Efficiency Paradox [MÅ13] for a full discussion of resource efficiency versus flow efficiency.) One way to help people see the problems with resource efficiency is to ​Visualize Your Project’s Delays​.

Instead of resource-efficiency thinking, explain to your management about flow efficiency, as illustrated in the figure. When we flow work through teams, we see the highest throughput. It doesn’t matter if we talk about features or projects. Flow efficiency allows us to finish work faster.

This kind of thinking has several implications for managers:

• Managers need to manage the project portfolio to eliminate multitasking among projects.

• Managers need to staff and retain stable cross-functional teams.

• Managers need to look for throughput measures instead of utilization measures.

When managers don’t think about optimizing up for the team, the product, and the organization, they create management mayhem, as described in ​Avoid Management Mayhem​. In management’s defense, too often the organization creates rewards that optimize for the individual, not the team, the product, or the organization.

One way to see if your organization is optimizing up is to see how many people try to control or direct the team’s work. In agile approaches, the product owner is the single person who directs and controls what the team does. If managers try to control “their” developers, testers, writers, whatever, the team can’t manage its work.

Those teams struggle to manage all their work because they are multitasking by person instead of working as a team. Teams can’t depend on each other because managers move people around. Managers don’t realize what they are or are not measuring because they don’t understand agile measurement is different. Remember, ​Work as a Whole Team to Create the Product​.

Agile is a human-centered approach to work. Retraining your management will take time. Ask your managers to consider what they want: surrogate measures that create an individual approach to work, or measurements that encourage collaboration and delivery?

If you can help your managers change one idea about their thinking, ask them to consider flow efficiency instead of resource efficiency. Help your managers see the delays and the cost of those delays with ​Visualize Your Project’s Delays​.