Earlier this week I talked about goals or the outputs of the efficiency equation. This post I will be talking about the inputs to the efficiency equation. There are two ways you improve efficiency over time: (1) to get more outputs with the same inputs and (2) to get the same outputs with less inputs.
Anything you do can be considered an input; thus, there are infinite inputs that can be examined. For the purpose of simplicity I’m going to categorize all inputs as either Time, Capital (Money), or Skill. Inputs within each category have their limits. For instance, there is only so much time, money, or skill an individual possesses.
Time: Every single person has 1,440 minutes to use every day. The people who make the best use of those limited minutes will reach their goals more easily than those who choose to waste that valuable time.
Capital: Unless you are like my hero Warren Buffet, you also have a limited amount of capital and money to deploy towards reaching your goals. Making sure that each dollar you have works as hard for you as you do for it is important to making your life efficient.
Skill: Skills are knowledge, techniques, or abilities we use to achieve our goals. We learn to use skills starting at a very young age. Supply and demand will determine how valuable your skills are in the open market. The more difficult and rarer your skills are the most valuable they will likely be.
I should also mention that these inputs are all linked to each other. You can use money to buy additional time or skills. You can use your skills and time to earn capital. When evaluating whether you are becoming more efficient you need to look at the whole picture and not just one aspect. For example, if I want to reduce the amount of time it takes me to mow my lawn I could just hire a lawn maintenance service and reduce my total time spent; however, I would be paying a bill for the service, ignoring the money and capital aspect of inputs equation.
Don’t forget I’m giving away one copy of “The Goal: A Process of Ongoing Improvement” to a randomly selected subscriber to my website. You have to be registered by 8 pm PST on Sunday to be eligible for the drawing. Add your name and email off to the right to be entered.
In my last post I talked about how the measure of efficiency is a simple idea. The equation for efficiency is a measure of the outputs divided by the inputs. During this post I’m going to explore how we should look at the outputs of the efficiency equation in terms of goals.
Before I started my MBA I read a book called “The Goal: A Process of Ongoing Improvement” by Eliyahu M. Goldratt. This book changed the way I thought about life. Without ruining the book for you, I will just say that the main character learns that having the correct goal is far more beneficial than improving any single metric at the factory he works at. Without a consistent goal to work towards, our efforts become scattered and fragmented. After reading the book I realized that without an overarching goal we are just wandering about aimlessly.
Goals provide a target for achievement, or something to work towards. In the efficiency equation your goals are the same as your outputs. As goals are the end product for efficiency, it is important to think about and set valuable goals. So how can we make these goals the best they can be? I like to use and would recommend using SMART goals. When you set SMART goals you really need to think the process through to get the most out of it.
Specific – Goals need to be as specific and detailed as possible.
Measurable – This is how you will know your goal has been accomplished. I think this is the most important part and often one of the most difficult. There will be more on this topic later.
Achievable – Is it realistic that you can actually do this?
Relevant – Is this goal worth doing?
Time-bound – When do I expect to accomplish this goal? What is a realistic time frame?
I will be giving away a copy of “The Goal” to one randomly selected email subscriber of my website. The cut off to subscribe will be this Sunday (6/12/16) at 8 pm. Don’t miss this chance to get an incredible book. Just add your email in the right hand side of this post. If you are in the Elko area and don’t win send me a message and I will let you borrow my copy of the book.
Hi Everyone, if we haven’t met my name is Matt Warnert. I live in Elko, Nevada with my wife, soon to be one-year-old daughter, needy but lovable dog, and very elderly cat. I am a professional chemical engineer and project manager. I work at a gold mine currently managing large capital projects. I also have been involved with ore processing and gold recovery. I am currently in my last semester of graduate school for my executive MBA.
As you read this blog you are going to learn about efficiency. Efficiency is something I think about on a daily basis and I want to change how you think about every interaction you have with the world and wonder how it could go better. The simple definition of efficiency is really just a measure of how much output you get for a given amount of input at a single point in time. The idea is generally used in engineering settings to benchmark certain processes, but it also has applications across everything we do. I know efficiency sounds like a pretty mundane and boring term engineers use to describe how well something is working, but if you make conscious decisions to improve efficiency, over time the compounding effects can have a dramatic impact on everything you do.
Knowing how efficiently something is running at a single point in time is a meaningless number unless you have context to the situation. That is why it is very important that you measure and understand how efficient you currently are and periodically review that to see if you improving over time.
I intend to cover ways to improve your efficiency in the use of your time, capital, and skills. In some way, shape, or form everyone has at least one item on that list they want to do better at. By using a systematic and structured approach to efficiency improvement everyone can lead a life that more like the ideal one they envision.
Please subscribe to my blog on the right hand side of this page and help make the world a more efficient place.