I believe that I've had an incorrect view of what true efficiency is during my life many times I've said I want to be more efficient and I've taken different actions and I'm taking different decisions trying to be more efficient but if I view my life I think that many of those decisions and actions have been really counterproductive and I can see similar pattems in the world companies organizations individuals or even countries we view official see in a way which I believe can be extremely counterproductive even if we feel or we believe that we are becoming more efficient we are in fact decreasing efficiency and I'H try to explain why imagine that this cute little guy was your son let's call him EMM he's 10years old he's full of energy he has a lot of different interests he's a popular guy he have different hobbies and he still is a little crazy one he's your son then one day you get the phone call from his teacher saying we're worried about the millah we can see that he has severe concentration problems and he cannot really participate in the regular class he has concentration problems and we've been discussing this and we have a hypothesis that he might have ADHD ADH what is that attention deficit hyperactivity disorder that means that a person have difficult to focus he or she's impulsive and has full of hyper energy that's ADHD can you imagine if you got that message how would you reach as a parent maybe you would agree said well let's make an investigation because ADHD is considered to be a handicap then one can question what happens when you conduct an PhD investigation well there are several different steps the first step is that the parents they meet with the professionals and discuss the situation after that step then you have a chat with the child and get his or her perspective after that you conducted a functional invevtigation to sec what is working what is not working after that you conduct psychological inventigation and then after thar you go to the medical investigation in the prychological investigation you see how they react if they cannot if they can concentrate in the medical in eatigation you see how they react on different medicines then you can compile all the information from the laffferent tests and you lor different questionnaires several different steps the first step is that the parents they meet with the professionals and discuss the situation after that step then you have a chat with the child and get his or her perspective after that you conduct functional investigation to see what is working what is not working after that you conduct psychological investigation and then after that you go to the medical investigation in the psychological investigation you see how they react if they cannot if they can concentrate in the medical investigation you see how they react on different medicines then you can compile all the information from the different tests and you conduct alot different questionnaires and then you can settle he has ADHD or not so it looks fairly effective seven different steps the problem is this is not the case in the real world it doesn't look like this a fast sequence of seven different steps rather it looks like this there's some green part where they in fact do the investigation but there's a lot of red part as well where we wait because the way we organize organ organizations and companies today is in two different islands different functions where each function has one sort of responsibility so it's like taking a boat to different islands like when you go to Thailand you travel to all these different islands and that's exactly how an ADHD investigation looked like and then one can question if you are travelling to these seven different islands how long time does it take well this is a real example from the southern part of Sweden and it took in fact four months and then one can question is that efficient what would you say if it was your kid would it be efficient to wait for four months well if we look at this picture we can compare the green part with the red part and then maybe we could have a hypothesis maybe it's like 20% well valuating time and the rest 80% is non value-adding time that's not the case the real case is this if we come if we combine all the 17 or the seven steps we all have 17 hours and contrast that to four months that is 2880 hours so that means that our level of efficiency is 0.6 percent during 99.4% we are out in the ocean and no one really cares about us when we're up on an island then we get full attention full attention of all the doctors there fantastic but when we are in the middle of two different islands no one really takes care of us the problem however is that we cannot get this picture on a regular basis we don't see the big picture rather our unit of analysis are only these different islands and we don't really analyze them together we're analyzing separately this is what it looks like from a company or organizations perspective but the real problem if we take a customer or patient or citizens perspective this is what it looks like ok email might have ADHD what is happening then all of a sudden well it's the first step we have to go there and you go there and then it's the next step it's a chat with the kid and then it's a functional investigation and then it's a psychological investigation and then all of a sudden well I mean the medical investigation is tomorrow but we don't have time so we have to reschedule and reschedule and then the third time yes we nailed it medical investigation and then we gather all the information and then all of the sudden we can settle this is the case but the problem is we don't see the big picture because we are travelling to different islands and each Island they have like a tent over it when you're inside that on the island then it's fantastic to be there and one key question is this okay we can recognize this within healthcare within companies and organization even in the integration process of new Suites. We are developing organizations and companies that are considered to be different islands and each Island have different responsibilities some years ago it was a fantastic his name is under Chevallex he was working with ADHD investigations at school at University Hospital and he said this is not okay it's about our children we have to think in a completely different way so he gathered all the personnel working on the seven different islands he said we need to develop a new way of working 50 the question he said what is a good ADHD investigation everyone had to come up with their perspective and they said well it's about seven steps seven different steps seven different islands and then he said but okay if you have seven different step how can we develop a way of working where we'rc working one team instead of seven different teams one team where we really take parents perspective and a child perspective so we can deliver a good ADHD investigation how can we do that where we have a common goal where we first deliver quality we want to make a good investigation but we also want to deliver speed four months is not okay we want to do it faster then they sat down and talked what is our best way of working if We are going to work together seven different steps and they could decrease and decrease and ADHD investigation how can we do that where we have a common goal where we first deliver quality we want to make a good investigation but we also want to deliver speed four months is not okay we want to do it faster then they sat down and talked what is our best way of working if we are going to work together seven different steps and they could decrease and decrease and decrease and over time everyone could start to see the big picture. everyone was not only an island they said we are one island or one efficient ocean with different responsibilities but we have the same goal so with the visualization and continuous meeting they could control the investigation process and in fact they could decrease throughput I'm down to three weeks so four months down to three weeks and then no one can question how do they do that well it's fairly simple three weeks instead of four months they had numerous positive effects on the organization first of all it was faster but then they recognized it's so much easier to handle this why because we only have to take care of five children at the same time when it takes three weeks when it takes four months we have to handle 35 cases at the same time think about if you're a if you were to answer your emails once a week how many unanswered emails would you have in your computer if you were to answer two times a day you would have much less little slower that's mathematical laws which can explain that so if we go from four months down to three weeks we go from 35 cases down to five cases then it was a very creative secretary said well if it's only five kids let's take a picture of them we put them up on the wall and put the names on them and then we meet in front of this wall every day so we can make sure that we control the progress this is what looked like this is just a fictive picture but approximately five different kids and a standardized process in three weeks. three steps first week three steps second week and one step the third week and what they did was that they gather in front of this board everyone they said have we done step one yes have you around step two yes have we done step 3 yes good we are on track after first week have we done step four years step five yes step six no we haven't gotten their questionnaire yet why and then they could put in extra resources to handle that case so in order to be able to secure that this in fact happened they could control the progress so they had perfect progress controlled by seeing the big picture so there were a lot of positive effects first of all it was faster second of all they could increase and have stable quality which in turn delivered a great experience for the parents furthermore this reduced the stress of the personnel and which in turn made the personal rate really proud but the most interesting part here is that it increased productivity more than hundred percent and what I think is interesting here is how is this possible we have a win wan win situation everyone is better off and if we look into micro economic theory this is not possible we talk about trade-off's I mean we cannot deliver high quality at the same time as low-cost it's impossible so for instance if we have a five-star hotel then we can be good in high quality bu] we want delivering in terms of low cost or we have a budget hotel we are good in low cost but we won't be delivering high quality and theirs we can have a five star four star three total just different type of customer needs but this case here we were beating the trade off we were increasing quality at the same time as lowering the cost increasing productivity and what I think is really interesting is the question how and that's why I want to talk about efficiency because if we look into systems today we define efficiency from a resource perspective we define efficiency from a functional perspective it's like we take an organization here's the customer need and we cut the need on the customer up and we say you this is your responsibility this is your tesponsibility and this is your responsibility and if I were the president I need knis to make sure that everyone deliven so we measure efficiency on an island level wath this is whot we called front of each Island the good thing is that we have high capacity utilization flow efficiency here we have focus on the need instead we focus on how fast can we fulfill the need but the bad thing is that we have low capacity utilization which one of these forms shall we take flow efficiency great from a customer perspective resource efficiency great from economies of scale perspective but what we research can see is that we shall always always drive flow efficiency why I'll think about it what kind of indirect effects will these two forms have on our organization if we fell over focus on resource efficiency then we will develop efficient Islands where each island do not see the big picture they only focus on what they are supposed to be doing and after a while they develop a subculture a subculture which after a while get a king or a queen saying this is my Island don't come here and disturb our way of working and when we have these kings and queens on the different islands what happens then well everyone are doing a fantastic job but if you look from more perspective how much of the total time do we really take care of the customer well we have a Kenya or a queen taking care of the customer during 0.6 percent of the total time during 99 percent 0.4 percent of the time in this case no one takes care about the patient or the customer because they ' ve done their part of the work so if we drive resource efficiency we will go to situation where we have 0% percent time where we care about the customer but the indirect effects of low efficiency is that we go towards full focus on customer satisfaction or customer focus and that's drives effectiveness we're doing the right thing here drives in effectrveness we re doing the wrong thing because were making decision from an island perspective so what happens here what would you do if it was your son email well you would probably sit there and after a while when you found out that you have been waiting enough you will start a call that's a new need because you're upset and the doctor have to take care of you and I can promise you if if was your son you wouldn't be so mice to the doctors is that Tve been waiting now for three weeks what is happening then they have to take care of that so that's a new need so the organization develops new needs when we don't focus on the flow and that's what we call the efficiency paradox when we don't see the big picture we will become ineffective we cannot see the big picture we make incorrect decisions we develop new needs and organization will become an engme of waste and errors so if we look at this what happened responsibility and this is your responsibility and if 1 were the president 1 need kpis to make sure that everyone delivers so we measure efficiency on an island level with this is what we called resource efficiency so one can say that if this was a doctor how much time available does the doctor have and how much value can she deliver during that time and this is what we call the resource efficiency we try to measure value from a certain function or a resource another type of perspective that is to put focus on the patient in this case it's like putting up a film camera think if we had a GoPro and we could put it on EML shoulder and press record once the need was identified until the need was fulfilled then we would have a forty or four months long movie I will tell you that 44 months long movie it wouldn't be an action movie we know that there's only 0.6% that's action imagine that you enter a cinema sitting down waiting and it's only one minute out of two hours that is action you would leave in a couple of minutes because here we have competitive pressures we don't have that especially not in the public sector we just have to wait so when it comes to flow efficiency then we measure lefficiency how well can we fulfill the need of a customer totally different so we have two forms of efficiencies either we drive a resource efficiency making people work more utilize people's competence or we drive flow efficiency meaning that we fulfill the need our customers and of course it's not about either or we want to reach the star but the question is if we want to jeach star which of these two forms shall be prioritized first we can compare them with eacn other well flow efficiency and resource efficiency in resource efficiency we focus on the resources the bad thing is that we'll have long throughput time because all the islands are busiest so there will be queues and waiting times in would probably sit there and after a while when you found out that you have been waiting enough you will start a call that's a new need because you're upset and the doctor have to take care of you and I can promise you if it was your son you wouldn't be so nice to the doctors is that Ive been waiting now for three weeks what is happening then they have to take care of that so that's a new need so the organization develops new needs when we don't focus on the flow and that's what we call the efficiency paradox when we don't see the big picture we will become ineffective we cannot see the big picture we make incorrect decisions we develop new needs and organization will become an engine of waste and errors so if we look at this what happened really with ADHD example well it took first four months then they took they could decrease throughput time what happens with a number of cases from 35 down to five which is the easier easiest one to handle 35 volts or 5 volts it's so much easier to handle but those are the indirect effects that we do not measure when we measure Island efficiency because that can only be measured on a system level so number of cases decreases number of handle decreases number of restarts decrease that complexity decreases and so much easier and that's the kind of situation we want to be in here we need to take care of things that do not add any value at all but when we can have over capacity to always make sure that we have efficient processes then we derive deliver true value from a system perspective and from a customer perspective so prioritizing flow efficiency drives effectiveness we do the right thing so my question to you is where do you put up your camera on your employees or on your customers the citizens or your patients good luck.

Answer the following questions:

1. Who is the customer of this ADHD diagnostic process?
2. What is it about this ADHD diagnostic process that makes it efficient or not for customers?
3. How do the employees in this ADHD diagnostic process evaluate their own efficiency? Is it the same as the customers' point of view?
4. Modig uses the analogy "when you are on an island, it is like you are in a tent and it is fantastic! But when you are at sea, it is like nobody really cares about you".
   1. In a resource efficient organization, do customers spend more time on islands or at sea?
   2. What about in a flow efficient organization?
5. Name at least two ways that the doctor in the video improved the ADHD diagnostic process.