ILM Level 5 Leadership & Management › pdf › 8607-510-Managing-for... · apparent is that efficiency and effectiveness are inextricably linked. Managers need to apply careful consideration

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ILM Level 5 Leadership & Management

Managing for Efficiency & Effectiveness

8607-510Also covering units 8605-510

[Intentionally Blank]

8607-510 Managing For Efficiency and Effectiveness

Contents

ILM Unit Specification 2

Introduction 3

Managing for Efficiency and Effectiveness 4

Vision and Mission Statements 8

Organisational Goals and Objectives – Strategic Plans 9

Authority, Accountability and Responsibility 13

Delegation 15

Communication of Individual and Team Objectives, Responsibilities and Priorities 21

Monitoring and Controlling Outcomes 22

Key Performance Indicators 23

The Balanced Scorecard 25

Linking Efficiency and Effectiveness to Prioritisation 26

Systems and Processes 29

Business Process Reengineering (BPR) for Efficiency and Effectiveness 30

Usability Testing 32

Process Modelling 34

Flow Charting 35

Lean Manufacturing – For Efficient and Effective Use of Resources 39

Eight Categories of Waste in Lean Manufacturing 42

Material Requirement Planning (MRP) 46

Six Sigma ® 50

Analysing the Efficiency and Effectiveness of Business Processes – Factors to Consider When Analysing Business Processes

55

Tools and Techniques for Process Analysis and Improvement 56

Resolving Tensions Between Existing and Proposed Systems and Processes 61

Root Cause Analysis – Rational Problem Solving 63

Analysing the Scope for Improvements and Constraints 69

Planning Techniques 71

Operational Constraints 73

Action Planning Tools 73

Management Style 80

The Importance of Engaging Followers to Achieve Efficiency and Effectiveness 80

Reasons for Low Levels of Follower Engagement 81

Other Factors that Impact on Leadership Effectiveness 83

Motivation 83

Leadership and Motivation 84

Motivating for Star Performance 86

Leadership Styles, Behaviours and Cultures 88

Action Planning for Development of Your Leadership and Management Style to Manage More Efficiently and Effectively

94

Conclusion 97

Appendix 1 98

Bibliography 99

1


Managing for Efficiency and Effectiveness 8607-510

Level: 5 Credit value: 4 Unit guided learning hours: 18

Learning outcomes (the learner will) Assessment criteria (the learner can)

1 Be able to assess the organisation’s

ability to manage efficiently and effectively to achieve targets and objectives

1.1

1.2

1.3

1.4

Assess own organisation’s ability to translate vision, mission and strategic goals into operational objectives with realistic and measurable targets Assess own organisation’s ability to efficiently and effectively delegate responsibilities for the achievement of targets and objectives Assess the efficiency and effectiveness of control methods used to monitor the achievement of targets and objectives in own area of responsibility Implement improvements to organisational efficiency and effectiveness in own area of responsibility

2 Be able to evaluate own ability to

manage efficiently and effectively

2.1

2.2

Evaluate own ability to manage effectively and efficiently Implement changes in own management style in order to manage more efficiently and effectively

Unit purpose and aim: To develop understanding and ability to manage efficiently and effectively as

required by a practising or potential middle manager.

Indicative Content:

Nature, purpose and importance of vision and mission in setting values and strategic direction, and the significance of stakeholders in shaping vision and mission

Importance of translating vision, mission and strategic goals in to operational objectives

Setting SMART objectives

Definitions of, and conflicts between, effectiveness and efficiency

Definitions of, and conflicts between, authority, accountability and responsibility

Need for negotiating techniques

Setting priorities

Principles of delegation to achieve overall objectives

Control mechanisms to monitor outcomes and ensure achievement of objectives

Using feedback from others to critically evaluate own performance

Techniques for collecting and analysing feedback from others, including 3600 feedback

Personal development planning

Measurable organisational, team and individual objectives

Time management techniques

Efficiency and effectiveness matrix

Target setting and performance indicators

Planning techniques appropriate to activity

Systems theory and process design

Monitoring and control techniques and records

Use of results to “close the loop” and make continuous improvements

This table is extracted from the ILM Qualification Specifications

2


Introduction This Workbook, and the various activities within it, will introduce you to concepts relating to managing for efficiency and effectiveness. As a manager you will undoubtedly have responsibilities for managing efficiency and effectiveness in your functional area or for the work that your team carries out. The activities in this Workbook will help you to understand the different methods that are used in managing for efficiency and effectiveness and to consider which of these are relevant to your organisation. You will be armed with tools and techniques that will allow you to evaluate and improve your management of organisational efficiency and effectiveness. At this level of study, you will be expected to take the theories introduced and apply them to workplace situations and experiences, offering recommendations for improvements in workplace practice. Fundamentally, you will need to consider the ‘why’ and ‘so what’ questions when examining the various issues. Beyond that you will be expected to analyse the applicability of models, concepts and theories to your workplace and offer critique of the assertions associated with the models and theory. To become really adept at this level, you may want to plunder elements of several models and explain their attraction along with why each element has relevance to the situation you are analysing.

3


Managing for Efficiency and Effectiveness We need to be able to define both efficiency and effectiveness before we can move to look the significance of efficiency and effectiveness in organisations.

What is Efficiency and what is Effectiveness? Activity: In your own words define ‘efficiency’ and ‘effectiveness’.

Efficiency: Effectiveness:

Definitions of efficiency include:

The quality of doing something well with no waste of time or money

(Oxford Dictionary)

The ratio of the effective or useful output to the total input in any system.

(Farlex Dictionary) Definitions of effectiveness include:

The degree to which something is successful in producing a desired result; success

(Oxford Dictionary)

Having an intended or expected effect. (Farlex Dictionary)

These definitions bring into focus a number of issues that will be important when examining efficiency and effectiveness in the context of organisations. Specifically:

Efficiency relates to costs – waste, time and money. It concerns turning inputs into outputs which in any organisation is effected through processes. Effectiveness is about meeting expectations and achieving goals.

4


Combining the 2 concepts, it is evident that success arises from having well defined parameters in terms of vision, mission, goals and objectives and that processes are well managed to produce the desired results in a cost-effective way that makes best use of time, money and other resources. This leads to the inevitable conclusion that it is essential to have a clearly defined business strategy and that strategic goals are congruent with goals and objectives cascading throughout the organisation. Thereafter, it falls to managers to ensure that the goals are achieved and the outputs/outcomes are delivered in the most efficient way. Peter Drucker summed up efficiency and effectiveness very succinctly when he famously said ‘efficiency is doing things right [processes]’ and ‘effectiveness is doing the right things [goals]’.

Activity: What if any contradictions you see between managing efficiency and managing effectiveness?

Efficiency is doing things right

Effectiveness is doing the right things

Peter Drucker

5


Managing efficiency requires best application of resources to achieve the objectives. One difficulty is that reducing resources used might detract from the longer term effectiveness. For example if a car manufacturer decided to increase efficiency by applying less paint to vehicles, if may be that the vehicle becomes less resistant to rust and buyers become dissatisfied with the product, they tell others and sales volumes decrease as a result. The short term gain (saving paint costs) leads to longer term reduction in profitability (from lost sales volume). Effectiveness can be accomplished without regard to whether the job was done efficiently – e.g. inexpensively or on time. Efficiency can be achieved by applying a low cost, timely solution but without meeting customer expectations. What is apparent is that efficiency and effectiveness are inextricably linked. Managers need to apply careful consideration to ensure that the best use is made of available resources whilst at the same time meeting customer expectations. The Efficiency and Effectiveness Control Loop

Economy Efficiency Effectiveness

Inputs Processes Outputs &

Outcomes

Sensor

Feedback/Control Loop

Change inputs Change processes Change outputs Leave ‘as is’

Human Energy

The Efficiency and Effectiveness Control Loop (Format: AH Raymondson, 2017)

6


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ILM Level 5 Leadership & Management › pdf › 8607-510-Managing-for... · apparent is that efficiency and effectiveness are inextricably linked. Managers need to apply careful consideration