OK, no they're not the same things, but there is a trade-off there.
Large companies in stable markets reward efficiency. Staff KPI's are all about reducing costs, because that's where the profit growth is (because the market is stable and so is revenue).
But efficiency is achieved by streamlining processes. That streamlining is almost always at the expense of adaptability. The processes become optimised, but brittle and resistant to change. Which is obvious if you think about it - the process becomes designed to do one thing incredibly well, and the staff become adapted to that one process. Trying to change the process (or staff) makes it more expensive, by definition: because if it made it cheaper it would be an optimisation and would have happened already. "cutting out slack" does equate to making the process less adaptable.
Then something changes and it's hard, if not impossible, to get the process to change and the people to think differently. Managers whose bonuses are tied to their KPIs are reluctant to make necessary but costly changes to their department if those KPIs are all linked to efficiency. This is why large organisations are doing their innovation thinking in smaller, separate "skunkworks" or "labs" units.
Also, why large companies are incredibly efficient at producing profits from a stable market, but get out-competed instantly by smaller, more adaptable, less efficient startups.
> Also, why large companies are incredibly efficient at producing profits from a stable market, but get out-competed instantly by smaller, more adaptable, less efficient startups.
Because if they‘re worth their money, they can afford to. Large corporation routinely buy small competitors with profits made from their streamlined operation.
Large companies in stable markets reward efficiency. Staff KPI's are all about reducing costs, because that's where the profit growth is (because the market is stable and so is revenue).
But efficiency is achieved by streamlining processes. That streamlining is almost always at the expense of adaptability. The processes become optimised, but brittle and resistant to change. Which is obvious if you think about it - the process becomes designed to do one thing incredibly well, and the staff become adapted to that one process. Trying to change the process (or staff) makes it more expensive, by definition: because if it made it cheaper it would be an optimisation and would have happened already. "cutting out slack" does equate to making the process less adaptable.
Then something changes and it's hard, if not impossible, to get the process to change and the people to think differently. Managers whose bonuses are tied to their KPIs are reluctant to make necessary but costly changes to their department if those KPIs are all linked to efficiency. This is why large organisations are doing their innovation thinking in smaller, separate "skunkworks" or "labs" units.
Also, why large companies are incredibly efficient at producing profits from a stable market, but get out-competed instantly by smaller, more adaptable, less efficient startups.