Day: September 22, 2021

Driving your car faster on the highway burns more gas.  Parasitic drag increases as velocity increases, and therefore it takes more energy to travel the same distance at a higher speed.  If you had no speed limits and no safety concerns, how fast should you drive?  The answer comes at the intersection of how much you’re willing to spend and how much time you have.  A sustainable pace for organizations and individually is the intersection of a set of factors.

Mandatory Overtime

Consider the case where you’re looking to hire skilled workers but haven’t been able to find them.  To meet customer demand and organizational commitments, you might decide to start offering overtime, including overtime incentives.  Pay rates are typically 150%-200% of base pay, and in many cases, there are bonuses on top of these premium rates.

However, the pay incentives for overtime will only work for so long.  In some cases, organizations resort to mandatory overtime.  Despite the increased pay, resentment builds until eventually people will quit – making it even harder to find the right people because of the reputation that will be built and because there are more positions to fill.

In short, you know that you’re not at a sustainable pace when you’re working overtime for more than a short time, because it’s not what was collectively agreed to.

Efficiency

Most organizations have an optimal pace.  It’s a place where there’s good productivity with relative efficiency.  Positions are filled, people work their hours, and the organization makes money.  When we slide into overtime, we realize that we rapidly erase any profit, because our labor costs have increased dramatically.  I know many organizations that operate in a perpetual state of overtime availability, because they can’t hire folks – and they can’t hire folks, because they’re requiring mandatory overtime.

They’re stuck, because they pushed the production beyond sustainable capacity, and they didn’t increase the sustainable capacity to keep up.

Failure

It’s well known that when people are tired, they make more mistakes – not just mistakes in the products they’re creating but safety mistakes as well.  The result can be much more than a broken widget, it can be serious injury or even death.  Despite this, we put systems into places where we’re trying to extract more productivity than we can sustain.  In the short term, it may increase profits despite the extra labor costs.  However, in the long term, we find that we’re teetering along the edge of total collapse.

Continuous Improvement

The solution to these challenges is to always be working on improving the capacity of the organization – and yourself personally.  The more you can increase the sustainable pace, the more room you have as the system becomes strained.  These capacity gains come from adding additional production resources and, critically, also come with better learning.  The more that you and your organization can learn, the more capacity there is for eliminating unnecessary steps and improving the execution of the remaining steps.

Pace of Change

The pace of change in your organization is like any other sustainable pace.  If you find a rate of change the organization can sustain, then you should do that, with only occasional bursts of change that exceed the sustainable pace.  However, simultaneously, you should be consciously improving your change acumen so that the organization develops a greater capacity to accomplish change.  The capacity of the organization to accept and embrace change should be as important as the ability to maintain a short-term, sustainable production pace – that is, if the organization is going to survive in a world of change and transition.