Niklas woke up the Congress to the idea that we can at times get stuck arguing for trivial decisions. For example, arguing that we should reduce waste, when there cannot be a serious argument for maintaining or increasing waste. On the other hand determining which approach toward efficiency an enterprise should take is a decision with non trivial consequences.

As in his book, This is Lean, Niklas clearly outlined the distinctions between Resource efficiency and Flow efficiency. Resource efficiency focuses on keeping individual resources, people and equipment, working at highest possible levels of capacity. Flow efficiency focuses on creating and delivering value with the shortest amount of time and and smallest amount of expenditure from the perspective of the customer.

The paradox Niklas identifies is that a Resource efficient focus results in self generating problems for an enterprise. In his book he discusses efficient resources as functioning like islands separated be expanses of water. The challenge with this approach is that very few resources in reality have any separation at all from the resources on which they depend and which depend upon them. The self generating problems develop in part as resources attempt to fill non utilized time to appear busy. This creates a false portrayal of efficiency.

Establishing Flow efficiency needs to focus on improving the handoffs between resources. A challenge with this need, especially from a top down central planning approach is that resources often serve a range of demands, and demand from the range of sources varies. Value stream systems are often interlaced so at that any given moment a resource may need to respond to one of many separate customer needs which could not be centrally predicted. This is the underlying premise for establishing high levels of self-organization within enterprises.

The second part of Niklas’s talk addressed how we can create Flow efficiency and by extension the self-organizing capabilities required by creating change in organizations. Organizations, or enterprises, can be understood to mean companies, projects, or commerce within communities.

A challenge with creating this change that Niklas noted was our presupposition about the people we are asking to change, and the presuppositions people may have about themselves. Establishing and improving Flow efficiency requires team problem solving, and leadership that facilitates team action after seeing a target, and reflection following that action. When we accept that people can learn to see the issues they face for themselves, leaders can act as problem-solving coaches and mentors rather than supermen and superwomen that swoop in to solve problems for others.

Which may bring us back to Niklas’s earlier point about trivial versus non-trivial decisions. How we organize the relationships between the people in our projects, companies, and local economies requires a fundamental and at this point non-trivial decision. Are people working in response to master plans and decisions as determined by their leaders, or are people working in response to the needs and challenges faced by colleagues as determined by the tests and results they determine together?