An efficient or a humanely efficient organization? A well-functioning organization requires both kinds of efficiency

Operational efficiency, which ensures both the efficiency and the performance of the company, is a familiar concept for many in management roles.

On the other hand, humane efficiency is overlooked in too many organizations. Humane efficiency describes the psychological dynamics and human factors of an organization: how, for example, a sense of community is realized within the organization and how the people working in the organization can be motivated. 

Outi Ikonen, Terveystalo’s Chief Organizational Psychologist, points out that an organization that strives for efficiency should invest in both operational and humane efficiency. 

“Without one there cannot be the other. Taking humane efficiency into account increases the growth of the organization’s productivity, the success of various changes and the well-being of employees,” says Ikonen.

The world is changing – pay attention to how changes are made

Adopting the ideas of humane efficiency is particularly useful when changes are being made.

“For example, uncertainty has increased enormously during the COVID-19 crisis, and it is now even more important to take human factors into account. If no attention is paid to human factors, efficiency will definitely not increase and may even decrease,” says Ikonen.

According to Ikonen, the success of various organizational changes also depends to a large extent on how well humane efficiency is realized within the organization. 

“The change process can be very good in terms of operational efficiency, but if humane efficiency is not taken into account, employees will not be motivated and, at worst, trust will be undermined.” 

The step toward humane efficiency does not have to be taken alone. 

“The goal of the Humane Efficiency coaching offered by Terveystalo is to increase the organization’s competence in managing human factors and, through that, improve the entire organization’s productivity and the well-being of its employees,” Outi Ikonen says.

The management’s example matters

Building a healthy and humane organization starts with the senior management clarifying the target situation. 

“Supervisors should be aware of the effects of humane efficiency, but the actions of the management team are particularly important. If the senior management does not make a strong commitment to the issue and act as an agent of change, humane efficiency will not be improved,” Ikonen says.

The process itself is not always easy. In order for an organization to develop, the management needs a genuine understanding of the current state of the organization’s humane efficiency and the target situation toward which it intends to proceed. 

“Organizations often invest in well-being at work, but the projects end up being too unconnected. In order for humane efficiency to become a reality, it is important that good practices are properly embedded in the culture and structures of the organization. In this way, they will eventually become the actual common practices of the organization,” Ikonen says.

Five steps toward a humanely efficient workplace

1. Let humanity show. Be yourself. If you work in a supervisory role, it is good to think about how much you can let your feelings show. However, keep in mind that supervisors and managers have their own strengths and vulnerabilities, which should not be hidden unnecessarily. 
2. Remember balance. Lead change, inspire, and encourage, while also ensuring sufficient internal stability, routines, and smoothness of work. 
3. Boldly combine humane and operational leadership. A good manager of people can also be an excellent manager of performance at the same time. Humane efficiency and operational efficiency are not mutually exclusive. 
4. Learn to understand. Listen to and understand not only things but also people’s experiences and feelings. A leader should use their own example to create a psychologically safe work community in which asking, wondering and mistakes are allowed.
5. Set an example. Set limits that support well-being for yourself and others and ensure a good work–life balance. Supervisors should keep in mind that if they work too hard, they will set an example for employees that they should work just as hard. At worst, overachievement undermines humane efficiency.

Learn more about Humane Efficiency