Efficiency begins with flow

For decades, efficiency has been understood as synonymous with the full utilization of resources. In other words, it meant keeping machines running and employees busy at all times. This traditional view is deeply rooted in management thinking and appears logical at first glance—after all, idle resources are often considered synonymous with waste.

But what if this logic is actually creating more serious inefficiencies? What if our attempt to optimize each resource in isolation compromises the overall efficiency of the system?

This is where the paradox emerges: “Efficiency begins with flow”. Instead of starting with resource efficiency, the new paradigm emphasizes creating flow first, leaving resource optimization for later.

This article will examine why this new paradigm is crucial for achieving better results with reduced waste and a greater emphasis on customer satisfaction.

What are paradoxes?

A paradox is an idea that, at first glance, seems contradictory, but when analyzed in detail, reveals a new truth. It is not just a contradiction, it is an invitation to critical thinking. It occurs when two seemingly opposing ideas coexist and together offer a more nuanced understanding of reality.

In the world of management, paradoxes play a critical role because they help break away from simplistic thinking. They challenge ingrained thought patterns and compel us to view systems from a different perspective. This is precisely what a Kaizen Culture encourages: questioning the obvious to uncover new ways to improve.

The paradoxes of a Kaizen Culture

At Kaizen Institute, we have identified seven key paradoxes that help explain the true essence of continuous improvement. Each one challenges a conventional idea and reveals a new path for leading, improving, and transforming organizations:

1. Practice over tools.
2. Small is not the only Kaizen.
3. Efficiency begins with flow.
4. Standardize to improve.
5. Kaizen is more than operations.
6. Kaizen is a meta-strategy.
7. Kaizen is the smartest way to run a business.

These paradoxes are not only thought-provoking, they are transformative. And in this article, we will explore the paradox: “Efficiency begins with flow”.

The old paradigm: believing efficiency comes from maximizing resource utilization

For decades, management was shaped by a seemingly simple idea: the busier the resources, the more efficient the organization. This belief, deeply rooted since the Industrial Revolution, gave rise to the paradigm of resource efficiency, where value is placed on keeping machines running continuously, schedules completely filled, and teams always busy.

The logic appears unquestionable: idle resources are seen as waste, and productivity only exists when everyone is in action. This approach has become the foundation of many management systems and is often reflected in performance indicators, such as equipment use rates and employee productivity.

The illusion of traditional efficiency

Despite its intuitive appeal, resource efficiency is a limited and sometimes misleading view. Optimizing each resource in isolation does not guarantee overall system efficiency. On the contrary, focusing on keeping everything and everyone busy can result in delays, waste, and unnecessary complexity.

Consider a factory that decides to keep all machines running at all times, even when there’s no immediate demand. The most likely outcome is overproduction—one of the most harmful forms of waste. Why? Because it generates a chain reaction of other problems: inventory accumulation, increased storage and transportation costs, greater risk of deterioration, and loss of visibility regarding problems.

The same pattern can be observed in a hospital setting: fully booked schedules can result in long wait times for patients, compromising their experience and negatively impacting their well-being.

Rather than improving performance, this obsession with full utilization creates bottlenecks, reduces flexibility, and distances organizations from their customers’ real needs.

The negative effects of resource efficiency

The traditional paradigm doesn’t just impact processes—it also affects people and organizational culture. When teams are evaluated based on their level of activity, they often fall into cycles of stress, disengagement, and burnout. Creativity and continuous improvement are stifled by a culture that prioritizes constant activity over doing things better.

Resource efficiency also encourages siloed thinking. Each department tends to optimize its own performance, even if it disrupts overall flow.

Paradoxically, the effort to eliminate waste and maximize results often leads to more waste and poorer outcomes. The real cost of this approach is hidden: customer service delays, low quality, weak adaptability, and decisions disconnected from the actual value stream.

The new paradigm: prioritizing flow over resource utilization

True efficiency isn’t about keeping every resource busy—it’s about ensuring work flows smoothly and without interruption from start to customer delivery. This is the foundation of the new efficiency paradigm: flow efficiency. Instead of measuring success by machine utilization rates or the number of tasks completed per employee, the focus shifts to the speed, consistency, and ease with which products, services, or information move through the system.

Resource efficiency vs. Flow: What truly measures efficiency?

Resource efficiency measures the amount of time that employees, equipment, or facilities are actively used. Flow efficiency, on the other hand, examines the total time an item—whether a request, patient, product, or project—takes to complete the entire process, from start to finish.

The first model centers on the resource; the second focuses on the customer. The first seeks to eliminate idle time for resources. The second aims to eliminate waiting time along the value stream. And here lies the paradox: optimizing resources doesn’t necessarily mean improving overall organizational performance.

This obsession with resource efficiency drives many companies to maximize occupancy—at the cost of delays, employee disengagement, and increased process complexity. Flow efficiency, by contrast, supports fast delivery, simplicity, and a better customer experience—even if it means some resources are occasionally unoccupied.

Why flow efficiency produces better outcomes

Imagine two healthcare systems with the same goal: diagnosing a complex condition. In one, specialists, equipment, and rooms are constantly in use, with no downtime. The system runs at “full capacity,” but patients wait days or weeks between appointments, tests, and results. Wait times and anxiety build up. In the other system, not all resources are constantly active. There are moments of apparent inactivity. Yet patients are seen quickly, diagnoses are completed within hours, and the emotional toll is significantly reduced. This second system is built around flow efficiency.

This example clearly illustrates the paradox: trying to keep all resources constantly busy leads to inefficiencies, while a system focused on flow achieves better performance, higher quality, and greater customer satisfaction.

This logic applies across sectors. In the automotive industry, Toyota proved that producing based on real demand (pull system) results in higher quality, less waste, and greater agility. In software development, agile methodologies follow the same principle—reducing work-in-progress and delivering value continuously. In customer service, resolving issues quickly and in a single contact is far more efficient than keeping agents constantly busy while customers are left waiting. That approach not only increases frustration but also drives repeated calls or forces customers to seek out alternatives, often more costly channels—ultimately reducing satisfaction.

The logic is straightforward: flow efficiency improves the system as a whole, while resource efficiency only improves individual components—often at the expense of overall flow. It also fosters a culture of continuous improvement, where employees are encouraged to identify and eliminate flow barriers, rather than simply “staying busy”.

Applying flow efficiency in organizations

Understanding the value of flow efficiency is only the starting point. True transformation occurs when this principle shifts from theory to practice, requiring adjustments to performance indicators, process design, team dynamics, and organizational culture. Below are five essential levers for successfully implementing flow efficiency.

Redefining metrics: from utilization to flow

For decades, organizational performance has been measured by resource utilization—running machines, busy people, full rooms. In the flow efficiency paradigm, metrics must reflect how smoothly and quickly work moves through the system:

• Lead time – measures total time from request to completion.
• Cycle time – reflects the time needed to complete a specific process.
• Throughput – tracks the number of completed units (products, patients, customer requests) within a set period.
• Work In Progress (WIP) – monitors the number of items being processed at any given time.

The rule is simple: the lower the WIP, the faster the flow. By shifting their focus to these indicators, organizations can identify bottlenecks, reduce waiting times, and enhance responsiveness.

Reducing batch sizes and work in progress (WIP)

Many organizations still operate with large batches to gain scale, reduce setup times, and keep resources busy as long as possible. However, this often results in long lead times and significant delays.

Adopting one-piece flow or small batch processing allows work to move faster and with fewer errors. To make this shift, it’s essential to limit Work In Progress (WIP) and implement pull systems based on actual demand.

This change exposes problems more clearly, makes them easier to solve, improves adaptability to demand variability, and increases agility in responding to customer needs.

Identifying bottlenecks through value stream mapping

Flow efficiency requires visibility across the entire system—not just the performance of individual functions or departments. This is where value stream mapping comes in, a tool that visualizes the complete journey of a product, service, or piece of information.

This exercise helps identify bottlenecks, waiting times, and other areas of waste. Based on this process overview, you can apply Kaizen principles to address critical points and optimize end-to-end flow.

Promoting operational flexibility

The rigidity of traditional models works against flow. To sustain flow—especially in dynamic environments—organizations must build versatile, cross-functional teams.

Training employees in multiple activities enables them to assume different roles as needed. Flexible schedules, shift reorganization, and real-time visibility into process status enable quick adjustments to resources in response to demand.

This operational flexibility helps eliminate bottlenecks and improves the organization’s ability to adapt.

Building a flow-oriented culture

Implementing flow efficiency is not just a technical change—it’s a cultural transformation. It requires rethinking the concept of productivity: moving away from resource occupancy and focusing instead on value generation.

Leaders must clarify the benefits of prioritizing flow and explain why underutilizing a resource at times may be necessary to improve overall performance. Teams should be empowered to identify sources of waste that disrupt flow and encouraged to take action.

Performance measurement should shift away from valuing resource usage alone and begin focusing on metrics such as agility, delivery speed, and customer satisfaction.

Building this culture demands hands-on leadership, transparent communication, and empowered teams.

Conclusion: to be efficient, create flow

The belief that efficiency means keeping every resource busy no longer meets today’s challenges. The most effective organizations are those that ensure a continuous, agile flow—fully aligned with customer needs.

Adopting flow efficiency requires rethinking the way work is done, led, and measured. It means moving away from viewing work as a series of isolated tasks and starting to see the process in an integrated way—from order to delivery, from need to solution. This systemic view allows you to reduce time, eliminate hidden waste, and provide more consistent and satisfying experiences.

Creating flow doesn’t mean sacrificing efficiency—it means putting efficiency in service of what truly matters.

Article based on the book The Kaizen Culture Paradox – The Smartest Way to Run a Business by Alberto Bastos and Euclides Coimbra (coming soon).