Note: We’re continuing Part 1 of Growth Isn’t One Sided: The Trouble With Scale. Last week we explored why alignment without flexibility creates rigidity that stalls innovation. This week: why the systems that make you efficient can create silos that make you ineffective, and how that can undermine the coordination companies need to keep growing.
One Takeaway: Operators, refiners, and creators fuel innovation and growth. These are completely different functions and need completely different management approaches.
Gaps Can Kill Businesses
Sometimes, businesses have gaps in responsibilities between teams (as we saw with Bill). To fix this, someone needs to take responsibility for outcomes that cross different teams. Without this, there’s no reason for anyone to care about fixing stubborn problems, other than being a “bleeding heart employee” at all times—which is impossible.
If a gap remains unfixed, your customers suffer.
Efficiency Can Be the Enemy of Effectiveness
The tools that make you efficient can often stop you from being effective. Peter Drucker explained that “efficiency attempts to do things right; effectiveness is concerned with doing the right things.”1
A business can die of inefficiency, but no business survives simply because it is efficient. More often, businesses die because they are no longer effective, even though they may be efficient. There’s nothing less effective than a fast-working engineering team that turns out beautiful blueprints for the wrong product.2
The most inefficient thing a company can do is be ineffective.
To be both efficient and effective, a company needs systems that enable both. If a company is only efficient but not effective, it risks building products for a one-size-fits-all world that doesn’t exist. If they’re effective without being efficient, they’ll see similar projects built by different teams simultaneously. Both are wasteful.
Three Types of Work
All businesses have three types of work essential to their success: operating, refining, and creating. Each is completely different and focuses on different parts of the business.
Operators focus on day-to-day business operations
Refiners look for ways to improve current systems
Creators look for new ways to grow the business either through new products or new customers.
It’s critical for each to work well in order for your business to be effective and efficient.
What This Looks Like in Practice
Imagine a regional retail chain facing declining foot traffic at several locations. Here’s how each type of work responds:
Operators maintain store fundamentals: They ensure cleanliness, adequate staffing, and efficient transaction processing. Their metrics show they’re hitting all the important targets. Stores are clean, wait times are low, inventory is 97% stocked. They’re executing flawlessly on operational standards.
Refiners optimize current systems: They analyze customer flow patterns, adjust staffing schedules based on peak hours, and negotiate 12% better supplier terms. Their metrics show measurable improvements. They’ve brought labor costs down 8%, customer satisfaction scores are up from 3.2 to 3.7. They’re making existing operations demonstrably better.
If Operators and Refiners are doing their jobs, why is foot traffic down?
Creators notice the real problem: They see that declining stores are all in neighborhoods experiencing demographic shifts. Young families are replacing retirees, or urban professionals are moving into formerly suburban areas. Instead of serving the old customer base more efficiently, they decide they need to experiment with new product mixes, change store layouts, and try service models appealing to new residents.
The operators and refiners are doing excellent work within their areas. But only the creators are addressing the real, new mismatch between what stores offer and what the community now wants.
The trouble is creators who look for new solutions can face an uphill battle. Both the operators and refiners are focused on making sure their current priorities aren’t mismanaged.
Unintended Consequences
Most companies unintentionally punish creator-type work because it doesn’t fit existing measurement systems. Creators hear: “That’s not in our OKRs.” “We don’t have data showing that will work.” “That’s not your responsibility.” Or “let’s focus on improving our current metrics first.”
Meanwhile, the real problems persist, and competitors who adapt start winning. Creators work differently. They deal with uncertainty and incomplete information. They go after problems that don’t yet have clear solutions or that fall between existing responsibilities. You can’t set targets today for solutions to problems you’re unaware of.
Building Systems that Enable All Three
The challenge isn’t choosing between operators, refiners, and creators. The key is creating systems that enable each type of work and avoid misalignments in priorities and responsibilities:
Operators need structure: Clear processes, consistent metrics, and predictable workflows. Success means reliable execution.
Refiners need frameworks: Optimization targets, efficiency metrics, and improvement systems. Success means measurable gains within existing operations.
Creators need freedom: Exploration budgets, longer time horizons, and permission to fail. Success means learning and discovering new possibilities.
The most successful organizations don’t manage all three types of work the same way. They recognize that different kinds of work need different kinds of support and measurement.
The Connecting Function
What most companies lack is someone focused on connecting these different types of work. Operators excel at consistency, refiners excel at improvement, and creators excel at innovation. That’s all great, but someone needs to ensure their work combines toward the right larger goals.
This connecting function becomes especially critical as companies grow. Without it, you get efficient silos that optimize themselves while the business as a whole becomes less effective. These connectors, we’ll call them Harmonizers, bridge the gaps between different types of thinking and ensure all three functions work toward shared business outcomes rather than competing departmental metrics.
The Bottom Line
You can divide your company’s teams into three main focuses: operating, refining, or creating. Traditional management systems work great for operators and refiners, but creators can often be pushed aside.
Your company needs systems that give employees an incentive to produce unexpected, beneficial work across each function. A sole focus on achieving metrics can actively discourage the very innovation that drives long-term growth. The solution lies in recognizing these different functions and creating connections that help them work together.
Understanding these three functions raises a deeper question: when should you use structured management approaches versus entrepreneurial approaches? Different types of problems require fundamentally different ways of thinking...
This is Chapter 3 of Growth Isn’t One Sided, a mini-book I’m sharing weekly on how to grow your business without breaking it. [Read the Introduction: How Lyft and Uber Taught Me to Think Differently] | Subscribe for weekly insights!
1965 March 6, The Financial Post, Do you do things right, or do the right things? by Peter Drucker, (Digest of a lecture delivered this week at the University of Toronto), Quote Page 7, Column 1, Toronto, Ontario, Canada. https://quoteinvestigator.com/2021/04/09/doing-right/#f+439442+1+4
See Drucker The Effective Executive p. 4