Operational efficiency: the form of a process matters

In this Italian-language video, shot in Brooklyn, I say that in the United States I am struck by how much people appreciate a certain Italian approach to work, the ability to give form even to efficiency. Here I try to explain why this goes beyond taste: it has a specific industrial history, that of Adriano Olivetti, and an economic explanation that the people who run a company can use.

Video transcript (translated from Italian)

Now we are in Brooklyn, in one of its historic areas: here, between the late nineteenth and early twentieth centuries, hundreds of thousands of Italians settled and built thriving communities. Their legacy still survives today, here, among these buildings.

I am starting with this because here I often meet American business owners and investors, and I am always struck by how much they appreciate a certain Italian approach to work.

And I do not mean only creativity or design, but something deeper: the ability to give form even to efficiency.

We Italians have in fact learned that functionality is not at odds with aesthetics.

That a well-designed process, a system that works, can have elegance.

And this is what I am often recognized for when I work with American companies: the ability to have a complete view.

The ability to combine numbers and sensitivity, data analysis and culture, method and perception.

In my role as a business strategist, this is exactly what I aim for: making business processes clear and harmonious, building efficiency without losing identity, improving performance without sacrificing form.

Because real innovation is not only doing more, but doing it better, with coherence, with beauty, in depth.

And this is what is understood and respected here in the United States.

In Brooklyn, among these buildings

The video was shot in Carroll Gardens, a Brooklyn neighborhood that until the 1960s was considered part of Red Hook. From the late nineteenth century it had filled with Italian immigrants, many of whom worked on the docks. In 1920 about 390,000 people born in Italy lived in New York, and more than a third of them in Brooklyn (NYC Department of City Planning). Many of the row houses on those streets are still the original nineteenth-century ones (Landmarks Preservation Commission, 1973).

This is where I start, because in the United States I often hear people praise something that in Italy we take for granted. It has only partly to do with creativity and design. Above all, it has to do with the way a process, a service or an organization is designed, with the idea that form is part of the result.

The form of a process is part of its efficiency: a clear system is used better, is corrected sooner and retains the people who work in it.

Olivetti treated the factory as a design project

On April 23, 1955, the industrialist Adriano Olivetti opened his plant at Pozzuoli, near Naples. It was designed by Luigi Cosenza, with gardens by Pietro Porcinai and colors by Marcello Nizzoli. In his speech to the workers, later collected in Città dell’uomo (Edizioni di Comunità, 1960), he said that the factory had risen “out of respect for the beauty of its surroundings, and so that beauty might be a comfort in everyday work” (my translation). And he asked a question that still matters: “Can industry set itself aims? Are these to be found simply in the level of profits?” (my translation).

For Olivetti, light, space and services for the people who worked there were part of the way things were made, just like the machinery. The factories and houses built on this principle in Ivrea, in Piedmont, were inscribed on the UNESCO World Heritage List in 2018 as “Ivrea, industrial city of the 20th century”: “one of the first and highest expressions,” UNESCO writes, “of a modern vision in relation to production.”

Adriano Olivetti built factories in which architecture, light and services for workers were part of the way things were made; in 2018 UNESCO recognized Ivrea as an industrial city of the twentieth century.

Form creates value on two sides

Today Olivetti’s insight has an explanation that an economist can accept. Felix Oberholzer-Gee, a professor at Harvard Business School, reduces strategy to two levers in Better, Simpler Strategy (2021); I described them in my review of the book. A company creates value if it raises its customers’ willingness to pay, or if it lowers the willingness to sell of those who work with it: employees and suppliers. The model that holds the two together is the value stick.

For employees, willingness to sell is the lowest pay at which a person will accept a job. It depends on the nature and intensity of the work, on career prospects, on the workplace climate, on the alternatives. “Companies that offer exceptionally engaging work,” Oberholzer-Gee writes, “create value by lowering willingness-to-sell.” A clear process, a well-designed environment and understandable rules act precisely on that threshold: they make the work less of a strain and easier to do well.

Something similar happens on the customer side. A service that is clear from the first use, an order you can track without having to call, an invoice you can read: these raise willingness to pay, because they remove friction the customer would otherwise have had to put up with. That is why in the video I speak of processes that are “clear and harmonious”: clarity has an economic value before it has an aesthetic one.

When attention to form costs too much

There is another side to this lesson. Attention to form can become an elegant way of not deciding: the offices are refurbished, the paperwork is redesigned, the image is polished, and meanwhile the process stays slow. Beauty becomes an alibi when it serves to hide a problem instead of removing it.

Attention to form becomes an alibi when it costs more than it yields: it helps if it removes friction, not if it hides it.

For the people who run a company, the criterion is simple to state and demanding to apply: every change to the form of a process must make the work easier for the person who does it or for the person who receives it, and you must be able to see that it does. Olivetti knew this well: his factories were beautiful, and they made machines that sold all over the world. When I deal with American companies as part of my work on international expansion, this combination is what I am recognized for, as I say in the video: form as part of efficiency.

What to do and what not to do

• Look at a process from the point of view of the people who use it every day, inside and outside the company.
• Remove the steps that no one can explain, before making them more beautiful.
• Count attention to the quality of working life among the levers that create value, alongside prices and costs.
• Do not invest in form to hide the lack of a decision.
• Do not judge a change by its elegance, but by how much easier it makes the work.

Sources

• Adriano Olivetti, speech at the opening of the Pozzuoli plant, April 23, 1955, in Città dell’uomo, Edizioni di Comunità, 1960; later in Ai lavoratori. Discorsi agli operai di Pozzuoli e Ivrea, introduction by Luciano Gallino, Edizioni di Comunità, 2012.
• UNESCO, “Ivrea, industrial city of the 20th century,” World Heritage List, 2018. https://whc.unesco.org/en/list/1538
• Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance, Harvard Business Review Press, 2021; excerpt in HBS Working Knowledge. https://www.library.hbs.edu/working-knowledge/a-simple-question-that-can-guide-companies-to-epic-success
• NYC Department of City Planning, “Persons Born in Italy by Census Tract, New York City, 1920.” https://www.nyc.gov/assets/planning/download/pdf/data-maps/nyc-population/historical-population/1920_italy_fb.pdf
• New York City Landmarks Preservation Commission, “Carroll Gardens Historic District,” 1973. https://s-media.nyc.gov/agencies/lpc/lp/0696.pdf