This focus is not just timely—it is essential. Many companies are falling short of their financial targets, and major strategic initiatives are stalling in execution. Meanwhile, intensifying global competition and persistent geopolitical uncertainties are making revenue growth less predictable. In this environment, efficiency is not an option—it is crucial to sustained profitability and strategic agility.
Despite decades of technological advancement, efficiency levels across industries have been declining. A look at value added per employee—a key efficiency metric—highlights this downward trend. In Germany, labor productivity growth has decelerated from over 2 percent annually in the 1990s to just 0.6 percent in recent years. Across the U.S. and Europe, corporate efficiency gains remain concentrated in factory automation and operational process improvements, while productivity in white-collar roles has stagnated or even declined.
The challenge is not that companies have failed to pursue efficiency. Rather, their efforts have been uneven. While manufacturing and logistics have seen measurable improvements, corporate functions, service roles, and knowledge-intensive work—where a growing share of economic value is created—continue to operate in suboptimal ways. Why do companies struggle to achieve broad-based efficiency improvements? The answer lies in five deeply embedded barriers that persist across industries.
Bureaucracy: complexity that slows execution
As organizations scale, they introduce layers of decision-making, redundant approval chains, and fragmented governance structures—all of which slow down execution. Leaders often believe these mechanisms ensure control, yet they frequently erode speed, clarity, and accountability. A multinational financial services firm, for example, required 12 different sign-offs to approve a new client onboarding process, resulting in excessive delays and a declining win rate.
Unenforced processes: when designed workflows are ignored
Many companies have well-structured processes on paper, yet in reality, employees frequently bypass, adapt, or disregard them. Instead of following optimized workflows, teams rely on workarounds, siloed decision-making, and outdated methods, leading to operational friction. A European insurance company, for example, invested in an automated claims processing system to reduce handling time and improve customer service. However, due to inconsistent system use and reliance on legacy manual workflows, nearly half of the claims still required manual processing, negating the expected efficiency gains.
Digital overload: more tools, less productivity
Paradoxically, the rapid expansion of digital tools has made work more complex, not simpler. Employees spend increasing amounts of time switching between email, chats, virtual groups, Customer Relationship Management tools, and knowledge portals, often struggling to locate the right information or align with colleagues. A European insurance company, for example, deployed five overlapping collaboration platforms. Instead of improving efficiency, it resulted in constant context-switching, misaligned workflows, and a 30 percent increase in time spent on internal coordination.
Endless meetings: when time becomes the biggest bottleneck
Meetings have become one of the most underestimated efficiency killers in modern organizations. Executives and employees alike spend excessive time in discussions, status updates, and alignment calls, often with unclear objectives, redundant participants, or no tangible outcomes. This meeting culture not only drains productivity but also limits focus time for high-impact work. A global consumer goods company found that middle managers spend more than 60 percent of their workweek in meetings – many of which lacked a clear agenda or decision-making authority. By streamlining meeting structures, reducing attendance, and enforcing a strict outcome-based approach, they freed up 20 percent of working hours, significantly improving strategy and project execution speed.
Lack of ownership: the hidden barrier to change
Perhaps the most fundamental barrier is a lack of individual accountability. Many employees feel disempowered to drive change, believing inefficiencies are systemic and beyond their influence. Instead of proactively addressing bottlenecks, teams default to work around them, creating additional friction and wasted effort. For example, in a multinational technology company, teams routinely flagged inefficiencies in cross-department workflows—but without clear ownership or executive sponsorship, these insights never translated into action. When leadership restructured accountability, assigning specific individuals to drive efficiency initiatives, implementation speed and engagement increased dramatically.