Two words that sound similar but are very different. It is easy to see why many people think that the terms effective and efficient are interchangeable but they mean very different things. Let’s have a look at why efficient and effective are not the same thing.
If you look at the home page of this website we define efficiency as doing the same old thing better, and effectiveness as successfully doing what you need to do to produce the desired result. Peter Drucker summed it up rather more succinctly by saying “Efficiency is doing things right. Effectiveness is doing the right thing.”
Efficiency is much closer to productivity than it is to effectiveness. It involves a focus on those areas that will make the best use of resources to maximise output. Effectiveness on the other hand looks first to the objective and then prioritises those things that move us toward our objective. We can be effective without being efficient and still achieve our objective but if we are efficient without being effective (which is where most productivity and efficiency systems go wrong) then whilst we will increase output or reduce inputs we won’t necessarily get where we want to go.
Let’s look at it from a leadership point of view. Efficient leaders organise their teams in such a way as to maximise output with the minimum of input. They use efficient techniques such as lean and standardised techniques to minimise waste. Effective leaders organise their teams to enable the organisation to move towards he ultimate objective. The team is organised to ensure that each member knows why they are doing things and not just what they are doing. This may, or may not produce maximum output in the short term but will ensure long run continuity and achievement.
In a world where efficiency and productivity are becoming easier and cheaper to achieve the one thing that will make you and your organisation stand out is effectiveness. Our next blog looks at how you can stand out in a crowded market place.
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