Efficiency Vs. Effectiveness: What's The Difference? (With ...

Efficiency is doing things the right way, while effectiveness is doing the right things. Something is effective if it produces the intended ... EfficiencyVs.Effectiveness:What’sTheDifference?(WithExamples) ByMatthewZane -Aug.13,2021 ArticlesInGuide Glossary WhatIsGrossMonthlyIncome?WhatIsManagement?WhatIsAProblemStatement?WhatIsAnnualNetIncome?WhatIsALetterOfTransmittal?WhatIsAttrition?WhatDoesWhiteCollarMean?WhatDoesBlueCollarMean?WhatIsEfficiencyVsEffectiveness?WhatIsADislocatedWorker?WhatIsHumanResource(HR)?ThankYouLetterScholarshipsWhatIsConstructiveCriticism?WhatIsAQuarterLifeCrisis?WhatIsImposterSyndrome?WhatIsNotesPayable?TypesOfCommunicationEconomicDemandCostBenefitAnalysisCollectiveBargainingKeyPerformanceIndicatorsWhatIsGenderBiasInAJobDescription?WhatIsTheHiddenJobMarket?WhatIsTheDifferenceBetweenAJobVs.ACareer?WhatIsAProratedSalary?W9Vs.1099DoubleDecliningBalanceMethodDivergentVsConvergentThinkingBudgetingProcessTypesOfIntelligenceWhatIsBargainingPower?WhatIsOperatingCapital?DifferenceBetweenMarginVsMarkupParticipativeLeadershipAutocraticLeadershipAuthoratarianLeadershipSituationalLeadershipDifferenceBetweenGeneralistVsSpecialistStrategicLeadershipCompetitiveStrategiesEquityVsEqualityWhatIsMarginalization?ColleagueVsCoworkerWhatIsTheGlassCeiling?WhatAreGuiltyPleasures?EmotionWheelNepotismInTheWorkplaceSustainableCompetitiveAdvantageOrganizationalDevelopmentCommunicationStylesChooseACareer PayForPerformanceFormulas APRFormulaTotalVariableCostFormulaHowtoCalculateProbabilityHowToFindAPercentileHowToCalculateWeightedAverageWhatIsTheSampleMean?HotToCalculateGrowthRateHotToCalculateInflationRateHowToCalculateMarginalUtilityHowToAveragePercentagesCalculateDebtToAssetRatioHowToCalculatePercentYieldFixedCostFormulaHowToCalculateInterestHowToCalculateEarningsPerShareHowToCalculateRetainedEarningsHowToCalculateAdjustedGrossIncomeHowToCalculateConsumerPriceIndexHowToCalculateCostOfGoodsSoldHowToCalculateCorrelationHowToCalculateConfidenceIntervalHowToCalculateConsumerSurplusHowToCalculateDebtToIncomeRatioHowToCalculateDepreciationHowToCalculateElasticityOfDemandHowToCalculateEquityHowToCalculateFullTimeEquivalentHowToCalculateGrossProfitPercentageHowToCalculateMarginOfErrorHowToCalculateOpportunityCostHowToCalculateOperatingCashFlowHowToCalculateOperatingIncomeHowToCalculateOddsHowToCalculatePercentChangeHowToCalculateZScoreCostOfCapitalFormulaHowToCalculateTimeAndAHalf FindaJobYouReallyWantIn InThisArticle   Skiptosection WhatIstheDifferenceBetweenEfficiencyandEffectiveness?WhatComesFirst,EffectivenessorEfficiency?WhatDoesanEffectiveLeaderDo?EvolvingFromEffectivenesstoEfficiencyBalancingEffectivenessandEfficiencyEfficiencyvs.EffectivenessFAQSignUpForMoreAdviceandJobsShowMore Efficiencyandeffectivenessaretwobuzzwordsthatgetthrownaroundalotinthebusinessworld.However,theyarefrequentlyemployedincorrectlyandinterpretedpoorly. Incorporatingamethodologythatisbotheffectiveandefficientisthegoalofeverybusiness.Knowingthedifferencebetweenthetwotermsisthefirststeptodevelopingmoreproductivepractices. WhatIstheDifferenceBetweenEfficiencyandEffectiveness? Efficiencyisdoingthingstherightway,whileeffectivenessisdoingtherightthings.Somethingiseffectiveifitproducestheintendedresult,whereasitisefficientifitfunctionswiththeleastuseofresources.Itispossibletobeeffectivewithoutbeingefficientandviceversa. Considertheseexamplescenariosforabetterideaofthedifferencebetweenefficiencyandeffectiveness. Efficient.Alicedevelopsagenericsalesemailshecansendto100potentialclientseachday.2%ofheremailsleadtoasale. Effective.Bobresearchespotentialclientsandcraftsatailoredemailforeach.Hesendstenemailsaday.40%ofhisemailsleadtoasale. Alicehasfoundawaytomaximizeherworkinghours,asfarascustomercontactsperhourgo.ShehasthesameresourcesasBob(time,effort,listofleads,etc.)butachievesmoreconnections.Inotherwords,Alicehasmaximizedheroutput,giventhesameinputasBob.Shehasstreamlinedtheprocessofreachingalargenumberofclientsquickly. Bob,ontheotherhand,hasastrategyforclosingsalesmoreregularly.Hespendsmoretimeandresourcesoneachemail,butthateffortpaysoffwithahighersuccessrate.Bobhasprioritizeddevelopingmeaningfulconnectionsovercontactingamaximumnumberofclientsintheshortesttimeframe.Hehasfocusedonthegoalofsellingthecompany’sproductsratherthanperformingthatfunctionquickly. Here’saquickbreakdownofthedifferencesbetweenefficiencyandeffectiveness: Efficiency Process-oriented(bestpossiblemethodswithleastwastedresources) Improvescurrentworkflow(present-oriented) Measurableusingpredefinedmetrics Time-sensitive Input/outputratiomatters Primarilyconcernedwithinternalmechanisms(usingminimalcompanyresourcesformaximumpayoff) Effectiveness Goal-oriented(bestpossibleresult,regardlessofresourcesused) Improvesqualityofwork(future-oriented) Difficulttomeasure Nottimesensitive Input/outputratioisunimportant Primarilyconcernedwithexternalresults(competitivepositioninthemarket) Whileefficiencyandeffectivenessfocusondifferentaspectsofawell-functioningbusiness,theyarenotmutuallyexclusive.Let’sexpandourhypotheticalscenariosfromearliertoincludemorepeople. Inefficientandineffective.Connorcraftsagenericsalesemailandsendsittotwentypotentialclientsaday.1%ofhisemailsleadtoasale. Efficientandeffective.Denisedevelopsapartiallygenericsalesemail,thenincorporatesclientresearchtomakeeachemailsomewhatpersonallytailored.Shesendsittotwentypotentialclientsaday.30%ofheremailsleadtoasale. Asyoucantell,everybusinesswantsanemployeelikeDenise.ShehasdevelopedamoreefficientsystemthanBob’swhileonlysacrificingabitofeffectiveness. Connoristheultimatedragonbusiness.Histacticsareineffectiveinleadingtosales,andheemploysthosetacticsinefficiently. Forthosekeepingtrackathome:Alice(ineffective,efficient)makestwosalesperday,Bob(effective,inefficient)makesfour,Connor(ineffective,inefficient)makes0.2,andDenise(effective,efficient)makessix. WhatComesFirst,EffectivenessorEfficiency? Effectivenessshouldbethefirstpriorityofanybusiness,followedbydevelopingefficientpractices.Thinkofitthisway:ifit’syourfirsttimebakinganapplepie,areyoumoreconcernedwithcraftingadeliciousdessertorbakingitinrecordtimeandwiththefewestapples?Clearly,deliveringatastytreatismoreimportantthanbakingitefficiently. Inthesamevein,businessesshouldstriveonlytoperformtasksthateffectivelypromoteprofitsandgrowth.Itdoesn’tmatterifacompanycandevelopaprojectwithfewresourcesinashortspaceoftimeifthatprojectdoesn’talignwithcorporategoals. Thebiggestissuewithprioritizingefficiencyovereffectivenessisthatpeoplemayneveractuallyperformtheirtasksbecausetheybecomestucktryingtooptimizehowtheycompleteit.Itisessentialfirsttolearnhowtoperformatask,evenifyourmethodsarenotoptimal.Then,youcaniterateandimprove,makingthecompletionofyoureffectivetaskmoreefficient. Thefirststepinmakingaproductivecompanyisfocusingoneffectiveness,evenatthecostofefficiency.Onceabusinessputseffectivepracticesinplace,thecompanycanbeginmakingthosepracticesmoreefficient. WhatDoesanEffectiveLeaderDo? Aneffectiveleaderlooksoutsidetheboundsofhisorhercompanytothebiggerpicture.Heorshesetsexpectationsthatindividualscaneasilyalignwiththeirworkpractices.Ittakesdisciplineandlong-termthinkingtobeaneffectiveleader.Followingthesetipscanmakeyourleadershipmoreeffective: Dotherightthings.Soundssimple,weknow,butdoingtherightthingspoorlyismoreimportantthandoingthewrongthingswell.Effectiveleadersmanagetheirworkers,sotheyspendtimeonlyonworkthatalignswithbroadercorporategoals. Seekfeedback.Effectiveleadersareawareoftheirblindspots.Theyvaluecontributionsfromemployeeswhohaveideasondevelopingmoreeffectivemethodsandinspireotherstocreateideasthatcanaidthecompany. Hireanddeveloptherightpeople.Youcanhavethebeststrategiesintheworld,butifyoudon’thavethehumancapitaltomakeithappen,you’vegotnexttonothing.Effectiveleadersinvestinrecruitmentstrategiesthatattracttoptalent. Theyalsodevelopthestrengthsofexistingemployeesandinternallypromotethosethatbestcontributetothecompany’seffectiveness. Synergize.Corporategoalsareallfineandwell,buttheytakeseveraldepartmentsandcountlessindividualstoactualize.Effectiveleadersknowhowtoencouragecollaborationandcommunicationsothatallworkersunderstandwhattheirbroadergoalsareandwheretheyfitintothosegoals. Managetime.Timeisacompany’smostvaluableresource.Effectiveleadersmaximizetheirtimebyfocusingonlong-termstrategiesanddeterminingcorporategoals.Theydon’tgetboggeddownintheminutiaeofday-to-daytasks,insteadseekingtooptimizethevalueofthosetasks. Makedecisions.Effectiveleadersmakebigpicturedecisionsusingtheinputofthosearoundthem.Theyalsotakeboththeinternal(availableresources)andexternal(markettrends)elementsintoaccountbeforereachingadecision. EvolvingFromEffectivenesstoEfficiency Onceacompanyputseffectivemethodsintoplace,evolvingitsefficiencyisthenextstep.Ifacompanyhasatop-qualityproductbutstrugglestodeliverittoclientsefficiently,theywillstruggletocompeteinthemarket.That’sthemacroviewofthings.Onanindividuallevel,wecanbreakdowntheevolutiontoefficiencyintofivesteps: Practicethemosteffectivewaysofperformingyourtask,regardlessofthetimeandresourcesspent. Learnmoreabouttheprocessthroughtrialanderror. Lookforactionsthatcanbeautomated,donewithfewerresources,completedfaster,orcutoutentirely. Analyzetheresultsofthesechangesandseehowmucheffectivenessyoulosebyoptimizingefficiency. Repeattheprocessandcontinuetoadjust. Companiesthatestablisheffectivepracticesbutdon’tlookforabetterwaytoperformthemsuccumbtoinefficiency.Thekeyistodevelopkeyperformanceindicatorssothatanystructuralchangesmadetoimproveefficiencycanbeadequatelymeasuredandalteredifneedbe. BalancingEffectivenessandEfficiency Asyoucanprobablytellbynow,balancingeffectivenessandefficiencyistheHolyGrailforanybusiness.Ifefficiencyisdoingthingstherightwayandeffectivenessisdoingtherightthings,thenagoodbalanceofthetwomeansdoingtherightthingstherightway. Thatmeansstartingwithasolution,howeverimperfect,toaproblem.Then,implementthatsolutionandlearnfromit.Finally,useyourexperiencestodeterminethebestwaystoimproveuponthatsolutiontoincreaseefficiency. Ultimately,clientswantaneffectiveproduct.Butifacompanycan’tkeepupwiththedemand,theirmarketsharewillfalloff.Everysituationisdifferent.Acompanythat’stryingtogrowaggressivelyandhasampleresourcesmightprioritizeeffectiveness.Butacompanythat’scontentwiththeirmarketshareandhaslimitedresourceswillprioritizemakingtheiroperationsmoreefficient. Findingthebalancebetweeneffectivenessandefficiencyistheultimategoal,whetheronapersonalorcorporatelevel.Worktofindthemosteffectivemethodsandthenadjustthosetomaximizeefficiency,andyou’vepositionedyourselftobeproductiveandsuccessful. Efficiencyvs.EffectivenessFAQ Whatisthedifferencebetweenefficiencyandeffectiveness,withexamples?Thedifferencebetweenefficiencyandeffectivenessisthateffectivenessreferstoperformingactionsthatwillhelpachievesomegoal,whileefficiencyreferstoperformingthoseactionswiththeleastamountoftimeorresourcesexpended. Examplesofthedifferencebetweenefficiencyandeffectivenessareallaroundus.Considercarsandtrains.Botharehighlyeffectivefortransportingpeoplelongdistances.Buttrainsareabletotransportmorepeopleusingfewerresources(gasoline,fewerrailroadsthanroads,etc.)thancars,makingtrainsmuchmoreefficient. Whatiseffectivenessandefficiencyinmanagement?Inmanagement,effectivenessreferstoyourteamorcompany’sabilitytoaccomplishresultsthatyou’veidentifiedasessentialforthebusiness’ssuccess. Inordertomeasuretheeffectivenessofaproject,task,orprocess,youneedtofirsthavesomewayofmeasuringwhetherornotyou’veachievedwhatyousetouttoachieve.Inasense,thismakeseffectivenessasubjectivemeasure.Thesametaskcanbecomelesseffectiveasgoalsandconditionschange. Asamanager,efficiencyreferstoyourteam’sabilitytoproducesuccessfulresultswithlesstimeandfewerresources.Forexample,youmaymeasureyourproject’seffectivenessbyhowmanynewcustomersitgenerated,whileyou’dmeasureitsefficiencybyhowmuchitcost,howmanyemployeesspenttimeonit,andhowmuchtimetheyspentonit. Whatisanexampleofefficiency?Fuelefficiencyisacommonexampleofefficiencywethinkaboutallthetime.Theterm“milespergallon”isameasureofefficiency.It’sansweringthequestion“howmanymilescanthisvehiclegoononegallongasoline,”whichmakesitausefulcomparativemeasurewhenshoppingforcars. Amorefuelefficientcartakesyoufartherwithfewerresources(andultimatelylessmoney). Canyoubeefficientwithoutbeingeffective?Ifsomethingisnotatalleffective,thenitcannotbemadeefficient. Rememberthat“effective”isessentiallyasubjectiveterm.Inotherwords,evenwhenyoudon’tsayit,you’reimplyingthatataskiseffectiveatsomethinginparticular.Forexample,rubbingrockstogetherisreallyeffectiveatmakingnoise,butittakesaspecialkindofrocktobeeffectiveatmakingsparksaswell. Noamountofreducedresourcesortimewillincreaseyourspark-generatingefficiencyifyou’reusingthewrongrocks,becauseyourtaskwillliterallyneverproducethedesiredresult. Whyisefficiencyimportant?Fromenergyefficiencytoefficiencyatwork,mostofusvalueajobdonewithoutanywastedtimeorresources.Workingefficientlyensuresthatyou’reworkingsmarter,notharder. Howusefulwasthispost?Clickonastartorateit!SubmitRatingAveragerating/5.Votecount:Novotessofar!Bethefirsttoratethispost.ArticlesInGuideGlossary WhatIsGrossMonthlyIncome?WhatIsManagement?WhatIsAProblemStatement?WhatIsAnnualNetIncome?WhatIsALetterOfTransmittal?WhatIsAttrition?WhatDoesWhiteCollarMean?WhatDoesBlueCollarMean?WhatIsEfficiencyVsEffectiveness?WhatIsADislocatedWorker?WhatIsHumanResource(HR)?ThankYouLetterScholarshipsWhatIsConstructiveCriticism?WhatIsAQuarterLifeCrisis?WhatIsImposterSyndrome?WhatIsNotesPayable?TypesOfCommunicationEconomicDemandCostBenefitAnalysisCollectiveBargainingKeyPerformanceIndicatorsWhatIsGenderBiasInAJobDescription?WhatIsTheHiddenJobMarket?WhatIsTheDifferenceBetweenAJobVs.ACareer?WhatIsAProratedSalary?W9Vs.1099DoubleDecliningBalanceMethodDivergentVsConvergentThinkingBudgetingProcessTypesOfIntelligenceWhatIsBargainingPower?WhatIsOperatingCapital?DifferenceBetweenMarginVsMarkupParticipativeLeadershipAutocraticLeadershipAuthoratarianLeadershipSituationalLeadershipDifferenceBetweenGeneralistVsSpecialistStrategicLeadershipCompetitiveStrategiesEquityVsEqualityWhatIsMarginalization?ColleagueVsCoworkerWhatIsTheGlassCeiling?WhatAreGuiltyPleasures?EmotionWheelNepotismInTheWorkplaceSustainableCompetitiveAdvantageOrganizationalDevelopmentCommunicationStylesChooseACareer PayForPerformanceFormulas APRFormulaTotalVariableCostFormulaHowtoCalculateProbabilityHowToFindAPercentileHowToCalculateWeightedAverageWhatIsTheSampleMean?HotToCalculateGrowthRateHotToCalculateInflationRateHowToCalculateMarginalUtilityHowToAveragePercentagesCalculateDebtToAssetRatioHowToCalculatePercentYieldFixedCostFormulaHowToCalculateInterestHowToCalculateEarningsPerShareHowToCalculateRetainedEarningsHowToCalculateAdjustedGrossIncomeHowToCalculateConsumerPriceIndexHowToCalculateCostOfGoodsSoldHowToCalculateCorrelationHowToCalculateConfidenceIntervalHowToCalculateConsumerSurplusHowToCalculateDebtToIncomeRatioHowToCalculateDepreciationHowToCalculateElasticityOfDemandHowToCalculateEquityHowToCalculateFullTimeEquivalentHowToCalculateGrossProfitPercentageHowToCalculateMarginOfErrorHowToCalculateOpportunityCostHowToCalculateOperatingCashFlowHowToCalculateOperatingIncomeHowToCalculateOddsHowToCalculatePercentChangeHowToCalculateZScoreCostOfCapitalFormulaHowToCalculateTimeAndAHalf Nevermissanopportunitythat’srightforyou. GetStarted Author MatthewZane MatthewZaneistheleadeditorofZippia'sHowToGetAJobGuides.Heisateacher,writer,andworld-travelerthatwantstohelppeopleateverystageofthecareerlifecycle.HecompletedhismastersinAmericanLiteraturefromTrinityCollegeDublinandBAinEnglishfromtheUniversityofConnecticut. 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