management

Efficiency Vs. Effectiveness: Why Successful Leaders Need Both

10/12/2021
6 minutes read

These two words may look alike, but trust us, they are far from the same. A leader needs to focus on tackling the correct issues and in accordance with priorities.

And you can do that by understanding what to manage, why it's important, and the action points. This is where efficiency and effectiveness come in.

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What's The Difference?

Let's get the difference between efficiency and effectiveness out of the way first. Efficiency is the ability to do something or produce something without wasting materials, time, or energy: the quality or degree of being efficient. Meanwhile, effectiveness produces the desired result: having an intended effect. The tangible difference between efficiency and effectiveness may not have struck you before as they are often juxtaposed to each other like the yin-yang symbol. However, understanding how these two strategies work against each other, rather than being interchangeable terms, will get you on the right path to being a successful leader and helping your team succeed. 

So, efficiency means optimizing resources to do the right thing in the best way possible, while effectiveness can boil down to getting the job done. In other words, something is effective if it produces the intended result, whereas it's efficient if it functions with the least use of resources. Combining the two means producing maximum output from the given input with the least. For example, Alex develops a generic sales email he can send to 100 potential clients each day. As a result, 2% of his emails lead to a sale. In other words, Alex and his efficiency refer to how well something is done. However, effectiveness indicates the extent to which something has been done, to achieve the targeted outcome. For example, Oda researches potential clients and crafts a tailored email for each. She sends ten emails a day. As a result, 40% of her emails lead to a sale. In other words, Oda and her effectiveness refer to how useful something is. 

These terms are a crucial part of a leader's journey to achieve success and not end up with a team struggling to nail down resource-effective workflows while achieving results. Before moving on, let's quickly have a breakdown of what we have learned about the differences between efficiency and effectiveness:

Efficiency

  • Efficiency is asking, "What needs to be done?"

  • Succeed with limited resources

  • Focus on process

  • Measure progress against specific metrics

Effectiveness

  • Effectiveness is asking, "Why is this being done?"

  • Invest in results

  • Aligns with objectives and goals

  • Connect their work to the big picture

 

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From A to B

The goal is to build a team that is both efficient and effective. Implementing both strategies at once may not get you the desired results and is not an easy task. Generally, it is best to solve effectiveness before working on efficiency. Imagine this: you decide to prioritize effectiveness by ensuring that your team works on initiatives that move your company towards relevant goals. Then, once you have developed effectiveness as a practice, you can start to optimize for efficiency. Put it in another way, doing the same effective work in less time. This will help your team focus better on the relevant tasks and start working on new initiatives. Getting to this point requires the whole team's time and determination, especially the leader, as leading by doing is critical. By getting there is not all or nothing - it requires balance.

 

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The True Balance

Having a sense of self-awareness as a leader is pivotal to helping you find the perfect balance between efficiency and effectiveness that works for your environment. Balancing these two strategies is not an easy task, and when you finally figure out how, you will only get better and better at it. One tip on transitioning to a more balanced workflow is to start with a solution to a problem you're facing, no matter how incomplete or inefficient the solution may be. It's always better to have an unfinished starting point than nothing at all. Then, once you start implementing the solution and learn from its inefficiencies, you can use this experience to determine the best ways to improve upon that solution to increase efficiency. 

The internal organizational benefits of finding this balance can help you manage your team's productivity, teamwork, and communication to achieve results with the least resources. From an external perspective, keep in mind that every situation is different, and a company that tries to grow fast and has excellent resources might prioritize effectiveness. On the other hand, a company that's satisfied with its market share and has limited resources may, on the other hand, prioritize making its operations more efficient. 

The ultimate goal is to find the proper balance between efficiency and effectiveness - both personally and professionally. By finding that balance in your personal life, you can lead by doing. So, start by working on yourself through different methods and adjust the effective ones to maximize efficiency. Once you have done that, you are well-positioned to be a productive manager and successful leader. 

 

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Conclusion

By looking at the difference between efficiency and effectiveness and learning their different strengths, we now know they both have a prominent place in the business environment that must be maintained by the organization because its success lies on them. So start by solving for effectiveness before working on efficiency. Because if you prioritize effectiveness, you will eventually be ready to optimize for efficiency. And remember, no need to rush! Take your time. It's better to do it steadily and slowly than rocky and fast. Once you hit the balance, you will be an inspiration to your team and a force that gets the job done.

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