Effectively Efficient

Category: Strategy Published on Jul 27 2016

Efficiency and effectiveness are important for all profitable businesses. Ideally, companies are achieving both. However, in any situation where a company must choose it’s more important to be effective than to be efficient.


This may sound backwards to you. And yet, it is a true statement. Here is why.

Effectiveness has to do with strategy. When you are effective you are doing the right things to achieve the results you desire. By being effective you reach long term goals and add value to your company.


Efficiency, on the other hand, has to do with daily operations. When you are efficient you are doing things well and you are maximizing return by controlling costs.  By being efficient you minimize waste (both time and resources).


Don’t get me wrong, I love being efficient. I create procedures and checklists to enhance my productivity and increase efficiency.  When you become efficient at key processes that are important you will be successful. However, seeking efficiency for efficiency’s purpose is a fool’s journey. In the end, if you are being efficient at doing something that adds no value or has no relevance, you are wasting resources.


And that is why effectiveness will trump efficiency every time. It’s more important to do the right stuff, even if you are doing it inefficiently, than to do things perfectly. In times of rapid change and growth, it’s very easy to get caught in the efficiency trap. That is because when you are uncertain what to do next, it is much more comfortable for most people to improve something they are familiar with than to forge forward strategically and spend time on the right things.


Now I will add one more caveat to this conversation: Do not interpret what I have said so far to mean the efficiency is unimportant. That is just as wrong as focusing overmuch on efficiency. There is a balance required between the two sides. And there is a time and place for each in your business. A business that is doing the right things, but doing them inefficiently will not reach their true profit potential as they will have too much waste. However, before you concentrate on being efficient, be darned sure that you are becoming efficient at something that truly matters.


Take a look at your business. Are you being effective and doing the right things? Are there opportunities in these areas to become more efficient? If so, what are you doing reading this blog? Get to work and find a way to become effectively efficient in your business.