Words Mean Things – Efficient and Effective

Efficiency is doing things right.
Effectiveness is doing the right things!
- Peter Drucker

As we continue to explore words and their impact on conversations and behaviors, I would be remiss if I didn’t bring up a common set of words that generally makes me twitchy if one is emphasized more than the other — the words are Efficient and Effective. Let’s first look at the definitions of both:

effective. a. Successful in producing a desired or intended result.

efficient. a. (esp. of a system or machine) Achieving maximum productivity with minimum wasted effort or expense. (of a person) Working in a well-organized and competent way.

A lot of people talk about and use both these words — in fact, with some folks, these words are their Drinking Game words (every time they say it, you drink). If your role focuses more around management then you probably guilty of using the word “efficient” quite a bit. If your role is focused more around product quality or release management, then you probably say “effective” throughout the day. If what you do or build is largely commoditized or well established, you may tend to focus on how efficiently things get done. If what you produce is suffering in the market (either a lot of support or lack of sales), the word you probably talk about a lot more is effectiveness.

In all these cases, the context of the person or the product dictates our focus on either efficiency or effectiveness. This seems fairly harmless, but problems creep in when we might focus on one thing more than the other. If we focus to much on achieving maximum productivity, we may tend to miss key details and or skirt over a key step that insured quality. If we focus solely on effectiveness, we may see over engineering, gold plating, and an opportunity pass us by.

I’ve read several blogs lately about having efficient daily stand ups or retrospectives or planning meetings, with just a few words mentioning ensuring effectiveness. Since these meetings are about creating a team and continuously improving, effectiveness should be a key part if not the primary part of the discussion. In these situations, you could argue that efficiency would help drive effectiveness. For example, sticking to the 15 minute rule around stand-ups is meant to be a time boundary to help team members to ensure their effectiveness of their message.

EffectiveEfficientAgile and Lean principles have elements of both effective (focus on delivering value) and efficiency (while minimizing waste). If you are an efficiency junky, don’t forget effectiveness. And if you tend to be an effectiveness aficionado, don’t forget that in today’s market landscape — things have to be done efficiently. Both of these words should be used together and when we have a discussion about doing something better, we should understand how the improvement impacts effectiveness and efficiency. I quoted Peter Drucker at the beginning of this post, and it’s appropriate since his writings, specifically his book The Effective Executive has long shaped this Effective vs. Efficient model and thinking. The model shows that without effectiveness, efficiency doesn’t matter. That being said, the time window for effectiveness has gotten smaller due to competition and more demanding consumers — meaning, in his model you may not survive long.

So the next time we are innovating around our process, let’s be sure the conversation includes doing things effectively while while keeping efficiency in mind.

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2 Responses to Words Mean Things – Efficient and Effective

  1. eddie says:

    In business it’s also important to keep in the mind the time-value of money. Focusing too much on efficiency has an opportunity cost, often in a non-linear fashion. Getting something out the door quickly may be inefficient but is effective in that you capture the market, start earning a return on your investment and keep ahead of the competition. Too often management can lose sight of the market cost of being ‘efficient’.

  2. Mike says:

    A good Scrum Master can help greatly in driving both these attributes. Agree wholeheartedly that effectiveness is the precursor to efficiency. Nice blog post, Matt.

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