Still chasing efficiency? Find out why effectiveness is a better goal

Efficiency vs effectiveness. These two buzzwords are often used interchangeably, especially in the workplace. 

But there are some key differences that are important for employees and management to understand. For businesses to be effective and efficient, all team members must first grasp the distinction between these two terms.

Can you be efficient without effectiveness? And which is more important — effectiveness or efficiency?

We cover all the differences between efficiency vs effectiveness and how you can use both to achieve your team goals. 

Efficiency versus effectiveness defined

As Peter Drucker put it simply, effectiveness is doing the right things, while efficiency is doing things right. Either requires the assumption that you can define what the right outcome is and what things should be done.  

Regardless of limited resources, time, or physical energy, an efficient team will always prioritize progress, success, and hitting targets with machine-like dedication. 

Efficient teams:

• Focus on getting maximum output with the least amount of time and effort
• Use a methodical work process 
• Define and follow rules
• Embrace standardization and automation

On the other hand, effectiveness means understanding that the best outcome is a moving target. Effectiveness requires using foresight to determine where resources should be invested for the best results.

Effective teams invest time and energy where their impact will be greatest.

Effective teams:

• Focus on doing the right things in the right way
• Are results-driven 
• Focus on the big picture
• Shift priorities as necessary 

Let’s look at two sales rep teams for a practical example of efficiency vs effectiveness.

Team A is an efficient team. They use a standardized script for their calls and work long hours to reach 200 clients a day. Of their calls, 10% lead to a sale. 

Team B is an effective team. Each sales rep spends more time doing preliminary research about each prospect. They reach 70 clients a day, of which 50% convert into a sale.

While Team A uses a streamlined process to reach more prospective clients, Team B has a higher success rate and drives more profit. 

Efficiency is a productivity metric because it looks at how tasks are executed. Effectiveness is a quality metric because it refers to the quality of the achieved results.

Which comes first, effectiveness or efficiency?

Both effectiveness and efficiency are necessary for a well-functioning workplace. For a team to become cohesive, neither one of these can be ignored.

A team that is highly efficient but lacks effectiveness may spend too much time ensuring deadlines are reached and boxes are ticked. They may do this without prioritizing the right projects. 

A team that prioritizes effectiveness over efficiency may be focusing on the right tasks. But not at the preferred speed or consistency that an efficient team would. 

That being said, before a team can become more efficient, it needs to identify what needs to be done. Only then can they optimize their work and do it efficiently. 

Being efficient and getting a lot of things done doesn't necessarily mean increased productivity because you could be doing the wrong tasks.

In this sense, becoming effective should be the focus before efficiency. But, the ultimate goal is for a team to become efficiently effective, which means doing the right things well. 

What are efficiency and effectiveness in management?

Leaders carry a lot of responsibility for the outcome of their team’s work. If efficiency is doing things right and effectiveness is doing the right things, then a great leader would know how to do the right things the right way.

Here are some qualities of effective vs efficient leaders. 

Effective leaders

• Are adaptable. Effective leaders use the power of flexibility to invest resources only where they are most needed at the time.
  
• Consider business goals and objectives. An effective leader is always looking at whether their team’s actions are successful in producing the desired result. Instead of barreling through a to-do list, effective leaders make sure their team’s actions match the business objectives.

• Encourage innovation. Creative thinking and innovation are necessary characteristics for a leader who has fewer resources or less time. They also encourage innovation from their team. They value contributions from their team and ideas for more effective methods.

• Have good internal communication. Effective leaders communicate well with all members of their team to uncover the best approach possible for a project. 

Efficient leaders

• Focus on productivity. Efficient leaders dedicate all of their time and energy to doing things in the best possible way. Minimal waste is the method of choice.
  
• Are methodological. An efficient leader will prefer to stick to a strict, methodical routine. They know what needs doing, and they won’t stop until it is done. Efficient leaders are usually very orderly people who like structure and procedure.
• Are task-oriented. Most efficient leaders are oriented to focus on the task at hand. While effective leaders focus on the big picture, efficient leaders focus on the fine details.
• Emphasize workflow. Efficient leaders are always looking for new ways to streamline their business processes. Because they want to use minimal resources for maximum payoff, their concern is improving their team’s current workflow.

How to increase the effectiveness of your teams

If you lead a team that thrives on efficiency but struggles to adapt to change, you can make the necessary changes. 

Take a look at these pointers for increased effectiveness. 

• Encourage flexibility. Rigidity is something that many efficient teams struggle to let go of. To become more effective, teams must be open to change.
• Embrace collaboration. Ideal effectiveness thrives when everyone’s minds come together as one. Be an inclusive leader by listening to the input of everyone on the team. 
• Diversify opinions. Everyone has something of value to offer. If decisions are always made by the same two or three people, a team can miss out on the opportunity for fresh ideas.
• Exercise mutual trust. Letting go of control and trusting that your colleagues can reach their goals is essential for any team. It enables team members to work together and for leaders to allocate resources more efficiently.
• Look at the big picture. Focusing too much on the small stuff can often cause a lack of effectiveness. Trying to see the bigger picture rather than sweating the finer details can bring the necessary clarity for task-oriented teams. 

How to increase the efficiency of your teams

There are many reasons why efficiency is important. It keeps workflow moving, helps us meet deadlines, and ensures that no energy is wasted. 

Teams that focus more on effectiveness than efficiency may struggle to meet these productivity standards. If that sounds familiar, take a look at these tips on how to increase efficiency.

• Delegate clearly. Teams that lack efficiency may need better delegation. When everyone knows exactly what their role is, work gets done faster. 

• Streamline your daily workflow. There are always ways to optimize workflow. Your team needs to find a process that eliminates waste and frees up space, time, and energy for priority tasks.
• Communicate expectations. 44% of employees say that miscommunication has caused a delay or failure to complete projects. Clearly communicated expectations are the gateway to improved team efficiency.
• Identify priorities, and stick to them. Effective but under-efficient teams may simply be prioritizing too many tasks at once. Pick your daily priorities as a team and focus 100% of your energy on them until completion.

An effective time management technique to do this is the Pomodoro Technique. This method uses time blocking to increase focus on your prioritized tasks.

• Motivate with positivity. Sometimes, a little bit of employee appreciation is all that’s needed to motivate a team. Positive reinforcement and recognition can be used as a tool to motivate productivity. This helps overall efficiency.

Integrating efficiency and effectiveness together

The most productive teams harness both efficiency and effectiveness in their pursuit of success. Here are some tips for finding that ideal balance.

1. Ask for input from all team members

In order to become a balanced and cohesive team, everyone’s input is necessary. 

You can increase your team’s efficiency and effectiveness by providing regular spaces for collaboration and feedback. This contributes to a collective understanding of what needs doing and why.

2. Align individual and company goals

Employees that simply focus on a company’s goals can become short-sighted. As can an organization that doesn’t acknowledge the impact its objectives have on individual employees. 

By aligning individuals' professional goals and company goals, these separate entities can begin working together rather. 

Each team member should have a clear understanding of how their contributions affect the organization. This way, they can tackle projects with more discipline and with a greater sense of belonging. 

3. Identify areas for improvement

Regularly assessing your team’s productivity can provide valuable insight. A great way to do this is with a SWOT analysis, which highlights opportunities for improvement. 

Based on your analysis, you can create a strategic plan for ways to optimize your team’s workflow.

Understand efficiency versus effectiveness for success

When it comes to efficiency vs effectiveness, both are needed for a team to truly thrive. 

With open communication, frequent assessment, and the pursuit of progress, any team can find that sweet spot between being efficient and effective.

If you are looking for ways to increase your team’s efficiency and effectiveness, request a demo from BetterUp. We can help you develop the skills and find the right approach to build a productive, happy team.