Being Effective vs Being Efficient. What's Better?

Years ago, when I worked in tech, I was the head of business operations. My role was to figure out how to work better together.

As we all know, working together in a global organization spanning across countries and time zones, such as Canada, Australia, and Singapore (among others), presents unique challenges. These include navigating cultural differences and the struggle to find a meeting time that suits everyone’s working hours. We've all been there, with someone on Zoom either ready to go to bed or still half asleep because it's so early (or both), leading to most of our communication being through Slack or email.

My primary objective was to establish a harmonious blend of structure and agility within our organization. We aimed for a clear structure that defined our work and managed risks, without stifling quick decision-making or creativity in the field. This was a challenging task, particularly in the face of rapid scaling.

It was important though, because:

• Majority of the C-suite was in Canada, and Singapore / Australia needed to make decisions without a 24-hour or more lag
• Each country operated autonomously with different cultural norms and ways of doing things that needed to be respected
• It was really challenging to have a full understanding of how the company was doing without some consistent metrics and consolidation of information

One of my team members Jeff Hemming, CSPO loved being (and still is) intentional about words. So when we started working together, I often said our processes needed to be efficient. He would quickly remind me that just because they were efficient didn’t mean they were effective, and he was absolutely right.

As a finance person, I always had the word efficiency ingrained in my head.

• How do we do this with less money?
• How do we do this with fewer people and resources??
• Can we do this in less time?

On the other hand, I'll also say that as accounting and finance people, we are not always the most efficient. We either get lost in spreadsheet land with hundreds of tabs, and for some reason, the last version never saves properly, or we do all of our processes manually when if we just dedicated some extra time, we could automate a lot of it.?

If efficiency is the only thing on our minds, we miss a big, important part of the question.?

“Will this still get the desired results and impact?”?

You might be doing it faster or at a lower cost, but you'll have a bigger problem if it doesn’t do what it needs to.?

The question we need to be asking:

How do we do things in less time, money, people, and resources (efficiently), and will this still get the desired results and impact (effectively)?

We need BOTH; processes need to be effective and efficient. Let's explore this further.

Being Efficient

Definition: 

Efficient: working in a well-organized and competent way and preventing the wasteful use of a particular resource.        

Efficiency is important because it helps us do things with the path of least resistance: fewer steps, fewer clicks, less money, and less time. In a world where there are never enough resources, we need to use our limited resources efficiently. However, we see many examples of efficiency being prioritized over effectiveness.

A Boeing 737 flight to Denver lost its engine cover (that's freaking scary); a series of 29 other incidents so far in 2024 as a result of cutting costs without asking the question, "will it get the results and impact we want?". Yes, they saved money (great!) and increased share value (temporarily), and now people are boycotting the airplanes for their safety. That can't be good for Boeing in the long run, not to mention the ethical considerations.

Here are some other examples of where efficiency is prioritized over effectiveness:

• Sending automated reports to stakeholders without considering data integrity or whether the information from the reports is actually being used; it may be fast to send the reports, but if no one is actually using them, why send them?
• Laying off staff to meet profitability targets and having to hire many back a few months later to meet growth and other demands costs a lot of time, money, and resources to hire someone. According to a report by the Society for Human Resource Management (SHRM), it costs employers an average of $4,129 and 42 days to fill an open role, and that doesn’t even consider the mental and emotional stress of layoffs.
• Hiring someone because they are available now and a friend of a friend, yet their capability and credentials are questionable. Hiring the first person available is efficient, especially if it’s less than what you budgeted for that person. But are they the right person for the job? Will they actually do the work you need them to do? The person might not be effective at this role, which might have even more consequences for you with frustration from other staff members, things taking even longer to complete and being in an even bigger mess than you started with.?

Without effectiveness, efficiency creates a wealth of new problems while hanging your profitable business together by threads. Businesses lose sight of the value they provide to their customers and employees, which impacts their longevity and future impact.?

Being effective

Definition: 

Effective: successful in producing a desired or intended result.        

Here are some questions we ask about effectiveness:

• Is it working the way it needs to?
• What is really important about this?
• What is the intended result?

Being effective is important because it ensures that whatever we do has the desired result. It helps us ensure we’re not just doing it because we’ve always done it that way. It helps us assess and make sure that things are actually working. But again, just because it’s effective doesn’t make it efficient, either.

• You might be very effective at getting high-quality clients you love working with. However, it takes over $10,000+ to generate one paid client and 1-2 years of relationship building. It may be hard to grow your business or have a steady stream of clients this way. Are there ways to continue getting high-quality clients you love working with while reducing the lead time and the investment?
• You might LOVE a report you get every week. It’s really effective because it gives you key metrics around the business so you can make decisions. Yet it takes one of your staff a week to assemble it. Are there ways to leverage automation and data to reduce the time it takes for this person to create the report? Each report might cost you $1,000 or more.?
• You might be very effective at completing all your work; each week, all the tasks are done on time with a high degree of excellence. However, you work late nights and weekends to get it all done. This is not very efficient because you consistently work 80+ hours per week to do it.?

Without considering efficiency, effectiveness can cause a business to lose sight of profitability and therefore risk the longevity of how long you can continue to operate.?

Closing thoughts

You need to consider both effectiveness and efficiency. Both are equally important. The balance of both creates high-performing, profitable businesses and teams that consistently deliver real value to their customers and employees.?

I’m all for businesses that can and want to do both. What about you?

Join me for a three-part Operations Series in my Online Emerging Leaders Workshop Series:

• Effectiveness vs Efficiency. What's better? on Wed Apr 24, 2024 at 3pm EST
• The Power of FOCUS on Tues May 28, 2024 at 1pm EST
• Prioritizing What Matters on Tues Jun 25, 2024 at 1pm EST

Investment: $37.50 + HST for each workshop

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About Jenn

Jenn coaches leaders to step into their authenticity and authority. She guides her clients as they expand in their lives and work. She supports her clients in exploring new paths that align with their values, purpose, and goals. She is committed to bringing about ongoing, high-impact, positive change with her clients.

She leverages her 10+ years of corporate experience in finance and business operations. She offers a perspective of strong business fundamentals, strategy and career growth while incorporating her coaching and wellness training to focus on sustainable growth.

Sources:

• Maura Zurick, Newsweek, List of 2024 Boeing Plane Incidents After Southwest Engine Part Falls Off, Apr 7, 2024, :// www.newsweek.com/list-2024-boeing-plane-incidents-after-southwest-engine-part-falls-off-1887757
• Jea Yu, Calculating the True Cost to Hire Employees, ADP Canada, https://www.adp.ca/en/resources/articles-and-insights/articles/c/calculating-the-true-cost-to-hire-employees.aspx