Monday, May 26, 2008

Effectiveness and Efficiency

On Effectiveness and Efficiency

I was recently told during my annual personnel review that I’m a very efficient manager but not as effective as they expected.
What does it mean? I’m obviously efficient but my department head is
not completely happy with my performance.


In order for you to get into the heart of the feedback you got, I’ll explain the
terms ‘efficient’ and ‘effective’, usually listed in management textbooks, by relating to various activities and situations. Not only businesspersons or managers, but whoever is engaged in the processes of planning, organizing, managing and monitoring, has a long practical familiarity with theses terms.

This ‘anyone’ may include, besides you, many. And here are just a few examples: a housewife that runs the family affairs, a student that is going to be tested and graded and also a retired civil servant who manages the budget while saving what he or she can for a rainy day. These are just a few examples.

So let us talk in scientific and precise language now:

Efficiency – is ‘to do the things right’; to be accurate, calculated and structured according to the up-to-date procedure, in order to achieve the highest yield in the least amount of invested resource or effort. Once you run your shop, house or life in efficient mode, you capture the amount of waste and get to your desired output while spending the least amount of input.

Here are some daily examples: the manager should calculate which activities would be efficiently done in-house and what would be better out-sourced in order to reduce costs. The busy mother must determine, working around a schedule, what route(s) to drop off three or four kids active in several sport or social clubs in various parts of the city. The student will retain more when knowing the best hours to study, based on his or her learning style and personal daily arousal cycle. The retired investor should monitor not only the yield, but also the managing costs of the household.

Effectiveness – is ‘to do the right things’ in order to not only meet current expectations, but the overall desired product.
That means: to make the right decisions of what to do or what not to do. To let yourself or others know what direction to choose, and therefore what avenue to ignore.

In another word, you may ask yourself if you have a good bland of MANAGEMENT: doing the things right, according to the current procedure; this is efficiency,

and LEADERSHIP: doing the right things, while considering long term outcomes; this is effectiveness.
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