Effectiveness vs Efficiency

Have we missed the point?

By Michael Berger

Efficiency means acting economically. The relationship between effort and benefit is to be optimized. Effort concerns all necessary resources to fulfill the task at hand: Work equipment, money, personnel, raw materials, and time. Productivity in companies is therefore measured by their efficiency. However, “when efficiency takes precedence over everything else, it becomes dangerous” (Dirk Kubjuweit) – this is what the above quote means. It disregards a basic organizational management principle: 

Effectiveness means doing the right things. Efficiency means doing things right. 

Götz Schmidt

First of all, we must decide what the right thing to do is, and only then does it make sense to implement it correctly. Because of the drive for efficiency, we neglect effectiveness time and again. The question is not asked often enough:

“Are we still pursuing the right goal?”

Another ironic statement is heard instead, e.g. in project management: When we lost sight of the goal, we doubled our speed.

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Vocabulary

1. effort (noun): Anstrengung
2. precedence (noun): Priorität
3. neglect (verb): vernachlässigen
4. pursue (verb): nach etw. streben

Discussion Questions

1. How effective is your company based on the distinction Michael makes?
2. How can your company become more effective?
3. What area is being neglected in your business? (Ex. employee health, teamwork, etc.)