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Jim's Gems: Efficiency or Effectiveness?

January 12, 2009
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The words effectiveness and efficiency are used often and, at times, there seems to be a fine line between the two terms. Effectiveness and efficiency, from a quality perspective, are two results that we must have working in tandem. However, have you ever thought about the difference between them? Read the following that I found in some of my old notes:

They both sound good, however, when given the opportunity to select the one of most importance, many manufacturers would choose efficiency over effectiveness. Why?

It is perceived that efficiency is more of a business metric of which profits are a product. Most managers want to run an efficient operation, and we spend a lot of time and energy trying to get there. But it is equally, if not more important to make our businesses effective.

Efficiency means doing things with a minimal effort-low input for high output. It means doing things right.

Effectiveness is doing the right things right; that is what we want. We can be as efficient as possible and be considered world-class, but at doing the wrong things.

We can practice the wrong technique, function or methodology, and work diligently at the application until we have it “nailed.” Then, we still might find ourselves wondering and worrying about why our business is not doing well; why our customers aren’t coming back; why warranty expense is out of control; why sales are down and profits are dropping-even though everything is working like a well-oiled machine.

When you visualize yourself or your business, don’t just see yourself doing things right; See yourself doing the right things right! And remember that sometimes the right thing, even if done imperfectly, can beat the heck out of a flawless performance of the wrong thing.

This holds true for everyone, not just those of us in the manufacturing business. It makes just as much sense for athletes, homemakers, teachers or students-anyone who really cares about excellence!

With this in mind, we might do well to think, “It’s great to be efficient, but effectiveness is what we really need to be pursuing.” If indeed we are truly effective, efficiency will follow, but the reverse may not be true.

Agree with the above or not, it is something to spend time in thought and reach your own conclusion. Think about it…
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effectiveness

Dr. Valmohammadi
January 16, 2009
The author has mentioned a very important subject,but we should consider that doing things right is efficency and doing the right things is effectiveness.So the sum of these means productivity.

Effectiveness as goal

C.M.Gupta
January 17, 2009
In my view ,Effective way of doing things as stated " is doing right things right" but how one can ensure that things one is doing is best possible it that context, there are different ways & school of thoughts for achieving.An effective person will always an aim for constant mprovement.Hence it will be alway dynamic.

Efficiency vs Effectiveness

Dr. Motzko
January 28, 2009
One of the findings from my research is the notion that effectiveness and efficiency are not mutually exclusive, but mutually dependent. This finding is contrary to the proposition of mutual exclusivity advocated by Gawande and Wheeler (1999), Erard, Chambon, Carneiro, Hald, and Henson (2002), Davis and Pett (2002), Davlesov and Nemeroff (2003), and Likhachev (2003). If this mutual dependency between effectiveness and efficiency is true, then many of the measurands of organizational effectiveness currently in use may need to be altered to reflect the new reality. The notion of mutual dependency between effectiveness and efficiency may be validated by the findings that these two measures have a tendency to blend. The amount of blending depends on size, organizational structure, degree of satisfaction with the sponsoring organization, and the context in which leadership is selecting the performance measurand (e.g. point-in-time. The above is a thumb-nail summary of my dissertation

Efficiency or Effectiveness

Tom Bruewer
February 11, 2009
I was at the circus a couple years ago with my two children, when I noticed a perfect example of effectiveness over efficiency. In between acts, stage hands converged on the ring to tear down the props from the last act and then set up for the next act. It was very effective at keeping the Greatest Show on Earth moving at a heart-pounding pace. Then something interesting happened. The stage hands just stood around, sometimes for minutes at a time, waiting for an act to end. Their boss didn't have them selling cotton candy or repairing safety nets; they just stood there. I'm sure there was a COO in the audience somewhere thinking "not very efficient". I don't recall the exact reference (sorry, Tim), but Tim Ferris mentions in his book "The Four Hour Work Week" that 80% of what most of us do in a workday is unnecessary and marginally productive. A quick audit of my own department's activities proved to me that he was not far off the mark. I think a lot of the reason why everyone stays so busy is that management equates efficiency (how much gets done) with effectiveness (how much progress is made to a goal). I took the following steps to transform the way my people view their roles in the organization. 1. Set clear goals and (more important) priorities. Every manager does this and most do it wrong. I make very clear to my employees that if an activity is not 1, 2, or 3 on the priority list they need to clear with me before they put any time to it. And if a non-priority activity is not related to compliance activities (environmental, safety, etc.) then I do not allow them to do it. It takes the pressure off of them when co-workers and other non-customers try to nibble away at their time. 2. Within the high-priority items, differentiate between tasks that require their best effort and tasks in which "good enough is good enough". This is sometimes difficult and requires a lot of trust between the boss and the employee. My employees know that they cannot be all things to all people. We do not, however, rely on an implicit understanding of what is critical. We lay everything out on the table and I clearly give them permission to do things most Quality Managers hate to even think about. We routinely use risk analysis to evaluate tasks that we can "let slide" or "put on the back burner" even when someone thinks it requires urgent attention. 3. Demonstrate to employees that they can be totally available for high priority items, and totally unavailable for other items. It is amazing how much unnecessary work disappears when you re-train people to NOT answer every ringing phone, encourage e-mail communication instead of phone conversations, and only check e-mail twice a day! 4. Educate employees to design business processes that are scalable. I use a litmus test when we develop new processes - can we triple the output without adding overhead activity? When we look at QA processes, we focus on the difference between "making a decision" and "implementing a decision rule". No process ever includes a phone (the most inefficient way to communicate in a business setting). More business should not mean more overhead. The results? We may not appear to be very "efficient", but we have become very effective! Vendor rejects have been reduced by 50%, internal rejects have been reduced by 75%, and we have reduced the size of our department by 25% without losing any momentum. The bottom line - stay focused on the truly important, don't stress out if there is downtime during the workday (use it to write blogs!), and get creative in deflecting unimportant distractions. You will be amazed at how effective you can become. Then (and only then) work at being more efficient at being effective.

my problem is solved

khurram jawad khan
February 21, 2009
hey how r u all? i was assigned a topic that what is more important efficiency or effectiveness. i read this and my problem is solved

Efficiency or Effectiveness

EHenry
March 4, 2009
Well, hum, we were struggling with this concept as well, but after reading Mr. Smith's take on this and reading the comments, I now see everyone struggles with this concept. However, I concur with two points here... 1. If indeed we are truly effective, efficiency will follow, but the reverse may not be true. 2. "that effectiveness and efficiency are not mutually exclusive, but mutually dependent."

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