Efficiency vs. Effectiveness and Why You Should Care…

| June 1, 2018


Efficiency vs. Effectiveness and Why You Should Care...

“Efficiency is doing things right; effectiveness is doing the right things” ~ Peter Drucker


Efficiency vs. Effectiveness and Why You Should Care...
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In business, the word RESULTS is a very big deal

Your business survives on the RESULTS you produce.

Your employee’s hopes, dreams, and paychecks are determined by the RESULTS produced.

Your cash flow, net worth, goodwill, everything is a function of your ability to produce the RESULTS expected in the time you have.

Nothing new in this conversation, right?!

We all know that to be a powerful leader we must be a productive leader.

Which leads to the two big words we will be discussing today: Efficiency and Effectiveness.

How Efficient Are You?

Efficiency is a simple idea to understand.

It is a measurement of how often you do things the RIGHT WAY at the RIGHT TIME.

It is a measurement of how well you get things done.

It is about how quickly you move stuff off your To Do Lists.

Getting the RESULTS EXPECTED in the shortest time possible is the hallmark of being EFFICIENT.

Simply put, efficiency is all about TACTICS.

How Effective Are You?

Efficiency vs. Effectiveness and Why You Should Care...

Effectiveness is a much more complex idea to understand!

Effectiveness is about doing the RIGHT THINGS for the RIGHT REASONS.

It is about determining what the right things are to be doing in the first place.

It is all about STRATEGY, not just throwing a bunch of tactics at a problem.

When we created MyBizIQ.com it was instantly apparent that small businesses were pretty good at getting things done… but had no clue what had to be done to be successful. In our research, it was clear that even the smallest of businesses failed because they lacked even a semblance of a strategy.

Without an effective strategy, there is no possible way of knowing what the right things are to be doing with your precious time and resources.

Just doing more of the wrong things efficiently is not a prescription for success.

Take a look at the Function Clock graphic above. Let’s ask the basic, do or die, questions so you can see the importance of this conversation.

  1. How effective are you in determining your direction, vision and evolving mission for your business?
  2. How effective are you at creating an innovative and inventive organization?
  3. How effective are you at finding and fielding the best talent?
  4. How effective are you in branding, marketing, and differentiating your business?
  5. How effective are you at creating a powerful, growing sales force?
  6. How effective are you in producing your products and services?
  7. How effective are you at operations management — running the shop at peak pitch?
  8. How effective are you at administrative management — reporting, taxes, paperwork…?
  9. How effective are you in financial management — making your money work as hard as you do?
  10. How effective are you at gauging the economy in which you operate — local, state and globally?

Efficiency vs. Effectiveness and Why You Should Care...

No question, there is a lot to running a successful business.

Maybe you are great at 2 or 3 of these vital functions.

Maybe you have a strong sense of passion, purpose, and mission — a real vision for building your business.

Maybe you are pretty good at marketing.

But, in this highly unforgiving environment, a business without a STRATEGY for dominate effectiveness is a CORPSE waiting to be buried.

Having built many highly successful businesses, I concur with the graphic to the right.

But, ultimately it comes down to this:

They didn’t PLAN to WIN…

They didn’t PLAY to WIN…

FACT: Half of all businesses started today will be gone in 36-48 months.

Good or bad economy. Doesn’t make much of a difference.

What DOES make a difference is that you live BOTH words: EFFECTIVENESS & EFFICIENCY.


Successful businesses…

  • Out-compete their competition
  • Onboard an incredible team
  • Have fierce financial management
  • Are constantly evolving with highly innovative products and services
  • Have large cash reserves to develop their businesses any way they see fit

Big difference!

E. R. Haas, CEO The TQ Smart Family of Products


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Efficiency vs. Effectiveness and Why You Should Care...

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Category: Business Growth, Featured

About the Author ()

E. R. Haas is CEO of the TQ Smart family of web sites including ThinkTQ.com, IntentionalExcellence.com, MyBizIQ.com, MyBelieversGuide.com, MarriageWithPurpose.com and hundreds of others.E. R. is a "serial entrepreneur" and has created over 20 different businesses in software, manufacturing, finance, publishing and many other areas.He is married to Jan Haas who shares his interest in model railroading, gardening, and traveling by train. Together, they have 5 grown children, 9 grandchildren, and 6 great-grandchildren.

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