It may sound like the same thing, but efficiency and effectiveness are different concepts.
Practicing the ability to use both can generate important results in the corporate and business world, especially in a context of professionals who are in management and leadership positions.
Read the article below and understand in more detail how relevant it is for you, the manager, to use these fundamentals.
Remember: efficiency and effectiveness should go together in your daily life, but before you put this very important idea into practice, let’s understand the definition?
According to the dictionary, effectiveness is the ability to produce or develop something established. For example, reaching a goal or being successful in achieving an objective. Therefore, the focus is on the achievement and not on the path, tools, resources, or costs to reach the target.
On the other hand, according to the dictionary, efficiency is related to achieving the result in the most economical and optimized way possible by doing the process the right way. That is, with fewer resources and in less time, using procedures that best fit your business model. In other words, it is to develop the processes aiming for the maximum result with the minimum possible resources, taking into account that for each operation, market niche, and sector involved, there are particularities that must be seen by managers.
Practical examples of efficiency and effectiveness in business
To make it even clearer, here are some examples:
In the case of efficiency, suppose an organization has to produce 1,000 bags in 30 days. So the company goes to a supplier, buys the fabric, and produces all the stipulated bags within the given time frame. However, during the production process, 15% of the fabric was wasted. Even with the waste, the company successfully reached its goal. Therefore, the work team was effective.
In the same company, another team did market research and found a supplier that sold the fabric at 8% less than what was being purchased. In addition, they changed the production process and the material was wasted 11%, which is 3% less waste than in the previous example. At the end of the process, the team was only able to produce 800 bags. The goal was not reached, but we noticed that the total cost was reduced compared to the first case, depending on the values of inputs and costs in general, 3% can represent a considerable value, consequently, in this example the team was efficient.
Thus, we can see that the concepts go together, but do not mean the same thing. When management is able to perceive this difference, it gains the opportunity to optimize the process and decrease expenses while achieving the planned result.
For an organization to succeed, it is necessary that efficiency and effectiveness go hand in hand in the day-to-day processes. That is why managers and leaders must rely on specific solutions for their routines.
How to realize effectiveness and efficiency in your business
As said, effectiveness can be measured from the results of the employees’ actions. It can improve as the professionals receive performance evaluations and feedback. This feedback is fundamental for improvement and improvement in the short, medium, and long term.
The same is true for efficiency, which is measured according to the project’s development. Tasks performed in the shortest possible time, reduction of resources, and other optimization strategies increase overall results, and, little by little, effectiveness and efficiency go hand in hand.
The most important thing in all of this is to always have a managerial and strategic leadership eye, considering different variables, providing analysis, comparing results, planning, researching, and always providing feedback to everyone involved.
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