Efficiency vs Effectiveness

Efficiency and Effectiveness. Two words that get used a lot in business, but have radically different implications for business success.

In my experience, many organizations focus almost exclusively on "efficiency", and miss the whole point of why you want to be efficient in the first place! For example, you can have the most efficient production line in the world, but if the end product is poorly designed or contains inherent flaws there is essentially zero value resulting from the supposed efficiency.

The important thing is to focus on effectiveness. Is the thing you are doing, the system you are designing, the product you are developing going to be effective in growing business, solving a problem, or sustaining an operation? If so - great! You are on the right path!

After you've determined the effectiveness of your end result, then you can layer on efficiency to create an effective result in the most efficient manner. Think of the ideal state as a happy marriage between the two words. But don't be lured by those who start out insisting on efficiency without considering the effectiveness of the end result as the driver.

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