#264 How Do I Think About Efficiency and Effectiveness?
#264 How Do I Think About Efficiency and Effectiveness?

Words are truly important. They condition how we think about the world. It therefore matters whether we primarily want to be “more efficient” or “more effective”.

Efficiency is about doing more with less whereas effectiveness gets us thinking about outcomes and may well not require us to do anything.

In simple terms, efficiency is about process, effectiveness is about outcomes. Efficiency is small picture, effectiveness bigger picture.

They can therefore both make sense provided efficiency is in service of effectiveness.

What Truly is Best Practice?

As Rory Sutherland, Vice-Chairman of Ogilvy UK, has noted, efficiency tends to mean uniformity so what we assume is best practice on Monday is considered best practice on Friday. Why?

Efficiency should be viewed as a tool not an end. Like any other tool, if it best serves the desired outcomes, then it is best practice. It is doesn’t, it isn’t.

Equally important is understanding what you are making more efficient and ensuring that optimising the parts of a system benefits the overall system. For example, the human appendix may seem to have no purpose most of the time so in most snapshots would simply be using up precious resources with no obvious benefits. However, many scientists now believe it helps us recover from gastrointestinal conditions so offers long-term benefits.

What Questions Might We Ask?

It is therefore essential that before trying to make processes efficient that you first have absolute clarity around:

  • What is this process part of?
  • What is the bigger picture?
  • What timeframe am I optimising for? Cutting R&D to zero makes sense in the short-term, not the long-term.
  • Who am I optimising for?
  • What do I want to accomplish?
  • How do I want to accomplish it?
  • How do I want to be seen as accomplishing it?
  • What experience do I want to create?
  • What values do I want to communicate?

Might Efficiency Have a Cost?

Designing narrowly efficient processes is relatively easy on paper. Building systems that take account of all the human participants brings much more uncertainty and potential costs. How then might we think about this?

Let’s imagine we want to set up a new food delivery service. We want it to be efficient, but we also want to ensure that this efficiency isn’t costing us in terms of overall experience.

  • What is it we want to accomplish?
  • What experience do we want to create for customers?
  • What experience do we want to create for employees and partners?
  • How can we most effectively (and consistency) do this?
  • What role might efficiency play?
  • What might efficiency cost us?
  • What metric are we using? Efficiency? Some form of satisfaction? Once you have an efficient process, how are you going to test for possible better outcomes that may seem (or be) less efficient?

 

Real-World Example: Launching an Online Food Delivery Service

  • What is it we want to accomplish?
    • The idea is to provide customers with a convenient way of ordering food from their favourite local restaurants and have it delivered within a stipulated timeframe.
  • What experience do we want to create for customers?
    • We want to provide customers with a seamless ordering experience with easy-to-find menu options, real-time order tracking and secure payment.
  • What experience do we want to create for employees and partners?
    • We want restaurants to be able to seamlessly integrate with the platform and easily manage and track orders.
    • We want to provide delivery partners with a clear tracking and communication system, so they know where to pick up and drop off orders, with optimal routing.
    • Customer service representatives also need the tools and training to address any concerns or feedback from users promptly and professionally.
  • How can we most effectively (and consistently) do this?
    • By investing in robust infrastructure that can handle high volumes, provide accurate routing for deliveries, and offer data analytics for continuous improvement.
    • Regularly collecting and analysing feedback from both partners and customers can help refine the service over time.
  • What role might efficiency play?
    • Efficiency is crucial for this service.
    • Restaurants need to prepare orders quickly, and the system must assign and route them efficiently to delivery partners.
    • For delivery partners, optimised routes ensure quicker deliveries, which may lead to higher customer satisfaction and more deliveries per hour.
    • The platform also needs to ensure a streamlined end-user experience.

       

  • What might efficiency cost us?
    • Overemphasis on efficiency can lead to problems.
    • For example, if delivery partners are pushed too hard for quick deliveries, it might result in unsafe driving or higher turnover. How might we avoid this?
    • Overloading restaurant partners with too many orders in the name of efficiency might compromise food quality. How might we avoid this?
    • Prioritizing efficiency in the user interface design could lead to a sterile, impersonal user experience devoid of brand personality or user engagement features.
    • Where might seeming inefficiency improve the customer experience?
    • Are we cutting corners? Might there be longer-term reputational risks?
  • What metric are we using?
    • The key takeaway so far is that while efficiency can optimise processes, if it comes at the expense of quality, safety or the broader goals and values of the business then questions need to be asked.
    • It is thus important to understand what represents success.
      • Is it purely bottom line?
      • Kitchen to table time?
      • Sustainability?
      • What are you measuring that feels important?
      • What might you not be measuring that feels important?

Questions in the Image:

  • What do efficiency and effectiveness mean?
  • Can I be effective and not efficient?
  • Can I be efficient but not effective?
  • How might I be more effective and less efficient?

Want to Read More Around This Topic?

Essentialism: The Disciplined Pursuit of Less by Greg McKeown (link to Amazon.co.uk). This book emphasizes the importance of focusing on what truly matters in order to achieve meaningful results across your world. It provides actionable advice on how to eliminate distractions and prioritise tasks that align with your long-term vision.

Nurturing Curiosity – Daily Practice: This is part of the Nurturing Curiosity series of tools, insights and questions designed to help nurture curiosity as part of our daily practice. In point of fact, every interaction we have is an opportunity to question what we are observing and how we and others are seeing the world. Also remember that questions come in many forms throughout our day – rain hitting the window reminds me of approaching winter. Winter was traditionally a time when our ancestors lived off their harvests. What then have I harvested that will sustain me over the coming months?

About Tom O’Leary

I coach, mentor and teach leaders who are shaping a brighter future.

Leadership can be lonely, the challenges daunting, and the workload overwhelming. I help leaders feel heard, gain clarity, take action, build confidence and thrive! Leaders matter. Their work matters. We need them at their best!

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