Effective vs. Efficient

Hare, tortoise and eco efficiency

Efficiency and effectiveness are two terms widely used in operational excellence and Lean. They are used indistinctly many times, but their meaning is really different:

Efficiency is doing the thing right. Effectiveness is doing the right thing.

Peter Drucker

Effectiveness is related with the Critical Quality Attributes of the product: those features and characteristics that your customer expects and is willing to pay for. A process is effective only if it provides what the customer wants. Efficiency is linked to Performance: how work is done and how well are the available resources used.

All combinations of effective/ineffective – efficient/inefficient are possible, even the counter-intuitive “efficient & ineffective” (well, some people think that effective is a prerequisite for efficient. This means that a process not doing the right things – therefore, ineffective – can not be considered efficient. It’s a valid point but I’ll consider effectiveness and efficiency independent from now on). Let’s see an example. Imagine I want a portion of pizza for dinner. Four things can happen:

  • The taste and temperature of the pizza is perfect (effective) and I get it very quick (efficient)
  • The taste and temperature of the pizza is perfect (effective) but I have to wait too long (inefficient)
  • I get a cup of coffee instead of pizza (ineffective) but very quick (efficient)
  • I get cold pizza (ineffective) and I have to wait too long (inefficient)

Effective vs Efficient pic

Please note that in this example we are assuming that a quick process is an effective process. This is not necessarily true for several reasons. First, speed can be accomplished assigning excessive resources to do a job. This would lead to high speed but also to high costs, which is absolutely not efficient. Second, speed is often a Critical Quality Attribute, more related with effectiveness than with efficiency. However the “speed = efficiency” assumption is a fair simplification for this example.

Efficiency is important; effectiveness is absolutely critical. Ineffective processes are constantly producing things your customers will not buy: this destroys the company reputation and economy. Always solve effectiveness problems immediately. Then, when you know you are doing the right things, it’s time to start thinking how to improve them.

There is nothing quite so useless, as doing with great efficiency, something that should not be done at all.

Peter Drucker

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