Blog Detail

A few days ago, I was in a fast food restaurant waiting for that oh so delicious (and nutritious) meal.  When the lady ahead of me received her meal, in a very timely fashion I might add, it was not what she wanted.  In my neighbourhood, this food establishment is not well known for working quickly, but something must have changed because there was a definite improvement…sort of. On that day, I can say that whatever efforts taken with the lady’s order, they were efficient. But were they effective? No, because they quickly made her the wrong order!

You may be reading this blog and saying to yourself “that is so obvious,” and in this instance, it is. I am using this story to simply illustrate the difference between being efficient and being effective.  Businesses oftentimes pursue efficiency in operations without efficacy considerations.

So, does efficiency lead to effectiveness? The answer is a resounding no.  Pursuing a strategy, or tactic solely to improve efficiency in business will eventually fail to deliver.  To demonstrate what I mean, I will discuss 5 prevailing strategies that organizations employ to drive efficiencies in business:

#1: Keep Up With The Tech!

We keep hearing that technology is advancing rapidly and that organizations must keep pace. This is true, a company today that does not see technology as integral to how they do business might as well craft its own epitaph. Implementing technology should improve your end user experience, and allow you to do more with less. What do I mean by this?  I recently had a client who wanted to revamp their website. But, prior to doing that they wanted to ensure that the operational processes executing user requests from their website worked as efficiently as possible through technology enablement. This systematic thinking is necessary to ensure technology drives efficiency and customer value.

#2: Outsourcing

With the focus on core competencies, companies engage third party vendors to take over aspects of their delivery model. This can indeed drive efficiencies, but may not always capture effectiveness, and like above, can lead to inefficiencies. If the processes that will be executed by the service provider are unclear and there is no accountability for tangibly delivering expectations, then this strategy will fail to be efficient and effective.

#3: “Right” Sizing…Right

There are many terms for this activity, some call it headcount reductions. Most large organizations have done this, sometimes under the guise of implementing a new program. To name a few: Lean, Six Sigma, and Re-engineering. Human resources are sometimes removed without considering their role in generating value for the organization. Such short-term decisions consequently leave a gap in the delivery model, which over time gets filled with even more people than were initially cut.  This practice does not drive effectiveness and rarely creates sustained efficiency.  Some companies may find themselves in this vicious loop of right-sizing, rebuilding the resource base, only to right-size again, a practice that completely erodes productivity.

#4: Data or a Pretty Picture?

Have you ever sat in a meeting with beautiful dashboards that tell a wonderful story about what is perceivably happening in the organization? What happens after the meeting is over?  Maybe a few actions, but nothing significant.  This is because the data was not linked to the critical processes that need to change. Companies spend significantly on implementing business intelligence solutions that will perceivably drive efficiency.  Remember, data results from your organization doing something.  If the data is not directly linked to what you are doing, you have invested in the ability to create pretty pictures.

#5: Transformations #StayRelevant

A term linked so closely to the digital age, because if you are not heading in that direction then you are heading towards irrelevancy. When implemented correctly, transformations create efficient and effective organizations. However, you must be ready for the scope. Oftentimes technology may be the catalyst, but success hinges on the integration of: people (stakeholders), processes, organizational culture, leadership and management, data, measurement, and technology.  If you are not ready to affect this type of holistic change then it is unlikely a transformation will significantly improve business efficiency and effectiveness.

The story is not bleak. All the above strategies are viable in driving efficiency and effectiveness in organization’s operations. But, the key is that these two should not be separated.

My challenges to you is this…if your organization is planning any one of the above, or another efficiency strategy, seek out what efficiency and effectiveness drivers the initiative is expected to lift.  Feel free to connect with me if you have questions.