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Organizational Culture Discusssions: Efficiency vs Effectiveness


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Many people confuse the terms 'efficiency' vs. 'effectiveness', or they see them as the same thing. They are anything but. This presentation covers why focusing on a culture of Effectiveness is so much more productive, and why a focus on efficiency can actually hurt your organization. Whether its agility, adaptability, social connectedness, social business, or becoming a responsive organization is your objective. This seemingly subtle distinction will prove to be a useful tool in your toolbox.

Published in: Business

Organizational Culture Discusssions: Efficiency vs Effectiveness

  1. 1. Organizational Culture Discussions Effectiveness vs. Efficiency Matt Ridings @techguerilla
  2. 2. Text Efficiency is an industrial age metaphor It makes the assumption that we have built the correct machines/ services. Therefore by increasingly making them more efficient we will achieve greater margins.
  3. 3. Efficiency Is process oriented Is effort oriented Is time oriented Is NOT goal oriented
  4. 4. Text Effectiveness Efficiency is a goal unto itself, whereas Effectiveness is oriented on achieving the CORRECT goal. Therein lies the advantage of maintaining a focus on effectiveness vs. efficiency.
  5. 5. For Example Company A may be very ‘efficient’ at producing bicycles without seats. But they’ll never be as ‘effective’ as Company B who is less efficient, but puts seats on their bicycles
  6. 6. The Effectiveness Advantage Effectiveness requires a focus on whether you are doing the RIGHT things. Efficiency requires a focus on optimization, even if you’re optimizing the WRONG things.
  7. 7. The Effectiveness Advantage Effectiveness requires thinking about WHY you are doing something. Efficiency requires thinking about WHAT you are doing.
  8. 8. The Effectiveness Advantage Effectiveness forces you to focus on business objectives. Efficiency is not a business objective, no matter what you’ve been told, it is a process of OPTIMIZING business objectives.
  9. 9. The Effectiveness Advantage A laser focus on efficiency can lead to a less effective organization. Reducing the paints available to an artist, or insisting they paint faster, does not create better art.
  10. 10. Symbiotic Relationships In an age with an everincreasing pace of change a focus on effectiveness is more valuable.
  11. 11. Symbiotic Relationships Efficiency is still important, but it comes after effectiveness is reached. In a down market we tend to reach too quickly for efficiency measures.
  12. 12. Symbiotic Relationships Efficiency is great at increasing margins on existing revenues, but horrible at creating new sources of revenues. This is the age of evolving business models, and a focus on efficiency is a means to try and simply survive whereas a focus on effectiveness is a means to try and thrive.
  13. 13. The Company Narrative What type of culture is being created by the stories being told and the actions that leadership is undertaking?
  14. 14. The Company Narrative Is it a culture of effectiveness which fosters a sense of innovation, collaboration, experimentation, and hope….
  15. 15. The Company Narrative …or is it a culture of efficiency which fosters a sense of fear and stagnation?
  16. 16. Text Still Confused? Reach out and lets talk.
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