Efficiency or Effectiveness:
Do Words Really Matter?

During a conference I attended last week, I was reminded again that using words imprecisely can have dire consequences. As part of their presentation on cost efficiency, two speakers stressed the need to balance two related yet different concepts that often are used interchangeably: efficiency and effectiveness. Although both are critical to an organization’s ability to survive and thrive, their respective desired outcomes often are in conflict.

The speakers defined “efficiency” as doing things right – i.e., using resources the best way possible. They suggested examining the ratio of outputs to inputs would help assess the degree of an organization’s efficiency. “Effectiveness,” on the other hand, means doing the right things – i.e., achieving the desired outcomes. The reality is that few, if any, organizations have unlimited resources. As a result, there must be a balance between the sometimes contradictory concepts of effectiveness (the WHAT) and efficiency (the HOW).

The problem arises when people use these two terms interchangeably. To the extent that decision-makers focus solely or primarily on cost efficiency when allocating resources, for example, they cause the organization’s effectiveness to suffer.

Let’s use public safety as an example of how using “efficiency” and “effectiveness” interchangeably may play out. Most people want to live and work in communities that are safe, healthy, and economically viable. Since the recent recession caused local governments to slash their budgets, including the funding for public safety agencies, the focus has been almost exclusively on efficiency – i.e., how much can we cut from the budget? Although most organizations generally can find ways to become more efficient, beyond a certain point there are no resources to cut without degrading service effectiveness. This result may manifest as slower response times when people call 911. Services previously available, such as community policing, gang enforcement, and fire prevention education, also may disappear. Failing to distinguish between these two terms has added to the significant decrease in the level of public safety in many communities across the U.S. and other countries.

Is that outcome okay? The answer is up to the residents of the affected communities. However, for them to make informed decisions about what they are willing to trade off, they must understand the implications of an imbalance between efficiency and effectiveness. That is, if we cut back on resources, what will be the impact on public safety? On the other hand, if we focus on effectiveness to the exclusion of efficiency, are we being realistic?

The bottom line: for the health and well-being of your organization, distinguish clearly between the concepts of efficiency and effectiveness. Focus first on the end result you want to provide your customers and stakeholders (the WHAT), then address the ways you might achieve that outcome most efficiently (the HOW). Maintaining a balance between the two concepts will serve your organization and its stakeholders well.

To find other articles and resources that may be of value to you, I invite you to visit my web site at www.BusinessAlignmentStrategies.com and my blog at www.OptimizeBusinessResults.com.

Alignment Solutions is a concise, bi-weekly newsletter written specifically to help organizational leaders optimize their business results. Your e-mail address is never shared with anyone for any reason. You may unsubscribe by clicking the link on the bottom of this e-mail.

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© 2014 Pat Lynch. All rights reserved.

What Major League Baseball Can Teach
Organizations about Succession Planning

Organizations of all sizes in the public, private, and non-profit sectors can achieve their goals and missions more quickly and easily when they implement an effective succession planning process. So why is it that too few of them choose to do so?

My definition of succession planning is an on-going, long-term process to systematically develop talent so there is a readily available, qualified pool of candidates to fill critical positions throughout the organization as they become vacant.

Whatever the reason for its absence – e.g., perceived lack of time or resources, lack of knowledge about how to develop a plan, failure to implement a plan, mistaken belief that small organizations don’t need such a process – a solid succession process is not a high priority for many leaders and business owners despite the real benefits that would accrue to their stakeholders and to themselves.

Major League Baseball’s (MLB) farm club system is, in effect, a succession process. Teams hire promising athletes, train them, provide opportunities for honing their skills, and if/when they are ready, move them up to the major leagues. Here are ten reasons this system works well for MLB:

1. There is a process – i.e., teams implement their staffing plans.
2. Teams search for good talent, candidates whose skills fit their immediate and future needs.
3. Teams train their players and give them lots of opportunities to practice their skills.
4. Players get specific, timely feedback about their performance.
5. If a team mistakenly calls a player up to the majors before he’s ready, causing the athlete to struggle or fail, he’s sent back quickly for more training and/or experience.
6. Players on the major league roster may be sent back down to the farm team for remediation.
7. Teams staff their positions with the best person for the job, even when it means a long-time player, or one who is solid but not quite as good, gets moved out or down.
8. Teams hold players and coaches accountable for meeting stated performance criteria.
9. Coaches make staffing decisions based on what’s best for the team, not for individual players.
10. Teams let players go when it becomes evident they cannot or will not meet the job requirements.

How many of the above elements exist in your organization? Where can you make improvements?

To learn more about important elements of succession planning, take a look at my article Succession Planning Myths and Realities.

To find other articles and resources that may be of value to you, I invite you to visit my web site at www.BusinessAlignmentStrategies.com and my blog at www.OptimizeBusinessResults.com.

Alignment Solutions is a concise, bi-weekly newsletter written specifically to help organizational leaders optimize their business results. Your e-mail address is never shared with anyone for any reason. You may unsubscribe by clicking the link on the bottom of this e-mail.

Click here to Join Our Mailing List!

© 2014 Pat Lynch. All rights reserved.