Effectiveness, Efficiency and Efficacy

published in: Leadership

29 Apr
2010

The issue of effectiveness is second in frequency among the themes discussed with some of the readers of Academy for leaders.  There are three closely related words on the topic: Effectiveness, Efficiency and Efficacy


Effectiveness is doing "the right" things, i.e. setting right targets to achieve an overall goal (the effect).  In his book “The Effective Manager” Peter Drucker claims that effectiveness is a very important discipline which “can be learned and must be learned.” effectiveness, efficiency, efficacy, leader We could easily learn what the right things are.  But this is not enough to be effective.  As Nicholay Haitov said in "Men Times" – it’s one thing to wish (know), another - to be capable of doing it and third and fourth - to do it. Most important is the fourth - to do it.  Effectiveness is not a destination, it is a journey. We will always need to find the right things and we will always have to do them.  Our success will be measured by our results, not by our plans, intentions or promises.


Efficiency is doing things in the most economical way (good input to output ratio).  Some colleagues do their job with 300 telephone calls and in 900 minutes, while others do the same job with 500 calls and 2000 minutes.

And the last word in the category is Efficacy.  Efficacy is getting things done, i.e. meeting targets.  Efficacy is the ability to produce a desired amount of the desired effect, or success in achieving a given goal.  Contrary to efficiency, the focus of efficacy is the achievement as such, not the
resources spent in achieving the desired effect.
 

Postulate on effectiveness: what is effective is not necessarily efficacious, and what is efficacious is not necessarily efficient.


For an illustration let’s consider the following examples:
1.   Our goal is to produce 1000 T-shirts. We buy from a nearby store a roll of cloth, width of 1.4 meters, and length of 30 m.  We cut out and sew 1000 T-shirts.  Eventually the fabric waste is 14%. But the task is successfully completed. We are proud of ourselves because we are efficacious.

2.   The goal is the same.  We buy fabric, but this time we check 3 stores and find the same fabric at 8% lower price. For cutting out we use specialized software.  Thus the fabric waste is reduced to 11.5% and we have produced 55 T-shirts over the targeted 1000.  We congratulate ourselves for being efficient.
 

3.  The task is the same.  This time before we start we ask: “Is this going to be ad hoc or repeated process?”  We understand that it will be a regular one.  So we create a process:  a/ calculating the waste in fabric rolls of varying width (1 m, 1.4 m, 2.8 m);  b/ selecting material with minimum wastage;  c/ three offers from suppliers; g/ runtime - X days, and etc.  As a result, we buy a roll of a width of 1 meter, the meter price is the same as in example 2, but the waste is reduced to 9%.  We sew 1000 T-shirts.  We have created a process for the future colleagues, enabling them to make the right things.  We have been effective.  The "drama" with the effectiveness is that it is very hard to measure if we had not been only efficacious or only efficient.  When we are effective from the very beginning, things seem to happen easy and orderly and it is hard to feel satisfaction from that effectivenessBut that’s exactly why the leaders exist - to be effective for the sake of effectiveness, not for the satisfaction.

 

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