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Efficiency and Effectiveness at Work: What is the Difference?

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Many companies pride themselves on their efficiency, having implemented processes and systems that allow employees to maximize their tasks in the shortest amount of time possible. At the office, efficient workers are those who can accurately complete their duties in a timely manner. However, an effective company or employee is something entirely different.

Effectiveness is defined as the degree to which something is successful in producing a desired result. When a company is effective, it succeeds in continuing to innovate and produce top-quality products or services that delight customers and clients. An effective worker doesn’t just attempt to complete their tasks as quickly as possible, but works to come up with inventive solutions to problems and continually improve their performance to achieve the best results.

Thomas Klein, the head of human resources at Service Innovation Labs and cofounder at Innential, has spent much of his career researching how to develop working environments wherein employees can be more effective. Effectiveness starts, he says, with facing your current challenges and finding new and innovative solutions, not merely trying to be more efficient:

“Corporates have proven their business model over a long period of time and they are really efficient in what they are doing. But they now need to figure out what could be a new business model for the future, and you can’t measure this thought efficiency, but through effectiveness.”

This, he says, is where innovation is key. Companies who are effective, he stipulates, are not necessarily efficient. This is because when you are attempting to build a new system you can’t compare your brand new ideas with others that haven’t been tried before. The key is to focus on the user or customer’s needs first and build from there. When doing this, Thomas suggests looking at how designers work. “Designers always have this user-centric focus,” he says. They tend to look for a need in the market, create a very general prototype, and then test it out again and again.

According to Thomas, being effective should be at the center of companies’ strategies for building the businesses of the future. This is not to minimize the importance of efficiency, but to suggest that is should come later in the process:

“Effectiveness means: how good am I at solving problems? Once I solve the problem, I can work on it and see how efficient I can become. But first I need to have a new idea concerning how I will solve this new problem.”

The question now, at a time when technology is transforming the workplace at a more rapid rate than ever before, is how do companies and their workers shift the focus from efficiency to effectiveness? The first step is for companies to recognize where they are failing to be effective and take steps toward change.

Thomas predicts that in a short amount of time, all jobs that have only to do with execution could feasibly be done by a machine. Thus, the value that workers can bring to the table is that of developing and sustaining a culture of innovation and effective solutions to problems that satisfy the needs of consumers. “This is where the people are needed because that’s the human brain that can then get new ideas and come up with new solutions,” says Thomas. “Once the solution is figured out, you can make things more efficient.”

Here at Innential, we focus on maximizing effectiveness in the workplace. If you are interested in taking part in our free company assessment, contact us at info@innential.com.