As an organization, a simple way to increase productivity is to evaluate work for efficiency and effectiveness. Although similar in definition, it’s important to understand the differences. Efficiency relates to the time and resource usage. Effectiveness revolves around prioritization and strategic decision-making. Both are required for effective leadership, so we’re going to take a deeper look to increase productivity in the workplace.
What is Efficiency?
Efficiency is measured using the input-output model in economics. If you can create the same output with fewer inputs or produce more output with the same inputs, you’ve increased efficiency. For a business, the inputs would include assets, resources, time, money and talent. Efficiency is probably the easiest to understand and managing efficiency is the most basic form of leadership, as well as innovation.
How to Improve Efficiency
You can improve efficiency with technology — processes or tools that increase production output. Because time is an extremely limited resource, it can help to focus on the Pareto principle. The Pareto principle or 80/20 rule states that 80% of results come from 20% of the causes in many circumstances. It applies to nearly every field of study, including sports, business, economics and technology. Microsoft even found that 80% of their user errors were caused by 20% of software bugs!
Find the bottlenecks in your processes or the major disruptions to workflow to increase efficiency with the least amount of time and effort expended. If a piece of software or technology training can save hours of lost productivity, it may make more sense to invest. Find the point of resource usage that provides the optimal return on investment — the most marginal benefit, not the total benefit.
What is Effectiveness?
Effectiveness is harder to quantify because it involves all the factors related to accomplishing a task or objective. For a manager, the effectiveness of communication, delegation and resource expenditure may all be considered during a performance review. For a staff member, the ability to complete a fixed number of tasks, performed for a specific number of hours each week may qualify for effectiveness.
How to Improve Effectiveness
Coaching to improve effectiveness is difficult. It usually requires specific knowledge and experience. Hiring effective candidates is more challenging than ever, so invest in a thorough interview process and extensive screening to save yourself lost productivity down the road.
Once an employee is onboard, effectiveness can be systematically improved through performance reviews and continuing education. Performance reviews should be completed frequently. If a review is only addressing change on an annual level, many opportunities for improvement may have been missed or overlooked too long. Continuing education requirements also encourage people to become more effective by learning new strategies and tactics.
Bringing It Together
Finally, efficiency and effectiveness need to work together to achieve results. Efficient effectiveness requires a systematic plan that is empirically evidenced, testable and able to be improved. Effective efficiency requires choosing to do the right things well, instead of wasting too much time or effort in the wrong direction. Both principles together increase personal, collaborative and organizational productivity for an efficient, as well as effective workplace.
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