Are you Effective or Efficient?

Brisbane Business Accountant - are you efficient or effective?

And what’s the difference? Does it matter? Don’t these words really mean the same thing? No they don’t, and being mindful of the difference can dramatically improve your results in life, work, business, and finance.

Let me quote this adage: Efficiency is doing things right, while Effectiveness is doing the right things.

Efficiency refers to doing something with the least time and effort. Effectiveness is a measure of whether the thing you’re doing is useful.

Let’s say you run a mail delivery business. You are concerned that electronic communications – like SMS, email & social media – are going to take business away from you, because the public perceive that these methods of communication are cheaper and faster. You launch a business improvement program – intended to turn around the falling trend in customer revenue – by reducing the costs of sending physical letters, and ensuring that letters are delivered in the shortest time possible. Your program achieves cost reductions of 20% which can be passed on to consumers, and reduces average delivery times by a similar margin. You call this program a success. 18 months later your business goes broke, because your volume of mail has reduced by 50%, and you have no effective method of competing with electronic communications.

Did the business strategy improve efficiency? Yes it did – perhaps even to the maximum extent possible. Was it successful in saving the business? No – because it centred on ineffective strategy and assumptions.

Efficiency means using your ladder to climb the wall quickly. Effectiveness means having your ladder up against the right wall. Make sure your ladder is aimed at the right wall first, and then figure out the most efficient way to climb it.

If you would like to discuss your business, professional, or financial strategies with a skilled adviser who can help ensure you are effective, call your Brisbane Business Accountant now on 07 3822 7201.