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Effectiveness vs. Efficiency: Which Is More Important (+Why)?

When it comes to being productive, a lot of people and organisations strive to be more efficient. They want to tick off more to do list items per day, reach out to more leads per month, or otherwise do more of something in less time. 

effective vs efficient
Efficiency and effectiveness can lead to different results. A worker can be efficient without being effective. Learn how to balance both. (Image source: Envato Elements)

While efficiency can be a good thing, it can also be a distraction from your real goals. It’s all very well to do something efficiently, but if it’s not furthering you or your organisation’s purpose, then it doesn’t really matter. Efficiency and effectiveness aren’t the same thing.

Let’s dig in and explore the differences between being efficient and being effective—and look at when to strive for each one. You’ll discover why effectiveness is important.

Efficiency vs. Effectiveness

If you’re thinking about whether to be effective vs. efficient, it’s important to look at what efficiency and effectiveness mean as well as the result of being efficient versus the result of being effective.

According to the dictionary, efficiency is all about doing specific tasks in an optimised way. You’re more efficient if you find a way to do something two times or five times or ten times in the time it used to take you to do it once. 

Let’s look at an example of efficiency: lead generation. A very efficient way to reach out to a lot of leads is to send mass emails, all with the same marketing text. You can reach out to hundreds or thousands of leads per day this way. At your next team meeting you’ll be able to stand up and say you contacted 5,000 potential customers in a single afternoon. That’s about 30 leads contacted per minute—pretty efficient, right? 

Now let’s look at what effectiveness is. Checking the dictionary again we find that effectiveness is all about doing the right tasks regardless of the time it takes. Continuing with our lead generation example above, if your actual goal is to generate a sale a mass email blast is normally really ineffective. Sure, you contact a lot of people at once, but how often do they actually open and read your generic marketing email, let alone click through and buy whatever you’re selling?

A much more effective way to make a real sale is to take the time to research a potential client or customer and send them a custom email detailing how your product could help their specific situation with a few ideas on how they could implement it. They’re much more likely to respond to a message like this with very clear steps than to a generic message. Boom! You’ve got one sale, even if it has taken you an entire afternoon—or even longer—to make it.

These, however, are the two extremes. While you should try to be effective first, you also have to consider whether you’re efficiently spending your time and resources. While creating a well-researched custom email is going to be a very effective way to convert leads into sales, they’re very time-consuming. If you’re selling a multi-thousand dollar per month subscription service, then they’re probably worth doing. On the other hand, if you’re selling a $0.99 app, then a custom email is so inefficient that you’d probably spend 100x the potential profit from any one lead if you researched it to create a customised email. 

This is where balancing effectiveness and efficiency comes in. After all, efficiently doing the wrong tasks is a waste of time, but efficiently doing the right ones is how you succeed. 

Let’s take a look at a process you can use to balance efficiency and effectiveness.

1. Do the Right Things

We’ve taken a deep look at goal setting before, but to refresh your memory you want goals to be SMART or Specific, Measurable, Achievable, Relevant, and Time-Constrained. For more information, review this tutorial:

The first step towards achieving any goal—or anything really—is to make sure you’re going in the right direction, or that your actions are Relevant. If you’re trying to lose weight, you need to stop eating unhealthy foods before you do anything else! Going to the gym won’t do anything about the huge pizza or bowl of ice-cream you had for dinner last night.

2. Do the Right Things Often

It doesn’t matter, at least at first, how long it takes you to do something that gets you closer to your goal, as long as it moves you in the right direction. Start with the most effective possible thing you could do, like directly reaching out to customers. Optimisation comes later. Before you can even begin to optimise, you first need to have done the effective action enough times so you know what bits can be automated, batched, sped up, streamlined, or even skipped.

Going back to lead generation and converting leads to sales, regardless of whether you’re selling an expensive software service or a cheap app, your first step should be to reach out to potential customers and try to make a sale directly. It’s the single most effective action you can take to sell your product.

Talk to your customers and, more importantly, listen to them. Find out what their problems are and work with them to find ways that your product can help them solve them. At this stage, things will be incredibly inefficient. And if your sole aim was to make a single sale that would be an issue. But, since your aim is to make more than one sale you’re actually efficiently learning about your customers. Sometimes you need to move sideways for a little while to move forward. For some tips on how to get feedback from your clients, study this:

Once you’ve made a few dozen sales by trying to be as effective as possible, regardless of cost, you now have enough information to start trying to make the effective process more efficient. 

3. Do the Right Things Well

Once you’ve identified the right tasks for you or your organisation to be doing, it’s time to look at doing them efficiently. Effectiveness trumps efficiency, but being efficiently effective is obviously the best. Getting the right things done is more important than getting random things done well, but doing the right things well is what creates a profitable business. 

Look at what actions you took to be effective and break them down into different steps. Then, start looking at ways to speed up and optimise each step. Let’s continue to use contacting leads and converting them to sales as an example.

Say you’ve sold your app or service directly to 20 different customers. You now have a huge amount of information about what they were looking for and what sales techniques worked. If, for example, you found that there were three broad categories of companies that were interested in your product and each group had different reasons for being interested in it. That’s more than enough information to start doing much more targeted email marketing. 

Instead of researching each individual lead in detail, you could research them just enough to find out if they were a potential Category A, B, or C client. Then, you could send them a semi-personalised email with text written to address the needs of whichever category company they are. You’d really only have three different emails with some gaps where you could fill in some specifics about the potential client. 

While this semi-personalised approach probably won’t be as effective as fully researching each potential lead, you’ll be able to reach out to a lot more of them in the same time. Whatever small drop in effectiveness there is will (hopefully) be more than offset by the increased efficiency. 

When you’re starting to optimise your actions, it’s important to have a baseline to compare things to. You should pick a business metric. For lead generation I’d recommend Cost of Customer Acquisition—and analyse its value when you were working on being purely effective. Once you implement your plans to become more efficient, you can then re-analyse the metric to see if what you’ve done has worked. Learn more about business metrics in this tutorial:

With the example we’re using, we’d want our Cost of Customer Acquisition to come down and we’d probably look to see an increase in overall sales as well. That would tell us that we were reaching more customers with less resources and that by doing so, we were able to reach enough more customers that the increased efficiency was good for the bottom line.

4. Assess, Assess, Assesss

The key with this sort of strategy is to always be looking for ways to increase both efficiency and effectiveness, and, at every step, to look back and assess the impact any changes you’ve made have had. 

As I mentioned above, setting a baseline value for key metrics and then comparing them once you’ve implemented some changes is really important. It really lets you see how what you’re doing is affecting the organisation. At every step you should be prepared to roll back your changes if they aren’t giving you the results you’re looking for. Striving to be too efficient can seriously dent effectiveness. You never want to be in a situation where the overall health of your business suffers.

With that said, it’s important not to put too much stock on hitting numbers. Key metrics serve as a good guideline, but they aren’t the be all and end all. As Ted Coiné says, “If it can be measured, it can be manipulated.” You want metrics to help your performance, not become mindless targets for people to strive to hit however they can.

Also, remember other non-measured organisational goals like keeping staff happy. If your drive for efficiency is starting to affect staff happiness, in the long term you’re likely to see a higher staff turnover, which will have serious negative effects. Effectiveness and efficiency are always a balance. 

Again, to continue our lead generation example. It might turn out that the sales people like having a relationship with their individual clients. While those relationships might not be as efficient as the whole sales team covering every client, the slight performance hit may be worth the additional (although hard to measure) staff happiness. 

Apply These Principles More Broadly

While I’ve been using a simple example in this article, the same process applies much more broadly to any organisational (and even personal) goals you’ve got. Here’s the process:

  1. Take the most effective steps and actions that, regardless of cost, get you close to your goal. 
  2. Perform those actions enough times that you know what works and what doesn’t. 
  3. Analyse the actions for ways to automate, speed up, remove, batch, reduce costs, or otherwise do thing more quickly without sacrificing (too much) effectiveness. 
  4. Analyse the results and repeat the process.

Here’s another example: I’m a freelance writer. If I want to get more clients, my first task should be to spend time crafting individual pitch letters to a few prospective sites. 

Once I got the responses—either positive or negative—back, I can assess what worked and what didn’t for different kinds of sites. 

Then, it’s time to send out another round of pitches, this time incorporating what I learnt from the first round and especially trying to look at ways to send out more pitches in the same amount of time. 

After that, it’s another assessment. Did the changes I made lead to more work? Or did they lead to less work? For me, I actually need to do highly individualised pitch letters to get work. For you, it may be different. 

Start Balancing Efficiency and Effectiveness

Now that you’ve compared being effective vs being efficient, you’ll want to put the process into practice. The process works whatever you’re trying to do. Do it effectively, make it efficient, test, repeat. Try it out, you won’t be disappointed.