Efficiency and effectiveness are two terms that are often confused by inexperienced leaders, and understanding the differences between them is crucial if you want to be in good control of your organization. There are many factors that can affect either the efficiency or the effectiveness of your processes, and sometimes both will get impacted. Itâ€™s important to see the big picture and know what kind of impact you can expect from everything youâ€™re doing in your organization, otherwise youâ€™ll quickly see your productivity charts going down.
The efficiency and effectiveness matrix is a great tool for navigating this part of your work, and it can provide you with some insightful revelations about the current state of your organization. As long as you take the time to carefully analyze your different activities and ensure that youâ€™re familiar with how theyâ€™re impacting your work, you should be able to realize some significant improvements in the organization, and see great boosts to performance in the long run.
How the Matrix Works
The basic idea of the efficiency and effectiveness matrix is that it groups the factors it analyzes according to their impact on both effectiveness as well as efficiency, and it allows you to see exactly where each factor is located in the grand scheme of things.
Before you start using the matrix itself though, itâ€™s important to actually understand the difference between effectiveness and efficiency. Put simply, effectiveness means that youâ€™re working towards the right goal â€“ that every step of the way, youâ€™re contributing towards a productive end result.
On the other hand, the meaning of efficiency is related to doing things the right way. In other words, when youâ€™re working efficiently, it means that youâ€™re using the smallest amount of resources with the best potential for good results in the end.
Usually, youâ€™ll want factors to align to a certain corner of the matrix, ignoring the others.
The Ideal State
You should ideally be looking for parts of your processes that are high on both charts. Doing the right thing, and doing it the right way at the same time, is where you should ideally be in all your operations, and there are various ways to ensure that processes fall in this part of the matrix. These ways are mostly individual to the specific processes youâ€™ve got running in your organization, and youâ€™ll need to find individual solutions for each case.
Also, keep in mind that sometimes itâ€™s okay for a process to not be perfectly aligned with both axes on the matrix. In some cases itâ€™s impossible to achieve 100% efficiency, and doing things effectively sometimes relies on having some prior information that might not be available yet. Taking the time to study your processes carefully and knowing what each of them requires for an optimal execution is important when you want to make sure that youâ€™re not reading the results of the matrix incorrectly.
You may also need to run several iterations of the analysis in order to get a truly objective overview of the situation. This also includes times when youâ€™re trying to realize some specific improvements in your company, in which case youâ€™ll clearly need to repeat your analysis after each improvement iteration in order to know that youâ€™re moving in the right direction.
The efficiency and effectiveness matrix can provide you with a great insight into the way your company works, and can quickly point you in the right direction for improvements and large-scale changes. As simple as the tool is, it can bring a lot to the table in terms of shedding some extra light on your operations, and you should definitely look into it in more detail.