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Wednesday, September 9, 2009

Let's improve our efficiency

Entrepreneurs typically do not understand the difference between "efficiency" and "effectiveness", and thus do not benefit from those differences.

To improve productivity, effectiveness precedes efficiency.

Effectiveness as it relates to organizational productivity refers to identifying and taking the right action, individually or as a group. Efficiency means doing the right thing in the right way, to streamline, simply and amplify the process.

For example, if a company a needs to hire 3 salespeople, setting up for and interviewing a dozen excellent receptionist candidates generally won't produce a sales person hire. You might already have the receptionist resumes, you might have the receptionist interview worked out and be capable of quickly interviewing those candidates and separating the likely candidates from others who apply.

However, doing something very well, quickly, "efficiently", does not mean we are
doing the right thing.

Improving, streamlining, simplifying a process that still does not produce the correct or desired end result means we are efficient, but not effective.
There does not seem to be much value in trying to improve efficiency, until we are sure our time, energy and other resources are targeted at first being effective.

Take a moment to survey your organization. Are there processes that run very smoothly but are outdated, or produce a result(a report for example) that isn't useful?

Work toward effectiveness first. When you are sure about taking the right action,
then you can improve how quickly, accurately or inexpensively you are operating.

Effectiveness first, then efficiency and your personal and team productivity will improve.

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