The Battle of Efficiency and Efficacy
Achieving a balance between the two means running an efficient operation that not only delivers ROI to customers – but also back to your business.
By Diana L. Mirakaj
No company would ever encourage employees to be inefficient. In fact, many businesses strive to achieve high degrees of process efficiency in their operations. On the surface, this may seem a noble pursuit, but it often results in failure. While efficiency is a business requirement, efficacy of process outcomes is the larger need and goal.
Although some of the basic business principles haven’t changed – consistently achieving the highest level of effectiveness possible, for example – the trifecta of “better, faster, cheaper” has broadened to encompass far more strategic paths. Determining operational success includes metrics that cover not only productivity and efficiency but also the effectiveness of process outcomes, such as the generation of customer demand, revenue increases, expense management, and overall market performance.
The results of outcome metrics provide management with a marked advantage by converting data into intelligence that can be used to continuously improve an organization’s decision-making, investment strategy, and sales model. The goal of all this analysis is to remain ahead of the competition and on top of market trends. Leveraging this visibility makes a company not only more efficient but also more effective.
Delivering consistent service excellence in the marketplace requires companies to identify, understand, and create the products, services, and solutions that focus on customers’ needs. To do this, businesses will have to recognize the continual need for transformation and adaptation of their models to improve upon their value propositions.
While flexibility is essential, creating efficiency and effectiveness is not an ad hoc process. Regardless of whether an organization is executing on an existing and well-established strategy or developing a new product or plan, ensuring steady and efficient operations is essential to the organization’s overall fiscal health. This is a matter of cost control and maximizing productivity. Efficiency requires a focus on the development and standardization of specific processes that regulate workflows, coordinate decision-making, optimize channels, and manage head count and resources.
Measuring business outcomes and delivering value includes a 360-degree view of strategic management; therefore, effectiveness requires two divergent but linked types of data: operational and performance-based. Operational information must work in tandem with processes and services, constantly defining the activities that deliver value to the customer. Performance-based information calculates the results of the work in terms of business value to the customer. When combined, this data brings a company one step closer to answering the million-dollar question, “What’s the ROI?”
Operationally effective companies distinguish themselves based not only on output but also on approach. That’s not to imply an absence of efficiency, but it does acknowledge that running a business requires more than knowing how to operate on a lean structure with limited spending. While there are benefits to those attributes, the advantages of astute planning, wise investments, and a strong product and service pipeline will pay higher dividends than any “safe” money will ever return. It’s not a battle; it’s a balance. The combination of these factors gives an organization greater insight into the efficiency of its operational performance and an enhanced ability to effectuate corrective actions and initiate organizational change management to ensure that effectiveness is sustainable.