Effective vs Efficiency

Effective vs. Efficient

Marilyn SanfordsmartPRENEUR Blog Series

Is the process or activity effective?

Efficiencies are typically at the heart of planning and tracking business.  Ways to ensure efficiency may include:  tools, training, tracking systems, supervision, etc.  We have lots of ways to highlight and ensure efficiencies.  The question that is rarely asked: is the process or activity effective?  There is an important distinction.

A highway may be built to incredible standards using sophisticated processes, tools and highly trained and skilled labor.  However, if it is not in the right location, or direction, it is hardly effective.  

As an example, I may quote a certain figure to a client and may execute very efficiently.   However, if I didn’t spend the time to ensure the client fully understood our deliverables, and that we ensured our solution captured and met client expectations, we are not aligned.  This lack of alignment could come at a pretty hefty price. 

Internally, our own staff need to be clear about what it takes to meet client expectations.  When the bill is presented, we learn a lot and often we’ll humbly discount.  That discount is telling, leading to insights into our lack of effectiveness though we may have been very efficient in execution.  

The whole team needs to know what it takes on every job to be effective; to know the deliverables that capture customer expectations.   Processes are the soft tools that guide this and are intended to ensure all stakeholders are aligned and engaged; to include mechanisms that mine for expectations and are clear about what ‘effective’ looks like.  Likely, this is different for each job.  

We all want to be efficient

We all want to be efficient, to do things well, however this focus is only optimized when an additional question is asked.  Apart from being efficient, was this effective?  Did we execute to both our expectations and our client’s? 

So, let’s peel this back.  We learn how to do specific jobs and we focus on being efficient, to get that job done with as few steps, parts and revisits as possible.  These are typically covered in our training, through supervision and with growing experience levels.  Creating an iterative system that tracks and mines for improvement opportunities is essential to efficiency.   However, effective asks first, do we know what success looks like for this client, and, if accomplished, are all players aligned. Do we (company and client) know what success looks like? 

Measuring Effectiveness

We can measure ‘effective’ by looking at what we set out to achieve on each job.  At a macro level, did our margin equal or exceed what was sold and do we know why. Did the client pay the entire bill, or were there end job negotiations or conflicts? Was our labor fully billed?  Did we meet or exceed our productivity expectations?  Were there returned visits and lagging deficiencies? Constant team engagement throughout, and especially on post job reviews, is insightful.  Consider post job reviews living documents, signed by the team with an intention to engage and capture what was learned.  These, in turn, lead to improvements and good decisions on future jobs.   

What Did We learn from the Experience?

Healthy firms put the client experience at the heart of this, which highlights what matters to the client.  Overall processes honed over time include separate department responsibilities and handoffs with their own post reviews, typically at every handoff.  Also tracking task management, outstanding tasks and deficiencies, daily.  Do these include updated priorities, key activities and handoffs amongst team members?   Ritualistic commitments to these processes are important. This consistency leads to improvements. Understanding and insights come with every post job review.  These are the learnings.   Done well, with transparency including meaningful follow-up and accountability, they can also be morale boosters which increase employee engagement and feed improvements.

About the Author

Marilyn Sanford

Marilyn is a Professional Accountant. She spent 23 years running trade based businesses, offering Low Voltage Custom Integration solutions to demanding and discriminating customers for high end residences and businesses. She has served on boards, taught in her Industry and is a Fellow of the Custom Electronic Design and Installation Association (CEDIA). Marilyn Co—founded Smart fx in 1992, merged with La Scala in 2000 and later acquired LaScaIa in 2007. Over the years running a custom installation business, she learned what it takes to run a profitable business dependent on construction timelines. These insights and lessons learned, delivering ‘skilled labour’ as a primary service offering, were the seeds that grew the LincEdge concept.