Effectiveness and Efficiency – How to Strike the Right Balance

6th February 2020Business Coaching


Do you know how to strike the right balance between effectiveness and efficiency?

Peak performance comes when you hit that “sweet spot” of being efficient and effective in equal measure.

The late, great Peter Drucker, defined efficiency as doing things right and effectiveness as doing the right things.

Interestingy, we all have a natural bias towards one or the other.

Often in trying to be both effective and efficient at the same time leads us to be neither. The result can be poor performance.

So, what’s the answer to this conundrum?

Effectiveness versus efficiency matrix grpah

One potential solution is to aim first for effectiveness, then to switch to efficiency and move back again to effectiveness in a continual cycle.


In today’s fast-moving business world, it is important to do the right things.

This often means taking quick decisions, usually with imperfect information, so that you can test your business cases rapidly through real-life prototyping.

Working in this agile way can be very effective.

Provided of course that you don’t take on too many initiatives simultaneously and are able to learn fast.

If not, the likely result will be missed opportunities due to not failing fast enough and not prioritizing successes sufficiently quickly.

Before you reach this point, it makes sense to shift your focus to efficiency.


Do you have a successful prototype that works not just in theory but also in practice?

Now is the time to improve processes and systems to make it more efficient. Aiming to make improvements over time rather than trying to achieve perfection straight away.

Over-engineering at this stage can waste time and effort. It is always better to iterate, evaluating the effects of the improvements and making further changes at a later date in the light of experience.

This approach frees up time to focus on doing more of the right things. This is turn creates a better balance between efficiency and effectiveness.

In this way, you increase your chances of transforming poor performance into peak performance.

Becoming more effective

In order to become more effective, you have to decide what are the most important long-term priorities for your business.

This requires strategic planning and alignment across functions.

Simple tools can be very helpful in deciding where to prioritize. The Eisenhower matrix below is one such tool:

Eisenhower matrix

Becoming more efficient

In order to become more efficient, you have to improve your systems, processes, and tools.

The good news is that technology is making it easier to automate or eliminate tasks that up to now have involved lots of manual inputs.

These include administrative activities such as invoicing, job scheduling and extracting data for reporting.

A 2019 McKinsey study on the future of work found that at least 30 percent of the tasks of 60 percent of all job functions can be automated.

With increasing technical capabilities of digital platforms and processes and with the advent of artificial intelligence, the opportunity to drive efficiency has perhaps never been greater.

Alternating between effectiveness and efficiency

In summary, becoming more effective and more efficient results in improved productivity. You get more of the important activities done in a shorter period of time.

By constantly alternating your focus between effectiveness and efficiency you get things done at a lower cost and higher profit today. At the same time, you ensure that you are also doing the right things to transform and develop your business for tomorrow

For more insight on improving your business efficiency and effectiveness, please read Excellence in execution

Finally, for more business advice and support, read more articles on this business coaching blog or subscribe to stay updated.