The Danger of Increased Efficiency

One of my most common rants is to try to dispel the notion that efficiency is the same thing as effectiveness. While the words sound similar and are often used interchangeably, they mean something different. From my performance management perspective, efficiency is doing work in the right way while effectiveness is doing the right work.

As such, I couldn’t help but smile when I saw Don Moyer’s short article in Harvard Business Review. Don quotes Drucker’s warning there is “surely nothing quite so useless as doing with great efficiency what should not be done at all.” To this, he adds a Peter Keen quote “even dramatic levels of process improvements don’t translate into better business performance.” Both are reminders about the danger of increased efficiency.

I couldn’t agree more. In my own industry, I have often argued enterprise software overly emphasizes efficiency. This is evidenced by the focus on automating existing processes and can lead to unhealthy performance metrics.

Performance management provides a structured ‘logical’ framework to balance the efficiency and effectiveness. Start by focusing on what you’re trying to accomplish and then streamline the processes needed to reach those outcomes.

You’ll be effective for what’s important. And efficient on the things you need to be.

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One Response to The Danger of Increased Efficiency

  1. Charles Chandler April 4, 2016 at 8:34 pm #

    Hi Johnathan,

    I realize I am commenting on one of your old 2007 posts, but I happened to run across it today (the wonders of the Internet).

    It was Peter Drucker who wrote “efficiency is doing things right; effectiveness is doing the right things”, in his 1974 book, Management: Tasks, Responsibilities and Practices; however, I believe that this was a rare instance in which he was actually wrong. Effectiveness is not about doing anything inside the organization, rather, it is about achieving something outside of it. Effectiveness is really about converting an organization’s supply-side intentions (to serve its environment with its offerings) into demand-side behaviors (uptake, adoption, or use of those offerings within the environment).

    I agree with you that a focus on efficiency can be dangerous, because systems theory tells us that an increase in efficiency in one part of an organization does not necessarily improve the performance of the organization as a whole. Many efficiency improvement efforts fail for this reason. Rather than focusing on efficiency first, organizations need to be monitoring their effectiveness in real time before turning to efficiency improvements. Check out

    Charles Chandler

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