Effectiveness and efficiency

Science, technology, and economics focus on efficiency, but not effectiveness. The difference between efficiency and effectiveness is important to an understanding of transformational leadership.

  • Efficiency is a measure of how well resources are used to achieve ends; it is value-free.
  • Effectiveness is efficiency weighted by the values of the ends achieved; it is value-full.

For example, a men’s’ clothing manufacturer may efficiently turn out suits that do not fit well. Another less efficient manufacturer may turn out suits that do fit well. Because “fit” is a value to customers, the second manufacturer would be considered to be the more effective even though less efficient than the first. Of course, a manufacturer can be both efficient and effective.

Put another way:

  • effectiveness is a matter of doing the right things;
  • efficiency is a matter of doing things right.

For example, the more efficient our automobiles have become, the more of them are on city streets. The more of them on city streets, the more congestion there is. The efficiency of an act can be determined without reference to those affected by it.

Not so for effectiveness. It is necessarily personal. The value of an act may be, and usually is, quite different for different individuals.

The difference between efficiency and effectiveness is also reflected in the difference between development and growth, and development is of greater concern to a transformational leader than growth.

Source: A Systemic View Of Transformational Leadership, Russell L. Ackoff.

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