Efficiency vs. effectivity

Mangagement by design

For many organisations, the aim is still to permanently optimize their organisation and processes as efficiently as possible – to make it “lean”. So far so good. That’s how it is written in the textbook, that’s how management levels are measured and that’s how “leading by management” works.

But what is often forgotten when optimising efficiency is the fact that with all the optimisation measures that contribute to increasing efficiency, success can be achieved quickly, but only to a limited extent in terms of its effect. Not to mention the usual dangers of quality loss and supply chain problems.

In contrast, we find that far too little attention is paid to optimising effectiveness, i.e. “leading by design” of corporate offerings and the overall customer experience. What good is it for a company to have an organisation and production trimmed to efficiency if at the same time entire customer groups and markets disappear, product and service potentials remain unused and competitors become stronger?

Therefore, the focus on efficiency and effectiveness should always be balanced at eye level. After all, when increasing a company’s effectiveness, the aim is not primarily on short-term success, but rather on the long-term development of optimised offers and the acquisition of whole new customer segments while keeping costs constant or, ideally, decreasing them. Effectiveness can thus be increased permanently and indefinitely.

In the design of new offers, effectiveness is the supreme discipline in every company and decisive for the clientele. Efficiency in order processing is a prerequisite for customers anyway.

We at VETICA have noticed that more and more end decision makers are rethinking their usual “efficiency patterns” and want to work proactively on increasing their effectiveness. We can actively support the internal organisation with the appropriate methods, a creative mindset and many years of experience.

With our partner STAUFEN Inova, we have developed a screening tool over the last 4 years that allows us to map and assess the efficiency and effectiveness of a company in the shortest possible time and evaluate future potential for increasing the value of companies.