Efficiency vs. Effectiveness: My 400+ Hour Annual ROI

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What’s the difference between effectiveness and efficiency?

Efficiency and effectiveness are two buzzwords that can be hard to articulate. But it’s not impossible!

Efficiency is the process of getting things done with the least amount of effort. But effectiveness refers to how well an activity or work product accomplishes a goal.

One of my favorite quotes is “Efficiency equals effectiveness.”

Why do in 3 hours what can be done in 1?

But we shouldn’t focus on effectiveness or efficiency solely. Both will lead to maximum productivity.

We can use fewer essential resources to reach the desired result. Yet, we spend more time to achieve success.

In this article, I discuss how to determine the right balance of effectiveness and efficiency. The goal is to become effective leaders.

After reading this, you’ll know how to improve efficiency and effectiveness. Then, you can work on achieving your goals.

Becoming Effective Leaders by Increasing Productivity

Becoming Effective Leaders by Increasing Productivity

As business operators, we all want to be effective leaders. But with limited resources available, this can sometimes feel impossible.

Effectiveness is within reach. We’re determining the optimal way to achieve an intended result. Thus, we can accomplish our ultimate goal with less time and resources.

We might want to improve customer satisfaction in the least expensive way. Or enhance a business process we haven’t been performing efficiently.

The right things don’t always have a clear direction.

We have to use decision-making as effective leaders to decide where to invest time for the best ROI. Our effectiveness depends on it!

Our true value as business operators is that we look for ways of achieving goals. But to do so in ways that save time, we’re keeping track of our efforts as we grow aggressively.

As effective business owners, we’re completing activities with the least waste possible. We know that without this idea in mind, we leave cash on the table.

Finding a Good Balance Between Effectiveness and Efficiency

Finding a Good Balance Between Effectiveness and Efficiency

In the real world, nothing efficient is perfect. Efficiency means that we’ve worked to achieve something.

Something that’s as close to perfection as possible.

Finding a good balance between the right task and how we can efficiently spend time is challenging. But we remain confident in our ability to complete a task.

Regardless of whether it’s the wrong thing in the least expensive way or the right thing in record time.

But completing activities in the least expensive way requires investment. Investment of our time and other resources.

We need to invest in the right things.

We can’t expect incredible results when only effectiveness drives them.

Each effort we exert on each wrong thing can lead us to the right task. But this doesn’t always promote effectiveness and efficiency.

One of the most limited things we have is time. And when we invest it in the wrong things, we can’t expect to be efficient and use fewer resources.

Becoming More Competitive

To get in a competitive position, we need to go beyond our focus on market trends. We need to seek feedback from our teams. This can reveal our effectiveness AND efficiency. Only then we’re no longer focusing on effectiveness or efficiency alone.

Find a solid balance between effectiveness and efficiency; they’re not mutually exclusive. In other words, let’s say we want to become more efficient. We need to know that effectiveness refers to how efficient we are.

Whether it’s a task or organization, there’s no difference. Achieving goals means doing the right things efficiently and effectively.

To achieve positive results in every aspect of our performance in the best possible manner. By being efficient as we avoid wasting what we have!

Keep in mind, as we work for our market share, we don’t have to choose between the optimal way and record time. While being efficient can mean using less time, each solution is unique to the problem at hand.

How Companies Boost Efficiency and Effectiveness

How Companies Boost Efficiency and Effectiveness

Between the operations and sales of companies, processes are crucial. Setting Standard Operating Procedure for every aspect of a business is one of the best ways to increase company efficiency and effectiveness.

With SOPs in place, you maximize your use of resources. Whether budget, technology, or time,  you’ll be doing the most with what you have.

In short, inefficiencies can cost your company time and resources. Not to mention lead to lost revenue.

As more people use inefficient processes, this creates a ripple effect. It’s hard for any company to handle.

It might not seem like it’ll damage the effectiveness and efficiency of an operation. But in reality, it’s just a matter of time.

Effectiveness vs. Efficiency: Effectiveness Converts, But is Efficiency More Important?

Effectiveness vs. Efficiency: Effectiveness Converts, But is Efficiency More Important?

Companies are constantly seeking ways to increase efficiency and effectiveness. But which one takes priority?

If you ask me, I say both! Efficiency equals effectiveness. As long as we’re doing more with less – then that’s an investment with returns. But then we have to ask ourselves, “What’s our ROI?”

Here’s an example of my ROI when I took steps to make myself more efficient and effective.

How I Increased My Efficiency AND Effectiveness

How I Increased My Efficiency AND Effectiveness

So I’ve been steadily increasing my investment in my health. But my goal is to increase my efficiency and effectiveness in all aspects of my life.

For example, at the beginning of the pandemic, I decided to become more healthy. But between lifting and cardio training, my workout routine took more than two hours at the start of 2020.

Time is Cash

I was gaining muscle. I was feeling great!

But the time I was investing was excessive. There simply weren’t enough hours in a day.

For example, I was spending 2+ hours in the gym 5 or 6 days a week. With the time it took to commute back and forth and the post-workout shower, I was spending 3+ hours on each session.

And time is money!

After I calculated over 15 hours of time dedicated to my workout a week, I knew I had to rethink my strategy. But it wasn’t until the gym shut down for COVID that I decided to make an investment in myself.

My Decision

I started to look at gym alternatives and landed on a recumbent bike.

I changed my focus from muscle gain to weight loss. Now I spend 1 hour per day on cardiovascular training and burn 750+ calories daily.

Paired with a post-sesh shower and coffee, I’m back to work in fewer than 2 hours.

Breaking Down My ROI

My ROI here is impressive. I invested $1,200 in a recumbent bike for an ROI of 1.5 hours daily, five or six days per week.

That’s an average ROI of 7.5 to 9 hours per week!

In this example, I made an investment of $1,200 and increased my annual productivity by at least 390 hours. But I expect to save 400+ hours I’ll reinvest elsewhere.

While it’s not the holy grail of ROIs, I’m proud of it!

What Does it Mean to Be Efficient?

What Does it Mean to Be Efficient?

What does it mean to be efficient anyway?

Efficiency is the act or process of using resources in the best way possible. Efficiency is a measure of effectiveness and the ability to do something without waste. This means no wasting time, energy, money, or other valuable resources.

Effectiveness vs. Efficiency: The Domino Effect

Effectiveness vs. Efficiency: The Domino Effect

The Domino Effect is a theory that highlights how one action leads to others. One thing can knock down 10 – or more!

Just like with a line of standing dominos, the energy from the first action spreads. It goes beyond what one action alone should achieve.

And this is a theory we can use in our lives as entrepreneurs.

Change How You Ponder Your Efficiency & Effectiveness!

Think, “What’s my first domino?” What can you do that will have the most significant impact on your success?

I’m not saying this will be easy. It won’t be – but there are ways we can do it. Keep this in mind as you work towards something BIG!

Louis Levey

Louis Levey

Louis Levey is the Content Success Manager and Founder at No Strings Content. He's passionate about helping businesses use content to attract, educate, and convert audiences. His hometown is Boca Raton, Florida, but he currently lives and works remotely in Chiang Mai, Thailand.

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