In the world of optimization, I often hear people use the terms effectiveness, efficiency, and productivity interchangeably. While these words are all related to optimizing overall performance, each has its own specific meaning.
Understanding the true meaning of each of these words can give you an edge when analyzing your life for places you can optimize your performance.
To put it simply, effectiveness is doing things that bring optimal results; efficiency is doing things in an optimal way; and productivity is your output as a result of your effectiveness and efficiency.
These terms are not simply productivity jargon that can be interchanged. Each of them can be measured, which means they each offer a place where you can focus your efforts to improve.
Let’s take a look.
What is Effectiveness?
Effectiveness is the degree to which you are successful in producing the desired result. When you take on any endeavor, you usually have an objective. Effectiveness is comparing what you can get done, with what you actually got done.
To decide whether you were effective in meeting your objective, you simply need to ask, “Did I do what I set out to do?”
While the answer isn’t always yes or no, e.g. I reached 80% of my quota, each answer tells you how effective you were at completing your task. Very effective, or not very effective. This then helps you decide if the activity is the right thing to do to reach your objective versus some other activity that might be of higher value.
Effectiveness can be measured, so this means it can also be improved. It can be measured in values, or merely by the outcome.
When thinking of productivity, effectiveness must come first. This first step lets you know if you’re working on the right thing, to begin with.
Effectiveness is not to be confused with efficiency. While effectiveness measures your degree of success, efficiency measures how many resources you had to use to reach that success.
What is Efficiency?
Efficiency is doing more with less. Or, said another way, it’s a measure of how well you perform a task with the least waste of resources. These resources can include, time, energy, money, materials, and effort.
To increase efficiency, you work on generating more output from the same amount of input. For example, if you can create, store, and share a file paperlessly, you save time, resources, and possibly money. This means you have operated more efficiently.
What is Productivity?
Productivity is the power to produce, especially in abundance. If you are productive, that means you do a lot. If a company is productive, it means they produce a lot.
To produce a lot, you need to achieve the greatest output for your total input.
This sounds a lot like being effective and efficient, doesn’t it?
In fact, being effective and efficient are the ingredients necessary for optimal productivity. You determine productivity (how much you can get done over time) by the end result (effectiveness) versus the effort (efficiency) to achieve the result.
If you focus on improving your effectiveness and efficiency, you will naturally be more productive.
Relationship between effectiveness, efficiency, and productivity
Now that you know the meaning of effectiveness, efficiency, and productivity, let’s look at how you can use these three metrics to improve your outcomes.
When we problem solve, we have a tendency to look for a solution in the area of productivity. But when you can break a workflow, sales process, production line, or anything, down into three parts: effective, efficient, and then productive, you get a more focused way to problem solve. Plus you’ll see areas for improvement you weren’t aware of before.
These three ways of measuring results are related to each other. If you put all three together you have a useful way of looking at your output and determining where you can improve. I like to call it the Effective-Efficient-Productive Equation.
Effectiveness + Efficiency = Productivity
This equation gives you the framework you need to evaluate your initiatives and projects to get the best overall performance.
So, if you can get more done (by being effective) with less effort (by being efficient) you will naturally increase your productivity.
The last piece to this puzzle is finding the tools you’ll need to improve in the areas you identify that need to be improved. There are many systems you can turn to to help improve in the areas of effectiveness and efficiency.
One of my favorites is the GTD system laid out by David Allen in the book, Getting Things Done.
And, as a member of the Paperless Community, it won’t surprise you to hear that the remaining tools I use to optimize my performance are paperless!
Does going paperless help you become more effective, efficient, and productive?
Each of us will use Effectiveness + Efficiency = Productivity differently.
The beauty of the equation is, we can use it in our home lives and our work lives by applying it to things like our workflow, or how regularly we journal.
Here’s an example of how you can use the equation in your paperless home or paperless office to improve your performance and increase productivity.
First, choose an area you want to focus on. For this example, we’ll look at your budget.
Determine the objective of your budget: your ultimate desired outcome and purpose for using a budget. Then, use the equation to analyze your budget by asking yourself how effective the budget is, or asking how effective you are at executing the budget. You might come up with all kinds of questions and thoughts regarding the effectiveness of the activities surrounding your budget.
Take note of the places where you or your budget aren’t meeting the objectives. Now that you’ve looked at your budget through the lens of effectiveness, apply the efficiency part of the equation to your budget.
How easy is the budget to understand? How quickly can you balance the books, cut checks, etc? Again, you’ll come up with many questions and thoughts about how efficient your budget is, the system you use to balance your budget, or how efficient you are at implementing your budget.
Once you have a good list of places you can improve your effectiveness and efficiency, you can begin looking at paperless apps, programs, hardware, and software that will provide ways you can track and organize your budget (effectiveness), or keep better records and issue payments (efficiency). And increasing effectiveness and efficiency means you’re naturally increasing your productivity. You’ll get more done.
This same method can be applied to as many areas in your home and work life as you desire.
Paperless technology lends itself naturally to being effective, efficient, and productive. The apps, programs, software, and hardware we love are full of ways we can be more effective, efficient, and productive.
With the Effective-Efficient-Productive Equation and the Paperless Movement website and YouTube videos, you can get a great start on measuring and optimizing your overall productivity.
You can learn more about paperless tools to increase effectiveness, efficiency, and productivity in The Inner Circle, where I review paperless technology and answer your questions about increasing productivity with paperless technology.