Efficient vs. Effective

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Efficient vs. Effective

“Efficiency is doing things right; effectiveness is doing the right things.”  -- Peter F. Drucker

At first glance, the quote looks like it’s right out of a fortune cookie instead of being an insight from one of the most influential business minds of the 20th century.  A simple flip of two words, but also the differentiating factor between good and great.  So then; is it better to be efficient, or effective?

Efficient vs. Effective

Drucker’s premise goes right along with the cliché “Work smarter, not harder.” In the contract world efficient is making 20 bids a day to potential clients, where effective is making five bids to clients ready to make a decision. 

It’s about creating a level of management that produces successful results, not simply filling trackers and logs to monitor performance. It’s about getting the right clients which allows you to produce quality work, not getting clients simply to produce quantity.

In the freelance realm, there is a fine line between bidding low to get the job and selling out. Although many freelancers and contractors don’t manage others, they do manage themselves, their brand, their time, their clients and their payrolls.  

It is the effective person, manager, company that finds immeasurable levels of personal and business success.  The efficient person, manager or company, finds a moderate level of success, but may not have the personal gratification that goes along with it.

A Startup Example

For example, a small startup content marketing firm finds an opportunity working with a B-list celebrity. The negotiated rate is low, but the potential for networking, experience and CV highlights is great.  

The 10 hours a month sounds doable and starts off as a positive experience.  But itt soon becomes apparent that the demands of the client no longer fit into the $20 per hour price range and are quickly exceeding the agreed upon 10 hours per month.  More profitable and long-term clients are being neglected, and for what; a chance encounter with a high dollar client? 

So what do you do with a client like this? 

The efficient manager, continues to work with them, after all it is another client and another paycheck (albeit a small one), risking the integrity of the company by continuing to neglect long-term clients.  

The effective manager has a no-holds-barred conversation with the client explaining that the level of work warrants more time, more money, and probably both.  If none of the options are agreed upon, the client is dismissed.   

Chalk it up to experience, to a learning moment, an opportunity to gain a better understanding of the difference between effective and efficient. 

Learn to become the effective manager. It doesn’t guarantee that you won’t find some low-balling, demanding, clueless client along the way, but hopefully you will be able to the right thing, and do it quickly.

What kind of “manager” are you? Are you comfortable just doing things right? Or do you want to succeed knowing that you are doing the right things?

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