{"id":38660,"date":"2021-06-06T21:00:00","date_gmt":"2021-06-07T01:00:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=38660"},"modified":"2021-08-14T13:01:46","modified_gmt":"2021-08-14T17:01:46","slug":"peter-drucker-efficiency-and-effectiveness","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/peter-drucker-efficiency-and-effectiveness\/","title":{"rendered":"Peter Drucker: Efficiency and Effectiveness Dichotomy"},"content":{"rendered":"\n

What is the difference between efficiency and effectiveness<\/a>? Which attribute do you think is more important when it comes to organizational performance?<\/p>\n\n\n\n

When it comes to results, Drucker differentiates between efficiency and effectiveness. Efficiency is getting a lot of things done, while effectiveness is choosing and getting the right things done.<\/p>\n\n\n\n

Keep reading to learn about Peter Drucker’s efficiency and effectiveness dichotomy.<\/p>\n\n\n\n\n\n\n\n

Peter Drucker on Efficiency vs Effectiveness<\/h2>\n\n\n\n

Further, Drucker writes that effectiveness, unlike innate attributes such as talent and intelligence, entails a set of practices you can learn. In fact, it\u2019s essential to learn effectiveness because without it, talent and intelligence won\u2019t get you anywhere. You need effectiveness to magnify and translate them into results.<\/p>\n\n\n\n

Individual effectiveness is necessary for organizational<\/em> effectiveness as well. Drucker argues that rather than hiring for talent<\/a>, charisma, or a broad set of skills, organizations would be better off if they prioritized effectiveness: Hiring for and developing individual effectiveness strengthens organizations by increasing their performance and results. In turn, successful organizations\u2014businesses, nonprofits, government, and educational institutions\u2014strengthen the social order and provide services and products valuable to society.<\/p>\n\n\n\n

Hiring for Charisma Doesn\u2019t Work<\/strong>

Companies and their boards are often prone to hiring charismatic, high-profile, attention-getting CEOs. But Drucker wrote in 2005 that in 65 years of interviewing executives, he found no common qualities<\/em> for success<\/a> (neither charisma nor anything else). Top-performing executives varied in personality and style. Rather, what they had in common were key practices<\/em> for effectiveness.

Similarly, Jim Collins writes in Good to Great<\/em><\/a> that charisma is overrated in hiring CEOs; some of the best CEOs he found were unassuming but disciplined and resolute. In Quiet<\/em><\/a>, Susan Cain quotes a study of 128 executives showing that extroverted or charismatic leaders were no more effective than introverts. In some instances, introverted leaders performed better. Further, psychologist Carol Dweck writes in Mindset<\/em><\/a> that hiring for charisma alone can lead to disaster, with the fall of Enron due to the arrogance of its leaders (who ignored the company\u2019s issues) as a case in point.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
Defining Personal Effectiveness Today<\/strong>

In the years since Drucker defined effectiveness, much more has been written about what it is and how to achieve<\/a> it. Many self-help authors on individual effectiveness define effectiveness either in terms of productivity (Drucker\u2019s efficiency), or as a collection of personal qualities and leadership ability.

For example, Getting Things Done<\/em><\/a> focuses on effectiveness as productivity, but Stephen Covey\u2019s The 7 Habits of Highly Effective People<\/em><\/a> focuses more broadly on qualities and behaviors such as developing initiative, collaborating, and communicating. In The 21 Immutable Laws of Leadership<\/em><\/a>, John Maxwell argues that effectiveness is contingent on leadership ability, then explains the behaviors, attitudes, and skills necessary for leadership\u2014for example, planning, prioritizing, and persistence.\u00a0

In the trade-off between efficiency and effectiveness, Peter Drucker emphasizes the importance of focusing on the latter. His practical definition of effectiveness focuses on doing<\/em> rather than being or becoming <\/em>a certain type of leader.

Defining Organizational Effectiveness Today<\/strong>
Most current definitions of organizational effectiveness incorporate or morph into efficiency\u2014for example, a typical definition of effectiveness is how efficiently<\/em> an organization meets the outcomes and objectives it has defined for itself. However, efficiency is unsustainable\u2014once you\u2019ve maximized your process, there\u2019s nowhere else to go; further, as your competitors improve, your process is no longer a differentiator. In contrast, Drucker\u2019s definition of effectiveness\u2014focusing on what an organization can do better rather than faster or cheaper\u2014lends itself to innovation and ongoing growth.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Drucker\u2019s Five Practices for Effectiveness<\/strong><\/h3>\n\n\n\n

This section presents an overview of Drucker\u2019s five practices for effectiveness and how they\u2019re viewed today. <\/p>\n\n\n\n

The practices are interconnected, and they revolve around strategic thinking and prioritizing\u2014that is, determining the highest-impact things you can do and making sure you get them done.<\/strong> Practices 1, 2, and 5\u2014managing your time, doing key tasks, and making good decisions\u2014all involve prioritizing; maximizing<\/a> strengths (practice 4) requires knowing your unique contribution (practice 3) because it likely will relate to a strength. Here\u2019s a brief look at each practice, then and now.<\/p>\n\n\n\n

1)<\/strong> Manage your time<\/a>:<\/strong> Know exactly how you\u2019re using your time. Work diligently to manage the limited amount of your time you can control. <\/p>\n\n\n\n