Sunday, January 15, 2006

Effectiveness vs Efficiency

Effectiveness is doing the right things. Effectiveness is doing things right. Doing the wrong things right is disastrous. Peter F. Drucker
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Management is doing things right; leadership is doing the right things. Peter F. Drucker
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http://www.peter-drucker.com/books/0887306128.html

Effectiveness Can Be Learned
To be, effective is the job of the executive. "To effect" and "to execute" are, after all, near-synonyms. Whether he works in a business or in a hospital, in a government agency or in a labor union, in a university or in the army, the executive is, first of all, expected to get the right things done. And this is simply that he is expected to be effective.

Yet men of high effectiveness are conspicuous by their absence in executive jobs. High intelligence is common enough among executives. Imagination is far from rare. The level of knowledge tends to be high. But there seems to be little correlation between a man's effectiveness and his intelligence, his imagination or his knowledge. Brilliant men are often strikingly ineffectual; they fail to realize that the brilliant insight is not by itself achievement. They never have learned that insights become effectiveness only through hard systematic work. Conversely, in every organization there are some highly effective plodders. While others rush around in the frenzy and busyness which very bright people so often confuse with "creativity," the plodder puts one foot in front of the other and gets there like the tortoise in the old fable.

Intelligence, imagination, and knowledge are essential resources, but only effectiveness converts them into results. By themselves, they only set limits to what can be attained.

WHY WE NEED EFFECTIVE EXECUTIVES
All this should be obvious. But why then has so little attention been paid to effectiveness, in an age in which there are mountains of books and articles on every other aspect of the executive's tasks?

One reason for this neglect is that effectiveness is the specific technology of the knowledge worker within an organization. Until recently, there was no more than a handful of these around.

For manual work, we need only efficiency; that is, the ability to do things right rather than the ability to get the right things done. The manual worker can always be judged in terms of the quantity and quality of a definable and discrete output, such as a pair of shoes. We have learned how to measure efficiency and how to define quality in manual work during the last hundred years-to the point where we have been able to multiply the output of the individual worker tremendously.

Formerly, the manual worker-whether machine operator or front-line soldier-predominated in an organizations. Few people of effectiveness were needed: those at the top who gave the orders that others carried out. They were so small a fraction of the total work population that we could, rightly or wrongly, take their effectiveness for granted. We could depend on the supply of "naturals," the few people in any area of human endeavor who somehow know what the rest of us have to learn the hard way.

This was true not only of business and the army. It is hard to realize today that "government" during the American Civil War a hundred years ago meant the merest handful of people. Lincoln's Secretary of War had fewer than fifty civilian subordinates, most of them not "executives' and policy-makers but telegraph clerks. The entire Washington establishment of the U.S. government in Theodore Roosevelt's time, around 1900, could be comfortably housed in any one of the government buildings along the Mall today.

The hospital of yesterday did not know any of the "health-service professionals," the X-ray and lab technicians, the dieticians and therapists, the social workers, and so on, of whom it now employs as many as two hundred and fifty for every one hundred patients. Apart from a few nurses, there were only cleaning women, cooks and maids. The physician was the knowledge worker, with the nurse as his aide.

In other words, up to recent times, the major problem o organization was efficiency in the performance of the manual worker who did what he had been told to do. Knowledge workers were not predominant in organization.

In fact, only a small fraction of the knowledge workers of earlier days were part of an organization. Most of them worked by themselves as professionals, at best with a clerk. Their effectiveness or lack of effectiveness concerned only themselves and affected only themselves.

Today, however, the large knowledge organization is the central reality. Modem society is a society of large organized institutions. In every one of them, including the armed services, the center of gravity has shifted to the knowledge worker, the man who puts to work what he has between his ears rather than the brawn of his muscles or the skill of his hands. Increasingly, the majority of people who have been schooled to use knowledge, theory, and concept rather than physical force or manual skill work in an organization and are effective insofar as they can make a contribution to the organization.

Now effectiveness can no longer be taken for granted. Now it can no longer be neglected.

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http://www.thinkingmanagers.com/blog/2005/11/23/peter-drucker-effective-efficient/

Peter Drucker - Efficient v Effective
November 23, 2005

Filed under: Management Gurus, Management — Bob @ 9:58 pm
I promised to let you into the late Peter Drucker’s secrets of managing effectively. First, how good are you at the five functions of the manager?

1. setting objectives
2. organising the group
3. motivating and communicating
4. measuring performance
5. developing people

For each of the five, ask two questions: am I truly effective (doing the right thing) or am I merely efficient (doing things right)? Score yourself on effectiveness and efficiency on each of the five functions on a scale of 0–10: 35 or below is inadequate. Rectify fast! 35-70 is average to good. Improve! And 75 and above is great, but don’t relax!

To set objectives, do a feedback analysis on a regular basis. Whenever you take a key decision or action, write down what you expect to happen. Review results at regular intervals and compare them with expectations. Use this feedback as a guide and goad to reinforce strengths and eliminate weaknesses.

Then organise yourself. Ask three absolutely basic and marvellous time management questions.

o What am I doing that does not need to be done at all?
o What am I doing that can be done by somebody else?
o What am I doing that only I can do?

Obviously, you scrap the first, delegate the second, and concentrate only on tasks in the last question. You’ll free up huge quantities of time, but watch out, the unnecessary time-wasters keep on creeping back – shoot ‘em on sight.

Motivating hinges on people identifying themselves with the organisation and their own group, and with its products and/or services: while accepting individual and group responsibility for the quality and performance of their work. The key tools are the three Ps: Pay, Placement and Promotion. That means how you reward people, put the round and square pegs in the appropriate holes, and raise people to realise more of their potential.

Don’t measure performance by financial numbers alone. Look for indicators like market share, quality ratings by customers, successful innovations, competitive rankings, customer satisfaction, employment morale, cost of waste, use of capital, productivity. It’s a measure of the complexity of the management task that you need to get all these indicators moving upwards at the same time.

Finally, developing yourself and others requires constantly taking action to improve – and there will ALWAYS be room for improvement. So take the six step action plan:

1. Identify your strengths
2. Improve your strengths
3. Increase your knowledge
4. Eliminate bad habits
5. Practice good manners
6. Avoid weak areas

It’s no use just concentrating on yourself; being a good deed in a naughty world won’t get you far. Everybody should have their own individual action plans to guide and improve their performance, making the best use of time by concentrating on strengths and wasting as little as possible on areas of low performance.

Drucker, as you can see, was a highly pragmatic man. Pragmatic means ‘concerned with what is practicable, expedient or convenient, or with practical consequences rather than with theories and ideas’. Drucker actually combines both - and that’s how you combine efficiency with effectiveness.

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