Most of us know the difference between effectiveness and efficiency. Effectiveness is doing the right things, while efficiency is doing things right. Their intersection yields high productivity. I even wrote a book about it: Doing the Right Things Right: How the Effective Executive Spends Time. But many people remain confused about the difference between productivity and efficiency. Too often, the terms are viewed as synonyms. They’re not. They’re related but certainly not interchangeable. Indeed, in some cases, they couldn’t be farther apart.
Productivity is simply output per unit of time. Efficiency is the best possible output per unit of time, i.e., doing things right. When you do the right things right, you hit your maximum level of efficiency and productivity.
For example: If Andy produces 1,000 lines of code in a week while Brad produces 800 lines, it may look like Andy is the more productive worker; that’s true if he has a low error rate. But if his code requires 30 hours of debugging, and Brad’s works the first time it compiles, Brad is clearly far more efficient than Andy — and this plugs straight into his true productivity, his penchant to do the right things right. Ultimately, he’s more productive than Andy, though for some observers this fact may be easy to miss.
Here’s how to tell the difference between plain productivity and empowering efficiency:
- Productivity is quantity; efficiency is quality. The biggest difference between productivity and efficiency is simple: productivity measures bulk output; efficiency measures the proportion of output that works as intended. While it’s true, sometimes, that “quantity has a quality of its own,” the statement is more applicable to warfare than business. It’s often wasteful and hinders any attempt to maximize “right the first time” quality.
- Productivity is performance; efficiency is how well you perform. Just because you perform something doesn’t mean you do it well, though it may prove workmanlike. Consider daytime TV actors vs. their movie and TV counterparts. Daytime actors produce a new show every weekday. They tend to do a decent job, no knock to them; but movie and TV actors have weeks or months to perfect their work, plus special-effects budgets.
- Productivity doesn’t take underlying costs into account; efficiency does. Consider the coding example above. Andy did 1,000 lines of code that week while Brad did 800, so Andy was obviously the winner of the productivity award. But his code was so buggy it doubled the cost of production. Meanwhile, Brad’s code worked right the first time at half the cost of Andy’s. His more careful, methodical work saved money instead of just getting the product out the door ASAP.
- Productivity is a raw measure; efficiency is a refined one. Raw productivity shows how much someone accomplished. Efficiency reflects productivity that generates profit and should always serve as an input to productivity planning — so that, ironically, it becomes an output as well. Otherwise it’s Andy and Brad again. Productivity is just output; efficiency includes built-in quality control. It may not help speed productivity, but it ensures that what you produce fits your needs and requirements the first time, so you don’t have to spend more resources fixing it.
Productivity + Efficiency = True productivity
Both productivity and efficiency matter, but in most fields (especially traditional manufacturing), productivity without efficiency is a business killer. So what if you produce 100 machine parts if only 25 work as designed? Stretching to increase your productivity, whether your product is widgets, computer code, white papers, or archaeological reports, can hurt you more than maintaining a slower, more deliberate pace — because when you work too fast, you make mistakes you then have to spend precious resources to repair. If you don’t, and the products get to customers who bring the errors to your attention in some dramatic way, then your business takes a hit and so do you. Look what happened to the Ford Pinto in the 1970s.
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Do you really want a millstone like that around your neck when you can avoid it by intentionally coupling productivity and efficiency, instead of just assuming if you have one, you have the other? It’s clear that efficiency and productivity must be inextricably linked if you want to achieve true productivity — but they can exist separately, sometimes to devastating effect.
This was originally published on Laura Stack’s The Productivity Pro blog.