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Advertising & Marketing

Effectiveness versus efficiency- Finding the right balance

Nadim Khoury, Chief operating officer at Grey Group MENA: ‘We need to improve our understanding about the intrinsic inability of companies to pursue efficiency and effectiveness simultaneously’

As costs escalate and companies expand further across borders, it is crucial to optimise expenditure among different agency offices without forsaking production capacity.

As advertising agencies fall into this cluster of companies seeking growth in rising markets, while retaining market share in saturated markets, restructuring their departments to achieve record levels of work has become vital for their sustainability. As such, performance reviews based on efficiency and effectiveness – and the lack thereof – play a big role in what route should be taken.

The terms ‘efficiency’ and ‘effectiveness’ are very often heard when discussing workplace dynamics, and while the two are perceived to be very closely linked, they apparently rest on opposite ends of a restructuring strategy in terms of what course better suits an organisation’s requirements.

While an effective employee generates quality work, an efficient employee produces fast, smart work. An ideal scenario is combining the two results in better, faster production with fewer resources, with efficiency being a necessary but tricky factor, and effectiveness being the force behind sustainable growth. While both elements are vital to the success of any work environment, which of the two is more critical for today’s multinationals?

Effectiveness is measured by the quality of work that results from employees and managers, and is determined by reviewing each employee’s performance and consistency over a certain period. The effectiveness of a company’s workforce has a direct, substantial impact on the company’s products or services, which, in turn, determine how the business is perceived in the eyes of the consumer or client. This, however, could slow down the production rate drastically because too much of an emphasis has been put on the quality and outcome rather than the work process.

On the other hand, efficiency is measured by the duration required by employees and managers to complete their work, with the most efficient staff member requiring the least amount of time and resources as a result of their clever strategies. An efficient workforce is one that is capable of saving time and money, while increasing its productivity and generating more work for the company within its given timeline and budget. However, placing too much of an emphasis on efficiency could result in falling into an efficiency trap, since many managers are so taken with efficiency gains, and this inclination is preventing them from providing their company with differentiation and sustainable growth.

Choosing effectiveness over efficiency is simply too costly for any multinational to handle in today’s markets, unless it has a lot of resources or chooses to merge with another company and combine their capital, workforce, clients and reach. Inversely, while many would choose to downsize their employees and cut down on costs as an efficient means to generate more profit, improving efficiency while neglecting the importance of effectiveness would mean improving productivity and performance within the company alone, while overlooking growth opportunities in the market.

So, when it comes down to the definitive question, is it more important for an organisation to pursue effectiveness or efficiency? A company with vast resources that is seeking aggressive growth could be better off maximising its effectiveness. Whereby, a company that seeks to maximise its outcome without depleting its limited resources could be better off operating in an efficient manner. But, ideally speaking, finding a middle ground between the two is a goal well worth achieving for all multinationals.

We need to improve our understanding about the intrinsic inability of companies to pursue efficiency and effectiveness simultaneously. Maybe this is attributed to an ingrained belief that there is a trade-off between efficiency and effectiveness. It appears that managers are often trapped in the dilemma of answering ‘either’ ‘or’ questions, and face difficulties in embracing the conjunction ‘and’, as the likes of James Collins and Jerry Porras, and Constantinos Markides and Constantinos D. Charitou and previously written.

Source: Grey MENA

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