Efficiency vs. Effectiveness

Effectiveness is doing the right thing. Efficiency is doing things right. Being efficient without first being effective is waste. In other words, doing the wrong thing well is wasted effort. Most experienced business people know this, and often still forget it.

Not to get on a Starbucks focus, but they have reminded me about this again. As most of you know, Starbucks hit on some difficult times, which got Howard back into the company. Howard is all about Effectiveness and, by his own admission, not really focused on Efficiency. Apparently Howard has been convinced that being efficient is mandatory and does not have to undermine effectiveness.

Examples of some of the new efficiency moves at Starbucks include:

1. Getting better at consistently and efficiently delivering supplies to stores

2. Getting baristas to follow a consistent 6-step process  to brew coffee

3. Reducing the time to set up the pastry case by 40%

4. Adding data gathering that can be used to create useful information at a level above a store or even a region to allow better decision making

The key for Starbucks is that Howard won’t let them forget that Effectiveness trumps Efficiency, but, in today’s world Effectiveness alone is not enough.


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