Effectiveness is simply defined as doing the “right” things, while efficiency revolves around doing things “right”. In the broader context of business, effectiveness is the extent to which a task or process (or performance) produces a desired result “successfully” or in a better way. Efficiency is the ability to accomplish a task or process (or performance) with a minimum wastage in terms of time, economic resources, and effort or performance competency.

In this sense, effectiveness is about doing something with a sense of innovation and ability to find better methods towards cost savings, speed of delivery, smoother processes, etc. It involves adaptation to changes in the business environment and concentration on long-term objectives. Efficiency is differently oriented: it mainly focuses on standardized or repetitive processes involving pre-defined tasks and performance criteria. Therefore, it is more about the short term, and does not generally encourage thinking out of the box.

For example, a production line worker is said to be efficient if all steps and procedures are properly performed as per the set policies/ criteria, etc. However, an effective worker is one who could figure out means to reach the desired results with shorter time, less resources, and innovative methods.