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Performance Efficient and Cost-Effective


When I use the phrase “organizational change management” (OCM), I say that the process makes an organization more “performance efficient” and “cost-effective.” But what is the difference between what is “efficient” and what is “effective?” The words effective and efficient both mean "capable of producing a result," but there is an important difference. Effective means "producing a result that is wanted". Efficient means "capable of producing desired results without wasting materials, time, or energy".

The difference is that when something is effective it produces a result even if it takes some unnecessary resources to do so. When something is efficient, not only does it produce a result, but it does so in a quick or simple way using as little material, time, effort, or energy as possible. The following example sentences show how the two words are used.

  • The 200-page instruction manual was effective [=successful] in teaching the teen to repair the car himself, but it would have been more efficient [=faster and easier] for someone to show him.

  • His disorganized method of cleaning the house was effective but it was not efficient; in the end, the house was clean, but it took much longer than it should have.

  • Walking may be an effective way to get to the office, but driving is more efficient. Both methods will get you there, but driving takes less time and energy (Carr, 2016).

The word effective puts more attention on the actual ability to produce a desired result. The word efficient puts more attention on the lack of waste in producing that result. So, that means “performance efficient” it means that the performance will produce the desired result without without wasting materials, time, or energy. On the other hand, “cost effective” means it will produce the desired result cost wise that you want.

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