The difference between efficiency and effectiveness

White Stripes, an American rock band, played its "shortest live show ever" on 16 July 2007 in St. John's, Newfoundland. The concert lasted for exactly half a second and consisted of a single C major chord. The justification for the now-famous one-note show is that the band wanted to play in every Canadian province. White Stripes is an excellent example of the quest for efficiency and effectiveness that we all pursue these days. Try to think of two other qualities that are so sought-after and aggravating all at the same time. After all, how romantic is an efficient lover, and how enjoyable is an effective dinner?

DVDs, the war on terror, text messaging, global warming, the blogosphere, digital television, the Internet, hybrid vehicles, 3G mobile phones. New phenomena and behaviour patterns have sprung up like wildfire over the past decade. Richard Watson, a trend forecaster, says that international firms tripled the pace of their innovation from 1900 to 2000. As individuals, we are expected not only to keep up with a globalised, digitalised world, but take charge of our busy personal lives – look after our children, read books, follow the news, work out, nurture our relationships. Inefficiency is the villain that haunts us at every turn.

But efficiency and effectiveness are slippery concepts. You're effective if you accomplish what you set out to do regardless of how you went about it. But Swedish companies are increasingly stressing the effort more than the goal itself.

The business world is abstract. It's very difficult to see the big picture when it comes to a firm's complex network of clients and suppliers. Moreover, the products of today are often invisible services and information as opposed to tangible objects.

Because the brain is ill-suited to think in abstract terms, we often look for concrete symbols. We represent love with red hearts. We turn time into a continuum where certain things are behind us (the past) and certain things are in front of us (the future).

These days business is most frequently compared with the world of athletics. We discuss the salaries of executives as if they were hockey players. Supervisors encourage employees to "run faster" and "play like a team." Kick-off meetings invite athletes to supply inspiration.

But equating the world of athletics and business has one basic fallacy. Success in athletics is mostly based on performance. If you want to be an Olympic skier or skater, you'd better be out there on the slope or ice when nobody else is around. Train harder. perform better.

The business world puts more emphasis on innovative thinking. Change your perspective, set challenges, see hidden patterns and opportunities.

Japan has long had a performance-based business sector. I have seen Toyota employees who refuse to go home. Nobody wants to "let the team down." Death from overwork (karoshi) has been a problem since the 1960s. Swedes come down with burn-out, a milder form of the same disease, as the result of a business sector that stresses effort and performance instead of objectives. Building Information Modeling (BIM) distinguishes between efficiency and effectiveness.

Efficiency is defined as "doing the thing right."
Effectiveness is defined as "doing the right thing."

The White Stripes one-note-show is a perfect example of doing the right thing. If you want to play in every Canadian province, you have to adapt your format.

Name: Magnus Lindkvist
Profession: Trend watcher
Speciality: Travels around the world to study what people want to buy, how they want to live, how they see the future, and why.