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CEO Insider

Productivity or Efficiency: Which is Better for Business?

In 1978 when I was 8 years old my family travelled around Europe for 3 months towing a caravan. Looking back, my parents were extremely brave and adventurous and quite possibly a little insane to drag 3 young children (11, 8 and 4) from church to castle to gallery to vineyard to church to castle….and back again across multiple countries where we spoke not a word of the local language and when we said we were ‘Australian’ most people thought we were ‘Austrian’ and spoke to us accordingly. There were seemingly endless hours sitting in the backseat of the old pale blue Volvo as we transversed Alps, field after field of sunflowers, or the back roads to avoid taking on the lunatics on the autobahn.

One thing I remember about the long hours in the car was a game my mum invented that had something or other to do with proverbs. It is fair to say that I don’t actually remember the rules or the purpose of the game, but four decades plus later I am still able to reel off a ridiculous number of proverbs to suit any occasion. It’s a skill.

And on reflection, a lot of proverbs – at least the 4 dozen or so inked into my memory – have a lot to say about being productive or about being efficient. Which is kind of funny, given I am now a time management specialist.

I haven’t thought about those proverbs in a long time, but then a week or so ago, a client reached out to me with this question: I am struggling to understand the difference between efficiency and productivity: how are they different? And two proverbs immediately sprung to mind:

  • Don’t put the cart before the horse; and
    Make hay while the sun shines

But which is focussed on efficiency and which on productivity?

My client’s question was a great one – because I see so many people confuse these two concepts. Often, leaders talk in terms of ‘productivity’ when they really mean ‘efficiency’, or vice versa, or they simply interchange the words assuming that they mean exactly the same thing. But these two words don’t mean the same thing, they aren’t interchangeable, and as a leader it’s important to understand the difference so that you can maximise both the productivity and the efficiency elements of your business.

Efficiency means doing the same with less – where you expend less (in dollars or man hours) with the aim of achieving the same result. For example, you are looking to embrace ‘efficiency’ where you:

  • reduce staff numbers (a.k.a redundancies) but aim for the same results
  • remove unnecessary hurdles/ steps/ approvals so your people can get on with getting their job done
  • create templates and document repeatable processes to stop people recreating the wheel
  • remove steps from an established process (to save time/ reduce costs) without impacting the outcome

Effective efficiency initiatives take costs out of the business.

On the other hand, Productivity means doing more with the same – where you produce more (outcomes/ products/ services/ revenue) with the same amount of work or the same number of staff. For example, you are looking to embrace ‘productivity’ where you:

  • create a workplace culture that encourages your team to: properly plan their day/ week/ month/ year; control their own agenda; and focus on the right tasks at the right time
  • implement a team Playbook or suite of Protocols where you encourage, for example: single tasking rather than multitasking; individuals to work on their high value tasks when they are at their most energetic; your team to approach their day as a series of 100 metre sprints with regular rest breaks as opposed to a marathon with no rest breaks; periods of high value work where interruptions are discouraged and devices are switched off

Effective productivity initiatives add value back into the business.

And this is where proverbs come in handy to help explain the difference:

‘Don’t put the cart before the horse’: is an efficiency proverb, advising us not to do things out of sequence. In every process, whether you are dealing with a cart and horse or the billing and invoice process, there is an order that must be followed.

‘Make hay while the sun shines’: is a productivity proverb, urging us to take advantage of our working conditions. If the sun is out, reap the hay; if you are feeling energetic and enthusiastic and creative and in flow, then this is the absolute best time to do your hardest most impactful revenue generating work.

This is the way I like to think about it: you want your processes to be EFFICIENT and you want your people to be PRODUCTIVE. To create the best possible business you need both.

Written by Kate Christie. Have you read?
Best Countries For Raising Kids.
Best Countries to Headquarter Multinational Corporations (MNCs).
Best Countries For Retirement.
Best Countries For International Students.

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CEOWORLD magazine - Latest - CEO Insider - Productivity or Efficiency: Which is Better for Business?
Kate Christie
Kate Christie is the Founder and CEO of Time Stylers, a time management specialist, the best selling author of 4 time management books and a global speaker.

Kate Christie is an opinion columnist for the CEOWORLD magazine. Connect with her through LinkedIn.