Managers and leaders find it difficult to put into practice the effective organisation phenomenon. The latter situation is complicated further by the free manner in which the words effective, efficiency, and efficacy are used in our lexicon. In many instances, they are used interchangeably – adding to the confusion.
Depending on the context in which the word effectiveness is used, effectiveness can mean: doing the right things or achieving predictable outcomes. Effectiveness is different from efficiency which is about doing things in the right manner. Efficiency is a resource deployment matter and should be treated as such. Indeed, it is possible to achieve a state of effectiveness but in a very inefficient manner. The INGO has always been accused of achieving effectiveness but at astronomical and unsustainable cost.
Efficacy, on the other hand, is the extent to which the desired result is achieved – efficacy is, therefore, an outcome-effect related issue.
Someone may be effective and efficient and will achieve the outcome you want; they may also be effective and inefficient, but still, achieve the desired result.
So, whenever we discuss the effective organisation, we have to tag along efficiency and efficacy. Effectiveness cannot be looked at in isolation. It is a system of ‘things’ that in the ideal world, should end in a state of efficacy.
While many organisations claim to be effective, at the Effectiveness lab, we appreciate the fact that it is systemic-effectiveness that results in efficacy and therefore SMART outcomes; the latter is only possible when a significant level of effectiveness’ twin, efficiency, is attained. Effectiveness is, therefore, systemic.
The Effectiveness lab shall dedicate part of its 2017 work to serialising the elements that make an organisation effective – in the Effectiveness lab’s lexicon, such an organisation achieves SMART outcomes and is labelled the SMART organisation.
If a SMART organisation is indeed systemic as outlined above, then it is also bionic in nature. We consider the SMART organisation bionic because, like living organisms, the finer and interconnected elements of such an organisation present in the form of an intertwined system. Indeed, the whole is greater than the sum of the parts.
The bionic organisation, like the human body, functions well when all the vital elements (vitals in humans) are operating optimally. The Effectiveness lab outlines four organization-vitals (OV’s) that are required for the bionic organisation to function optimally:
- Leadership
- Strategy
- Design (Architecture)
- People
All the four OV’s need various levels of orchestration, moreover from a common pedestal, for them to support the attainment of the ideal state of bionic-balance (BB) at the organisation. The orchestration is a function of sustained and effective leadership and systems management. The above four OV’s are critical enabling factors in a bionic organisation and have many other sub-elements below them as we shall elaborate in later series
You may have witnessed organisations that are well resourced, perhaps with a strong brand, as well as healthy bottom-lines, but still, struggle to operate above the sub-optimal level. Such organisations or individuals believe they are doing everything right, but fail to achieve SMART organisation status and ultimately organisational bionic-balance. Institutions in this category will learn if they bother to conduct research, that they are as a matter of routine managing the four OV’s above as stand-alone silos. Instead, the vitals ought to be managed under the bionic entity framework with vertical, horizontal and other hybrid interconnections. It is an intertwined architecture.
One of the biggest challenges facing the global charity industry is identifying a practical solution to becoming both effective and efficient and still attain the desired state of efficacy. The global charity industry is worth billions of dollars and more often than not, performs admirable life-saving work. We all know that. However, questions have been asked, including by charities themselves, whether the same job and efficacy could be attained at a lower cost – i.e. via more efficient means. The global charity industry configuration is under the spotlight. Perhaps, charities may learn a thing or two from the 2017 Effectiveness lab’s work, specifically becoming effective by achieving and sustaining organisational bionic-balance.
All the above talks to the so-called systemic approach to managing and leading the modern organisation. The siloed approach no longer works in a 24/7, fast-changing global business environment. It surprises us at the Effectiveness lab when managers and leaders, even after getting into trouble, choose to look at organisations as groups of vertical as opposed to interconnecting silos. We regularly witness states of organisational bionic-imbalance, with standalone organisational vitals.
Well, please note and learn, that it has to be a systemic approach. A systemic approach considers the organisational vitals and processes, before the outcome – whether it’s bottom line or impact/outcome for the business and charity sector friends respectively. It is assumed that when the organisational-vitals and their interconnections are right, the end result from such organisational bionic-balance is positive – be they profit or impact on people.
The systemic approach supporters continuously evaluate and tinker with the horizontal interconnections between the organisational-vitals, to derive the best outcomes and attain the bionically balanced and SMART organisation status
We look forward to having you as we delve into: The Effective organisation and the constant struggle to connect organizational-vitals and sustain the state of bionic-balance
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Categories: You, the Leader!
Hi, Apollo.
I must confess that I got confused at the beginning of this blog. I have now learned how to work with effectiveness, efficiency and efficacy.These are 3 great ways to get to an effective organization. I have summed up my understanding as effectiveness is doing the right thing, efficiency is how well you do your work and efficacy is the ability to produce desired results.
How should we go about productivity if we cannot work between outputs and inputs in our work?
Kind of confusing.
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Indeed – confusing it be Emelda! Thanks for reading the blog!
The Effectiveness lab is there to help us all reflect objectively on matters Effectiveness – and you have done that so very well above
We can indeed work between outputs and inputs – inputs talk to efficiency and outputs to effectiveness – the combination of the two may give us efficacy or not
Subsequent blogs will elaborate more on aspects of the four organisational-vitals and how they help derive a bionically balance entity
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ABG, I’m keenly waiting to learn how to build a balanced bionic (BB) business using the four organizational-vitals (OV’s) above. I agree with you on a systemic approach to building efficient and effective organizations. It is systems that build vertical but interconnected silos.
Asante sana bwana,
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Thanks Seddu – watch for the future series sebbo!
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Effectiveness, Efficiency and Efficacy. What a great combination in organizational management. We often talk about these key concepts but largely fail to apply them maximally. The most stubborn concept is Efficiency. We usually fall short of expectations. Our global AID business industry emphasizes operational efficiency with grants from donors. But the competition for these grants lead to us to non efficient approaches. A good example is implementation of projects through consortium of international NGOs, plus a host of sub grants to local NGOs. Despite the outcomes, a lot more money is spent in overhead costs for each participating NGO, perhaps, funds that would have added more impact to beneficiaries (efficacy). AID industry has been audited and reviewed with the view of increasing more money to target beneficiaries but such arrangements of consortia accepted by donors will not improve the efficiency in medium term. Over to you Apollo!
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Kairu – thanks for the brilliant dissection of aid efficacy! Quite impressive indeed
You are right – the donor thing, and I have called them development ‘gods’ in my earlier blogs, doesn’t help address issues to do with Effectiveness – we need to stop and review how this industry works
It will come down to the four organisational-vitals: leadership – strategy – architecture- and bold people/and habits to change this orthodox mindset
Tough work indeed
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