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How to Constantly Make Right Decisions When Life Is Full of Uncertainties

How to Constantly Make Right Decisions When Life Is Full of Uncertainties

Have you ever gone through a situation so bad that you sat down for a moment and wondered if you have thought this through because then you wouldn’t be stuck in this mess? You probably have because half the hardships that we meet in our life are created by ridiculous decisions we make, which are a reflection of our productivity. From what and where to eat, to what career to pursue, every little aspect of your life depends on smart decisions and clever calculations. Read on to find out why.

Always Calculate the Cost And Benefit Before Making Decisions

Cost benefit calculation is one of the smartest ways through which leading business experts and brands strategically determine and foresee the future of a business move. Sure, all of us do try and think things through before diving right in to the conclusion of a business decision, but the bigger the impact, the bigger the risk. To reduce the risk and to reassure yourself of a successful venture, you need to do a cost benefit calculation. It should be very much a part of everyday life. Before making any substantial decision, analyze the costs and benefits.[1]

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Cost Benefit Analysis Helps You to Plan for the Future

The easiest way to execute a correct calculation and the right way to do it is by calculating the foreseeable cost as well as the expected quantifiable positive cash flow over a set period of time. This may sound a tad bit complicated but it is not. It’s as simple as planning all factors of a budget thoroughly so that you don’t have to face higher risks. Basically, cost benefit analysis reduces the risk.

It lets you lay a stronger foundation for your decision. It also helps you to foresee the changes that are going to occur to your plan and the mobilization of peripheral factors. It’s the smart way of making a decision. It’s a reflection of your productivity.

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The biggest challenge is the process itself. It’s not that easy after all. It requires quite bit of groundwork. You need to understand the environment that your decision is going to disrupt. A thorough analysis is much needed. You need to understand the trends and nature of the market.

Predict Potential Risks and Plan for Them

In its simplest form, cost benefit calculation is a basic analysis, of how much of any resources are you investing and what you are getting in return. You draw a parallel between the inputs and outputs.

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For instance, one could calculate how much one student studies for an exam and how high he will score on the paper. The result should be positively related, as in the more he studied, the better he must have scored. Or else, some peripheral element must have impacted the entire scenario.

In a larger context, you should ask yourself how much money you are investing into a business and what your profit will be. This needs to be analyzed long before the plan is implemented. In other words, the plan should be formed on the foundation of this calculation.

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One needs to be on their toes while calculating these means as even the slightest factor could bring about transformative impact. Being updated, clear and focused can help you tremendously. Being absolutely aware of your plan and its impacts is necessary.

It makes the decision making process simpler and clearer. Cost benefit calculation can be applied to both smaller and larger decisions. It also aids you to be accurate in your planning and execution process. Try using this tool for a successful life!

Reference

[1] Investopedia: Cost-Benefit Analysis

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Abhay Jeet Mishra

Writer at Lifehack & Enterested.com

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Last Updated on September 30, 2020

Effective vs Efficient: What’s the Difference Regarding Productivity?

Effective vs Efficient: What’s the Difference Regarding Productivity?

When it comes to being effective vs efficient, there are a lot of similarities, and because of this, they’re often misused and misinterpreted, both in daily use and application.

Every business should look for new ways to improve employee effectiveness and efficiency to save time and energy in the long term. Just because a company or employee has one, however, doesn’t necessarily mean that the other is equally present.

Utilizing both an effective and efficient methodology in nearly any capacity of work and life will yield high levels of productivity, while a lack of it will lead to a lack of positive results.

Before we discuss the various nuances between the word effective and efficient and how they factor into productivity, let’s break things down with a definition of their terms.

Effective vs Efficient

Effective is defined as “producing a decided, decisive, or desired effect.” Meanwhile, the word “efficient ” is defined as “capable of producing desired results with little or no waste (as of time or materials).”[1]

A rather simple way of explaining the differences between the two would be to consider a light bulb. Say that your porch light burned out and you decided that you wanted to replace the incandescent light bulb outside with an LED one. Either light bulb would be effective in accomplishing the goal of providing you with light at night, but the LED one would use less energy and therefore be the more efficient choice.

Now, if you incorrectly set a timer for the light, and it was turned on throughout the entire day, then you would be wasting energy. While the bulb is still performing the task of creating light in an efficient manner, it’s on during the wrong time of day and therefore not effective.

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The effective way is focused on accomplishing the goal, while the efficient method is focused on the best way of accomplishing the goal.

Whether we’re talking about a method, employee, or business, the subject in question can be either effective or efficient, or, in rare instances, they can be both.

When it comes to effective vs efficient, the goal of achieving maximum productivity is going to be a combination where the subject is effective and as efficient as possible in doing so.

Effectiveness in Success and Productivity

Being effective vs efficient is all about doing something that brings about the desired intent or effect[2]. If a pest control company is hired to rid a building’s infestation, and they employ “method A” and successfully completed the job, they’ve been effective at achieving the task.

The task was performed correctly, to the extent that the pest control company did what they were hired to do. As for how efficient “method A” was in completing the task, that’s another story.

If the pest control company took longer than expected to complete the job and used more resources than needed, then their efficiency in completing the task wasn’t particularly good. The client may feel that even though the job was completed, the value in the service wasn’t up to par.

When assessing the effectiveness of any business strategy, it’s wise to ask certain questions before moving forward:

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  • Has a target solution to the problem been identified?
  • What is the ideal response time for achieving the goal?
  • Does the cost balance out with the benefit?

Looking at these questions, a leader should ask to what extent a method, tool, or resource meets the above criteria and achieve the desired effect. If the subject in question doesn’t hit any of these marks, then productivity will likely suffer.

Efficiency in Success and Productivity

Efficiency is going to account for the resources and materials used in relation to the value of achieving the desired effect. Money, people, inventory, and (perhaps most importantly) time, all factor into the equation.

When it comes to being effective vs efficient, efficiency can be measured in numerous ways[3]. In general, the business that uses fewer materials or that is able to save time is going to be more efficient and have an advantage over the competition. This is assuming that they’re also effective, of course.

Consider a sales team for example. Let’s say that a company’s sales team is tasked with making 100 calls a week and that the members of that team are hitting their goal each week without any struggle.

The members on the sales team are effective in hitting their goal. However, the question of efficiency comes into play when management looks at how many of those calls turn into solid connections and closed deals.

If less than 10 percent of those calls generate a connection, the productivity is relatively low because the efficiency is not adequately balancing out with the effect. Management can either keep the same strategy or take a new approach.

Perhaps they break up their sales team with certain members handling different parts of the sales process, or they explore a better way of connecting with their customers through a communications company.

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The goal is ultimately going to be finding the right balance, where they’re being efficient with the resources they have to maximize their sales goals without stretching themselves too thin. Finding this balance is often easier said than done, but it’s incredibly important for any business that is going to thrive.

Combining Efficiency and Effectiveness to Maximize Productivity

Being effective vs efficient works best if both are pulled together for the best results.

If a business is ineffective in accomplishing its overall goal, and the customer doesn’t feel that the service is equated with the cost, then efficiency becomes largely irrelevant. The business may be speedy and use minimal resources, but they struggle to be effective. This may put them at risk of going under.

It’s for this reason that it’s best to shoot for being effective first, and then work on bringing efficiency into practice.

Improving productivity starts with taking the initiative to look at how effective a company, employee, or method is through performance reviews. Leaders should make a point to regularly examine performance at all levels on a whole, and take into account the results that are being generated.

Businesses and employees often succumb to inefficiency because they don’t look for a better way, or they lack the proper tools to be effective in the most efficient manner possible.

Similar to improving a manager or employee’s level of effectiveness, regularly measuring the resources needed to obtain the desired effect will ensure that efficiency is being accounted for. This involves everything from keeping track of inventory and expenses, to how communication is handled within an organization.

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By putting in place a baseline value for key metrics and checking them once changes have been made, a company will have a much better idea of the results they’re generating.

It’s no doubt a step-by-step process. By making concentrated efforts, weakness can be identified and rectified sooner rather than later when the damage is already done.

Bottom Line

Understanding the differences between being effective vs efficient is key when it comes to maximizing productivity. It’s simply working smart so that the intended results are achieved in the best way possible. Finding the optimal balance should be the ultimate goal for employees and businesses:

  • Take the steps that result in meeting the solution.
  • Review the process and figure out how to do it better.
  • Repeat the process with what has been learned in a more efficient manner.

And just like that, effective and efficient productivity is maximized.

More on How to Improve Productivity

Featured photo credit: Tim van der Kuip via unsplash.com

Reference

[1] Merriam-Webster: effective and efficient
[2] Mind Tools: Being Effective at Work
[3] Inc.: 8 Things Really Efficient People Do

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