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Published on September 28, 2018

Productivity vs Efficiency: Which One Matters More and Why?

Productivity vs Efficiency: Which One Matters More and Why?

In this article you will discover the key difference between productivity and efficiency, and which one will help you achieve your goals.

Productivity vs efficiency is a discussion between quantity and quality. A productive person is known as someone who gets things done. Although their accomplishments may be short-lived if they did not build their strategy for the long-haul. In most of our lives, productivity and efficiency are at odds with each other.

When you are focusing on productivity, your efficiency is the first thing to suffer. Likewise, when you are confirming your plans are thoughtful and well-crafted, you run the risk of burying your goal in months of red tape.

Productivity In Your Life

Measuring productivity tends to be straightforward, so it is usually where people place their focus. People usually calculate productivity by measuring a person’s output during two similar time periods. For example, if you read two books in January and four books in February, you were more productive in February.

Businesses will calculate productivity by comparing employees, departments, and locations. For instance, the California office of a firm generated $60,000 in March, while the Florida office generated $50,000 in the same month, making the California office more productive.

Productivity’s Blind Spot

Because most people measure productivity by calculating output, you have probably felt at least once in your life that productivity was capturing the complete picture.

If your supervisor asks you for a report by end of day, they are thinking it is a reasonable request. While it is true the report only takes 30 minutes to create, that is not the only thing you are working on today.

If the report was your only task, you agree you should have it completed by the end of the day. However, your department added a new employee and you agreed to train them on all the processes.

Depending on the complexity of your role and the engagement of the trainee, it could take you an entire day to walk step-by-step through your work. You also have a few additional time sensitive matters that you accepted last week and they have the same deadline.

As you are starting to see, when you only capture someone’s output to determine if they are being productive, you are lacking key information.

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You open yourself up to the possibility of thinking someone had a less productive week, when they were more productive than last week.

Efficiency, the Other Half of the Productivity Coin

If productivity focuses on your output, then efficiency emphasizes the quality of your work, which usually focuses on saving time or conserving resources.

Think of your productivity as the revenue you generated from a sale, and think of your efficiency as the money you get to take home after you pay your expenses.

Using the business example from before, while the California office generated $60,000 in sales, they spent $20,000 in related seminar and travel expenses. The Florida office generated their sales by using an inexpensive online-webinar platform, so the Florida office was more efficient and generated larger profits.

Efficiency also accounts for quality in relation to time.

For example, Autumn and Alek work in a call-center where their job was to survey 100 customers per day. Autumn reached her number after she called 150 customers and Alek reached her number after calling 300 customers.

While they both achieved their productivity milestone, Autumn was more efficient because she only had to call an extra 50 people, while Alek had to call an additional 200 people.

Is There Such a Thing as Being Too Efficient?

Like productivity, focusing solely on efficiency can lead to unintended consequences. You do not want to complete your work hastily, but you also do not want to set the unreasonable expectation that you can achieve perfection.

Challenges, missteps, and failure are a part of growth and achieving results.

Whenever you focus too much on quality, you will find yourself coping with self-doubt, anxiety, and procrastination. If you are in a leadership position, your team may be too scared to produce anything because they are so worried about making a mistake.

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Out of fear, everyone remains in the analysis phase as they continue to plan for every possible outcome. Even though it is tempting to celebrate successful perfectionists like Steve Jobs and others, there are studies that confirm most successful people in any given field are less likely to be perfectionist.

Perfectionism keeps most people from making decisions because the anxiety about making mistakes holds them back.[1]

Striking a Balance Between Productivity and Efficiency

When trying to decide whether productivity or efficiency is more important, it is important to understand you need both. Accomplishing your goals and keeping your resolutions provide a great feeling, but you are going to want to measure the cost.

You need to monitor the amount of time and resources you invested into achieving your goal. There is a point of diminishing returns where you are producing at such a high output, your work is full of errors and requires additional attention.

The same diminishing returns exist if you are concerned about quality to the point you are teetering on perfectionism — as perfectionists have an unhealthy fear of failure that keeps them from producing anywhere near optimum levels.

Three Strategies to Maximize Your Results

1. Be Intentional with Your Time and Resources

Start by attempting to maintain your current level of production while lowering the resources you use.

This strategy requires you to be intentional with your goals. For example, if you oversaw the marketing budget for a multi-billion-dollar company, you may be reaching your results, but only because of you are flooding the market with ads.

If you wanted to increase your efficiency without impacting your productivity, what would you do?

One simple strategy is to conduct a review of all your marketing campaigns. Once you have completed the review, you can rank your campaigns based on their return on investment.

You can then increase your productivity and efficiency by reallocating the money you spent on the bottom 10% of ads and moving them to your top 10% of ads.

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2. Reduce Waste

Another strategy that will provide an immediate impact is for you to focus on reducing your waste. Again, we are going to implement techniques that will positively impact your efficiency and productivity.

Start reducing waste by finding less expensive alternatives that will accomplish the same tasks you are currently producing.

As was the case with our business example where the California office spent significantly more money that the Florida office. Are there more cost effective, but reputable options that you have not explored yet?

It is a great idea to review your expenses annually to see if there are places you can improve. If you are not sure, shop around to see if your prices are in line with the market.

You can even employ this technique with your own personal finances.

Have you ever wondered why every car insurance commercial promises they can help you save 40%+ on car insurance? It is because most people do not update their auto coverage on a regular basis. Since automobiles are a depreciating asset, your car is losing value every year.

If you bought your vehicle for $20,000, then it may only be worth $15,000 after the first year. However, if you are still paying insurance based on a $20,000 value, you are naturally going to be paying more if you received insurance based on a $15,000 value.

Therefore, when you call the new insurance company, they are going to offer you insurance based on the vehicle’s current value of $15,000.

The reason car insurance companies are so confident they can save you money is because they know you are paying for insurance on a $20,000 car when your car may be worth half or a third of that.

3. Prioritize Your Goals

The third approach to help you balance productivity and efficiency is to prioritize your goals. If you want to avoid falling into the perfectionism trap, you are going to have to admit you cannot have everything exactly the way you want.

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You are going to need to decide what matters to you most and be willing to sacrifice other less important goals to ensure you achieve your top priority.

For instance, the truck driving industry is extremely competitive and as a result, truck drivers must focus on keeping costs down and operating higher efficiency. To manage their costs, truck drivers like to make sure they are never driving an empty truck. If they have a delivery in Miami, they want to make sure they have a pickup in Miami to cover the drive back.

Anytime a truck driver is unable to find cargo for their drive back, they are wasting time and resources. Imagine if your next pickup was in Atlanta. Without cargo, that entire drive would be an uncovered expense and those can add up quickly.

To ensure they have their costs under control, truck drivers will prioritize ensuring they are not driving empty over all other goals and objectives.

Sometimes the driver is unable to find a pickup at their drop-off location at the same rate they hauled the cargo down. However, since they have prioritized “not driving empty,” they do not have an issue offering reduced pricing when they find themselves in this situation.

If they did not prioritize their goals, they would be waiting in Miami for a back-haul that would cover their drive to Atlanta. Perfectionism tells you that you must accomplish all your goals or none of them.

When You Cannot Have It All

When you find yourself faced with difficult decisions, take a moment, and determine what matters to you most. If you can only accomplish one or two goals, which one will provide the greatest impact?

Then, take the time to understand and account for the necessary shift you will need to make to your productivity or efficiency levels. In the case of the truck driver, they sacrificed their productivity by taking a lower rate for their back-haul. Yet, they increased their efficiency because they covered their costs and made a small profit with their lowered rate.

What it ultimately means is the truck driver increased his productivity because the choice was not between their normal rate or a reduced rate, it was between an empty haul and a reduced rate haul.

Conclusion

By being intentional with your time and resources, reducing waste, and prioritizing your goals, you can increase your overall efficiency and productivity.

No matter the goal you have set for yourself in your life, there will always be a benefit to working more efficiently and balancing that with increased productivity.

Featured photo credit: rawpixel via unsplash.com

Reference

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Last Updated on February 18, 2019

How to Motivate Employees and Boost Team Productivity

How to Motivate Employees and Boost Team Productivity

These days, in a world with cognitive, AI, and extraordinary advances, we have failed at the most basic stimulus: motivation. Why do I say so? Just take a look at these statistics:

58 percent of managers said they didn’t receive any management training as per a CareerBuilder.com survey. Only 12% of employees leave their jobs because of more money. Research indicates that around 80% of employees leave their jobs due to “lack of appreciation”. Due to fear of failing, more than half of American workers don’t take their paid vacations. 53% of Americans are unhappy at work (not engaged). And 1 in 3 are working in a field they don’t like.[1]

Archaic people management and HR structures are the root cause.

“If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.” – Antoine de Saint-Exupery

So how to motivate employees and boost team productivity?

Here are 3 key things that you can do to motivate your employees and boost team productivity:

1. Run Your Team/Group/Company like a Lean Startup

The Lean Startup phenomena by Eric Ries has been socialized across millions all over the globe. In a nutshell, it is a methodology for developing businesses and products, which aims to shorten product development cycles and rapidly discover if a proposed business model is viable; this is achieved by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning.[2]

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Encourage Your Employees

When you empower your employees (or family members) to do what they deem to be best for a particular roadblock, idea, or improvement, you create magic. You create genuine trust. You enable innovation. The result is happy, inspired employees who feel they have a say in the grand cosmic stage at work.

Note that increasing the competency level of employees and coaching and mentoring them along the way is key. You yourself, need to do the same. Nourish your brain – and get a mentor that will keep you at the edge of your game.

Offer Rewards

Motivation is also intrinsic. The startups I have worked at offered instant rewards — not just fat checks or equity increments, but Oscar-style nominations.

The non-monetary rewards were actually more coveted, and grandiose: lunch with the CEO, tickets to an Obama fund-raiser, horse-back riding with a world-class equestrian.

Compare this to a dodgy, corporate, white-cubicle dinosaur that had a “yearly performance review” where both parties dread the conversation. In a world of instant WhatsApp messages, having a conversation about performance, likes and dislikes cannot just happen annually in 60 minutes. Employees need to be rooted in the belief that their manager genuinely cares about them.

Give Autonomy

Another key attribute is autonomy. Most employees start brushing their resumes and cruising LinkedIn when their hands are tied in their current positions: approval forms, long meetings, escalations, and more meetings. In the world of agile and scrum masters, deliberating for the sake of deliberating is poison. You will choke the very employees that giddily accepted the job initially to “change the world”.

Within a reasonable realm of assessment and deep-dives, trust your employees to do the heavy lifting. Give them access to the knowledge, people and resources that help them directly make the choices that will shape the future of your team, and your company.

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Eliminate yourself as the bottleneck – and interject yourself as a benevolent, servant leader that is the symbol of high-performing organizations.

2. Apply the 90/90/1 Rule

I recently saw a video by Deepak Sharma (a leadership adviser) about productivity and this principle stuck with me. Here’s what it’s about:

Devote the First 90 Minutes of Your Day to Important Project

For the next 90 days, devote the first 90 minutes of your day to your most important project—nothing else. Do this for yourself and your employees.

We usually get sucked into the most wasteful, operational activities in the morning which robs our focus, and steers us into an unwanted rabbit hole. So mute your notifications, avoid the temptation to check your exploding inbox, and scroll your Instagram feed later. Instead, focus on that ONE thing that will provide real value to you, your team, or your business/company/home.

Apply this rule to yourself – and your team. Your team will thank you. Note: If you’re feeling really stretched for time, you can always hack the rule by testing out a “45/45/1” version.

A To Do Scheduling System

Another version of this is to use the Kanban concept, developed by Taiichi Ohno, an industrial engineer at Toyota. Kanban is a scheduling system employing boards and cards.

The most basic version is a canvas with “To-do”, “Doing”, and “Done” boards (or columns). Each activity or task is a “card” that moves from one column to the other. I use Trello (a Kanban-inspired app) that is a key system for my personal and professional life. It allows me to understand my workload, their priority, and due dates.

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I use importance and effort metrics (scores) for each task to understand what is truly necessary in my life to work on. It negates the FIFO (first-in, first out) paradox that has plagued millions of people. Instead, it allows me to take stock of what is on my plate, and then bite on what truly will move the needle for me, my team, my life, and my company.

With a limited appetite (at least for some), would you eat the veggies, fries, mashed potatoes and leave the sizzling steak? No, you wouldn’t (unless you are a vegan and ended up in the wrong restaurant).

Approach your work with a weighted vengeance – and encourage your team to do the same.

3. Align Passion and Skills to Purpose

The heart of human excellence often begins to beat when you discover a pursuit that absorbs you, frees you, challenges you, and gives you a sense of meaning, joy and passion.

“The most fortunate people on earth are those who have found a calling that’s bigger than they are—that moves them and fills their lives with constant passion, aliveness, and growth.” — Richard Leider

An ace team-member once told me that while she enjoys working for the company we both used to work at, she really hated anything to do with technology. She was more of a “people” person, and did not want to sit behind a desk sifting through lines of code.

What struck me was that she was in that role for more than a decade and had just spoken up. The good thing is she spoke up. She expressed her desire and interests. And it allowed her to get into a role of her liking within 30 days.

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Ask If They like What They’re Doing

If you, or a team member is frustrated, demotivated, or not performing at their best – one of the questions you should ask is whether they like what they are doing. Then genuinely try to help them get to the role they should be in (whether in the same team/company or not).

There’s a reason why 53% of Americans (and perhaps more or same across the globe) are unhappy at work. A butcher cannot be an ace salad maker. Pursue your passion – and help pave the way for your team. Unlock your potential and theirs. You will command and lead a supercharged team.

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.” – Steve Jobs

The Bottom Line

Sometimes, passion has to be ignited. It is dormant, clouded by busy-ness, buried by wrong career choices, and plagued by non-supportive eco-systems. Some will climb out of it, but we as society — and in the case of business teams — incumbent upon the manager/CEO/leader to foster, grow, and nurture the employee.

Teach her the ropes. Show her the path. Advise him as you would yourself. Let them lead, and make mistakes. Do not fear them, rather make them the leader you would want to become.

For your not-so-great team members, understand that it is not personal, it is just not a good fit. Help them move on to the pastures they would be fit to graze on. Hence, hire slow (and fire fast).

Your team is a reflection of you. Boosting their confidence and helping them achieve the impossible is motivation. Focus on that, and you will have a productive team that you and your company will be proud of.

More Resources About Team Management

Featured photo credit: rawpixel via unsplash.com

Reference

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