2-fer Tues #6 Effective vs Efficient, Maximize vs Optimize

** This piece is part of my ongoing “2-fer Tuesday” series where I share critical distinctions in how to view and think about the world that may help you see things more clearly - which then supports better thinking, firmer decision making, and wiser action taking. **

This week I’ll be addressing two common “traps” that most Leaders tumble into from time to time, and more importantly, showing that the way out of these traps can often most easily be seen by making some clear distinctions in what targets we’re shooting for and how we’re aiming at them. The first distinction I’ll address here is the more prevalent one of Efficient vs Effective. This issue is one that plagues both Leaders and Individual Contributors at every level of every organization, and wrongly focusing on Efficiency gains vs Effectiveness gains is a recipe for endless tail-chasing. The second distinction of Maximizing vs Optimizing takes things up a level and asks you to make sure that your Effectiveness gains are all working together towards healthier outcomes for everybody.

TL; DR – Don’t get so distracted by Efficiency that you lose sight of your Effectiveness, and the only escape from the negative trade-offs that come from Maximizing one outcome (like profit) is to find the balance point where all outcomes are Optimized in relation to each other. 

1)    Efficiency vs Effectiveness – So many of us out there feel like we are always being asked to “do more with less” and usually the “more” is “make more money” and the “less” is “with less resources” to do so. I’ve written elsewhere about efficiently managing our TME (Time, Money, Energy) budgets for better ROI’s on them, but here I want to move out of the Efficiency framework that tends to measure inputs, and instead move the focus over to the more important side of the equation that measures output in terms of Effectiveness.

While Effectiveness should always be top of mind, it becomes more and more important the higher up you go in your organization. I can’t think of any client I’ve ever had that mentioned simply having too much free time on their hands. In fact, the most frequent challenge I get from my new Executive clients comes from them trying to make time on their schedules to meet up, so helping them become more effective is the outcome I have to provide to make it our sessions worth their extremely limited and valuable time. At the end of the day, there is only so much to be gained by focusing on Efficiency and inputs, and nobody is talking about “Efficiency” when it comes to great Leaders. Effectiveness is how great Leaders are determined, not Efficiency.

How do I support Leaders that are properly focused on Effectiveness? By supporting their efforts to increase their overall Leadership Effectiveness Quotient (LEQ Score) via direct engagement with their Leadership Capacity, Company Culture, and embodied Character. These three areas are the biggest determinants of Leadership Effectiveness, and all can be improved with focused Coaching.

Read here and here for a deeper dive into the LEQ Score and why it matters.

2)    Maximizing vs Optimizing – Every effort that only focuses on increasing one metric requires necessary trade-offs in the form of losing ground in respect to others. Maximizing profit only eventually leads to the eventual “enshittification” of your products and services, which then in turn leads to no profits. Maximizing your efficiency in life hacks via spreadsheets, apps, and supplements, and other means and measures eventually leads to more time spent managing these things and less time living a better life. All maximization efforts focused on short timelines eventually lead to inevitable failure in the long term, with lots of frustration, pain, and suffering along the way.

A better approach is to get as clear as possible on all the goals and metrics that are important to you now as well as those that are important to the longer term sustainability of your team, project, or organization. Once you have a clearer awareness of those things, then you can begin to model how various efforts to increase one metric impact the others. Through this process of ongoing modeling and iterating in the real world (mapping and territories again), you should be able to find a nice range of operating where you have a clearer understanding of how your business goals interact and how efforts to manage them have various impacts across the system.

This awareness of your operating range for optimal harmonic balance allows you to push and pull the various levers as necessary to both drive temporary increases along one metric and to also counter various forces that would affect the system’s overall balance and longer term performance. For example, you might decide to temporarily increase overtime allowances as you head into a peak season for revenue generating, but can plan to offset those costs with extra time off for vacations before and afterwards. Another example that I love is the whole idea of the B Corp where instead of simply “maximizing shareholder value,” your company, like my Good Karma Cafe was, can be explicitly incorporated under the multi-pronged directive of “optimize the relationship between people, planet, and profit.”  

Looking back at our Effectiveness rubric of the LEQ lens for evaluating Leadership, you’ll see the 3 main categories of Capacity, Culture, and Character. This is a great place to try to find the best operating range of how you apply your very limited TME (Time, Money, and Energy) to best address any shortfalls in those categories and also increase your Effectiveness across all 3 of them as well. Optimization efforts here will help you make the most impactful changes right away and also get you well established on a “betterment” plan that leads to steady, consistent improvement in all the ways that matter.

How Effective is your Leadership? Where can you start to move your attention away from inputs and efficiency over to outputs of effectiveness? How might you increase your Leadership Effectiveness Quotient by having a better understanding of how the 3 metrics of Capacity, Culture, and Character interrelate, and how might you chart a way forward to find the optimal operating zone where your efforts at improvement raise all 3 scores simultaneously?