Effectiveness Is More Important Than Efficiency

Efficiency and effectiveness are very different things. You can teach yourself the most efficient way to pedal a bicycle, but you won’t get anywhere if the chain isn’t connected. People and companies find themselves in situations like this often. You’re busy. You’re working hard. You’re stuck in a rut.

Chances are you need to reassess your goalsfind more productive uses of your time, or if you’re the leader of an organization, you might need to restructure. (No, I don’t mean layoffs.)

Oddly enough, effective teams can thrive within an inefficient corporate structure. Yes, you read that correctly. Inefficiency can breed success.

Take Expedia as an example, a company that was recently profiled in Bloomberg BusinessweekThis internet travel company grew by acquisition and owns a handful of competing sites that all offer the same hotel and flight inventory. On paper, it made sense to unify the operations of all these websites: Develop a new feature for one site and push it out to all of them. In practice, innovation within the company ground to a halt, the websites broke often, and the company foundered.

Expedia pulled itself out of the muck by giving each site a dedicated technology and marketing team. Each of the brands sets its own course and competes directly with one another. Efficiency (or maybe just the appearance of efficiency) was traded for speed and innovation. Maybe most important of all, the people behind each brand have pride of ownership and their own identity.

Expedia’s success was no fluke. Great business leaders have acknowledged that ownership and effectiveness are more important than efficiency. Here’s what Marc Andreessen, a Silicon Valley venture capitalist, suggests for redesigning an organization after its growth has flattened out:

“A great general rule of thumb for this kind of organizational redesign is that you want to tolerate overlap. So each product division has its own QA team — so what? Your division heads — who are now your best people — will be able to move so much faster that way that it’s worth it.”

So how can we be more effective leaders? By stripping away layers of management and bureaucracy. By constructing self-sufficient teams. By empowering our people to get things done.