Excellence = Efficiency x Effectiveness

The one who drive organizations are Humans. Their performance and contribution will make organizations to achieve Excellence. But organizations need to be managed properly in order to pursue Excellence. If they are mismanaged, then the damage caused is much worse than that caused by individual humans.

Now let’s understand the meaning of Excellence. 

 Excellence is the defined as the quality of being excellent or state of possessing good qualities in an eminent degree or we can say that superiority in virtue.

Excellence comprises two important entities and relation is depicted as:

Excellence = Efficiency X Effectiveness

Efficiency in general describes the extent to which time or effort is well used for the intended task or purpose. It is often used with the specific purpose of relaying the capability of a specific application of effort to produce a specific outcome effectively with a minimum amount or quantity of waste, expense, or unnecessary effort.

Effectiveness is the capability to produce a desired result. When something is considered effective, it is meant to produce a deep vivid impression. Effectiveness involves achieving your goals that support your vision and mission.

Though both the terms are sometimes used interchangeably or used as synonyms, they both are different from each other but are mutually dependent on each other. In general, Efficiency is measurable concept while Effectiveness is non-measurable concept involving achieving objectives. In simple, efficiency is about doing things right and effectiveness is about doing the right things. Both if pursued separately leads to failure and but if used together, they lead to Excellence.

Management is based on these two entities i.e. Efficiency and Effectiveness, the combination of which leads to Excellence for an organization. Both give direction and support to each other on the path that leads to success. Efficient and Effective management helps in producing products or services which carry excellent value and quality and ensure excellent customer satisfaction. Japanese automobile makers are prime examples when it comes to achieving excellence through these two principles.

Efficiency in organizations consists of performing a series of steps in order to produce an output. When alone, efficiency doesn’t make any sense. Any organization is always guided by vision and mission which are main components of Effectiveness. So when the steps are performed (Efficiency) in order to fulfil the desired goals and objectives (Effectiveness), then the organization produces Excellence.