Understanding the difference between effectiveness and efficiency

In the realm of management systems, terms like effectiveness and efficiency frequently come up in discussions about resource allocation and performance evaluation. While effectiveness is commonly highlighted across many standards, efficiency takes center stage in specific areas, particularly in ISO 50001 (Energy Management). 

In this article, we’ll briefly explore the difference between effectiveness and efficiency.

Effectiveness vs efficiency

Effectiveness is about achieving objectives. 

It means implementing controls and processes that fulfill their intended purpose or goal. For instance, an effective information security control will protect information in terms of confidentiality, integrity and availability. An effective quality management process will lead to conforming products and customer satisfaction.

Efficiency, on the other hand, focuses on the resources required to achieve similar results. More specifically it is about optimizing processes to save on costs, time or energy. 

To illustrate with an example, imagine a car travelling from A to B. If the car reaches its destination successfully (B) then it has been effective. If it makes the trip using minimal fuel, it means that it has also been efficient.

Management system standards focus on effectiveness and less on efficiency

ISO 9001, ISO/IEC 27001 and other popular standards require effectiveness rather than efficiency for the management system and for organizational processes. 

ISO 50001, the energy management system standard, is the exception as it focuses on improving energy performance by using less resources.

However, efficiency should be an important consideration regardless of the standard implemented, as there is no organization operating with unlimited resources. 

For example, in the case of ISO 45001 (occupational health and safety management), work-related accidents can be avoided by implementing controls to address OH&S risks. However, these controls should be cost-effective, achieving the intended outcomes without unnecessary expenses.

Similar for the case of information security management. Information security controls (technological, physical, organizational or people controls) need to make sense economically, not only achieve their intended purpose.

The distinction between effectiveness and efficiency matters

It’s important to understand the difference between efficiency and effectiveness and although popular ISO management system standards focus mainly on effectiveness, every organization should consider efficiency at least for the following reasons:

• Resource allocation. In a world where every dollar matters, efficiency is a critical consideration in all projects that an organization undertakes.
• Continual improvement. As management system standards require organizations to improve continually, efficiency enhancement is an area where improvements can be made.

For a management system professional understanding the difference between concepts such as efficiency and effectiveness is important.