Value is created when resources (inputs) are transformed (through activities) to outputs (results of activities) that, when used, produce outcomes (results that add value).

Efficiency is about the input to output ratio.

Effectiveness is about the ability to produce outcomes.

Example: using resources to build wells in a village with water shortage.

Efficiency is about building as many wells at the right quality with the allocated resources.

Effectiveness is about the ability of this project to provide access to clean water to villagers.

Both efficiency and effectiveness matter.

In practice, I noticed that attention towards improving organizational performance focuses mainly on improving efficiency and less on enabling better effectiveness.

Over-optimizing for efficiency can undercut effectiveness though.

Questions that guide my explorations:

What if you found the right balance between efficiency and effectiveness?

How would this balance look like in practice?

What helps maintain this balance as both the environment and the internal dynamic changes?