By Steve Bennett Definitions Effectiveness One of the principal functions of management is to push out the frontiers of ordinary achievement, to attain extraordinary products, services, sales, profits and productivity. Contrasts sharply from efficiency which deals with using existing resources in an optimal way. The opportunities to produce revenue, to create markets, and to change the economic characteristics of existing products and markets is the foundation of success.
Efficiency is a minimum condition for survival after success has been achieved.
The difference between effectiveness and efficiency is parallel to that between entrepreneurial ability and executive ability. Both should have some qualities of the other. Entrepreneurs are effective at creating new customers. Executives need to be good at keeping existing ones. Good executives distrust their own judgement.