Efficiency AND/OR Effectiveness

Efficiency is the ability to accomplish an objective, minimizing waste in the area of money / time / effort; It measures competency in performance.

Effectiveness is the degree of success to which the objectives are achieved and the extent to which targeted problems are solved.

In contrast to efficiency, which means “doing the thing right”, effectiveness is determined without reference to costs “doing the right thing”.

Both are very different levers to pull in consumer experience metrics. For targeted rote jobs it maybe better to tag efficiency metrics in terms of effort and time required, but in the case of customer delight functions, it is better to target effectiveness metrics.

To illustrate I am recounting a personal encounter at a tier 1 city in India. I was staying at one of the premier properties in the city and visiting the market to carry out primary research with our dealers and distributors. In one of the dealer visits, my pocket was picked. Finished the day, returned to the hotel, called the owner of each of my plastic “Gods” to cancel and reissue them to my home address and then told my dad to mail a copy of my driver’s license so that I could take a color printout for the flight next day. Then, realized I had no money to pay my taxi nor my hotel the next day.

Went to the GM of the hotel and told him my dilemma, upon which he assured me that there was no problem and he would extend the time required to make the payment to the hotel and instead would I like a loan of Rs 5000 from the hotel to tide over matters till I could make a consolidated transfer to them? I was grateful and the next day the GM came over to the room with a lovely leather purse which had a photo of the local temple goddess (famous and apparently very powerful) inside it and said “Sir, nothing will go wrong as long as “ XXXXX” is with you. Please use this purse as a token from us. I have kept the Rs 5000 loan inside as well” …What I am glossing over here is also the signing of some papers later by the duty manager to confirm that I had taken an advance from the hotel and other legalities (but they were smoothly done, not overtly). That au-contraire by the way is efficiency…

But the consumer experience with the GM, now that is what I call effectiveness, not efficiency. The ingraining of the brand’s purpose towards its guest had to be strongly embedded in the GM’s behavior. The leather purse could not have been part of a “standard operating procedure”, the subtle understanding of my subcaste / religion / alliances from my surname and therefore the addition of the photo (Or maybe I was reading too much…)

Having said that, my submission is that efficiency is a precursor to effectiveness. Unless the GM knew that he had a target to achieve, the route to doing it, and the process to accomplish it, he cannot improve the customer experience for the recipient.

Take this to another level. Let us now compare all hotels with regards to their purpose. How would they be different in providing an effective / efficient service. Put another way, are one hotel’s set of core processes different from another? I doubt it. The difference is in the way they cloak it around the brand tone, values and the purpose they espouse.

At The Ritz-Carlton, employees know that their purpose is to provide unique, memorable, and personable customer service experiences. “We are Ladies and Gentlemen serving Ladies and Gentlemen.” Yes it brings up imagery of butlers, valets, footmen…

But to the average outsider that could fit to the Taj or the Oberoi as well. So how do they differentiate themselves with the customer?

The Oberoi’s Guest Mission is “We are committed to meeting and exceeding the expectations of our guests through our unremitting dedication to every aspect of service.” Cryptic… How can nobody else do this?

And the Taj’s “Quintessentially Indian in its fabric, Taj Hotels Resorts and Palaces is recognized the world over for delivering a unique flavour of hospitality that offers world-class refinement while remaining deeply rooted in its local heritage.” More refined purpose…

Which chain do you think, fits into the philosophy / purpose that the GM espoused? And do you think he was effective / efficient and what was he delivering?

Efficiency is a precursor to driving effectiveness. Know the basics… build capability (people and manpower)… deliver a consistence experience to 90% of your customers… This is efficiency…

Effectiveness is delighting the 1% who influence the 9% to come back to you to experience your efficiency.

In my opinion, driving efficiency to a certain degree will incur costs as you are driving the basics

  1. Getting the right people
  2. Driving the right behavior

But this is a reducing cost, as efficiency is about rote, repetitive behavior (easier to imbibe) while delivering the experience.

Effectiveness is driven when you start driving the third lever

3. Facilitating the right action by empowering the front end to take consumer decisions that delight

Both stages drive consumer experience and therefore the net promoter score, but the cost of taking up the NPS scores will rise as efficiency starts to stabilize and organisations start layering the process to build effectiveness.

Effectiveness is all about building and delivering warmth in the brand’s efficiency — empathy, authenticity, ingenuity…

This is highly people dependent and requires the front end to be married to the Brand’s purpose to deliver a heightened consumer moment of truth. If you don’t do the first two well, delivering on the third, is much like pissing in the dark. Half the time you get it right, while the other half …

Ah, well you WERE in the dark, weren’t you?