Efficiency and effectiveness
A useful distinction is that efficiency is the relationship between inputs and outputs [productivity], while effectiveness is the relationship between inputs and outcomes [impact]. Charles Handy, management writer and thinker, suggests “Efficiency seeks to minimise cost given a particular outcome, effectiveness is more concerned with improving the outcome, and so it will accept higher costs for higher outputs.”
Meeting social, financial and environmental objectives – the so-called ‘triple bottom line’ – complicates the picture. How do you balance efficiency and effectiveness?
“Success is not final, failure is not fatal; it is the courage to continue that counts.” Winston Churchill.
To paraphrase David Robinson, founder of Community Links in London… If we don’t fail it means we’re not taking risks. If we’re not taking risks it means we’re not trying to do things differently. And if we’re not trying to do things differently, we should be!
But nor should we waste our time flogging dead horses – know when to give up and move on.
What is the ideal size for your organisation? It can be dangerous simply to assume that bigger means better – it can be a liability or an asset. Impact may be a better measure than size alone.
The strength of many social ventures comes from them being rooted in local communities, yet scaling up successfully brings benefit to more people (social impact). One way to reconcile this may be to replicate a proven model, adapting it to each local context under a franchise, licence or less formal arrangement.
Management structures in not-for-private profit enterprises tend to be ‘flatter’ than in mainstream businesses, with relatively little distance between the administrative worker and the chair of the management committee. This can blur lines of authority and responsibility creating confusion, but ‘empowerment’ is more than a jargon word; it can harness additional staff resources – particularly important when times are hard