The 4 E’s of Excellence

Businesses have a tendency to focus on one or other of the three E’s:

  • Economy – doing things as cheaply as possible, avoiding spending more than is necessary
  • Efficiency – doing things as smoothly as possible, eliminating processes and activities that do not lead closer to the finished product.
  • Effectiveness – doing things as well as possible, making sure that the end result is a close match to what the customer actually wants.

Excessive economy can cause problems in production/delivery, as components fail more frequently, thus reducing efficiency.  Or producing a product that is just too low quality for what customers want.  Too much focus on efficiency can leave a company paying over the odds for the best parts or services.  Or removing processes that customers actually value, leaving them less satisfied.  And if the attention is exclusively on effectiveness, then costs can quickly get out of control and activities that don’t add real value will creep in.

Economy-Efficiency-Effectiveness-ExcellenceEconomy plus efficiency tends to create a low-cost strategy, where the cost of sale is driven low to allow competition on price alone.  Economy plus effectiveness will drive a budget strategy – with customers getting most of what they want at a price that seems very good value.  And efficiency plus effectiveness will tend towards a premium strategy, giving the customer a smooth delivery of what they want, but at a price.

You will often hear these three E’s  described as a kind of hierarchy, with Effectiveness being at the top of the tree.  However, they each have a part to play in building a successful business, and it is the combination of all three that brings the final E … Excellence itself.

About Andrew Horder

Founder of the blog at TheBusyFool.com, Andrew has been working with business owners for many years, helping them find and maintain their unique Focus - those activities and opportunities that they love, and will produce their success, what Andrew calls your Joyful Genius! Andrew's first book, The Busy Fool's a to Z of Loving Work is available from Amazon http://andrewhorder.com/amazon-azlw
About The Author

Andrew Horder

Founder of the blog at TheBusyFool.com, Andrew has been working with business owners for many years, helping them find and maintain their unique Focus - those activities and opportunities that they love, and will produce their success, what Andrew calls your Joyful Genius! Andrew's first book, The Busy Fool's a to Z of Loving Work is available from Amazon http://andrewhorder.com/amazon-azlw