{"id":117,"date":"2018-12-27T16:11:51","date_gmt":"2018-12-27T21:11:51","guid":{"rendered":"http:\/\/pressbooks.library.upei.ca\/smallbusinessmanagement\/chapter\/the-search-for-efficiency-and-effectiveness\/"},"modified":"2021-07-26T10:34:33","modified_gmt":"2021-07-26T14:34:33","slug":"the-search-for-efficiency-and-effectiveness","status":"publish","type":"chapter","link":"https:\/\/pressbooks.library.upei.ca\/smallbusinessmanagement\/chapter\/the-search-for-efficiency-and-effectiveness\/","title":{"raw":"Chapter 5: The Search for Efficiency and Effectiveness","rendered":"Chapter 5: The Search for Efficiency and Effectiveness"},"content":{"raw":"
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The small<\/em> in small business refers only to the number of employees or the volume of sales. It seldom refers to the level of enthusiasm, the amount of creativity, or the ability to innovate. A great example of this is Carrot Creative, a new social media agency headquartered in the Dumbo section of Brooklyn, New York. Mike Germano and Robert Gaafar started their first company while Mike was a college student and serving as a city councilman in Hamden, Connecticut. They developed sites that enabled students to sell used textbooks and rate their professors. In 2005, they opened Carrot Creative. When it was in its infancy, Carrot Creative was not a traditional marketing agency, and social media barely existed. The social media industry, as a whole, is one of the most innovative and fast-paced industries in the world, forcing companies such as Carrot Creative to stay ahead of the curve and adapt quickly.<\/p>\r\n

From the very beginning, Carrot Creative has been innovative and progressive\u2014not only because of its founders and team members but also out of necessity. It started with no available business model to copy, no rules to follow, and no resources on which to rely. They had one rule: do not accept the status quo. Carrot Creative was designed to become what its founders envisioned and what the market needed. They view themselves as a business that is always open to a challenge. They dare anyone to present them with a problem that they cannot solve. Germano, in a recent interview, put it this way, \u201cWe help brands build on social networks, teach them and help them in great ways for them to have conversations with their customers and really turn brands into people.\u201d[footnote]Julie Kanfer, \u201cBrooklyn Tech: Carrot Creative\u2019s Mike Germano,\u201d Brooklyn Heights Blog<\/em>, May 14, 2010, accessed February 4, 2012, brooklynheightsblog.com\/archives\/18448<\/a>.[\/footnote]<\/span><\/p>\r\n

Some of the brands that they have signed include Crayola, the National Football League, Major League Baseball, AOL, Disney, PepsiCo, Budweiser, the Islands of the Bahamas, and Ford Motor Company. Creative Carrot was the driving force behind Ford\u2019s social media campaign for its new Fiesta vehicle. This small<\/em> business has partnerships with some of the world\u2019s largest advertising agencies and public relations (PR) firms. They also have the honor to be on the forefront of designing the very tools that define social media. They view their title as an official \u201cFacebook Preferred Developer\u201d as just icing on the cake.<\/p>\r\n

Today, Carrot Creative remains on top of the creative game by giving all its employees the freedom to create in their own way. It keeps creativity flowing by cultivating an environment and culture that removes the idea of micromanaging and gives each Carrot Creative employee the freedom, trust, and responsibility for their own work and actions. One never knows when creativity will strike, but it certainly will not be inside a cubicle or under someone\u2019s thumb. Creativity flows through individual expression and personal work style. The Carrot Creative office is designed for just those things. There is space to work on couches, in a room of Astroturf, and private offices with maple desks, and, most importantly, the ability to be freely collaborative. As Germano said, \u201cWe appreciate the individual nature of small companies.\u201d[footnote]Julie Kanfer, \u201cBrooklyn Tech: Carrot Creative\u2019s Mike Germano,\u201d Brooklyn Heights Blog<\/em>, May 14, 2010, accessed February 4, 2012, brooklynheightsblog.com\/archives\/18448<\/a>.[\/footnote]<\/span><\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n

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Personal Efficiency and Effectiveness<\/h1>\r\n
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Learning Objectives<\/h3>\r\n
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  1. Recognize the difference between effectiveness and efficiency.<\/li>\r\n \t
  2. Understand the differences among first-, second-, third-, and fourth-generation time-management systems.<\/li>\r\n \t
  3. Learn how using an activity log to see how time is spent.<\/li>\r\n \t
  4. Learn the dos and don\u2019ts of time management.<\/li>\r\n<\/ol>\r\n<\/div>\r\n

    Open any basic management textbook, and there will always be a discussion of the importance for an organization to be both [pb_glossary id=\"1283\"]effective<\/strong>[\/pb_glossary] and [pb_glossary id=\"1285\"]efficient<\/strong>[\/pb_glossary]. These are fundamental concepts. An organization demonstrates effectiveness when it achieves the outcomes that it wishes to produce. [footnote]Amitai Etzioni, Modern Organizations<\/em> (Englewood Cliffs, NJ: Prentice Hall, 1964), 17[\/footnote]<\/span> Efficiency is \u201cthe capacity of an organization, institution or business to produce the desired results with the minimum expenditure of energy, time, money, personnel, material, etc.\u201d[footnote]\u201cEfficiency, Organizational,\u201d Mondofacto<\/em>, December 12, 1998, accessed February 4, 2012, www.mondofacto.com\/facts\/dictionary?efficiency%2C+organizational<\/a>.[\/footnote]<\/span> In discussing the distinction between the two concepts, Peter Drucker once said, \u201cEfficiency is doing things right; effectiveness is doing the right things.\u201d<\/span>[footnote]\u201cPeter Drucker Quotes,\u201d Brainy Quote<\/em>, accessed February 4, 2012, www.brainyquote.com\/quotes\/authors\/p\/peter_drucker.html<\/a><\/span>[\/footnote] Regardless of the exact definition of these concepts, it should be clear that any business should strive to be both effective and efficient.<\/p>\r\n

    It is important to recognize that for any given endeavor, one can be effective but not efficient and vice versa. This can be illustrated with the following example. Two students are working in their college mail room. Each is given a stack of five hundred individual class schedules that are to be sorted and placed in the mailboxes of the undergraduate students. They are told that when they are done, they will be given another job. The first student is meticulous and carefully checks that each class schedule goes to the right recipient. She completes the job in 4.5 hours. The second student is less careful about accuracy and makes several errors by putting the wrong schedule in the wrong box. However, he completes his work in 3 hours. The first student was effective because the task was to get the right schedule to the right student. The second student was more efficient, if efficiency is measured in the number of schedules dispensed per hour.<\/p>\r\n

    In the late 1950s and early 1960s, two important works on the nature of a firm introduced an expanded concept known as \u201corganizational slack.\u201d[footnote]James G. March and Herbert A. Simon, Organizations<\/em> (New York: John Wiley & Sons, 1958), 46[\/footnote][footnote]Richard M. Cyert and James G. March, A Behavioral Theory of the Firm<\/em> (Oxford, UK: Blackwell, 1963), 121.[\/footnote]<\/span> Slack was seen as the excess capacity maintained by an organization. By definition, slack implies that an organization is not perfectly efficient. Some argue that slack provides resources for innovation and change. Others see it as a buffer for a firm. [footnote]Joseph L. C. Cheng and Idalene F. Kesner, \u201cOrganizational Slack and Response to Environmental Shifts: The Impact of Resource Allocation Patterns,\u201d Journal of Management<\/em> 23, no. 1 (1997): 1\u201318.[\/footnote]<\/span> Although these debates might make for interesting academic discussions, it must be recognized that most small businesses do not have the luxury of maintaining any appreciable slack. Their survival hinges on being both<\/em> highly effective and highly efficient. Therefore, any technique, program, or methodology that improves those ends is vital to the well-being of a small business.<\/p>\r\n\r\n

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    Time Management<\/h1>\r\n
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    Strategy is the art of making use of time and space. I am less concerned about the latter than the former. Space we can recover, lost time never.[footnote]\u201cNapoleon Speaks on Increasing Market Share,\u201d Stealing Share, Inc.<\/em>, accessed June 1, 2012, http:\/\/www.stealingshare.com\/pages\/Napoleon%20Strategy%20works.htm<\/a>.[\/footnote]<\/span><\/p>\r\n

    Napoleon<\/p>\r\n\r\n<\/div>\r\n

    Throughout this chapter, the focus will be on the simple fact that one of the great enemies in life\u2014particularly a businessperson\u2019s life\u2014is the existence and acceptance of waste. One of the resources that we can least afford to waste is time. In many ways, time is the most precious of all resources. Other resources can often be purchased or acquired, but time cannot be purchased. Once lost, time can never be recaptured. Time, as a resource, should be of particular importance for the small business owner.<\/p>\r\n

    If one is serious about maximizing the use of time, then one should consider two venues: use a time-management system and avoid what are referred to as \u201ctime wasters.\u201d The term time-management system<\/em> is a broad concept and covers many different approaches. Regardless of the approach used, its adoption provides multiple benefits. As one author puts it\u2014\u201c\u2018[pb_glossary id=\"1287\"]Time management<\/strong>[\/pb_glossary]<\/a><\/span>\u2019 involves working on the right things [effectiveness] and doing them the best way [efficiency].\u201d[footnote]Peggy Duncan, The Time Management Memory Jogger<\/em> (Salem, NH: Goal\/QPC Publishers, 2008), xi.[\/footnote]<\/span> Steven Covey, author of First Things First<\/em>,[footnote]Steven Covey, A. Roger Merrill, and Rebecca R. Merrill, First Things First<\/em> (New York: Simon and Shuster, 1994), 35.[\/footnote]<\/span> a \u201cbible\u201d for time management, identifies four generations of time-management systems. He defines a\u00a0[pb_glossary id=\"1288\"]first-generation time-management system<\/strong>[\/pb_glossary]<\/em> as being composed of essentially a list of tasks that must be done. A [pb_glossary id=\"714\"]second-generation time-management system[\/pb_glossary]<\/strong><\/em>, ties deadlines to those tasks. A [pb_glossary id=\"715\"]third-generation time-management system[\/pb_glossary]<\/strong><\/em> incorporates task prioritization. Many business people are familiar with paper-and-pencil or computerized systems for listing tasks, noting their due dates, and prioritizing them in terms of relative importance. Covey argues for a [pb_glossary id=\"716\"]fourth-generation time-management system[\/pb_glossary]<\/strong><\/em>. This system is designed to bring balance into the personal and the professional lives of individuals. It is best illustrated by Covey\u2019s 2 \u00d7 2 matrix, where one axis is composed of tasks that can be categorized as urgent<\/em> or not urgent<\/em>. The other axis is composed of tasks that can be characterized as either important<\/em> or not important<\/em> (see Figure 5.1 \"Time-Management Matrix\"<\/a>). He emphasizes that those tasks that might be found in the important\/not urgent<\/em> quadrant (quadrant 2) might be critical to an individual\u2019s well-being. Unfortunately, because they are listed as not urgent<\/em>, they might fall by the wayside. His goal is to produce a \u201cbalanced manager.\u201d This balance refers to what he argues are the four fundamental human needs: physical needs, social needs, mental needs, and spiritual needs. His approach to time management is based on valuing relationships and recognizing that the proper management of relationships will reduce the amount of time wasted in activities.<\/p>\r\n\r\n

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    Figure 5.1<\/span> Time-Management Matrix<\/strong><\/h3>\r\n[caption id=\"\" align=\"alignnone\" width=\"1500\"]\"The The Time-Management Matrix explains prioritizing using the values of urgency and importance. The first quadrant is valued as important and urgent. This quadrant is labeled the quadrant of necessity. The second quadrant is not urgent however it is important, it is the quadrant of quality. The third quadrant is urgent but not important. It is the quadrant of deception. The fourth quadrant is not urgent or important and is, therefore, the quadrant of waste.[\/caption]\r\n\r\n
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    Source: [footnote]Steven Covey, A. Roger Merrill, and Rebecca R. Merrill, First Things First<\/em> (New York: Simon and Shuster, 1994), 37[\/footnote][footnote]James Cooper, \u201c3 Vital Time Management Principles for Small Business Owners & Entrepreneurs,\u201d mimosaPLANET<\/em>, December 2, 2010, accessed February 4, 2012, http:\/\/mimosaplanet.com\/Small-Business-Blog\/bid\/55824\/3-Vital-Time-Management-Principles-for-Small-Business-Owners-Entrepreneurs.html<\/a>.[\/footnote]<\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n

    Covey advocates that an individual should have a deep understanding of what is important in one\u2019s life and recognize that, on any day, one will assume different roles. Both elements need to be incorporated into the time-management system. For Covey, we all have to assume different roles in our personal and professional lives. The objective is to identify what these roles require time-wise and how they can be successfully integrated. To achieve integration, we need to better understand ourselves. Covey suggests that developing a personal mission statement is vital to achieving balance. Some characteristics of such a statement might include the following:<\/p>\r\n\r\n