A manager has to administer. He has to manage and improve what already exists and is

already known.


Economists call this efficiency.


But he also has to be an entrepreneur. He has to re-direct resources from areas of

low or diminishing financial results to areas of high or increasing results.


This is the secret of effectiveness.


Effective management focuses on opportunities to produce revenue and to create markets.

It concentrates on the 10-15% of products, orders, customers, markets or people who

produce 85-90% of the results.


An effective manager does not ask: ‘How do we do this or that better?’


He asks: ‘Which of our products, markets or consumers produce (or are capable of

producing) extraordinary results?’ and ‘Which have to be rendered obsolete?’

This does not deprecate efficiency. Businesses can die of poor efficiency.


But even the most efficient business cannot survive, let alone succeed, if it is efficient in

doing the wrong things – that is, if it lacks effectiveness.


No amount of efficiency, for example, would enable a manufacturer of buggy whips

to survive today!


Effectiveness is the foundation of success. Efficiency is a minimum condition for survival

after success has been achieved.


Source: Management tasks, responsibilities, practices, Peter F. Drucker