Effective and efficient are very common business/marketing terms. However, most of us tend to mix their meanings and usage occasionally (including myself), and that is why I decided to write on the topic.
First of all if you look for both terms in most dictionaries you’ll find very similar definitions (which makes the matter even more confusing). Some dictionaries get it right, however. Here is the definition from Dictionary.com, which I like:
Effective (adj.): Adequate to accomplish a purpose; producing the intended or expected result.
Efficient (adj.) Performing or functioning in the best possible manner with the least waste of time and effort.
If you want an easier way to memorize the difference, remember this sentence: “Being effective is about doing the right things, while being efficient is about doing the things in the right manner.”
Let’s use a practical example to illustrate the concepts. Suppose that two guys, Mark and John, are trying to change a flat tire on their cars (each one has his own car).
Mark starts by taking out the jack and placing it under the car. He quite doesn’t know where to position it, so he goes by trial and error and wastes a lot of time doing it. After 20 minutes he finally manages to fix it, so he proceeds to lift the car and change the tire.
As you can see Mark was doing the right thing, but he was doing it poorly. We can say that he was being effective, but not efficient.
John, on the other hand, starts by grabbing a towel and cleaning the tire. He wants to make the thing shiny before he changes it. And mind you he is very good and fast at cleaning every little detail of the tire.
We can say that John is being efficient, because he is cleaning the tire fast and throughly, but he is not being effective, because cleaning is a step that is not required at all when changing a flat tire.
Now if we had a third person, Peter, who could change the flat tire using the right steps and doing it quickly, we could say that he was both effective and efficient.