Efficiency means doing things right, but not necessarily the right things. You can be the most efficient buggy whip manufacturer in the world, but to what avail if there are no longer any buggies.

Efficiency is often associated with economies of scale. If you produce a product in high demand, you want to produce it using the fewest steps in the operation, having the fewest defects, using the most economical inputs, etc. Large scale operations are the best setting to optimize each of these variables.

Improving efficiencies is often done with an eye towards cost savings, a perennial concern of funding agents. Funding agents can easily measure returns on their investments.

You can measure efficiencies as part and parcel of an activity. You see improvements in efficiency in very short time-frames. You can forecast and measure improvements with high levels of accuracy.

Effectiveness means doing the right thing, perhaps not the right way. Effectiveness focuses on what it is you're trying to accomplish, your intended effect or results. Make sure you're working on the right pursuit before you try to be efficient in your pursuit.

Effectiveness is often associated with Creative endeavors. These are one-off creations of new products or services. Economies of scale do not often help. Individual passions, curiosity, drive, enthusiasm, etc. are what matter most. One person alone in a laboratory can come up with most of the ingredients for a blockbuster⁺ product.

Effective operations are not necessarily the most cost efficient. Funders often do not fully understand this challenge, probably because many R&D operations are not effective. Only the most effective R&D operations are given much latitude in spending.

Effectiveness is measured as an outcome, and only rarely as part and parcel of an activity. There are rarely quantifiable measures of creativity as the activity is being performed. Only the result can tell.

1. Inefficient R&D operations can often get in the way of effectiveness when researchers spend too much time on administrative or menial tasks
2. R&D for product extensions⁺ and/or copycat products⁺ often calls for less creativity and more efficiency when time is of the essence (e.g., due to competitive pressures).

For World Class R&D we measure success in terms of blockbuster products. Sub-blockbusters, copy cat products and product extensions are a means to an end: the blockbuster pursuit. This means that although we do not ignore efficiencies, we only focus on them to the extent they affect effectiveness. And we have a very high tolerance for inefficiencies in the hunt for blockbuster products.