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Talking about goals and objectives provides us with the perfect opportunity to bring up another pair of business terms that people have bandied back and forth for years: efficiency and effectiveness. The terms were first thrown together in an absolutely captivating business classic, Functions of the Executive, written by Chester Barnard back in 1939 (why are you snoring?). Old Chester was president of the New York Telephone Company, and perhaps he had a bit too much time on his hands (monopolies, you know, can lead to that). But he did come up with one useful notion for working with your company’s goals and objectives: efficiency versus effectiveness.

We all strive to be both efficient and effective in our individual work, of course. Effectiveness is often described as “doing the right thing,” whereas efficiency is described as “doing things right.” President Barnard came up with the idea that you can apply these concepts to a company and its activities.

In this context, effectiveness — doing the right thing — has a great deal to do with choosing the right goals to pursue. For example, consider an imaginary company we’ll call Global Gadgets. Its mission statement may emphasize becoming customer-focused and market-driven in all product areas. If Global Gadgets is to be effective, management must set goals that encourage product designers and engineers to be in touch with their customers first and to be aware of market demands before they start designing and creating new products.

Efficiency — doing things right — is concerned more with how well the company applies resources in pursuit of its goals. To be efficient, Global Gadgets’ employees must have objectives that ensure the company can achieve its goals of becoming customer-focused and market-driven. Among other results, these objectives should lead to a proper allocation of the research budget among design, product development, and market testing. Resources are always scarce, and Global Gadgets can’t afford to squander them.

Successful organizations aren’t just effective or just efficient. The best companies are both efficient and effective on a consistent basis. They achieve both efficiency and effectiveness by taking goal-setting and the development of clear, measurable objectives seriously in the relentless pursuit of the company’s mission. Achieving one without the other is like wearing an attention-getting gorgeous new designer outfit to the company’s annual New Year’s bash while keeping your bathroom slippers on: The shoes might have been an efficiently quick-and-easy way to dress, but … OMG, what?