# Labor - Execution Efficiency ⭐

The Execution Efficiency (EE) is a KPI that tells you whether your team is on track to be in budget or not. In other words, whether the team will meet its [Margin Objective](https://help.conduite.app/books/glossary/page/margin "Margin") on labor.

It compares how much labor you would have spent of the Execution Budget (EB) based on your current Execution Rate (%EX) to what you a have spent to date.

<div drawio-diagram="99"><img src="https://help.conduite.app/uploads/images/drawio/2023-04/drawing-3-1681458374.png" alt=""/></div>

<p class="callout success">Project teams should manage their project to achieve and Execution Efficiency 100% or above.</p>

<p class="callout success">Because it is a percentage, you can instantly assess the financial health of a project, regardless of the Margin Objective.</p>

<p class="callout success">It is the main KPI that allows you to trigger adjustments of strategy and/or objectives (client approach, margin, scope, ...).</p>

**Interpretation**

- **EE &lt; 100%** - The team will spent more money than expected and the margin generated will be lower than the objective.
- **EE = 100%** - The team will spent as much as expected.
- **EE &gt; 100%** - The team will spent less money than expected and the margin generated will be above the objective.

**Examples**

Let's consider a project that has a Labor budget (LB) of $1,000 and a Margin Objective (MO) of 40%. The resulting Execution Budget (EB) is:

<div drawio-diagram="61"><img src="https://help.conduite.app/uploads/images/drawio/2023-04/drawing-3-1680876241.png" alt=""/></div>

Let's consider the following scenarios:

<table border="1" id="bkmrk-scenario-1-scenario-" style="border-collapse: collapse; width: 100%; height: 347.079px;"><colgroup><col style="width: 24.9383%;"></col><col style="width: 24.9383%;"></col><col style="width: 24.9383%;"></col><col style="width: 24.9383%;"></col></colgroup><thead><tr style="height: 29.7969px;"><td style="height: 29.7969px;">  
</td><td class="align-center" style="height: 29.7969px;">Scenario 1</td><td class="align-center" style="height: 29.7969px;">Scenario 2</td><td class="align-center" style="height: 29.7969px;">Scenario 3</td></tr></thead><tbody><tr style="height: 29.7969px;"><td class="align-left" style="height: 29.7969px;">spent</td><td class="align-center" style="height: 29.7969px;">$200</td><td class="align-center" style="height: 29.7969px;">$150</td><td class="align-center" style="height: 29.7969px;">$400</td></tr><tr style="height: 29.7969px;"><td class="align-left" style="height: 29.7969px;">remaining</td><td class="align-center" style="height: 29.7969px;">$300</td><td class="align-center" style="height: 29.7969px;">$550</td><td class="align-center" style="height: 29.7969px;">$190</td></tr><tr style="height: 91.141px;"><td style="vertical-align: top; height: 91.141px;">Execution Rate (%EX)</td><td style="height: 91.141px;"><div drawio-diagram="66"><img src="https://help.conduite.app/uploads/images/drawio/2023-04/drawing-3-1680877000.png" alt=""/></div>

</td><td style="height: 91.141px;"><div drawio-diagram="67"><img src="https://help.conduite.app/uploads/images/drawio/2023-04/drawing-3-1680877027.png" alt=""/></div>

</td><td style="height: 91.141px;"><div drawio-diagram="68"><img src="https://help.conduite.app/uploads/images/drawio/2023-04/drawing-3-1680877032.png" alt=""/></div>

</td></tr><tr style="height: 166.547px;"><td style="vertical-align: top; height: 166.547px;">Execution Efficiency (EE)</td><td style="height: 166.547px;"><div drawio-diagram="63"><div drawio-diagram="69"><img src="https://help.conduite.app/uploads/images/drawio/2023-04/drawing-3-1680877037.png" alt=""/></div>

</div>

</td><td style="height: 166.547px;"><div drawio-diagram="64"><div drawio-diagram="70"><img src="https://help.conduite.app/uploads/images/drawio/2023-04/drawing-3-1680877043.png" alt=""/></div>

</div>

</td><td style="height: 166.547px;"><div drawio-diagram="65"><div drawio-diagram="71"><img src="https://help.conduite.app/uploads/images/drawio/2023-04/drawing-3-1680877048.png" alt=""/></div>

</div>

</td></tr></tbody></table>

Let's analyze these numbers and discuss possible actions:

<table border="1" id="bkmrk-ee-status-possible-a" style="border-collapse: collapse; width: 100%; height: 119.188px;"><colgroup><col style="width: 18.7886%;"></col><col style="width: 9.2707%;"></col><col style="width: 7.53682%;"></col><col style="width: 64.4039%;"></col></colgroup><thead><tr style="height: 29.7969px;"><td style="height: 29.7969px;">  
</td><td class="align-center" style="height: 29.7969px;">EE</td><td class="align-center" style="height: 29.7969px;">Status</td><td style="height: 29.7969px;">Possible Actions</td></tr></thead><tbody><tr style="height: 29.7969px;"><td style="height: 29.7969px;">Scenario 1</td><td class="align-center" style="height: 29.7969px;">120%</td><td class="align-center" style="height: 29.7969px;">**🎉**</td><td style="height: 29.7969px;">- Increase the Margin Objective  
    *The team wants to bank the extra margin*
- Invest the additional margin  
    *The team decides to do more for the client*

</td></tr><tr style="height: 29.7969px;"><td style="height: 29.7969px;">Scenario 2</td><td class="align-center" style="height: 29.7969px;">86%</td><td class="align-center" style="height: 29.7969px;">**🚨**</td><td style="height: 29.7969px;">- Decrease the Margin Objective  
    *The team considers it will not be able to make for the lost margin*
- Decrease the scope  
    *Convince the client to do less work in order to decrease the remaining costs*
- Ask for extra budget  
    *In order to completely or partially make for the lost margin*
- New working approach  
    *In order to increase the efficiency of the team and make up all or part of the lost margin*

</td></tr><tr style="height: 29.7969px;"><td style="height: 29.7969px;">Scenario 3</td><td class="align-center" style="height: 29.7969px;">102%</td><td class="align-center" style="height: 29.7969px;">**👌**</td><td style="height: 29.7969px;">- Nothing  
    *The team is executing as planned*

</td></tr></tbody></table>