A device is more efficient when a bigger share of its input energy is transferred usefully. To improve efficiency you reduce the wasted energy, so that less is dissipated.
Friction wastes energy as thermal energy, so adding lubrication such as oil to moving parts helps. Streamlining a car reduces air resistance, so the engine transfers less energy to the surroundings. Thicker wires have less resistance, so less electrical energy is wasted as thermal energy in the wires.
Thermal insulation stops thermal energy escaping from heating devices and buildings. Choosing better devices also helps. An LED lamp gives out the same light as a filament lamp but wastes much less energy as thermal energy. For example, an engine that wastes 40% of its input has an efficiency of 60%.