To make a device more efficient we reduce the energy it wastes, so that more of the input energy becomes useful output energy. Most waste is thermal energy, so the main aims are to cut friction and to cut unwanted thermal transfer.
Friction between moving parts transfers kinetic energy to thermal energy. Putting a lubricant, such as oil or grease, between the parts reduces friction, so less energy is wasted as thermal energy. Keeping moving parts clean and well fitted also helps.
Unwanted thermal transfer can be reduced with thermal insulation. Wrapping a hot water tank in thick insulation lowers the energy dissipated to the surroundings, so the efficiency of the heating system increases. Electrical devices can also be improved by using thicker wires, which have lower resistance and so waste less energy heating the wires.
If the input energy is the same, wasting less means a larger useful output, so the efficiency rises. It can never reach 100%.