Through my network of peers on LinkedIn it has been identified that a big challenge for businesses, certainly in my own network, is that of productivity and efficiency.
I’ve tackled this topic in my posts and in greater depth in my some of my articles – just search ‘productivity’ and you’ll find a few items.
But it seems that productivity, or lack of it, is still an issue for many of us.
To be able to improve it, we need to clearly understand what we are measuring and comparing it against. If your bar for success is set relatively low, then you may feel comfortable with your outcomes. Understanding where your expectations lie and how the outcomes meet them is key.
Drilling down to what productivity means
Previous articles on this topic have touched on time management, automation, delegation and so on. This time I’m going to get a bit deeper and look at the formula behind productivity, and how this formula quantifies it.
The common ‘productivity equation’ for business is:
revenue divided by staff costs
Bear in mind of course, you may be including the cost of individuals in your business that are not directly responsible for income generation. Therefore, you have to be clear on what your return on investment is for their role.
Should tasks such as service or operational excellence deliver an outcome that you measure differently to others in comparison to income? If so, how can you measure the outcome and therefore the value of those staff members? Is it in timeframe or service level agreement? Is it based on customer feedback?
Once you have identified the metrics by which to measure the different staff, you can begin to apply the quantification exercise to each member, applying your caveats where necessary.
The numbers will reveal the areas for improvement. The following exercise and example can be repeated for each group/staff member’s activities depending on their impact on income.
TIP: My primary tip to improve a process is to first map it out. Draw it out, list it, know it’s intricacies. After you have clarity of what is actually involved, you can then review each part, each step of the process to see if it can be improved.
That may mean automating it or delegating to another party. It may require a measure of each element rather than the task in full.
For example, say there are 10 steps in the process you want to become more efficient. Each step currently takes 10% of the total time. Can each step be reduced by 1%? Is one step in need of improvement more than any other? Are all steps necessary, are some missing?
Another way to improve a process is to get your team together to work on the ‘flow’ in your business. Get them to step back from it, reflect and together agree the efficiencies that can be made. I assure you that people in your business will have ideas of their own, and all deserve to be heard, at the right time.
What are your thoughts on productivity in your own business?
I’d welcome your thoughts on productivity within your business. Have you done an exercise like the one I describe? Do you have an innovative way of measuring productivity of staff that don’t directly impact income? I’m always available for a networking one-to-one and now my network is changing and growing in new ways, I’d like to connect and see how we could support one another.