A Place for Everything and Everything in Its Place – Part 1 – Business Productivity

Do you agree that every business leadership team’s prime focus is to increase its margin, each quarter and every quarter?

Moreover, do agree that improving productivity is the predominant factor to enhancing margin each quarter?

Unfortunately, profit margins rise and fall depending on the level of productivity that flows from the leadership team and their employees.

It’s therefore essential to have a plan in place to improve productivity, measure continuous improvement and reward innovation.

The ultimate goal is to compete on margin, and not on price.

Are you now developing a firm-wide culture that knows, strives and is passionate about continuous improvement and exceptional productivity?

Does your team now define, explain, measure and execute productivity?

What is Productivity?

Most say that workplace productivity is built on teamwork and a shared strategy of where a business is headed. There’s a readiness at all levels to keep learning, be accountable, and invest in skills.

Everyone’s role is valued, and all employees are encouraged to contribute ideas.

Productivity indicators

The three primary indicators of higher productivity are:

  1. The best application of employee’s capabilities and material resources;
  2. No unplanned wastage, no loss of materials; and
  3. Quantitative and qualitative production of goods and services at a lower cost year after year.

The obvious benefits of higher productivity:

    1. Increased profits because you are now dominating on margin;
    2. Better return on investment;
    3. Great employee relations. People are happy; there is an honest desire to go the ‘extra mile’;
    4. Client satisfaction. Enviable client satisfaction & loyalty scores;
    5. Top quality products and services with exceptional margin;
    6. Good credit profile. Reduced lending costs may be available to the organisation;
    7. Better credit terms. Suppliers are now offering discounts and longer payment terms; and
    8. Low employee turnover. Employees like being successful and as a result, stay longer. This saves on training costs and recruitment fees.

Evidence of Productivity

Most companies aspire to be or claim to be a productive organisation. However, there is often little tangible evidence or strategy to deliver what is claimed.

A productive organisation will complete the following, at a minimum, to affect their productivity:

      1. Weekly preparation of new tasks and measures of existing tasks;
      2. Strategy alignment with organisational vision clearly defined and shared;
      3. Project outcomes are clearly defined;
      4. Business processes are designed, and users rewarded for continuous improvement;
      5. Organisational structure is designed to meet strategy and modified when errors are identified;
      6. Job roles are defined;
      7. Job descriptions are written and known;
      8. Measurable objectives defined and mapped to client delivery are rewarded when exceeded;
      9. Performance measures designed;
      10. Performance appraisal process completed twice per year, based on individual KPIs; and
      11. Incentive systems designed and suitable to reward the right behaviours.

To confirm your current levels of productivity – conduct a productivity audit or Discovery Workshop to identify and critique current levels of productivity and congruence with strategy.

Written by Dan Peters of Edgeview Consulting. Contact details W: www.edgeview.com.au Ph: 0405 053 155 E: dan.peters@edgview.com.au