Assessing, improving productivity an ongoing part of running a company

If you are looking for ways to make your small business more productive, the answer isn’t just to buy new computers or outsource tasks like bookkeeping.

By Joyce Rosenberg
SMALL TALK The Salt Lake Tribune

People who advise small businesses say assessing and improving productivity is an integral, ongoing part of running a company, one that should be done regularly, just as you should continually monitor your cash flow. Technology and outsourcing can help your business be more productive, but they are tools, not end results.

The whole point of productivity is to ensure that employees’ time — as well as your own — is put to the best possible use.

Consultant Ed Paulson said of small business owners, "time is the most precious commodity they have next to their cash, and if they don’t effectively use their time, it’s like squandering the most valuable asset they have."

Paulson, president of Chicago-based Technology and Communications Inc., said business owners who regularly spend just a few hours looking at the bigger picture of their companies "can open up possibilities for eliminating things you don’t need to do and streamlining — making more efficient — the things that are ongoing regular activities."

For consultant Jason Jennings, assessing a company’s productivity should start with a look at the firm’s reason for being. He and a group of researchers studied thousands of companies to learn what made them productive; the research led to his book, Less is More.

"The No. 1 thing we discovered about the most productive companies is that they all have a very simple big objective that they stay focused on," Jennings said. "They do not try to be all things to all people. They’re not all involved in trying to serve many different markets."

That’s the approach taken by many big companies when they decide to sell off or shut down operations that fall outside their core business. The sideline companies distract from running the major business, and that means a drop-off in a company’s productivity.

Jennings also said a company cannot become more productive until it makes all its operations systematic, with no deviations. He said of the most productive companies he studied, "they turned everything they do into a system — the way they answer the phone, greet customers, diagnose customers’ needs, present a solution to customers."

Another facet of improving productivity is ensuring that employees are doing work they are well-suited for.

"Do you have the right people in the right positions?" asked Lisa Aldisert, president of the New York-based consultancy Pharos Alliance. "One of the biggest mistakes companies across the board make is they hire incorrectly."

That doesn’t mean you have a bad worker. Aldisert noted, for example, that a company might have an information technology employee who really knows computers, but who is a poor mentor or communicator and therefore the wrong person to be teaching co-workers how to use a PC or new software. That cuts down on productivity.

It’s common in a small, growing company for the firm’s small staff to increasingly take on new tasks. Aldisert said that also might work against productivity.

"They end up doing 10 other things that weren’t part of the package when they went in, but that may not be areas where they can be effective," she said.

That’s where solutions such as outsourcing or a greater use of technology come in. For example, if you have your sales staff taking reorders and checking on shipments instead of focusing on new business, it might make more sense — and make your workers more productive — if you hired a fulfillment service to do that.

Paulson suggested that business owners use the Internet as a customer service provider — but with the caveat that the Web is not a substitute for the interaction with customers that’s crucial to maintaining good relationships.

"If they need product information or they need customer service information . . . those are good things to put on a Web site," Paulson said. "They can get that information anytime, day or night."

"It frees you up from doing the more routine or mundane activities of providing the same information to different customers," he said.

But Paulson also recommended that business owners proceed cautiously as they take steps to improve productivity, and keep their customers in mind.

"If you optimize your processes and shortchange your customers, that’s a dumb thing to do," he said. "Always start with your customers and what they need."
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Joyce Rosenberg writes about small business for The Associated Press.

http://www.sltrib.com/2003/Sep/09142003/business/92087.asp