Productivity in your company
As a self-employed person or entrepreneur you are responsible for yourself and your business. What reads so nicely in one sentence and sounds totally logical really has it all. Let’s look a little deeper into this.
Every single day, you are faced with several decisions and challenges that need to be mastered. Every single day, you are responsible for managing your business, your personal desires, your health, and of course, your time. This can be quite challenging because it’s not about being diligent every day at all, it’s about being productive every day.
What do we mean when we talk about productivity?
From a business management point of view, productivity is a key figure that indicates the relationship between production results and the use of production factors. In short, productivity is the ratio between what you put in and what you get out. So if you are just busy all day, then you have been working all day without fail.
Yet, your business didn’t move forward in a positive way, it kind of worked off tasks that just needed to be done, or the ones you just saw, or even the ones that just got super important to you, but not the ones that really move you and your business forward.
Many entrepreneurs feel this way, and you are no exception. The important thing is that you are aware that this happens from time to time in your daily life and if you are aware of such tasks in your daily life, then you can eliminate them.
As an entrepreneur you have a multitude of tasks to take care of
Starting with: Get your vision out there for everyone to understand. Not only your customers, but also very importantly your employees. You are responsible for the implementation of your entrepreneurial values, you have to design the strategy for your company, control it and adjust it if necessary. You have to take care of your employees and their concerns, if any.
You have to check your whole system again and again and optimize it if necessary, adapt it to changing market situations, cut unnecessary things, keep an eye on the growth of your company, develop yourself further and somehow still manage the normal everyday life.
Wow, that’s a lot of challenges every single day and yes, not every day every area is super important, but how quickly does it happen when you put the focus on one area that there are so many issues popping up that want to get done that you lose sight of another issue area until there’s a real fire there.
Parkinson's law and its effects
This is where, without you really realizing it, Parkinson’s Law strikes. This one has nothing to do with the disease, but it is a 1957 book by Cyril Northcote Parkinson. After C. N. Parkinson was transferred to Malaysia, he observed work procedures in a colonial administration and derived his law: “Work can be stretched like rubber to fill the time available for it.”
This means that it happens not only to you as an entrepreneur, but also to your employees that they, to put it exaggeratedly, get stuck on activities and probably do them perfectly, but unfortunately are not productive at all, because they leave a lot of other things behind or possibly do not even see what is much more important now and what would bring the company significantly faster or further forward.
Take some time here to think about how the processes work in your company, where Parkinson’s Law occurs in your company, and how you can make sure that it doesn’t strike as often in the company, or preferably almost not at all.
The power of habit or routines
We humans love habits and sometimes routines creep in, which are no longer questioned, but are simply worked through day after day, month after month and year after year, simply because the processes were set up at some point and may simply have been transferred from employee to employee.
If new tasks are then added, there is no check at all as to whether old tasks have perhaps become superfluous. In many cases your employees feel that more and more is demanded of them, because no one really knows what the individual is actually doing. Most of the time you can bundle tasks or it makes sense to restructure them or nowadays maybe even partially automate them.
Another important tool to increase productivity is the Pareto Principle
I’m sure you’ve heard of that too. Please read it again here anyway and let it take effect. For those who don’t know it yet, here’s a quick explanation. The Italian economist Vilfredo Pareto found out in 1906 that in Italy about 20% of the population own 80% of the land. He then examined the income levels of other European and South American countries and came to similar conclusions. From this developed the Pareto principle, which is also called the 80-20 rule.
If you now transfer the whole thing to your company, then you can say that 20% of the tasks carried out contribute to 80% of the overall result. I’m sure you’ve read this before and it’s nothing new to you.
But this doesn’t just apply to tasks, it applies to everything. 20% of your customers account for 80% of your sales. 20% of your employees are responsible for 80% of your success. Ok, you can’t always use the number to the decimal point, but as a guideline it can always be used.
The Pareto principle also applies on the negative side
But more importantly, what applies to the positive, of course, also applies to the negative. This is something that not so many entrepreneurs keep in mind. Here for example: 20% of your employees contribute to 80% of a bad atmosphere in the company. 20% of your customers cause 80% of the effort in your business. On the other hand, 80% of the tasks performed bring your company only 20% of the turnover.
So you see how important productivity is to your business. And it doesn’t matter whether your employee works from a home office or on-site. You are constantly in the office / company or at trade fairs with customers, etc.? It is therefore all the more important that you create processes that can be used and applied from anywhere. Whether you are a sole trader or have one or more employees.
It is important that all gears (tasks, processes, ideas, etc.) mesh so that they have an optimal benefit for your company. We can understand if you sit there and say: “Whew, my head is spinning. How am I supposed to realize all this, implement it, uncover it …?
Facing the challenge in everyday life
Yes, this is admittedly a challenge. Always remember that the Pareto principle also applies here. 20% of your decisions contribute 80% to the outcome.
And no one expects everything to be ready converted tomorrow.
Nevertheless, increasing productivity should always be a high priority in your business decisions.
Productivity is the same as efficiency, right?
No, not at all. It is often assumed that way. And that is also very important to understand that these are different approaches. You should also communicate this clearly to your employees.
Increasing productivity is about improving the bottom line with the resources you have, such as time, people, etc. Increasing efficiency, on the other hand, is about reducing the resources needed, such as the number of employees.
If you make it clear in the company from the outset that it is important to you to improve productivity and not efficiency, then you will quickly have your employees on your side and receive constructive suggestions for solutions from them.
How and where should you start in your company right now?
What is the right thing to do in your company to increase productivity can only be found out by taking a close look. You have many possibilities for this. Depending on how your company is set up. Maybe there are process flow charts that you can look at and improve. Maybe you can hire someone to put these things together at your company.
Maybe you have your employees compile lists on which they summarize their tasks according to subject areas and with time specifications. Or you can specifically ask your employees what they would improve about their job. This is often where good ideas come to light.
Perhaps to-do lists are maintained daily or text templates are already saved by individual employees for recurring mails.
The list here is not intended to be exhaustive, but rather to inspire you to look at where you or your employees can look.
How did you solve the whole thing in your company?
Wondering how we pay attention to productivity in our company? We use a separate software called Linda pro for this. Of course, we were also faced with these and other challenges and had to consider how best to integrate this into our business.
After much research, we found nothing in the way of software products that met our needs. There was always something missing. So we developed our own software. We now use these throughout the company and are of course happy to make them available to other entrepreneurs.