As a business manager, one of the questions you are likely to grapple with from time to time is the one on how to improve business productivity. There are two scenarios where this question is likely to come up. The first scenario is where the business simply happens to be performing in a sub-optimal manner: leading to the question as to what you can do, to bring the performance up to par. The second scenario is where the business happens to be performing reasonably well, but where you nonetheless feel that it can perform even better. This, too, would lead to the question as to what measures you can take, to improve the business’ productivity. In this article, we will try to address that question, as we try to figure out ways in which business productivity can be boosted.
Diagnosing the problem
In trying to answer the question as to how business productivity can be boosted, it is important to appreciate, right from the outset, that we don’t purport to give a ‘one size fits all’ solution. This is to say that different solutions are needed for different businesses, depending on the respective businesses’ circumstances. Thus, for any given business, the best place to start is by diagnosing that business’ particular productivity problem. The fact that a particular business manager is trying to improve business productivity means that that particular business’ productivity is not as good as it should be. So, the diagnostic exercise is aimed at understanding why that is the case: why that particular business is not being as productive as it should be.
There are many different reasons as to why businesses fail to be as productive as they should be. There are cases where it turns out that the poor business productivity is due to lack of proper manpower. When we talk about lack of manpower, we are not just referring to the workers who are involved in operations (as traditionally defined). You could be looking at a case where the people doing the operations/production work are good, but where the folks doing the marketing work are not exactly good. The end result would still be poor business productivity.
There are other cases where you find businesses with proper manpower, but where the poor productivity is as a result of lack of motivation for the workers. You may have workers who are competent, but who aren’t adequately motivated. The end result would be poor output.
Then there are the cases where the poor business productivity is due to lack of proper equipment. It may be that investment in proper equipment was never made. It may also be that the (proper) equipment that was bought earlier has, with time, become obsolete or prone to malfunctions – leading to poor productivity.
In certain cases, you find that the problem is simply lack of proper management. Here too, you have to sink a little bit deeper, to understand where exactly the management failures are (if it turns out that, in your case, the poor productivity is due to management issues). This is where you may find out that the root of the problem is in financial management. That is also where you may find out that the root of the problem is in operations management, or in human resources management… or somewhere else in the business.
Therefore we see that the most important thing in diagnosing the problem is to dig deeper, to get to the root of the productivity problem. You shouldn’t take a superficial outlook. Ultimately, when it comes to treating the problem, you won’t have much success if you just treat the symptoms, without addressing the root causes. And you won’t understand the root causes, unless you dig deep during the diagnostic stage. This assertion is important, because many of the people who attempt to solve business productivity problems tend to do so by addressing superficial issues, without looking at the root (underlying) causes. This is why they end up attaining very little success.
Solving the poor business productivity problem
After going through the diagnostic process, and identifying the reasons as to why your business’ productivity is not as good as it should be, you will be able to find solutions straightaway. This is because the solutions tend to be very obvious, once the root causes of the problems are identified. Suppose, for instance, it turns out that the business is not performing optimally due to lack of proper manpower. The obvious solution, then, would be to hire the right people to work in the business. An alternative solution would be that of retraining the existing people: if your analysis reveals that the existing people can be retrained to the right standards.
If, on the other hand, it turns out that the business is not performing well due to lack of proper equipment, the obvious solution would be to invest in buying the right equipment. An alternative solution here would be to upgrade the existing equipment, if your diagnostic analysis revealed that the existing equipment is capable of being upgraded to the required standards.
We therefore see that the solutions to business productivity problems tend to be easy to pinpoint, once the root causes of the business productivity problems are diagnosed.
Making hard decisions
From what we have just said, it is easy to get the impression that solving the business productivity problems will be an easy undertaking. Well, sometimes (in a few cases), the steps that need to be taken to improve business productivity turn out to be easy ones. However, in most of the cases, implementation of the steps that need to be taken to improve business productivity turns out to be a difficult understanding. That is because, in most of the cases, hard decisions have to be taken and implemented, for business productivity to be boosted. For instance, let’s suppose (once again) that the cause of poor business productivity is diagnosed to be lack of proper manpower. The solution here, as we have observed, may entail hiring the right people to do the work in the business. And to create room for the ‘right people’, you may have to let the existing people go. In theory, it sounds easy. But in practice, that is a hard decision to make.
Similarly, if the cause of poor business productivity is identified as lack of proper equipment, the obvious solution (as we noted) will probably be in acquisition of the right equipment. This actually means getting money from somewhere, to buy the right equipment. Practically, this may entail having to take a business loan, or having to sell equity, in order to get the requisite funds. Those are not easy decisions to make, especially if you had gotten used to the freedom that comes with running a business by yourself (without having other shareholders) and without having to deal with creditors/lenders. Nonetheless, the hard decision has to be made, if business productivity is to be improved.
We ultimately come to the conclusion that improvement of business productivity is a three-step process. In the first step, you diagnose the problem: which entails trying to figure out why exactly the business is not being as productive as it is supposed to be. In the second step, you identify the solutions to the problem – which is a question of coming up with practical strategies to be implemented, in order to boost productivity. In the third step, you implement the business productivity improvement strategies: which may entail having to make some very hard decisions.