Posts tagged with: productivity

Business Growth Requires Individual Effectiveness

If your company is growing, it will have a tendency to continue to grow because you’re doing things right. Conversely, a company that is going backwards or shrinking has a tendency to continue to go backwards or shrink until acted upon by an outside force or you choose to make a change.

When we read about the concept of business growth in the top business periodicals, they always reference the multi-national corporations. That context isn’t relevant to small and medium size businesses. For you, business growth requires individual effectiveness.

In your business, you hold the office of president or CEO of the corporation, and you’re responsible for its success or failure. You and the members of your team are invested in your corporation, and it’s your responsibility to see that the value of the business continues to increase in the years ahead.

Growth vs. Death

All responsible company officers know that unless the company is growing, it’s showing the first signs of death. As the head of your corporation (be it 1, 50 or 500 people), you must realize that this applies to you as well.

Your Advantage

However, because you are also a person, you have a tremendous advantage over even the largest corporation. In a large multi-national corporation, can it double its production in a single day? Of course not. Can it double its sales in a single day? Of course not. It might like to, but its growth options can be gated by the complexities of such a large organization. Yet an individual person can double, triple, quadruple his/her effectiveness in a month or less. As a smaller business, you can implement flexibility, control and responsiveness to get immediate results which is very difficult for corporate giants to do.

Increase Effectiveness

Can you grow and improve as a person at least 10% a year? Of course you can. In fact, experts estimate a person can increase his or her effectiveness anywhere from 50% to 100% and more within 30 days. Now apply that to each person in your entire business.

History is filled with people who exceeded their previous performance to an almost unbelievable extent (artists, athletes, musicians, orators, military and political leaders, not to mention the corporate rags to riches stories).

Cost of Wasting an Hour

Think about it. If you waste even an hour of productive time every work day, it adds up to 250 hours a year. If you had an employee who wasted that much time, would you keep him on the payroll or fire him?

What is your time worth per hour [the burdened hourly rate it costs the company]?

 If your salary is $150,000 and your burdened hourly rate is 1.5 then your hourly cost to the company is $108 (assuming a straight 40 hours/week).

 Multiply this by 250 and you can see what you’re throwing away. $108 x 250hrs/yr = $27,000/yr.

The effect is compounded when you tally the cost for each member of your team.

If even 5 people (at $50,000 salary) waste an hour a day, that’s $36/hr x 5 = $180/day x 250 hrs/yr = $45,072/yr.

Salaries are sunk costs. That’s $72,000 you can’t recoup and you have nothing to show for it.

What can you do now to improve the effectiveness of every member of your team, to get better results/person? How would that improve your bottom-line?

Here’s the challenge from Earl Nightengale:

 “How much are you worth right now, today, as a corporation? What’s your value today, to yourself, your family, your company? If you were an outside investor, a stranger [e.g., a potential acquirer], would you invest in this corporation?”

Effectiveness, Performance, Productivity

Business growth requires individual effectiveness from the entire team. Wasted time equals lost opportunities and a direct reduction in net profits to your business that can be measured daily. Measure these three factors: effectiveness, performance, and productivity, to track the value each individual on your team contributes to your corporate growth.

 

Your Magic Operational Dashboard

Your Magic “Operational Dashboard”

Your magic “operational dashboard” is simply a listing of your business’ key metrics (your key performance metrics (KPI)). They are effective for many reasons.

GoDaddy CEO, Bob Parsons, summed it up when he said,

Measure everything of significance. Anything that is measured and watched, improves.”

It’s simpler than you think. List your company’s key metrics; the numbers, activity, results that are important to you. These become your personal ‘magic’ dashboard.

Simply by measuring something, it can improve. Intuitively, this makes sense. Start with your own operational dashboard to track performance and exactly how your business is performing overall.

Tracking and measuring will:

  • improve productivity
  • demonstrate value
  • provide the data to spot and fix problems faster

ACTION: Prove it to yourself. Pick 3 things significant to your bottomline. Measure, watch and track them for 30 days. See what improves.

What You Can’t Do Is Create More Time

Time behaves like money – it’s a scarce resource.
Anything you achieve in life can be valued
by how much time you invested to acquire it.
Do you know the value of your time?

Procrastination vs. Productivity

You can’t hoard time from yesterday to use today. You can’t borrow time from tomorrow to use today either. You need to leverage your time, and how you spend your time, to deliver the maximum value for the business now, not someday.

Your own productivity is the standard for your entire business. Productivity is the time you apply to your most valuable activities – those tasks and responsibilities that generate the most or highest revenues for the business. Staying “busy” with tasks you can hire out at $12/hr. or $25/hr. is not being productive.

Do you know what percentage of the time you are productive? Really productive in your business? To put your answer in context, consider this:

One study of Fortune 500 CEOs estimated they had 28 productive minutes a day. Another one estimated it at 38 productive minutes a day.

You’re thinking, those CEOs put in such long hours, that can’t be right. Only 28 or 38 minutes a day? Now think about what these CEOs of the most successful companies do, how much they get done and how much (little) time they actually get to focus on profit-building activities.

You don’t have nearly the responsibilities of a Fortune 500 CEO. You should be able to carve out a lot more productive time. When you do increase your productivity, consciously using time more wisely:

  •  What will your day look like?
  •  What will get prioritized on your schedule?
  •  What has been siphoning off your valuable time that you can delegate more?
  •  How will this increase in productivity impact your bottom line?
  •  How much more time can you focus on the CEO role of strategy vs.
    management?

You need to stay focused on your priorities and your most valuable activities. Therefore, to scale or sell the business on your terms, you must leverage what you do best to achieve your most ambitious goals.

To leverage what you do best, you must view you and your business in a different way.

  •  You must stop seeing you as the sole resource in your business
  •  You cannot be the hub of every decision
  •  You cannot wear every hat
  •  You must start looking at how to leverage who you are and what you do to
    serve a larger audience and play a bigger game.

To do that, you must build an actual business and a team around what you currently excel at doing.

How Does Systematizing Help You Accelerate Growth And Maximize Value?

To some extent, all business owners start their business on passion and prayer. As inspiration, motivation, and drive – you do need both passion and prayer.

However, the most notable businesses that we remember and talk about are not the thousands of businesses that get started each year. Rather they are those enterprises that look like and act like a thriving business entity. Those businesses that survive, flourish and grow are distinctive in a number of areas. These are the business owners who actively and intentionally become strategic entrepreneurs. Here are some of the benefits they obtain as a direct result of systematizing their businesses.

  1. Run your business as a business with goals, budgets, strategy, campaigns, customer centric, attentive to market trends and outside influences,
  2. Keep accurate current financials. Do not run the entire business out of the checkbook. They can withstand a complete audit.
  3. Use credit and debt responsibly to grow the business because it’s built into their strategic plan
  4. Take direction from their Boards. Leverage their Board of Directors and Board of Advisors wisely. All because they documented their strategic plan for using their boards and trained their boards from the beginning
  5. Are responsive to the market because they have systems in place to monitor, the prospect market, the competition and outside influences
  6. They build a strong team of experts around them by expecting everyone to document standards and systems in their area of expertise from inception, company value is evident and not dependent on one individual
  7. They can master the art of delegating, outsourcing, and automating in every area of their business – because they have a recorded every process, policy and system to be repeatable by someone else.
  8. They see their productivity escalate by adhering to these systems and the team can emulate this use of systems to get more done too
  9. With governance and legal documents and forms always up to date – these businesses are always ready for an eager buyer’s due diligence
  10. With growth forecasts and goals in hand, they can anticipate capital requirements and capital expenditures and develop attractive options and minimize risks
  11. New systems they implement are designed for the company to grow into, replacing the systems they’ve outgrown that are holding them back
  12. They are very resilient and responsive because they always have a Plan B for every eventuality
  13. All their short-term and long-term decisions and goals have always been tied to what it would take to fulfill their Exit Plan

Systemization is a critical aspect of grooming the business for sale. It takes time to plan, decide, implement and monitor results of your strategic systemization. You will develop Key Performance Indicators to evaluate and refine these systems. When you package up those same Key Performance Indicators as a trends report with 2-3 years data – it becomes powerful proof to persuade your buyer of the value they are buying.

Stay Focused on Your Priorities

When your intention is raised to the level of a commitment to accelerate growth, maximize value in the business and make that business buyer ready; at that point,  every task, goal and objectives must be tied to those clear specific objectives. It’s essential to make those objectives your priorities to make your business buyer attractive.

To Stay Focused On Your Priorities

Here are 5 simple ways to stay focused but they only work when you make these rules into habits you live by every day.

  1. Always tie your daily task list to your goals. If your daily tasks are not helping you develop your exit plan and bringing you closer to your transition, they are keeping you from it
  2. Be sure the first task you tackle each day moves you closer to achieving your biggest goals. Your biggest goals should be what helps you get out when you want to.
  3. Delegate what does not have to be done by you.
  4. Focus on what’s important to eliminate crises. Crises take you off your game to address another need on the critical path or on someone else’s priority list.
  5. Set time limits for every task on your list:
    1. to ensure you complete every task on your list
    2. to stay highly productive using your time wisely on every task you take on

There’s a very compatible synergy between priorities and productivity. Cultivate this kind of co-dependence and you’ll get more done.

Productivity Improvements Add Value to the Business Itself

Demonstrating and documenting productivity improvement efforts directly adds value to your team and adds value to the business itself that your prospective buyer can visibly see in action.

You instinctively know when you are being extremely productive. You get more done. You get more of the right things done. You effortlessly get the most important things done. Isn’t it when you are focused on your highest priorities?

Too often we equate productivity with being ‘busy’, ‘very busy’, ‘too busy’. It is easy to be extremely ‘busy’ reading all the newsletters in your inbox or filing away all the files and reports you’ve used all day. Instead, ask yourself:

“Is this the most valuable activity I should be doing right now?
What’s the most important thing that has to happen today
and has to be done by me?”

Busy-ness is not the same as being productive.

To get more time and achieve your goals, be sure you do two things: increase productivity in the allotted time and always address your highest priorities first.

To Increase Productivity

  1. Set your daily task list to address your goals first. Commit to the next step and get it done.
  2. Set aside a time and place to work uninterrupted (no appointments, no calls, no emails, no distractions).
  3. Tackle the most critical task of the day when you are at your peak for performance; often you will be most productive early in the day. In the context of exit essentials, you will ideally work on your exit plan and all aspects of it every day, first thing.
  4. Limit the time you expend on reading and answering email, say 30 minutes twice daily – and stick to this rule. Like a diet, you’ll see the difference over time, not overnight.
  5. Organize your time to group ‘like tasks’ together. For example, it’s more efficient to make all your calls/callbacks at the same time. You’re in control, and with a list of calls to make, you can more easily keep each call short and to the point.

Priorities and productivity are co-dependent objectives when you are trying to get something done. Both require focus, discipline, responsibility and accountability.

To get more time, and get more done in the time you have, you need to increase productivity.

Productivity – An Exit Skill Set to Add Value to Your Business

By definition, productivity is a measure of output from a production process, per unit of input or more simply yielding results, benefits or profits. Productivity is distinct from profitability. Profitability is the net difference between revenues and expenses. However, every little improvement to productivity has a direct impact on your profitability.

Until you monetize lost productivity, nothing will change. Take a week to track how you/your team use time. Review and discuss what you find. In discussions with clients, we talk about productivity in terms of the results they need and how to get more done in less time and reduce the cost to do so. You can too, just by being more aware of it.

Here are just three examples of lost productivity:

15% of all paper handled in businesses is lost, according the Delphi Group, a Boston consultancy

30 percent of all employees’ time is spent trying to find lost documents.
Jane M. Von Bergen (Knight Ridder Newspapers), The Boston Globe, 3/21/2006

Executives waste six weeks per year searching for lost documents.
From a survey of 2,600 executives by Esselte, maker of Pendaflex and Dymo, FastCompany Magazine, 8/2004

These statistics and others like them are clear evidence that organizations of all sizes desperately need productivity training to take control and get organized.

Consider what the results would be for your business.
If you were asked about the time you spend on just four activities:

  • Email and Internet Use
  • Stress and Work/Life Balance
  • Time and Multi-tasking
  • Paper and Filing

and the dollar cost to your business’ productivity for each of these, what would the answer be? How could you increase your productivity in that area? How could you improve productivity in that area for every employee in every department?

When you look at your productivity and the team you have built around your business, can you see inefficiencies in how things get done? What is it costing you to continue to do things the same way? If you monetize that lost productivity, how would you choose to spend those resources? Getting more done? Saving time? Saving money? Increased profitability? Spending more time with friends and family? Taking that vacation?

 

For more ideas on how to drastically improve productivity, ask about this free whitepaper.

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