It sounds like one of the things an expensive consultant might say but you’re left wondering, how does that apply to my business?
What does productivity look like if you own a B&B? What does it look like if you’re manufacturing kitchens? What does it mean if you own a rental property? What does it mean if you’re selling IT consultancy or graphic design?
Let’s break this down and see if we can work out some general principles and then get on to some specific hacks for your business.
- the state or quality of being productive.
- “the long-term productivity of land”
- the effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.
“Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.”
Nobel Prize Laureate Paul Krugman
- Do right by your customer – give them value
- Shorten the throughput of whatever process you have – be efficient
- Value adaptability over predictability – continuous improvement is key
- Know your Numbers – have an information dashboard so everyone has the same knowledge
- Engage your team – empowered, engaged teams will solve most of your problems, dis-engaged teams will create them!
Invest in team training
Often, my husband (passionate hospitality guy) and I wander into a bar, cafe or hotel and think “All this money spent on the fitout and nothing on team training!”
If you invest in your team, this will happen:
- Your team will be engaged because they understand what they’re doing and why they’re doing it.
- The customer will get more value from their experience – if you do nothing more than ask your team to smile at the customer and make eye contact – doesn’t cost a cent more in wages and significantly increases your customer’s experience.
- Reduces your wage bill – training your team means you need less of them because they are more efficient.
From the 5 General Principles, that’s 1, 2 and 5 done in one exercise. Now all you have to do is keep doing it (see principle 3)!
How to train your team
- Find a professional to help you.
- Research best practice on the internet
- See what your competitors are doing and copy the best businesses
- Talk to your team – you may have some hidden gems in there who can help train and motivate the others
- Involve everyone in understanding the customer’s experience
- Ask the best mother you know – often the best hospo people are trained by their mother, find a good one!
- Document, train and repeat – have a rolling programme of training for new and existing team members.
Construction is booming but many building companies are going under – why? Because they don’t know their numbers and they keep doing things the same old way.
For all the very many tradies out there, how about this?
Invest in technology
Find software which connects what you do to the cloud. There is a ton of excellent quoting, invoicing, payroll and job management systems, all of which can connect to your accounting software. You should be able to take a call, provide a quote, log your time, check your team’s time and see profitability by job whilst sitting in your ute.
Ban paper, ditch the old cards, throw out the desktop computer, files and servers and lighten your load through technology.
If you invest in technology, this will happen:
- Your quotes will be in the system and ready to convert to invoices without any drama
- You will invoice and get paid quicker
- Your jobs will be monitored as you go so you can see over-runs before they happen
- Your team will have better productivity because you can see where they are, what they’re doing and whether they are over-running.
- You’ll know if a job is not profitable so you can learn quickly how to improve quotes and refuse jobs that won’t make you any money.
- You will have enough information to begin really fine tuning your processes.
From the 5 General Principles, that’s 2, 3 and 4 done in one exercise. Now how about some team training which will help your customer’s experience and team engagement?
How to invest in technology
- Talk to tech people and find out what options are available
- Talk to your business community – someone will have been through this before you
- Invest some of your time to understand the options
- Talk to your team – you may have a tech wizard amongst them
- Cost the solutions and commit to change
You might easily think that these are not areas that can be made more productive but Beany likes a challenge. Remember that productivity is all about more output from each input. For rental properties this is about knowing your numbers and enhancing your customer experience. For real estate agents, it is all about the customer experience and being adaptable.
Invest in understanding your customer
Whether this is a tenant or a property purchaser, take the time to see the transaction from their point of view. If you understand their point of view, you may be able to add value to their experience without adding to your cost. For example, your tenant may pay an extra $10 per week if the lawns are neatly mowed when they inspect or if the house is well aired, clean and smells good. The home purchaser may be more willing to make a higher offer if they trust you.
If you invest some time in understanding your customer, this will happen:
- You will be able to charge more because you will understand what will add value for your customer
- You will be able to apply your time, or dollars, to the project with the best return
- You will understand where you can make money faster (which tenants/purchasers are best for you)
- You will be able to have a better working life as your tenant or purchaser will be happier with you
From the 5 General Principles, that’s 1 done and the most important one. Now all you have to do is to really understand your numbers (General Principle 4) so you can understand the benefits!
How to invest in understanding your customer
- Talk to them about their needs and desires
Businesses in this area are typically selling time and there are two components to this, the value of your time and the amount available for sale. How can you maximise your productivity with this in mind?
Invest in understanding your value to your customer
If you can move your product away from the amount of hours you can sell to the value of the service you are providing, it allows for an expansion of your business and an increase in productivity. Instead of selling one hour of IT consultancy, for example, you can sell an IT package to overhaul someone’s IT platform. The trick here is to detach yourself from the value of the service and understand what value exists in the mind of the customer.
If you invest in this area, this will happen:
- You can, if you choose, generate more business by selling services that your customer really wants
- You can increase the amount of services you can sell by adding more people into your team
- You can potentially increase your ‘hourly rate’ by selling a package
For the 5 General Principles, that’s 1 and 5 done. Now all you have to do is to really understand your numbers (General Principle 4) so you can understand the benefits!
How to invest in understanding your value to your customer
- Talk to them about their needs and desires
- Look at what your competitors are doing and charging
- Train your team to be able to step up into your role
- Manage your metrics – get some help so that you can understand the benefits and map change