How to assess and improve business efficiency in 3 steps
How efficient is your business and its processes?
Small businesses can run very efficiently, but as they grow and get bigger, they tend to get more complex. As more people, processes and products are added, efficiency can quickly go out the window (along with profitability). It’s up to leadership to identify where inefficiencies lie and continually resolve them, so that the business can continue to grow and profitability remains high.
Inefficient processes slow down productivity and limit the ability of a business to scale. Market research by ICD suggests most companies lose 20 to 30 per cent in revenue due to inefficiencies. A staggering figure.
At Converge, we work with businesses of all shapes and sizes, assessing and improving their processes to increase efficiency. The are 3 steps we’ve identified to help businesses assess their own efficiency and make improvements to their processes.
How to assess the efficiency of your business processes
Step 1. Survey your team
Your team is on the front-line with your customers and so they often know where to find inefficiencies best.
Inefficiencies are often hidden in plain sight. The way to find them is to look for where your team members are spending most of their time, experience the most frustration and/or where work is being avoided altogether. These are clues as to where inefficiencies lie.
Most employees will not inform managers of inefficiencies by default. That kind of feedback has to be invited by management and encouraged as part of your organisation’s work culture.
Here are 3 open-ended questions to ask your team members about where they are experiencing problems, slow-downs or frustrations with their work.
- Which tasks are most repetitive?
- Which tasks do you spend the most time on?
- Which tasks do you enjoy the least?
You can replace ‘Tasks’ with whatever work unit best suits your business. Eg. “What client projects do you spend the most time working on?”. Leaders should listen and ask follow-up questions so that they can understand what underlying problems with each process are leading to inefficiencies.
TIP: Use The Pareto Principle (80/20 rule) and look for the big glaring problems or frustrations experienced by your team. 80 per cent of negative results are due to 20 per cent of inefficiencies.
Step 2. Track everyone’s time
Do you know what your team members are spending most of their time on each day? There could be specific tasks or entire workflows that are chewing up employee’s time. You won’t truly know how much time can be reclaimed until you do a time audit.
Ask team members to start recording what they spend most of their time on for one work week. Assure your team that this exercise is not to assess how they’re working, rather, to discover what they’re working on and identify any tasks that may be chewing up more time than needed.
How you track everyone’s time will depend on how your business operates. You can use digital time-tracking tools, or a simple spreadsheet will suffice. There are two key things you want to record: (1) the activity and (2) the time spent working on it.
Tip: Schedule a recurring meeting for 5-10 minutes at the end of each work day to remind team members to check in and complete their time audit.
At the end of the week, review, calculate and analyse the data. You may be surprised at your findings! Most businesses are.
Step 3. Improve and automate processes
Now that you’ve surveyed the team and reviewed the findings of your time audit, you can start improving and automating each process in the business to unlock greater efficiencies.
There are 3 steps to improving each individual process:
- Pin-point where the current process is inefficient
- Improve the process by redesigning it for optimal efficiency
- Automate the process using technology solutions
Tip: Document your processes for team visibility and training.
Converge can help you fix business inefficiencies
At Converge, our team are the experts at solving process problems and automating workflows to remove the manual paperwork and process headache from businesses.
Do you need help making your business processes more efficient? Ask yourself:
- Are you spending all your time chasing your team up for status requests?
- Does it feel like you don’t know what’s going on in your business?
- Got so much on your mind, you’re worried about what you’ve forgotten about?
- Are you running your business out of your email inbox?
↑ All these problems are unnecessary when you work with us.
When you partner with Converge, your business will run more efficiently which, means more free time and more profit. Talk to us today and get a free assessment of your business. Call us on 07 3709 1356.
About the Author:
Calum McGonigle is the director of Converge Design, a productivity consulting company based in Brisbane Australia. With 15+ years of experience in business, Calum knows how to help you and your team become more efficient and profitable.