Whilst winning the talent wars has always been a challenge, businesses are struggling to recruit, retain and re-train talent like never before. And with ‘the great resignation’ and ‘quiet quitting’, unlocking productivity within businesses has never been so critical.
In this article, we look at the main reasons why firms suffer from poor productivity and what you can do to boost your productivity, quickly and significantly.
Why does productivity suffer?
A vast number of reasons cause poor productivity. But in many firms, poor productivity can be simplified by doing the wrong stuff or having the wrong team.
Think about it! How many times do we see business owners doing work that perhaps they shouldn’t be doing? Work that should be delegated to other team members.
Or we may have the wrong type of clients or team members for our business. Or worse still, we have the wrong team doing the wrong type of work.
3 ways to unlock productivity
Having the right team on board is critical for success, just look at any sports team. Whilst everyone can be an armchair critic towards sporting teams, we sometimes forget when it comes to business. We do the exact opposite of what we should be doing by hiring fast and firing slowly. We think people will get better, learn, or their attitudes will change.
So, assuming that you have the best team or the best team that you will get in the short term, here are three ways to boost productivity within your firm.
Have you ever felt that you need a dozen clones of yourself to get everything done and in the right way? How often do you lack time to do the things that really matter because you are doing something that you shouldn’t? Often, team members will bring us problems rather than solutions. So, how do you get your team to think like you?
A nifty solution that worked so well for me is the 1-3-1 methodology. The next time a team member comes to you with a problem rather than a solution, try this …
Ask the team member what the actual problem is. The reality is that when an issue arises, it may not be the actual underlying problem. You know how it goes; the team member says that the client is frustrated about a late submission. The real issue is not the submission; it’s the fact that we’ve not proactively handled the clients’ deadlines and expectations.
Rather than jumping in with a solution, ask the team member, “what three solutions do you think would solve this problem?” instead. If they don’t know, ask them to go away and think about it and guide them to find the best solutions. [Even if you think it will save time now by telling them, it will cost more time in the long run. They will never fulfill their potential!]
Once the team member has identified the three best solutions, get them to explain what they feel is the optimum solution and why. And once the whole team does this with all their colleagues, your business will move faster!
Customer selection is the key to building a great business. When we start out, we take every customer we can get, and are taught to treat all customers the same. The reality is that not all customers are equal, some pay more or buy more often, others pay late or are always complaining, and others waste our time.
The 80:20 rule would suggest that 20% of our customers constitute 80% of our profitability. Kaplan and Cooper went even further with the 20:225 rule. They found that 20% of your customers constitute 225% of your profitability and the remaining 80% erode profits.
Whilst both rules may be overly simplistic, and the actual numbers may be different for your business, they are recognised and corroborated by many worldwide. One thing we can agree on is that if we were to focus our efforts on our top 20% of customers, not only would we have significantly more time in our day, we would be way more profitable.,
How do you know who your best customers are? How does your team? It’s not just about who pays you the most. A great exercise to do as a team is to grade your customers. A simple matrix that looks at:
- Do they pay on time?
- Are they paying the right amount for a customer of their type?
- What is their attitude/mindset/do they share our values?
- Do we like them/do they listen to us?
- Are they stable and likely to be a customer for a while?
- Do they buy/subscribe to additional products/services?
More challenging work
Our team can get bored with monotonous and repetitive work, which can have a knock-on effect on productivity. One of the most effective elements of an employee value proposition and the ‘one big thing’ that will help with recruitment and retention is offering your team members more challenging work.
Not only will unleashing your team’s true potential be better for them, but it will also enhance your firm and your clients.
By adding value to the work we do, it can bring more purpose to the workplace, increase our margins and create happier and more successful customers. It’s a win/win/win!
Each firm can add value in different ways. Some do it by embedding a cause, such as sustainability, charity, etc. in everything they do. Some by delivering more exclusive products and services such as designers and others by emphasising the increased peer social value by owning their products.
It doesn’t have to be so lofty. And it doesn’t always have to be about subscription services. HINT – if you can add a monthly recurring revenue subscription service to your business, it will have a considerable impact.
Accounting firms can add value by delivering business advisory services to their clients (on top of the core compliance services). You need to think outside the box. How can you add value to the products or services you deliver to your customers and to the work that your employees do?
Unlocking productivity within your business is critical to succeed. And whilst there are many ways to do so, focus on the quick, easy wins. Don’t overthink, don’t procrastinate and do get your team involved. The more buy-in you get, the more realistic your chance of achieving success!