Why investing in a productivity improvement plan can increase the profitability of your business
Why investing in a productivity improvement plan can increase the profitability of your business
A productivity improvement strategy will enable your business to achieve more output with the same number of resources — increasing its profitability. Get started by evaluating your processes, systems, and behaviours and following these six best practices:
- Streamline processes
- Invest in technology
- Provide training and support
- Set clear goals and expectations
- Foster a positive work culture
- Measure and monitor progress
You may have noticed a drop in business productivity during the COVID-19 pandemic. Many business owners attributed the decrease to challenges caused by lockdowns and other factors — and government support helped to buffer the loss in profits.
The pandemic put serious strain on organizational processes and systems, many of which could not be followed during the lockdowns. While employees found new ways to complete tasks, many of these workarounds created inconsistencies and had unintended consequences. Additionally, organizations may still lack the metrics and oversight to monitor these changes.
Now the lockdowns are over, and many business leaders realize they need to find a way to address unproductivity within their organization.
How processes, systems, and behaviours impact productivity
Processes are formalized steps that employees need to follow to complete tasks efficiently. Systems are linked to processes — they are tools used to manage business operations and track every aspect of how your business is running. Behaviours are, in essence, how people leverage processes and systems to make informed decisions for your business.
For example, imagine a manufacturing company wants to increase productivity. It might start by analyzing its processes to identify bottlenecks in production. It may then introduce new systems such as technologies to streamline those processes or invest in behavioral change by training employees to work more effectively. This enables the business to produce more products with the same number of resources, reduce costs associated with errors, and increase profitability.
Productivity improvement involves evaluating your processes, systems, and behaviors and making the necessary changes to achieve more output with the same level of input. Below, we summarize the factors that may contribute to a lack of efficiency in your business, obstacles you may encounter along your path toward improving business productivity, and best practices to transform your organization.
Get clarity on today’s most pressing issues
What limits business productivity?
Several factors may be limiting the productivity of your business, including:
Inefficient processes
Processes that are time-consuming, redundant, or poorly designed can lead to inefficiencies that reduce business productivity.
Lack of automation
Failure to leverage automation technologies and software tools can decrease productivity by forcing your business to rely on slow and inefficient manual processes that may be prone to errors.
Poor time management
Wasted time can lead to missed deadlines and reduced output and impacts your bottom line both in terms of unproductive overhead and reduced revenue.
Inadequate training
Errors and rework frequently occur if employees do not have the knowledge or training needed to complete tasks effectively.
Communication breakdowns
Miscommunication among team members, between teams, or with customers result in delays, misunderstandings, and decreased productivity.
Technology challenges
Outdated, unreliable, or improperly integrated hardware, software, or network systems reduce productivity by increasing the potential for errors or downtime.
Obstacles to improving business productivity
You may have identified the factors limiting productivity in your business — but you may also encounter challenges on your path toward improvement. These are the most common obstacles you may face on your journey:
Resistance to change
Fear of the unknown or unfamiliarity with new technology and processes may cause people within your organization to resist change. This resistance may make it more difficult to introduce new solutions to increase workplace productivity.
Lack of resources
Additional resources are often required to address productivity gaps — such as funding for new technology or training programs. It can be difficult to improve business productivity if your organization does not have the resources it needs to invest in these solutions.
Lack of expertise
Your business may not have the specialized knowledge or skills needed to overcome productivity challenges — making it difficult to implement or improve upon existing processes.
Inadequate leadership
Strong leadership and a consistent tone at the top are necessary to secure funding, set the direction, and build momentum behind efforts to increase business productivity. It will be challenging to achieve long-term improvement if top-level management is not on board with the changes or fail to communicate your plans to employees.
How to improve business productivity
We’ve identified six best practices to help you boost productivity and increase the profitability of your business. As you follow the steps below, be careful to ensure you aren’t limiting your productivity measures to a single area of your business — such as a production line. Instead, you should focus on improving productivity across your organization.
It is also important to keep in mind that each of these steps require behavioral change to achieve success. This begins with you as a leader — and you must be open to changing your own behaviour as well as the behaviour of your organization. Demonstrate your commitment to productivity improvement by proactively managing change throughout your organization.
Streamline processes
Identify and eliminate inefficiencies in your processes — such as delays or unnecessary steps. Review your existing policies and practices to ensure they are optimally efficient and time effective.
Invest in technology
Technology solutions such as robotics, collaboration tools, project management software, or customer relationship management (CRM) systems are worthwhile solutions to boost productivity. However, it is important to ensure that the technology you choose is user-friendly, integrates with your other systems, and aligns with the goals and needs of your business.
Provide training and support
Technical training on new systems, soft skills such as communication and time management, or ongoing coaching and feedback can increase productivity and support your employees to perform their duties effectively.
Set clear goals and expectations
Set objectives aligned with your overall strategy and vision and ensure your goals are measurable, achievable, relevant, and time-bound (SMART). Additionally, ensure you clearly define your goals for employees, teams, and your entire organization.
Foster a positive work culture
Take the steps to create a company culture that promotes productivity, collaboration, and employee engagement. A positive work culture should encourage open communication, reward good performance, and provide professional growth and development opportunities.
Measure and monitor progress
Systems will allow you to measure productivity and monitor your progress towards your goals — and behavioral change will empower you to use this data to improve productivity. Track and analyze key performance indicators (KPIs) such as project completion rates or customer satisfaction and take a proactive approach by adjusting course as necessary to achieve your goals.
Take the next steps toward success
Improving your productivity is an essential step toward creating a more profitable business. Gaining a solid understanding of the processes, systems, and behaviours in your business will enable you to identify areas for improvement and take the right steps to achieve your goals.
Contact us
To learn more, contact:
Hussam Malek, P.Eng, M.Eng, MBA, Partner
[email protected]
416.515.3866
Insights
-
Progress
November 21, 2024
Strategic reinvestment: Unlocking resources for municipal priorities without raising taxes
Learn how municipalities can unlock vital resources, cut through red tape, and strategically reinvest in key priorities without increasing taxes.
-
Performance
November 21, 2024
Highlights from Quebec’s fall economic update
View a summary of MNP’s highlights from the 2024 Quebec fall economic outlook.
-
Confidence
November 21, 2024
FAQ: Canada’s new luxury tax and dealerships
There are many questions dealerships have about how Canada’s new Select Luxury Items Tax Act will impact their business. MNP has responded to the most common ones here, to help you adjust to and comply with the new legislation.
