Is your business in need of a productivity spring clean?
12 March 2018
As we head into spring, it may be worthwhile having a think about a productivity spring clean in your business.
There are lots of articles online on how to improve productivity but what does the term actually mean? Productivity is the amount of output produced for each hour worked.
It appears that the UK has a productivity issue with the UK Office for Budget Responsibility recently revising down productivity growth for the seventh year in row. What is needed is a dynamic movement to help close what is termed our “productivity gap”. Your business can help in this area by standing back and reviewing closely your business operations.
Does this all really matter? Nobel Prize winning economist Paul Krugman once said “productivity isn’t everything, but, in the long run it is almost everything”. Productivity growth generally comes from human ingenuity generating productivity ideas which are embraced by businesses. If we are able to improve productivity it should raise prosperity generally by supporting wage growth and living standards. With the recent wage growth with the new National Living Wage, this may actually act as a spur to improve productivity as businesses try to maintain or improve profit margins.
Okay, so where can you start? There are a number of key ways for small and medium sized businesses to look at improving productivity. Here are some that we have incorporated at Old Mill:
- Increase investment in technology and systems. At Old Mill we are currently investing in technology with paperless and automated systems. The main change our clients will see is increased use of our online portal to communicate securely and efficiently. We are also trying to reduce the burden of emails and have introduced Yammer for internal communications. As well as this, we are championing the move by our clients onto digital Cloud book-keeping systems with Xero. Perhaps your business could benefit from a similar investment?
- Improve training in staff skills. As a training office for professional qualifications, Old Mill provides staff with the expert knowledge to help clients. However training doesn’t stop there, post qualification, we have recently partnered with Bath University to provide an innovative leadership programme.
- Invest in research and development. Although we have limited scope for our own R&D, we have been assisting clients to define, measure and submit R&D tax credit claims to aid cash flow and further investment. The credit is a relief on corporation tax.
The above key areas have made a considerable positive difference to the productivity within Old Mill and the output produced for each hour worked. Your business can also benefit from incorporating similar improvements which fits in with your strategy and working values. More importantly, by giving staff more productive and rewarding systems, skills and technology, your business will be more likely to maintain and ultimately improve profitability. The result? Happy staff. But be aware, it is important to undertake robust forecasting to ensure the investment does produce a satisfactory return for the business owner.
There are also lots of books, articles and blogs on how to increase productivity with helpful day to day ideas. Consider holding meetings standing up or just saying no to unproductive meetings. Maybe you can look to minimise interruptions (to the best of your ability), particularly when working on time sensitive projects.
Looking further into the future, by 2030 the Boston Consulting Group estimates a quarter of all miles driven in the US will be self-driving cars, and Google has released headphones that can instantly translate 40 languages as your hear them. In the future, these innovations can be incorporated into businesses to help save time, and with the self-driving cars, actually create time to do productive tasks.
By being dynamic and focusing on staff skills, technology and undertaking innovate R&D, a productivity spring clean could make a world of difference financially for your business.
If you would like further advice on how a productivity spring clean can benefit your business, contact Old Mill and we can assist you with strategic planning and forecasting.