Measuring Productivity


You are likely to be judged – at least to some extent – by your financial performance. But financial measures such as profitability and return on investment are really indirect measures of the operations, good financial performance comes from good operations. You can measure the operations more directly using measures such as productivity, utilization and efficiency.

Productivity is the most common measure of operations. It shows the amount of output that you create for each unit of resource used. You might, for example, measure the number of units made per employee, sales per square meter, or deliveries per vehicle.

Your competitors are always trying to gain an advantage, and an effective way of doing this is by increasing their productivity. You then have to match their improvement simply to stay in business. So the benefits of higher productivity include:

  • Long-term survival;
  • Lower costs;
  • Less waste of resources;
  • Higher profits, wages, real income, etc;
  • Targets for continually improving operations;
  • Comparisons between operations;
  • Measures of management competence.

These are good reasons for improving productivity. But how can you do it? At the very worst, you simply make people work harder – problem solved. In reality there are four ways of increasing productivity:

  1. Improve effectiveness – with better decisions;
  2. Improve efficiency – with a process that gives more output for the same inputs;
  3. Improve the process – getting higher quality, fewer accidents, or less disruption;
  4. Improve motivation – getting better results from the workforce.

One of the problems with improving productivity is that employees see it as an excuse for sacking them. Productivity is really a measure of improvement performance, and it has very little to do with the old-fashioned idea of getting people to work harder. An enthusiastic person digging a hole with a spade can work very hard, and still be far less productive than a  lazy person with a bulldozer. Typically, 85 percent of productivity is set by the process which is designed by managers and only 15 percent is due to the individual workers.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Sticking to the basics


At a major power-tool company, drill sales weren’t up to projections, and the marketing director had brought in consultants and managers from marketing, engineering, manufacturing, and sales if they could figure out why. Frustrated that the session wasn’t getting anywhere, asked: “Why do you think people buy our drills?”

 

One consultant said it was the price. Others mentioned the company’s reputation for quality and service, the packaging and advertising, the easy availability and good warranty—all good answers.

 

“Hold on! Wait a minute!” the marketing director interrupted. “I’m beginning to see the cause of our problem. We have forgotten what business we are in. the real reason people buy our drills is because they want to make a hole! I think we’ve gotten too fancy. We’ve got to stick to the basics and sell them a tool that makes holes.”

 

When marketing started emphasizing how well the product drilled holes, sales increased 15 percent over a six-month period.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Handling Failure Factors


Herebelow are some useful techniques for handling failure factors while building your business:

1) Square peg, round hole: the most important thing to remember is, don’t try to make something fit if it doesn’t. You may have a high level of expertise in the traditional paradigm, and many of those skills will serve you well in marketing. But be aware that others won’t. When you find a skill or technique just isn’t working in the new paradigm, don’t blame marketing—discard the technique. Also, be open to learning new ideas and skills that were designed with marketing in mind.

2) Don’t re-invent the wheel: After decades, the patterns for successful behavior in marketing are fairly established. It’s human nature to want to add our own flair to everything, but make sure you learn the basics first. Some people in past decades tried some ideas but they didn’t turn to be effective as they hoped. Don’t re-invent the wheel.

3) Work the plan, not the angles: Perhaps the most important general rule for avoiding unexpected failure factors is to focus on the simple business building system and stay away from sidelines and ‘new’ angles. You came to marketing to build a business, not to get bogged down in side ventures and alternative schemes. Indeed, it’s tempting to look for alternative ‘revenue streams,’ but the time you spend chasing these things would be much better spent invested in your core business. Once you’ve made a commitment to building a marketing business, that commitment should be total. Any side activity has the potential to draw away your focus—and your growing business can suffer.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight