Trying to get staff to work harder?
Most service or jobs based businesses are trying to get more done with less resources. One of the key drivers in a service based business is ‘Personnel Productivity’. Getting the most income and earning capacity from a given production staff/labour team is a constant management nightmare.
One way to improve, is to do less work but ensure it is more of the profitable or desirable work.
You may have heard of the ‘Pareto Principle’, which is the 80/20 rule. An example of which, is 20% of customers, produce 80% of sales and profit. The ‘Pareto Principle’ has proven valid since the late 1800s when it was discovered by Vilfredo Pareto – an economist.
It follows then that we should concentrate on the 20% of customers, jobs, services, staff etc that are producing the 80% of results. In order to know what the 20% are, we need systems in place for tracking results and who/what is achieving them.
If you could do this smartly, then you would probably need less resources to achieve better results.
You know it can be hard to extricate yourself from the business, for enough time to spend working ‘on’ the business rather than ‘in’ it. If you can be disciplined enough to do this, it can pay big dividends, in terms of improved efficiency, personal satisfaction and lifestyle for you, as well as better profit and cashflow.
What you need to achieve these benefits … are good systems!
In order to set up systems you must get the ‘knowledge’ out of your head and into a format that staff can understand and follow.
You need to identify what are the most critical actions in your business, who is responsible for them and how they should be done. Once you know that, you can share this information with others and begin to do less of them yourself.
Obviously staff needs to be trained and monitored in these actions, but a little time invested in this area, could pay big dividends down the track.
Staff who have systems to follow feel much more secure in their work and create less distractions for themselves and others. Businesses with good systems and happy staff become the ‘employers of choice’.
Who wants to work in a business environment where the norm is ‘crisis management’. Everyone is stressed and unhappy? Any ‘Human Resources’ expert will tell you money often comes way down on the list of motivators for staff.
An example of critical actions in a service based business is the fulfillment and management of jobs. If you have a good job management system you have access to:
- Information required for staff to do the job
- Information about job profitability for the business owner
- Information about hours paid to staff compared to those sold to customers to make improvements to margins
- Information about ‘Work in Progress’ speeding up invoicing of jobs and improving cash-flow
Systems make it much easier to manage a business, as the manager doesn’t have to think of everything all the time, they simply point staff to the system. This leaves the business owner free to work ‘on’ the business rather than ‘in’ it.
Documented systems also create an environment for improvement. It gives staff the opportunity to contribute new ideas and see them incorporated into the system – another motivator and retainer of good staff.
Systems can take many forms e.g. manuals or a web based method. Web based methods for many business processes are popular today. They enable owners to run a business remotely when necessary e.g. when on holidays or even just from home.
If a staff member has a question you don’t have to scurry back to the office to explain the answer. You can simply direct them over the phone to the relevant information and talk them through it.
These types of systems are not as expensive as you might think. What price do you put on your own sanity and health?
Another benefit is in added value to your business. If you want to sell your business and retire or exit at some given future point, having systems is much more attractive to a buyer than a business that runs from inside the owner’s head.