Small Business Challenges in Defining and Managing Productivity

Mark J. Komen

Kodyne, Inc.

Minneapolis, MN

Whether your organization is for-profit, not for profit or governmental, and regardless of sector (manufacturing, business services, etc.), you need to get work done to deliver your products and/or services to your customers/stakeholders. So long as your organization serves a purpose in the community, you are essentially making a promise to provide some product or service to those wanting them.

Let’s define productivity as a measure of the efficiency with which you use resources in your organization.

I posed the following questions to a sample of small business owners and leaders:

What are your primary challenges in driving productivity in your organization?
What productivity measures/metrics do you use?
How do you address and resolve productivity issues in your organization?
What advice would you give other business leaders regarding productivity?

Their replies:

Several respondents pointed to a primary challenge as having enough skilled staff to take on the work in-house, especially when tight deadlines are involved. Related to this was the issue of interruptions and owner’s needing to manage their own time and avoiding a lack of focus. One owner stated that not having clearly defined productivity metrics can lead to rework and poor quality as her biggest challenge. Dan Yaman of Live Spark makes sure tasks are defined and prioritized up front.

Randy Korus of Kolson Marketing advises business leaders to define what’s expected of staff and train on this. Writing these expectations into performance evaluations and holding 1-on-1 meetings will reinforce the message. He also suggests putting the right tools in place along with well-defined processes and replacing workers who don’t get it! However, David Swanson of Reliable Twin Cleaning advises encouraging staff to complete their work correctly.

Mike McGuire of McGuire Benefits manages productivity by focusing on task completion – sales call tracking, meetings held, conversions and trends. He also looks at year-over-year comparisons.

Mark Jedele of Total Export holds regular 5-minute stand up meetings to go over projects and find oversights. He advises paying attention to the metrics.

Nick Bartlett of Byte Technology monitors the number of overdue job tickets and billable vs. non-billable time. He recommends creating a “Do Today” list and working on the most profitable things first. He sees his responsibility as clearing roadblocks for staff and communicating daily about projects and overdue items.

BayonIT’s Jon Taylor tracks turnaround time, the number of job tickets written, time spent and overall workload. He recommends giving employees meaningful work and resisting the thinking that “I’ll do it because I can do it faster than training someone to do it.”

Mike Day of Humeratech measures budgets vs. performance. He advises getting staff to own the data which encourages them to come prepared to meetings. Adam Meyer of Studio M Architects also watches time vs. budget but will micromanage work (the nuclear option) if he needs to do so.

Susan McPherson of Creative Communications Consultants recommends starting productivity discussions and measurements as soon as an employee joins your organization. She’s found it very difficult to address productivity with long-term staff members who aren’t accustomed to discussing and being evaluated by these types of metrics.

Summary Comments

You gotta define it!

Although these are 2 separate concepts, respondents tended to mingle productivity and quality in their responses. They have a point in that, at the core, the efficiency with which you use your resources must be coupled with the quality of the work delivered to customers and clients in order to satisfy client needs. I would posit that quality (defined as meeting or exceeding customer expectations) is an outcome of productivity. Well-designed work processes factor in quality as part of the work being done.

You gotta measure it!

The question is – what to measure? Some of the respondents were unclear on this subject but most of the responses fell into the following categories:

Time – how much time was spent on the work
Schedule – what got done and when
Financial – how much money was spent getting the work done and vs. a budget
Task completion – what actually got done

Spending money and progress against project/deliverable schedule are the 2 most common productivity metrics cited. Efficiency comes up in the context of the amount of rework required. Throughput and the number of touches or hand-offs in a process did not come up. Curiously, the issue of owners or staff needing to attend meetings did not arise either. This is a common complaint in that meetings are often viewed by staff as impediments to getting work done. Perhaps given that the respondents were owners, their need to attend meetings was not a deterrent to staff productivity or their own.

You gotta monitor it!

Several respondents cited the need to oversee staff completing the work. If this is a chronic condition, the need to continually oversee and get personally involved in managing work progress may be an indicator that staff is either not properly trained or motivated to get work out the door and at an acceptable quality level.

Meeting regularly with staff to reinforce messages and expectations, find and solve problems and discuss progress is key to getting work out the door.

One excellent point a respondent shared was the advantage of having history to determine actual vs. expected time a job might take. Using parametric data such as this is an advantage for bidding and setting customer (and staff) expectations.