These things are making your business inefficient and taking from your bottom line
With an ever more competitive marketplace out there, any business large or small can benefit from being as efficient as possible.
Experts say that inefficiency can impact the bottom line of a business by 20-30% a year – and this could easily mean that millions of dollars are wasted in ways that are entirely preventable. Inefficient practices sap money from all areas of the business, from customer engagement to research and development. This shrinks profit margins and ultimately can mean massive reductions on your bottom line.
Just as the personal development world is focused on making everybody into a more productive super-performer, there are areas in a business that could also use tweaking to eradicate time-wasting and money wasting activities and focus business activities for optimal performance.
As many experts point out, these inefficiencies can stem from the way that employees behave, focus and communicate, to the way systems are set up or the company structure.
Bart Motz, the co-founder and CEO of SUMO Heavy, writes for Entrepreneur that unclear communication is a major cause of inefficiencies in a business. He argue that email is not the best way for a team to talk to one another given that there are more efficient communication platforms, like Slack and Hipchat, as these allow for communications to be tracked and have an easy search function.
Apart from the means of communication Motz also advises that the way in which team members communicate should be revisited. He writes that every piece of communication should have a distinct and defined purpose and should be focused on something distinct and real.
A recent study out of Harvard shows that while it sounds counter-intuitive, non-stop working is actually not as productive as one thinks and could lead to a whole lot of wasted time.
These studies found that people have a limited capacity for concentrating over extended time periods and that the ensuing “brain fatigue” can literally derail work. A tired brain, the study found, becomes vulnerable to distractions. To prove their point the authors highlight that Facebook usage peaks at 3 pm in the afternoon.
They advise sporadic 15-minute breaks, doing something active like going for a walk, to replenish energy, improve self-control and decision-making and fuel productivity, improve attention and heighten creativity.
Motz adds that the break should be “the right kind of break” which doesn’t include sending snapchats or watching TV. In an article by The Byte Guy published on yourstory.com he identifies improper time management as one of the major reasons why start-up businesses falter. He advises to prioritise and minimise distractions
Too Many Meetings
Motz also identifies meetings, and especially in-person meetings as a major inefficiency that will steal time and can often veer off into something else. As anyone who has worked in a modern workplace knows, it is not uncommon to spend significant proportions of the work day in meetings these days, leaving little time to get tasks done.
Meetings can often be done online for a more efficient approach but undoubtedly also need a firm agenda and proper ground rules to minimise distractions. This will help to minimise the risk of getting off track, one of the major reasons that meetings take longer than they should.
Nick Candito, the co-founder and CEO of Progressly, writes in an article for Entrepreneur that “silos” in a company, referring to business units operating by themselves and not integrating with the rest of the company, “eat up a huge amount of resources, particularly in terms of interdepartmental cohesiveness.”
He highlights the problem of having different internal systems that do not talk to each other or demand the “duplication of input.” He argues that to eradicate these inefficiencies “companies should provide mechanisms to achieve transparency and openness; streamline communication and manage performance.”
Other systemic problems that can cause a business not to operate at maximum efficiency include employees not adapting to new technologies can cause bottlenecks and duplicate processes he added. Digital payment solutions and efficient card payment processing is one way to introduce a smooth system that could make your business more efficient.
Goldman adds that when it comes to improving business efficiency it is worth it to sweat the small stuff. Early detection of even the slightest anomaly would allow for platforms to run smoothly, prevents customers from being inconvenienced and potentially frees up the problem solvers who would eventually have to put out the fire to do more productive things, he adds.
Goldman further writes that IT-departments are highly vulnerable to inefficiencies and it would be worth the investment to simply infrastructure and cost, consolidate data centre footprints and create a similar system to be used by all departments in a business.
He advises that it is absolutely essential to increase communication between work silos. Goldman points out that data that is separated and segregated inhibits communication and collaboration leading to inefficiencies.
Lack Of Real-Time Insights
Candito further explains that a lack of good quality, real-time data makes it very difficult to take good decisions and prioritize actions. Goldman agrees that data insights were essential at running an efficient business adding that data sets must incorporate as much quality data as possible and be set up in a way to be instantly available and trustworthy.
Using competitor data can assist a business in designing and executing a more efficient digital marketing campaign. Finding a good tool to do this analysis speeds up the process of determining the best keywords for a digital campaign but also cuts out trial and error and keeps the focus on competitors.
This leads to actionable inputs. You know which keywords to target, you know what sort of content assets you need to create, and you can plan your SEO content strategy better. You know exactly how your link building campaigns should be run and you know when and how much to invest in marketing.
Lack Of Connection Or Collaboration
Another big source of inefficiency comes from the different parts of a business don’t work together as they should, often because they do not have adequate systems for collaboration in place. This can occur when teams or team members “do their own thing” rather than seeing their work as one part in the overall work of business, and not knowing how their piece fits into the overall puzzle.
Another major cause for this is the upper management not being connected to some or all aspects of day-to-day operations. Executives need an understanding of all components of the business in order to identify weaknesses and plan for growth. This should include a plan to link suppliers, customers and assets to ensure every component is working together for optimum efficiency and therefore maximum profits.
Taking a dedicated and strategic approach to efficiency in your business involves better communication, time management, a more efficient approach to meetings, better collaboration and reviewing and improving all systems. Doing so will make your processes more efficient, expanding profit margins and growing your bottom line.