Tips To Overcome Business Inefficiencies
Inefficient business processes have a negative impact on everything from profits to customer retention to recruiting and keeping top level talent. According to market research, some companies lose as much as 20%-30% of their yearly revenue due to inefficient and outdated business practices.
Even minor inefficiencies, like manually processing invoices or data, can add up to significant losses in productivity and revenue. Sometimes all it takes is a simple update or overhaul of an outdated program. In other cases, a major upgrade of operational procedures or entire departments is necessary to cut out waste and improve productivity.
Here are some suggestions to identify and correct inefficiencies that drag down productivity and eat into business revenue and profits.
Review the Org Chart to Improve Collaboration and Communication Across Teams
As companies grow and business needs change, the departments within the company and the people that make up those departments don't automatically keep pace. When was the last time your company updated its org chart?
A review of every department and their roles is one of the first places to look when you want to identify inefficient processes. Sometimes processes and systems don't keep up as companies scale. People can also be resistant to change and cling to "the way things have always been done."
Employee surveys are a great way to get feedback and figure out where you need to make cuts or invest more resources to improve productivity and efficiency.
Streamline Operations to Cut Out Waste
Are you spending more time and money than you need to on outdated processes that can be automated? Are there overlaps and redundancies across teams because of poor organization or lack of communication between departments?
This is typically a problem for larger companies with multiple departments and hundreds or thousands of employees, but it can also apply to small businesses and startups with a handful of employees.
Creating clear and well-defined processes for every department (and every employee within that department) helps to eliminate confusion and cut out waste due to redundancy.
Get Rid of Outdated Systems
Are you still using Google Docs to share company data and processes? Does your company manually process invoices? How are your hiring, training, and onboarding processes being handled? Are you using outdated software or technology?
These are some of the most common areas where companies waste the most time and money due to inefficiency. Taking a little time to evaluate them now could save you a lot of time (and money) in the future.
Update and Clarify Company Goals
To be productive, people need to understand their responsibilities and the expectations of their job, but they also need to know how they fit into the big picture. Set clear organizational goals that everyone in the company can get excited about and buy into, whether it's a traditional mission statement or a list of company values.
On a project level, making sure that everyone understands their specific role and responsibilities will keep things from falling through the cracks.
Create an Accountability Plan
Most companies rely on the year end performance review to check in with employees and assess performance, but the end of the year might be too late or not allow enough time to get in-depth information about individual and team productivity. Creating clear goals and processes is one side of the coin. Monitoring progress at regular intervals so that everyone is accountable and open to providing and receiving feedback is the other.
There are a few ways to instill a culture of accountability:
Conduct regular audits of processes and budgets across departments
Ask for regular feedback
Don't wait until the yearly performance review to check in with your employees
Develop a mentorship program
The goal of accountability isn't to micromanage employees but to make sure that everyone feels supported and has the resources they need to perform their job. Inefficiencies commonly result from bloat, but they can also result from a lack of adequate resources.
Invest in ETL Tools
Manually processing data is not only time-consuming and inefficient, it's becoming truly impossible as most companies collect and store more data than they can manage. Investing in ETL tools improves efficiency by collecting data from different sources, automatically transforming it to the correct format, and storing it in a centralized data warehouse.
Think about how much time and labor it would take to collect every spreadsheet, invoice, or Google doc across your organization, and then manually convert each one into the correct format before loading it all into a database. Depending on the size of your organization and how much data you've collected, it's probably not even humanly possible. But even if it is, just imagine how much more efficiently those employees could use their time.
Updating your processes and automating where you can will help to eliminate waste and give your employees the resources they need to be more productive, leading to higher job satisfaction and retention, happier customers, and increased revenue.