Let’s Talk About…Defining & Communicating ‘Efficiency’

Q: I run a growing service business and want to run it efficiently. I’m not sure how to describe that to the team, or where to start in general. Can you help?

Coming from a background in Operations, this mention of ‘efficiency’ really draws me in!

Efficiency means doing something better whilst holding costs (e.g. money, time) steady, or even decreasing them. Efficiency is doing the thing right, as opposed to Effectiveness which is doing the right thing. I’ll assume that you are already doing the right thing!

DECIDE YOUR MEANING

Efficiency is good – you need to be productive and make money. However, you likely have a gut feeling as to the appropriate degree of efficiency for your business – as a crude, high level example, is the business about your bank balance, or is there also a ‘greater good’ to which you wish to contribute? What was your original vision or intent? Decisions around efficiency can set tone, contributing to your culture and resulting reputation.

An over-enthusiastic quest for efficiency can bring problems. Many mentally enter into a ruthless parallel universe where humans (staff, suppliers…) are seen as a nuisance. Efficiency becomes financial sport rather than practical strategy. This is dangerous. Be mindful that, in the last few years, there have been many stories about companies who cut back way too much in the name of efficiency, leaving too little in the way of people, equipment, suppliers or materials to cope with any change in the business environment. Avoiding this would be wise.

ENGAGE PEOPLE

I would suggest getting the ball rolling with an exploratory BPR (Business Process Review). Involve your team from the outset – let them list the small, medium and large ideas they have, in terms of making things work better, and consequently making their working lives easier. Rather than dictating downwards, give them the platform to formally discuss what they are perhaps discussing among themselves already. If they are closer to the work, it makes sense that the initial ideas and potential solutions should come from them. As you hear the ideas and their potential impacts, you will understand their comfort levels. You will also learn what level of fine-tuning appeals to you, balancing this against what your accounts might suggest is necessary.

During BPR, make sure that both familiar and unfamiliar eyes are on each business area, for the best combination of existing knowledge and more abstract questioning. Put the focus on the concept of “better”, rather than on “less”. For example, think out-of-hours: if people are doing overtime, do you all understand why? How can you help get them home on time (especially if you are paying for those hours)? If a person no longer needs to carry out a particular task, what new, beneficial task could replace it? How could both their job satisfaction and your business be enhanced through such role-development? Look at new things you should be doing, alongside the things that can be improved, minimised or eliminated. This balancing act can help allay any fears that this is a pure ‘slashing exercise’.

If you foresee a significant period of review and adaptation for your business, make sure you hire the right people for this. Describe this well at interviews and during performance appraisals. As I always say, it makes life very difficult when you have “Anne 1.0” sitting in your office, resisting all change, when your business is trying to move onto version 5.0! Have the right people with you and much can happen organically.

Best of luck!

This Q&A was first published in Irish Tatler magazine.

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