An order comes in on Monday and ships to the customer on Friday. Now work out how many hours of that week were actually spent on this one order. Usually about three, and for the rest of those five days the order just sat waiting.
It sat waiting for you to approve it, for the stock to arrive, and for somebody to remember to raise the invoice. Your team did not work slowly. For most of those five days nothing was being done to that order at all.
What does productivity mean?
Productivity is how much output you get for every hour you work and every toman you spend. Output is work that reached the customer and that you were paid for, not work still sitting unfinished inside your business.
When you want more output, the first thing that comes to mind is to work more yourself or hire someone else. But there are only so many hours in your day, and the new person’s salary has to come out of this same business’s income. The only thing you can actually increase is the output you get from the hours you already work.
Why working faster changes nothing
Go back to that order. If your team works 20 percent faster, about half an hour comes off those three hours of real work and the order still ships on Friday. Remove one of those waits, though, and a whole day comes off.
That is why pushing people to work faster is the least effective thing you can do. In a small business, output is usually lost exactly where nobody is working at all.
Where does work sit waiting?
One of those waits is you. When every order, every purchase and every discount has to be approved by you first, the work stops each time it reaches you until your time frees up. The way out is to hand the repeat decisions to your team through delegation, otherwise the speed of the whole business stays tied to you.
The second wait is when nobody knows whose job the next step is. The order has been handed to the warehouse and everyone assumes somebody else is chasing it. Each role’s job description has to say who that work belongs to.
The third wait is rework. The job is done, but the customer wanted something else, so it is done again from scratch. You spent the time twice on one order, and the customer got it later.
Which number tells you your productivity?
Pick one order from this week and write down two numbers for it. First, how many days passed between the order coming in and going out. Second, how many hours were spent working on it during those days. The ratio between those two numbers is your business’s real productivity.
Then find where the work sat waiting longest. That is your business bottleneck, and until you fix it, anything else you fix will make little difference to your productivity.
Working out those two numbers takes about fifteen minutes, so you can do it in the same weekly hour I wrote about in business management. And if your orders keep sitting for days but you cannot tell where the problem is, in a free diagnostic session we will find it together.