Many times I have walked into a a client’s office and noticed a buzz of activity and thought; “Wow, things are really getting done here!” Only after talking to the the owner of the business did I discover their disappointment with the level of productivity. Some small business owners wonder if they themselves could be more productive. Perhaps you feel that way yourself.
Your Productivity Quotient
Take the productivity quiz below and be honest with yourself:
- Do you set aside time every day to plan and review your goals?
- Is your office area so well organized that you can find everything you need in seconds?
- Do you immediately respond to email, snail-mail, phone calls, faxes and written rather than putting it off or scheduling it for the future?
- Are you stress free rather than stressed out?
- Is your accounts receivable up to date? (less than 10% past due)?
- Do you pay bills on time, rather than pay them too early, or realize that you do not have the funds in your checking account to cover your bills due?
- Do you know how many hours to allocate each week to marketing and administrative tasks, as well as to billable hours for each client?
- Do you keep accurate financial records and are they up to date?
- Do you use a business plan as an on-going working document to evaluate and redefine your goals?
- Do you even HAVE a business plan?
- Do you know and use the business skills necessary to run a business efficiently?
- Are you an expert business owner, rather than just an expert in your field?
- Do you feel you use technology efficiently?
- Do you use the advanced features of your software?
- Does the software you use to track sales/inventory, write reports, send/receive email satisfy your business needs?
- Is your computer your friend rather than a device that intimidates you at times?
- Do you feel “Technically Adept” rather than “Technically Challenged”?
If you answered “NO” to 5 or more of these questions then read on. If you answered “YES” to all of these questions then contact me immediately so I can get you involved with Virtual Consulting Network as a productivity mentor.It’s almost a cliche, but it really is true: “Work SMARTER, not HARDER” is the key to small business success. Before we go on lets define some things for the sake of clarity.What Is Productivity?
Individual definitions of productivity differ both within organizations and between large and small organizations. In order to improve whatever it is that is meant by productivity at the organizational level, it is necessary that individuals within the organization know what their own productivity involves and how that fits into and helps achieve organizational productivity. There appear to be many people in organizations who are not clear as to what productivity is. Also, top management and owners may want to increase the training and education of their employees regarding productivity.How Do We Measure Productivity?
The relatively greater emphasis on monetary definitions of productivity by small businesses when compared to larger businesses, coupled with the fact that small businesses emphasize marketing suggestions to improve productivity are particularly interesting. It may be that the focus of productivity in small
businesses is directed toward improving outputs (e.g., sales or dollars); whereas, the focus of productivity in large business might be more on decreasing input costs or improving other processes which then affect outcome measures.Perhaps the productivity related costs associated with poor quality such as rework, increased scrap, downtime, warranties, and customer loss, have received relatively more attention and measurement in large businesses. Regardless of the explanation, the day-to-day quest for more sales as a self defined measure of productivity may obscure what has been deemed as the most effective way for small business to compete with quality and service. Small businesses may thus need to devote more attention and measurement to quality related costs in their efforts to improve productivity. In other words, there is more to productivity than increasing sales.Productivity In Large vs Small Businesses
Both large and small businesses feel they can increase their productivity; that they know what they could do to increase productivity; that many of the suggestions would not directly cost the company to implement; and that many of the ways that could be used to motivate people to improve productivity probably center
around their involvement in productivity improvement planning efforts.It may be that to get people in smaller organizations involved with increasing productivity it will first be necessary to educate small business people about the issues. In contrast to large businesses, employees in small organizations may already feel
participated out and quite involved. Thus, in the short run, it may also be necessary to pay them more to get more. Yet, for both the large and small business, the opportunities clearly exist to increase productivity by asking those who are directly involved with producing.Study of Productivity
The University of Seattle conducted a study in which they directly surveyed and compared employees of small and large businesses about what they think concerning productivity related issues. The findings are outlined in this article.Productivity – what is it, and how can it be improved still appears to be a major organizational concern for both small and large businesses. A lot has been written and researched about the subject, usually from a theoretical outside-the-organization perspective and has dealt with such issues as how productivity should be defined and measured, why the rate of productivity growth is declining, and finally how it can be improved.There appears to be an implicit, albeit untested, assumption that the activities which should be undertaken to improve productivity in large businesses are identical to those of small businesses.It does not make much substantive difference what academicians say about how productivity should be defined or how it should be improved because people still act and react on the basis of their beliefs, however erroneous we might think these perceptions are. In other words, to improve productivity rates we must first start by identifying the perceptions of organizational participants themselves.This exploratory study was undertaken to identify perceptions of employees in small businesses concerning productivity related issues, and then to compare their responses with those perceptions of participants in large organizations. Do employees in small business perceive productivity related issues differently than their counterparts in large businesses? If such differences exist, what implications does this have for managing productivity in small
businesses versus large companies?METHODOLOGY
The samples included 98 respondents from 61 small businesses with 50 or fewer employees and 226 respondents from ten large companies with over 50 employees within a major metropolitan area. Both samples were systematically selected from the 1983 Contacts Influential Business Directory.A firm was considered small if it had under 50 employees which was consistent with the local Chamber of Commerce’s definition and included 93% of the businesses in that area. Sixty large businesses and 305 small businesses were identified in the original sample. Of the businesses originally targeted and contacted, ten large businesses and 61 small businesses agreed to participate in the study.Questionnaires in both samples were provided to the main contact person in each organization who consented to distribute an agreed upon number to others in the organization. It was emphasized that the questionnaires should be randomly distributed among organizational participants, anonymously completed, and returned to a central collection box which the researchers picked up in the case of the large businesses and returned in addressed, stamped envelopes in the case of small businesses (to save time).Of the 1,332 questionnaires distributed to large businesses’, 226
were returned for a 17% response rate. Of the 618 questionnaires distributed to the small businesses, 98 were returned for a 16% response rate.The two major differences existed in the samples. First, job level is not comparable in that 64% of the respondents in the small business sample were owners and/ or top management, compared with seven percent of the respondents in the large business sample.The major contact in the small business sample was often the owner, whereas it was seldom possible to contact his or her counterpart in the large business sample. Second, type of company was not comparable in that the majority of respondents (55%) in
the large business sample consisted of manufacturing firms; whereas, type of business in the small business sample was more representative of the distribution in the general population.At first glance it might appear that any obtained differences in responses between large and small business samples could be attributed to these differences in job level and company type. However, there were no strong correlation’s in either sample between type of company or job level and responses to the survey questions. Thus any obtained differences in responses between samples could reasonably be attributed to real differences between large and small companies.Responses to open ended questions were coded by a format which utilized standardized coding sheets and an interrater agreement index. The coding scheme and instructions can be obtained from the authors.FINDINGS
In response to the first question, “How would you define productivity in your organization?” there were significant differences between the samples such that small business respondents tended to define productivity in financial terms, (e.g., amount of profit generated by the company, earnings, increased dollars, increased sales revenue) more than large business respondents (42% versus 15%, respectively).Conversely, large business respondents tended to define productivity in quality related terms more than small business respondents (43% vs. 25%, respectively). Typical quality responses would be “maintaining or improving quality of care given,” “top service,” “increasing customer satisfaction,” and “increasing employee morale.”Responses to the first question also indicated that 75% of the large business sample (170/212) attempted to define productivity or did so in a way that could be classified by the coders; whereas, for the small business sample less than 50% (48/98) of the respondents either defined productivity or did so in a way that could be
classifiable.Such answers as “I supervise only,” ” n/a,” “organization,” “communication skills,” and “increasing,” were a few examples of the unclassifiable responses. That is, there appeared to be more clarity as to how productivity was defined in the large business sample.In response to the second question, “By what percentage could you improve your productivity over the next twelve months?” there were significant differences between large and small business respondents. Small business respondents felt they could increase their productivity by a greater percentage than large business
respondents.Of those who responded, 50% of the large business respondents estimated they could increase their productivity by 14% or less; whereas, 75% of the small business respondents felt that they could increase their productivity by 15% or more. It is notable that only a few respondents in both samples (7% in large business and 4% small business) felt that they could not increase their productivity at all.In response to the third question, “What if anything, would you do to increase productivity by that amount?” there were significant differences between the samples such that small business respondents identified recommendations for improving productivity which emphasized marketing activities (e.g., “advertise more,”
“increase sales calls,” and “identify key potential customers”) more than respondents in the large business sample (42% and 7%, respectively). In contrast, large business respondents tended to identify more activities which centered around attempts to increase personal efficiency (e.g., “better work methods,” “better use of my
time”) than did small business respondents (41% and 23%, respectively).There were no significant differences between the large and small business responses with both sets of data indicating a high percentage of non-cost ways to improve productivity (e.g., “improved work habits,” “increased sales calls,” “take on only larger jobs,” “watch waste food decrease it”).In response to the fourth question, “What would it take to motivate you to increase productivity by that amount?”, there were percentage differences between the samples, but these were not significant. A greater percentage of the large business respondents tended to emphasize intangible, intrinsic motivators (e.g., recognition, feedback, increased authority, more time to be creative, increased participation) more than the respondents in the small business sample who tended to identify more tangible, extrinsic motivators such as pay, equity share, budget increases, time off, profit sharing, bonuses, and fringe benefits.The important thing here is that a substantial number of suggestions made by respondents in both samples did not involve direct cash outlays by companies, but rather emphasized recognition and involvement in productivity planning activities – the human element. This is not to suggest that pay is unimportant, but rather that people
do have ideas about how to improve productivity if we would only ask them.