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How to boost productivity in a small business

Britain might have a productivity problem, but that doesn't mean your firm has to.

by Rebecca Smith
Last Updated: 24 May 2016

It’s been a headache for everyone (not least the government) and Britain’s productivity problem hasn’t been improving. Official figures show that labour productivity (output per hour) dropped 1.2% in the fourth quarter of 2015 from the third quarter – the biggest fall since the financial crisis. So where does that leave a small business owner and how can you try to buck the trend?

Set deadlines

You don’t want employees feeling under the cosh too often, but you also want to make sure they know when work needs to be completed. Ed Relf, CEO of on-demand laundry app Laundrapp, says, ‘Get in the habit of giving everything a deadline.’ It should help keep individuals focused on what needs doing when and stop them putting off less urgent tasks indefinitely. ‘Everything always has a deadline – even if the project doesn’t have a natural conclusion point,’ Relf adds. You don’t want work rushed, but ‘as a small business your greatest strength is your speed and agility – use this to do everything your competitors would least like you to do’. Keeping your team working towards set goals should help.

Don’t skimp on training

Professor Cary Cooper of Alliance Manchester Business School says the productivity problem could be significantly helped by improving training. ‘We’re told by government and others that it’s partly due to lack of up-to-date technology, the latest machinery etc. but I suspect the most important factor is poor man management,’ he says.

Making sure you have managers at all levels within your firm who have interpersonal skills has many positive effects – ‘they set manageable workloads, achievable deadlines, provide flexibility, manage people by praise and reward rather than fault-finding and try to provide them, when possible, with reasonable work-life balance and minimise a long working hours culture’.

Simplify logistics

Depending on your business, productivity can often be boosted by investment in state of the art machinery. But if you don’t yet have the funds to make that a reality, adjusting your supply chain can bring improvements. Brush manufacturer Brushtec used to import plastic tubes from Italy, before they spent time researching other options and found a much more practical alternative. Product researcher Dan Renwick says, ‘We make them in house from recycled plastic which we source 20 miles away. This has saved not just on transport cost and time, but allowed us to adapt to demand much more quickly than before, so we’re operating at a much faster pace.’

Stay flexible

There’s still a mental block for many companies when it comes to allowing employees flexible working, but it can be a great way to improve productivity. Digital Mums provides mothers with online courses to set them up to work flexibly as social media managers. The 21 members of staff all work flexibly. Co-founder Kathryn Tyler says, ‘It makes us all really focused and we get more done.’

End the emails

For Sean Mallon, MD of business-selling platform Bizdaq, a key concern has been getting his 12-strong team away from their inboxes. ‘We moved all internal communications to a messaging application called Slack,’ he says. ‘Treating the email inbox as a to-do list and project communication tool is extremely ineffective.’

Mallon found that many times projects were delayed as important emails that needed a response from him often got lost in the deluge of other messages. He’s managed this by using the app, while his team have been able to ‘stay focused on real-time project discussion’. ‘Nothing is worse for productivity than a constant barrage of email and message notifications distracting people from the task at hand,’ Mallon says.

Often productivity can be increased by considering different ways of working and trying out new technology – it isn’t about encouraging your team to work harder, for longer. Instead try to find what will help them work best, which in turn, will help your business.

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