Crash Course in... boosting productivity
You've visited one of your rivals and been astonished to find that they're taking the same market share as you with half the people. It's time to take a look at your productivity.
Define it. Your productivity is the ratio of your inputs to your outputs. 'Identify your most important inputs and outputs,' says John Heap, director of the Grimsby-based National Productivity Centre. 'In labour-intensive businesses, the key input might be hours worked; in a steel plant, the capital cost of equipment.' There are lots of ways of looking at productivity, so it's useful to convert what you are looking at into monetary units to represent a common currency.
Benchmark. To improve productivity, you must first measure it and then monitor it regularly. Join a benchmarking club to find out where you stand versus competitors.
Invest. 'Most productivity growth comes from existing firms that add to the ratio of capital per worker and adopt new technology,' says Kevin Mole of Warwick Business School in his DTI report on SMEs and productivity. Training can make people more effective and innovative and reduces mistakes. Identify technology that lets you cut headcount or make a step change in output.
