Business Efficiency: What is it and Why is it Important?

“Efficiency is doing better what is already being done.”

From workflow optimization, to automation, to monitoring the right metrics, there’s a lot to consider. That’s why we’ve put together this guide to help you take practical steps that improve efficiency in any business.

Take a look at this diagram to get a better understanding of the flow of business efficiency.

This would be the simplest metric of efficiency, the one that means your business is viable. Even the newest small business owner knows that you need to make more than you spend.  

But if business efficiency is such a wide-reaching topic, how do you keep track of everything it involves? Agreeing what is the most important measure of your business performance is the first step. You need to measure the right metrics. Then, you need to use the reporting data to make meaningful changes.

Many businesses collect large amounts of data and create huge varieties of reports on performance. Yet, just observing the results isn’t enough, which are frequently hard to decipher. You need to make improvements to your processes based on those reports. Don’t fall into the reporting trap.

With so many reports coming in, it’s easy to view them all at only a surface level – to say “This report shows we are performing well, therefore I should focus attention elsewhere.” However, this can be a trap for business leaders.

Improving efficiency is a common goal for most businesses. Objectives such as doing more with less, reducing operating costs or improving the speed of delivery become quarterly targets that must be continually improved.

It usually feels sensible to associate hard numbers with the area that you are focusing on, by benchmarking a metric that will then become the goal to improve. Surely Without a strong method of measurement, you can’t measure the efficiency of a project. 

However, if that measurement becomes the priority, it can create more problems than it solves. Unless the metric is appropriately customer-focused, you could be failing customers while appearing to hit those metrics on the surface. 

Let’s say you run a service desk with a ten-minute target on first-line call routing – a seemingly beneficial KPI. But this time pressure can result in a poor diagnosis of the original issue, meaning calls become allocated to an incorrect status or the wrong department. 

So, you get the opposite of what was intended. Instead of happy customers with quick resolutions, you get angry customers who have to call back multiple times for a fix. Yet, your measurements would show the objective was being achieved. While operational efficiency may seemingly be improved, your cancellation rate will increase and revenue growth will be impacted.

It’s not just customer service this approach can impact. Another example might be reducing the amount of labor required to deliver a service. This might result in a cost reduction, but overworked departments are likely to deliver a lower-quality product again impacting revenue growth in your business. In deciding any measures in your business, it is important to make sure the customer satisfaction element is considered.

What happens when the scope of a business efficiency project changes?

In an extended project where objectives are still being agreed upon, goalposts usually change. This means the benefits of improved efficiency get delayed. It’s important to bear in mind that the problems of the reporting trap can be even more pronounced in this situation. 

A common goal might be to switch to real-time measurement of key metrics, so that you can better monitor the efficiency of your business. This can mean changing of software, alignment across departments, migration and implementation considerations. Just meeting the new reporting requirements has become an extensive project in itself. More teams become involved, with additional stakeholders and alignment needed.

Staff and management can become frustrated at a lack of progress, while resources continue to be spent without delivering benefits. This is a recipe for driving down motivation across your company. 

The long term benefits of such a project may well outweigh the challenges in implementing, but keeping a tight scope is important to realize those benefits in as realistic a timeframe as possible. While there is absolutely a place for metrics to support business efficiency, often the greatest immediate rewards are achieved by simply focusing on the basics of efficiency which we will now discuss.

These fundamentals apply to every department in your business, every employee, and are something your business can start implementing immediately.

For each category, there are several questions you should ask yourself. These will help ensure you’re getting the fundamentals correct before moving on with your efficiency strategy. 

Systems

A business system is simply a description of how things should be done, in a way that can be repeated. Normally, this is a collection of processes and procedures. Think about your training materials or your workflow documents, for example. 

Without a system, activity will be different every time, this leads to inconsistent service and inconsistent quality. It’s difficult to improve efficiency if results are this variable. Building a process library is an important first step. So ask yourself.

• Do you have a system?
• Is it presented in an easy to understand way?
• If a change is needed, how easy is that to implement?

Engagement

Engagement means how well a system is being followed. This is highly associated with your consistency of output. When consistency is not achieved, it may mean your system isn’t being followed or isn’t being understood. 

A common scenario is multiple well-documented processes that bear no resemblance to the work that actually takes place. Perhaps this is because they are out of date, not fit for purpose, or people don’t know how to use them. So ask yourself this. 

• Do you know when your processes are not being followed?
• Are you confident steps are not being skipped without good reason?
• When people performing the work change, does the quality degrade?
• Are changes to the system effective, or are they forgotten?
• Does management frequently have to get involved to maintain consistency?

Engagement has another effect too – if your staff aren’t actively engaged with their work, perhaps because it’s unclear, then they’re likely to do worse work, and not live up to expectations.

People & Perception

We call it  “human resources” for a reason. People are the heart of your business. Aspects of your system may become automated over time. Yet, people will always be involved and typically responsible for improvements. 

AI is great at defining solutions but rarely able to implement them alone. This means it’s important that your people and your systems work well together. You can make sure this is the case by asking several key questions.

• Are staff regularly trained on the system?
• How are improvement suggestions reviewed and implemented?
• How do you delegate ownership of how things are done?
• Can staff deviate if they find a better way?
• How is that tracked?

Another important aspect of your staff is their perception of your systems and your performance tracking. Do staff view the system as a method of control, or as something that supports a productive and positive work environment?

Looking out for employee psychology is as important as physical healthcare. If your staff don’t like the way a system is used, or the way they are monitored, motivation drops. This will drive down engagement with a system over time.

Own and stick to an established process

Create a defined system for how people should work on a task. Make sure that it fits with the way your teams operate. Work with employees who will be performing the tasks to refine these processes. 

Efficiency is something you can build into your company culture. Communicate defined processes clearly at all levels, from training materials to management guides. Make it a part of your culture and you’ll find that staff will come up with efficient process refinements themselves. 

Never stop improving

Corporation or startup, you can’t make one change for a more efficient business and stop there. Process is about change. Make those doing the work significant contributors to how to improve it. This is how you will get the most in-depth insight into how your processes are applied.

• Lack of training
• Lack of motivation
• Good ideas go to waste
• Human error

If an employee doesn’t understand your process, they can’t perform it effectively. If they don’t see the importance of a step, they might ignore it. If you don’t collect feedback from employees, their ideas for improvement go to waste. Any one of these mistakes could hurt your bottom line. 

Finally, everyone makes mistakes. When you’re relying on human input into automated systems, it becomes even more important. 

You need to catch these errors before they cascade into larger problems. One person inputting a wrong variable isn’t a big deal. If your automated system then uses that incorrect data as the basis for a task, that is a problem. 

Everything in one platform 

beSlick uniquely integrates process, workflow, tasks and to-do management in the same collaborative platform that encourages change and improvement. Everything is time stamped and tracked, and employees are notified when they need to take action.

Easy to use with minimal training 

In beSlick, you create templates for repeat activities that have the training embedded directly within. So, a new starter can be effective as quickly as possible. The interface is simple for users but powerful for management, to create a system their teams will work to. 

beSlick uses task tracking, flags, categories, notifications and many other familiar and easy to use tools. If your team members can use social media sites like LinkedIn and Twitter then they can use beSlick, it’s that simple. 

Quick and easy to implement 

Implementing a new workflow in beSlick can be achieved in minutes rather than days, allowing you to empower staff and create innovation even more quickly. The drag & drop interface is simple for non-technical users to pick up and implement positive change quickly.

Creates focus 

The first screen every user sees when they log in is what they need to do. They can then start completing, prioritizing, snoozing or reassigning to make sure things are moving forward efficiently.

Collaboration and communication 

Comment and @mention on activity in the same platform as the activity itself, even providing feedback on potential system improvements.

Balances flexibility and consistency

Gives clear visibility into success and failures but allows flexibility in the overall objective of a Task (Can still be completed with any deviation tracked for review). beSlick can be used on a laptop, PC or mobile, wherever there is internet access.

Capture Reporting Information and Improvement Suggestions 

As all activity is tracked and timestamped, it is clear for auditing, compliance and reporting purposes exactly how well your business is working.

A simple inbuilt mechanism notifies process owners when there are suggestions to improve, so they can be immediately implemented and make a positive impact on staff work efficiency.

We can either act as a coach to your internal resources or provide all the way through to a complete ‘done for you’ service to systemize your business and improve business efficiency. For more information on our implementation services see here.

As every business leader knows any worthwhile change in a business is not achieved overnight. It is important to demonstrate immediate value, by focusing on a pilot team or specific pain within the business. 

The success of this project will provide the internal knowledge you need. Allowing you to make the rest of the steps in your process efficiency journey much easier to achieve.

And one more thing, having a clear mission statement and values in your business is fundamental to success. Metrics might measure results, but it is employee motivation that starts everyone’s day with a full tank of fuel. Harnessing that motivation with alignment, so that everyone is swimming in the same direction, creates magic in your business. 

The number one thing you must do is make sure that your mission is clear. That your vision is understood and shared by all. That applies if you are the CEO of a business or the manager of a team.

When your vision is clear, individual decisions collectively pull in the same direction. If people are confused, the opposite happens and everyone will pull in different directions.

When you hire, you make that mission understanding and belief part of your hiring process. Then you will have a business team aligned around the same vision, motivated to do a great job. 

Provide those people with the systems and technology to achieve it, and you will have an efficient business. The results will be self-evident.