How To Stop Inefficiency From Sinking Your Business

"It works well enough for now," should never be an excuse for remaining with inefficient processes. Adaptable companies take more risks and spend more time innovating than those who content themselves with subpar processes — but they also tend to survive longer.

inefficiencyThe inefficiencies that drown a business seem harmless at the start. For some, it might be a few sheets of unnecessary paperwork tacked on to rote transactions. For others, it could be wasted time in overlong meetings and undirected client calls. Each small inefficiency tacks a few minutes or even hours onto daily tasks, but the waste doesn’t particularly stand out at the end of the workday. Over time, however, those seemingly small inefficiencies can compound and become as dangerous as holes in the side of a boat’s hull: sinking otherwise sturdy ventures into inevitable failure.

Dramatic as it sounds, the metaphor fits.

As a serial fixer, I’ve helped patch up more than a few leaky businesses. Years ago, I was asked by the number one elevator company in the world if I could help improve the profitability of their new equipment venture in North America. When I started, the business looked to be running well. With one or two exceptions, of the 90+ locations, none seemed to be lagging or draining resources. We were still losing money; at the time, those working in the industry had accepted that you almost had to give away the elevators to sell your service contracts.

When I dug a little deeper, I found the root of the problem: inefficiency.

While each of the company’s 90+ local offices in North America seemed to be operating effectively, there was a wide range of results between one office and the next in terms of performance and installation efficiencies. An organization-wide disconnect between sales departments, installation crews, and customers had made on-site miscommunications and confusion a norm at most locations.

Work crews rarely understood the details of what the owner or architect expected, and sales had no formal process in place to facilitate this communication. Sales staff would make assumptions about the conditions workers would face on the job site—but had no protocol to document said conditions, much less communicate them to the contractor and ensure that the projects’ unique needs were met. The uncertainty and inefficiency of the sales-to-installation process added on countless extra working hours, slowed completion, and had the potential to add significantly to the cost of completing the buildings.

It was a time-draining hassle for all those involved. Worse though, was the painful financial cost those small inefficiencies leveraged on the company, general contractor, and building owner alike. Once the team and I had implemented more efficient processes, we not only saved the company tens of millions of dollars in cost but also put it in a position to take on additional market shares.

Regardless of business specifics, my first step as an incoming CEO is always to find and plug any efficiency gaps—and while this example is a specific one, I firmly believe that its lessons apply across all industries.

Process Can Make or Break Your Budget

If a business seems to be running effectively and is still losing money, there may be flaws in the way it conducts its day-to-day work. According to one productivity study conducted by Loudhouse in 2015, the three primary culprits behind wasted time in the workplace are inefficient processes, unnecessary paperwork, and extraneous meetings.

For the elevator business discussed above, the issue lay primarily in process: namely, how information traveled between departments and expectations were communicated. To rectify the problem, we needed to tear down dysfunctional protocols and rebuild entirely new expectations for external and internal communication.

The sales team began working questions about efficiency and construction needs into initial conversations with the customer so that they could provide the installation crew with both the basic information they needed upfront and the site condition details that would allow workers to prepare and operate efficiently. We then facilitated discussions between the customer’s general contractor and the elevator installation team so that everyone shared the same expectations from the start.

This approach empowered the workers on-site to start work immediately upon arriving, hold contractors accountable for conditions they were promised and save time they might have otherwise spent correcting miscommunications or decoding customer needs. The saved time, boosted productivity, and improved client service more than justified the effort of implementing a more effective communication system.


MORE LIKE THIS

  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events

    Roundtable

    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)

     

    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.