6 Things Businesses Need to Boost Operational Efficiency
Operational efficiency is that perfect ratio between your business’s input and output. Low inputs and high outputs are hallmarks of successful companies. But how do you achieve that?
To begin with, don’t confuse production with efficiency. You may be producing a phenomenal number of units but at what cost? Efficiency is what increases the profit margin on those units.
Fortunately, there are a growing number of tools and methods companies can use to boost operational efficiencies. Here are six things you can add to your operational toolbox now to pump up profits later.
1. Intelligent Wi-Fi
Offering free Wi-Fi to customers on your premises is known to entice them to stay longer and spend more money. Is it also a benefit for employees? It depends on how smart your Wi-Fi is.
Innovations like Plume Workpass elevate normal Wi-Fi to a small business intelligence platform. By providing guest analytics like length of stay and demographic data, such networks can help you target your audience more effectively.
Imagine also being able to allow employees Wi-Fi access on their own devices (with limits). You can set boundaries on what they can access and for how long while they’re on the clock. That should increase efficiency and productivity at the same time.
Stop looking at your Wi-Fi investment as just a customer freebie. Put it to work as an integral component in your quest to achieve operational efficiency goals.
2. Business Knowledge
Socrates said, “To know thyself is the beginning of wisdom.” To know thy business — all of it — is the beginning of an efficient operation.
Business owners and leadership can develop a case of tunnel vision when it comes to aspects outside their experience. For example, someone who built a career in sales could open an auto dealership but know nothing about the service department. Or a chef can run a kitchen but know nothing remotely related to keeping the books.
The only way to spot inefficiencies in a business unit is to understand how they should work. For many business owners, this will require spending time working in and observing those areas. You must watch and learn before you can start making improvements.
The chef doesn’t need to earn an accounting degree to understand that part of the business. But turning a blind eye toward it isn’t a smart move. Knowing how every unit should operate will help you lead efficiency efforts at every level.
3. Cutting-Edge Tech
For good reason, technology is an obvious go-to for achieving operational efficiency. With the explosion of AI and predictive technologies, data analytics, and IoT, these solutions have become accessible to businesses of all sizes.
There are software and apps to improve efficiencies in every area of business, from customer-facing roles to the back office. Technology achieves efficiencies by removing redundancies, reducing human error, and automating tasks in logical succession.
As you implement separate apps and software, beware creating data silos that can negate the intended efficiency gains. To truly achieve them, pull together various on-premise and cloud-based software applications with an iPaaS (integration platform as a service). A solid iPaaS will tear down silos and keep redundancies and errors out of your operations.
Technology is no longer only the purview of Silicon Valley tech giants. It is fast becoming accessible to every company. A business merely has to decide to make the investment and put it to work.
4. Streamlined Communication
Even in small businesses, the flow of communication between management, employees, and customers can be choppy. Unfortunately, choppy waters are antithetical to efficient operations.
You may have an abundance of ways to communicate, including emails, phone calls, chat platforms, and dashboards. But too much of a good thing can muddy the waters. Should a particular message be sent via email or Slack? Or should it be a comment in a Google Doc instead? Streamlining communication throughout your business can help.
How you achieve this is going to depend on the nature and size of your business. If you’re a shop with a few employees who show up every day, maybe face-to-face communication works best. When your business has employees working remotely or globally, you’ll have to find other solutions.
If that describes your situation, select a communications platform that’s optimized for mobile, like Beekeeper or GoToMeeting. Leverage the cloud to share files and documents in one place and provide access to everyone who needs them.
Above all, ensure employees have access to fast and reliable internet whether they’re under one roof or spread across the world. Operational efficiencies rely on the fast and free flow of idea exchange.
5. Empowered Employees
Empowering employees requires giving them the authority and resources they need to make decisions. Some business owners and managers perceive this empowerment as a threat to their own authority. But companies that have embraced this approach are some of the most efficient operations around.
Employee empowerment produces happier and more engaged employees. They stay around longer. And because they believe they’re being listened to, they’re often change agents for increased efficiencies.
Empowering employees also means holding them accountable for their decisions and recognizing them for wins. For help with that, turn to software tools — like Motivosity or Kudos — that motivate and recognize stellar members of your workforce.
Sales representatives have long been rewarded for individual excellence because it’s easily measurable. It may take some creativity to apply the same concepts in other departments, but it can be done. An empowered employee will be an efficient one.
6. Peer Reviews
One way to gauge the efficiencies of your operations is to look outside of them. How do your operations compare to other companies in your industry? If you don’t know, it’s time to conduct some peer reviews.
There are multiple metrics you can pull from your business operations to compare against other companies. How does your unit input and output compare to another company of like size? How many units are you selling every day compared to a competitor? And who’s more profitable (which may mean more efficient)?
Reviewing your business in the context of your competitors doesn’t just help you see where you stand right now. It helps you identify operational efficiencies you can aspire to.
Operational efficiencies can make the difference between success and failure in business. Just adding these things to your toolbox won’t automatically help you become more efficient. Use these tools and methods skillfully, though, and you just might get more out of your business than you’re putting in.