In this article you can explore some conceptual and specific ways you can design your business, using strategic choices, for increased productivity. Before we do that let us review some productivity challenges you maybe facing.
For you as a business leader the quest for improved productivity is a constant. Increased productivity is a way to increase revenue, reduce costs, and improve competitiveness. Compromised productivity can result in or from:
You may experience inefficiencies in your operations, leading to wasted resources and lost productivity. This could include issues such as poor communication, lack of process standardization, or lack of automation.
You may experience high costs associated with their operations, such as high labor costs, high energy costs, or high inventory costs. Improving productivity can help to reduce these costs.
You may experience low output or low sales, indicating that their operations are not producing enough goods or services to meet demand. Improving productivity can help to increase output and meet demand.
You may experience time wasted on non-value added activities, such as unnecessary or avoidable meetings, slow-moving processes, excess wait time between steps in producing your business products / services / outputs or excess hand-offs with latency from one team or department to get a job done. Improving productivity can help to increase output by reducing time wasted and improve employee engagement and morale.
You may be struggling to scale your operations as they grow, and are finding your business is unable to keep up with demand as you expand. Improving productivity can help to increase capacity and allow for growth.
You may be experiencing difficulty in meeting customer demands and keeping up with the market trends and regulations. Improving productivity can help to allocate more capacity to meet these demands.
Thus improved productivity is not about just doing more, or producing more output. Productivity is focused upon doing more of what increases revenue, quality and /or competitiveness and / or decreases costs.
Focus and alignment will be important qualities in the design or setup of your business.
By making your strategic choices that are aligned with the aspirations or guiding purpose of your business, the targeted market, and a defined and specific approach to succeeding in those markets, a business can create increased clarity in direction to focus its efforts and resources, leading to improved productivity. The increased productivity occurs by focusing on the most important areas, reducing waste, increasing efficiency and effectiveness, and ultimately creating more value for customers and stakeholders.
StrategyCAD™ contribution
The StrategyCAD™ Strategic choices canvas enables you and your strategy team to make your strategic choices better and faster. See our StrategyCAD™ guide to learn more
This section assumes you have made or are making your strategic choices and provides suggestions on areas to focus on for productivity.
Establish KPI's that reflect measures of the type of productivity your business needs to increase throughput, reduce cost or increase competitiveness.
Balance your productivity KPI's with other KPI's important to your business to ensure productivity is not achieved at the expense of other outcomes e.g. customer satisfaction.
Action tip
Include KPI's indicative of desired productivity and relate them to the need for one or more of increased competitiveness or revenue or decreased costs or your customer or business aspirations. For example, if your business is pursuing a cost leadership strategy then increased productivity means you can provide your customers with as good or better products / services at lower prices. If your business is pursuing a differentiation strategy, then productivity means you can provide better products to more customers at the same or lower cost or allocate more funds to innovating for those customers.
Identify measurable activities that you and your team have control over and anticipate will enable the productivity KPI's. Socialize and evolve them with enabling teams to ensure you have the leading indicators of your desired productivity.
Frequently, establishing the KPI's and drivers and giving your teams the freedom to make them happen, will unlock both motivation and innovation in your teams as they aim to hit those activity and KPI targets.
Action tip
Include Business drivers expected to enable your productivity KPIs.
Defining and communicating with your team the scope of your where to play or compete choice along with the customer segments in scope, needs to be met and identify what is necessary to succeed in the arena, can help align and focus the team on the playing field as defined by the leadership / strategy team.
In the presence of an inadequately defined arena, unawareness of the overall arena strategy and a defined approach to succeeding too many teams members can be working hard but not rowing in the right or unified direction.
Action tip
Ensure your team understand the scope or the focus of your where to play choice. When everyone has the same understanding of the where to play choice - specifically which customer segments, jobs to be done, functional, social and emotional needs are in and out of scope, and the criteria for success in the chosen arena or arenas, then everyone increases their focus on the right target market, with the right targeting, positioning and can apply and align on the other criteria for succeeding in the arena, most particularly using the strategic choice of how to succeed.
There are potentially multiple hotspots but here are few to get you started on your increased productivity journey.
Defining your unique value blend defines the attributes that makes your business superior in the hearts and minds of your target customers. For example, Walmarts value blend might include
In the presence of an adequately defined value blend your team is aligned and focussed on the qualities of your business that matter most. Productivity is recovered by replacing the need to be all things to everyone with focus and alignment on those things that matter most to succeed with your target customers.
Action tips - Unique value blend
Define your Unique value blend that represents the qualities of your business that enables it to be seen as superior in the hearts and minds of your customers.
StrategyCAD™ includes a diverse range of value drivers you can use to build your better strategy faster.
Ensure these quality attributes are reflected in your offerings, channels and relationships.
Your business value chain is a series of activities that your business goes through to create and deliver a product or service to a customer. The purpose of a value chain and the StrategyCAD™ Value chain canvas is to identify and understand the different steps involved in creating and delivering a product or service, and to identify opportunities for efficiency and cost savings. By defining, understanding your value chains, you can identify areas where you can improve its operations, reduce costs, and create a more efficient and effective business model. The ultimate goal of a value chain is to create value for customers and stakeholders, while also creating a sustainable competitive advantage for the company.
Action tips - Value chain
Define your value chain for the products / services your business provides. Ensure each step has a defined purpose, objectives and success criteria. Ensure each secondary activity in the value chain is defined in terms of how it enables the primary activities.
Use the discovery model, to define, investigate, experiment with and then achieve productivity opportunities in your value chain.
Competencies or capabilities are the "Know-how" that your business is or needs to be excellent at in order to deliver the unique value blend, related offerings and relationships consistently and productively.
Action tips - Competencies
Define and assess the competencies your business needs to be brilliant at. If there are gaps in skills, access to resources, insufficient support from technology, organizational cultural or other factors limiting the competency - establish an action plan to increase the value of the competency and be more organized to apply it to boost the productivity associated with the competency.
You can use the StrategyCAD™ Competency canvas to capture the purpose, success criteria and objectives of your business competencies along with its enablers and how to be more organized in using them.
Resources include intangible resources like data, information, and skills and tangible resources like physical materials.
Are competencies, capabilities or key activities being impaired or stalled by inadequate or unavailable resources? This can be discovered through your competency and value chain assessments or taking the direct advice from your teams in the value chain.
Action tips - Resources
Ensure your value chain key activities and competencies have timely access to the resources of sufficient quality required.
Partnerships or strategic alliances can be a vehicle for achieving important strategic objectives including productivity, lowering costs, creating new sources of differentiation, or entering new markets. A partnership between your business and another is a cooperative arrangement that combine their resources and capabilities to create new value.
Action tips - Partnerships
Consider how and what partnerships will augment the capabilities your business needs to delivery its products / service better or faster.
Your strategy implementation ideally identifies where your business is today, why it is where it is, where it needs to be in a foreseeable time-frame and then provide a guiding policy to provide the capacity and focus to achieve the proximate vision.
Your Where are we today situational assessment, you can consider where your business is related to customers, competitors, ecosystem and internal.
For productivity you can particularly consider the internal state with respect to productivity
Action tips - Where are we today
Aim to review your business teams observations, belief and future expectation related to productivity.
You can do this as you assess your internal environment for multiple dimensions.
Aim to work with your teams to identify the single most significant root cause barrier to productivity. If this issue were resolve then all the related issues would also be resolved.
If that issue cannot be found, then aim to identify the most substantial causes of your productivity challenges.
Action tips - Diagnosis
Review your Where are we today observations and identify the single most likely root cause or causes of productivity issues. Then describe those issues
Reflecting on your KPI's and business drivers you created for your productivity. Define your implementation goals for improved productivity. You can start with the business and customer objectives you expect to benefit from improved productivity.
Then define the process and team / organizational objectives to support those business and customer outcomes.
Example of a proximate vision
Business aspiration - to be the industry leader in timely delivery of XYZ service
Customer aspiration - to enable our customers to succeed by being the valued partner and provider because of our reliable, predictable and quality delivery of XYZ service.
Process and capability - Reduce our cycle time from in excess of 100 days to never more than 90days and less than 90 days 80% of the time.
Organizational enablement - Training, resources, technology etc the organization needs to achieve the objective hierarchy.
Action tips - Proximate vision
Link your productivity objectives to business and customer outcomes.
Identify the process, capabilities and organizational enablement objectives that will be necessary to achieve those productivity outcomes.
Your guiding policy defines what your business needs to do more of or start doing, what it needs to sustain, reduce or eliminate in order to create the energy, activity, alignment, focus and capacity to achieve your proximate vision.
Action tips - Guiding policy
Ensure your guiding policy does not just continuously add more and more expectations on to your teams. Provide guidance in your policy for each of the policy components to ensure the teams have the capacity, alignment and focus.
Action tip - Strategy Implementation
Ensure you complete your Strategy implementation review to ensure you understand your current situation, particularly with respect to productivity. You have in scope and mind the most substantial productivity root cause issues or opportunities, you have a proximate vision of where your business can be in terms of productivity and you have a guiding policy to enable greater productivity.
