Productivity is a topic that regularly comes up in conversation at our Oxygen8 team meetings.
We are reminded regularly that New Zealand has a low productivity rate. How can we improve productivity (more output without any more labour hours)? Some ideas might include:
· software systems (eg. accounting, job management, scheduling)
· capital enhancements that make the job quicker through automation (eg. CNC machines, labelling and packaging machines)
· system and process enhancements ensuring no duplication of effort
· staff training / up-skilling
· collaboration between businesses to remove duplication of effort
New Zealand has a large number of small businesses, so I am particularly interested in the last point, as this is an area where I see a huge wastage of resources and time. Every business needs to market their business, manage sales, and get their accounts done. While business operations may vary, the basic building blocks in the other areas are largely the same for similar businesses.
Businesses working together can go some way to removing this duplication. This may include informal connections established through a networking group, industry group connections, co-operatives, agencies, buyer groups, or even franchises.
Availability of capital financing may be also an inhibiter to implementing productivity improvements. High interest rates and bank and other funder appetite for risk currently create a challenging borrowing environment, but there are options available.
Start by having a conversation with your team about how productivity could be improved. Read industry publications. Talk to other business owners. Get help from a trusted business advisor. While the labour market is starting to ease, growth must be focused on productivity and not just more labour hours.
Ann Gibbard is a Business Success Partner with Oxygen8 Consulting. For help with growing your business or improving its profitability, preparing your business for sale, or for a free Business Diagnostic, contact Ann at ann@oxygen8.co.nz or 021 682 014.