Managing the Productivity Cycle

Leaders are always challenged with improving the productivity of their business. Historically, productivity has been thought of as improving the output of people in the organization. But productivity is about realizing more with less:  Fewer people, less overhead cost, less working capital, and various other measures. My view is that the productivity of your business is really measured in terms of $ of revenue/ $ of cost. The higher the number, the better your productivity. Productivity isn’t just about people anymore. It is about people, systems, and processes throughout your business: Back office, supporting functions, sales, marketing, product development, the shop floor and throughout the supply chain. The productivity cycle below is applicable to any business process.

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In the work we do at Group50® Consulting, we use Value Stream Mapping and the Brown Paper Exercise as the starting point. Working with process owners, we identify what doesn’t work in the current state, identify what the process needs to do to support the future state of the business and then redesign the process. Redesigning the process is where most productivity activities start to run into trouble because process owners want to make changes to the way they currently do it. In our process, we look at the systems that support that process and redesign the process to leverage current or future systems. Afterall, technology is made up of millions of best practices and most companies don’t effectively leverage their technology investments.

The second area of trouble is in implementation. Redesigned processes and systems require that people change the way they do things, and the requirements of change management are not properly considered. We use the Business Hierarchy of Needs® as our change management framework. Using this framework provides teams with a standardized approach to properly engage process owners in redesigning processes and thinking through the change management requirements of their recommendations: people, process and technology and measuring performance. After the new process has been implemented, the Continuous Improvement model tells you when the productivity cycle needs to begin again to maintain your competitive advantage.

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While simple in concept, the larger the business process, the more difficult it is to manage the productivity cycle, especially if everyone in your business has a different approach. We have used these methodologies in companies ranging from lower middle market to large multi-national conglomerates, saving them hundreds of millions of dollars.

If you want to implement a productivity cycle that is scalable and repeatable, feel free to give me a call. I will look forward to speaking with you about it.

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