Business performance is greatly important to the success of any company. As the speed of business and the rate of change increases in the internet age, businesses cannot afford to get left behind. Maintaining the same level of performance year in, year out, is no longer sufficient. Companies must strive to do better and outperform their peers.
To improve business performance, smarter management must make better decisions. Strategies must be implemented wisely rather than haphazardly. There also needs to be sufficient follow through to ensure initiatives stick and aren’t just paid lip service to until management turns their back.
Here are 10 ways that smart management can work to make performance better than it’s ever been before.
1. Operational Efficiency
Managing operations is the meat and potatoes of most businesses. Without efficient operations, the company fails to deliver on its agreements with customers or clients.
Becoming more efficient within the operation ensures that money isn’t wasted through processes and procedures that don’t support the business. Wasteful steps that can be eliminated can be ruthlessly culled and a new procedure implemented that streamlines how the business gets things done. This ends up saving time and resources and frees people up to focus on more important issues.
2. Better Recruitment Policies
While smaller companies struggle to recruit the right type of staff into vacant positions, when knowing exactly what they need, there is a better chance that they’ll find it. Holding out for better personnel is an excellent first step to increasing the capabilities of the workforce that’s being put in place.
Smaller companies with the right approach can look to provide a more attractive work setting for potential employees. This might be a flexi-time work arrangement, some remote working days every month, longer vacation time, or extended health benefits.
Larger businesses have more attractive benefits packages and may be able to afford larger salaries too. These types of companies often have an easier time attracting top talent – sometimes right out of college – to work for them.
3. Ongoing Education and Training
For existing members of the management team who may have already taken an MBA in management, they understand the value of having a post-graduate education or training courses to advance knowledge. Boosting capabilities within the company by funding educational courses such as an MBA in management online and providing relevant short courses to staff keen to learn, encourages employees to find ways to get ahead.
A culture of self-improvement where staff look to acquire better knowledge, develop relevant skills and expand their attractiveness benefits both the company and the employees themselves. They can offer more to the business in capabilities on the job and are often suitable for advancement at that stage with management having new talent to nurture and grow.
4. Promoting from Within
Following on from a focus on developing employees through short courses and longer degrees either partly or fully funded by the company, promoting more often from within the ranks is a natural consequence of this approach.
Rather than always looking outside the company for fresh blood, which is something that non-progressive companies tend to do to fill a void, making it known that the company wants to promote internally encourages staff to step up.
Even for employees who don’t necessarily think about their career and where they want to be in five years’ time, they can still see the benefits of continual training and education when there are regular jobs coming up which they could apply for.
By promoting from within, staff see that the company wants employees to stay, expand their abilities and progress within the company. This is different to other businesses that pay lip service to this idea and then recruit externally.
5. Measuring Performance at a Granular Level
Measuring performance in one form or another is what’s necessary to understand how staff are performing. Without finding a way to examine how an employee is performing, management are purely going on a feel basis for how their subordinate is doing on the job.
For managers who are busy in their role with different responsibilities and reporting up the chain to more senior leadership or Vice Presidents, they may tend to only deal with their team when something goes wrong. The occasional team meeting where nothing gets decided or action points assigned to key people does nothing to change the situation either.
By creating performance measurements for every employee within a given department, it’s possible to benchmark how they are doing in their job. A drop-in performance can be spotted many months before an annual performance review is convened. Indeed, it avoids the situation where someone had a good performance review yet got fired three months later due to performance deficiencies which only serves to confuse the now ex-employee and the remaining staff who fear for their jobs.
While it’s not always easy to find individual measurements of performance for every job in a company, there’s usually a way to do so. It may be necessary to discuss it with the employee concerned to solicit their feedback; however, the manager should set what the performance metrics should be.
6. Use Better Project Management Systems
The more complex the projects within the company, the greater need there is for project management systems. The idea with project management systems is to break down projects by their component parts. These are usually individual tasks that get assigned to the most suitable person, with a timeline for delivery and what dependencies they have. The dependencies are what items they may need from someone else in the organization (or outside of it) in order to complete their task.
With smaller businesses, project management tends to be cobbled together from systems that were developed in the early stages of the business. Older, more established businesses tend to have matured enough to develop advanced systems that allow a complete overview of what different teams are working on and the progress they’re making.
Using the right type of system is also important. Some are open-ended with new tasks and projects being added as needed. This is applicable to a project management system that aims to track all major items relevant to the company. However, some other projects are shorter term with a beginning and end point. In which case, they will benefit from using Scrum or Agile frameworks to manage shorter projects with defined phases.
7. Eliminate Waste from the Company
The longer a company has been operating, the more wasteful it tends to get. Businesses often find a way to work and then stick with that under the guise of “that’s the way we’ve always done it” even when that way is no longer efficient, sensible, or wise.
An office manager is one of the better people to look into what the company does and to look to eliminate waste. Some project management practices also aim to remove waste from manufacturing and other areas of a business. This is also highly relevant with any type of business – not necessarily a manufacturing one.
Waste can be overordering materials that are rarely used, being inefficient with energy usage, having too much stock in the warehouse that aren’t best-sellers, and a host of other areas. It also includes wasteful expenditure in the business, again usually because this is how things have been done in the past. For instance, by centralizing ordering and services, companies can buy in bulk when applicable and negotiate preferential rates for services by going through a single provider.
8. Create Standard Operating Procedures for All Roles
A standard operating procedure (SOP) is a set of instructions for performing a task. There can be a series of them that cover various tasks within a department or an individual role.
Rather than having the situation where an employee is leaving and a new person comes in who requires training from the departing employee which creates variability in what is taught (and left out), an SOP standardizes the process.
An SOP can be a written document, one with images to illustrate steps in a procedure or a video to visually show how something is done. Ideally, as many steps as possible should be illustrated so new recruits are not confused because steps are missing. This is preferable over a shorter SOP that creates confusion.
When the company has a good set of SOPs, it’s then important to update them as often as is necessary. This can be the job of the line manager, but quite often the best person to do so is the new employee themselves. Having learned both from the SOPs and the departing employee, and then grappled with the reality of the role, they’re perhaps best placed to point out deficiencies, things that are missing and confusing explanations. Any changes can then be verified by their manager before being finally approved.
9. Multi-Skilling of Staff to Maintain Performance During Absences
Staff absences, whether due to unexplained sickness, a sickness with a doctor’s note, planned vacation, maternity or paternity leave, or another reason, cause disruption to the business operations. Even when these are known about in advance, it makes it difficult for the business to cover for staff shortages.
It’s very useful to have key members of staff who are trained in how to do another person’s job. This allows them to step into their role with very little notice to complete essential tasks that are required during the period of the other employee’s absence. This is best done with roles that are simpatico, such as the bought ledger clerk and a sales ledger clerk roles in the finance or accounting department. This is because training for staff performing in one role is highly applicable to the other role as well.
While it might be seen as an unnecessary expense to have staff train in alternative roles, it allows the company to maintain performance despite absences. Projects can still get completed on time, clients are kept happy, and the business operations don’t skip a beat.
10. Fresh Pair of Eyes
A fresh pair of eyes can see the business from a different perspective. This might be a management consultant coming into the business or a manager from a different department getting to look at how a different department is operating.
This is extremely helpful when it comes to operations. Companies tend to operate the same way for years and bake in inefficiencies that they’re then blind to spot. This becomes problematic, especially for managers despite their training who get so used to how the company works that they don’t stop to question if there’s a better way to go about it.
While some managers will object to a consultant coming into the company, fearing that their department will come under unfair criticism, this fear is largely unwarranted. Businesses don’t fix their problems by failing to address what’s wrong with them. If they’re sickly but the people within the business cannot figure out where the origin of the problem lies, it’s time to get a second opinion. Businesses should be treated not unlike the medical profession in that sense.
When management has an open-minded approach to business performance, then they’re willing to look at any issues that the company has and address them adroitly. That often means dealing with issues that aren’t fun, interesting or encouraging to resolve and move onto better situations.
When there’s a fundamental operational issue, it’s up to managers to step in and fix the issue. When staff aren’t trained well enough or recruiters are employing the wrong people in key positions, both these issues must be handled as soon as possible. Only by tackling the hard issues can management make strides towards the kind of business performance that wins awards, takes a significant market share, and improves on what was achieved before. Just as history is written by the winners, business managers are key to ensuring that the company doesn’t just deliver average performance over time, but instead provides increasing shareholder value through operational efficiencies and increased earnings.
