July 23, 2018
In this resource hungry world, we must learn how we can “do more with less”. To drive this organisations need to become more productive in their operations, which means getting more or better results by using less or same resources. Aside from productivity, organisations which aim to continuously improve must focus on their ability to respond to changes in this rapidly changing environment.
In this blog, we will tackle the importance of productivity and agility for an organisation to continuously improve. In addition we will discuss how we can efficiently and effectively address these productivity and agility challenges. We start by defining the terms productivity and agility.
What is productivity?
Productivity is defined by the ability to deliver more results by using less resources. It can be calculated by taking your output and dividing it by your input. In your organisation, look at what resources are being used to produce the output. The common resources being used by most organisations are labor, machinery, computer software, etc. These resources are considered your inputs and the products or services that you offer to your customers are the outputs.
You just need to take note that the more you produce with less input, the higher your productivity is.
What is agility?
Agility is the ability to rapidly respond to changes in the internal and external environment without losing momentum or vision. Agility revolves around three components and these are the ability to sense, create and respond to change quickly. The external environment of an organisation is rapidly changing in terms of politics, economic,and digital which places an importance on the organisation’s agility.
The more agile your organisation becomes, the better your organisation is equipped to sense and react to changing business environments.
Why is productivity and agility important?
Cost. Most, if not all organisations aim to save cost in producing their products or services and in operating the business. There is cost pressure because of the declining revenue in the recent years for some private and most public organisations. In order for them to create more revenue, there is a need to either sell more by spending less or servicing the customers more but maintaining the level of resource usage. This means companies need to increase productivity to gain more revenue.
Limited resources. With the relative financial pressure, companies might limit their resources like freezing the hiring of people. This adds pressure on the productivity of others since they are expected to do more despite their own limitations. This cost pressure can extend to limiting other resources such as the buying of equipment, machinery and even softwares. Organisations are forced to produce more with same or less resources.
Customer demands and expectations. With the peak of digitalisation, customers now expect more from the producers and service providers. They expect quick and correct responses for their queries and concerns. Your organisation’s agility will play a big role in this situation since you need to respond and meet their demands right away or you lose them.
Rate of change in the economic and political aspects. With the rampant globalisation happening and affecting almost all institutions, businesses need to be always prepared and be flexible to adapt to changes that would affect them and/or their customers. Organisations need to be agile to respond to political and economic changes as they arise.
How do we address productivity?
To help you improve your organisation’s productivity, you need to address these three pillars:
People. The People pillar refers to the mindsets and attitudes of the people of the organisation. It builds and represents the organisation’s culture. In a recent study of large profit and not-for-profit organisations, it has been assessed that culture greatly affects the productivity of the people in the organisation by improving employee engagement. It is said that an engaged workforce results to a declining rate of absenteeism and employee turnover therefore improving productivity.
Processes. The Process Pillar refers to the conceptual sequence of activity that enables the people to do what they have to do. This is seen to be one of the most challenging issue for businesses since most organisations do not present clear roles and responsibilities which affects the productivity of the organisation in the long run. The lack of direction should be addressed by creating and implementing process transparency. This solution enables the identification of waste in processes resulting to waste removal and driving the organisation’s productivity.
Technology. An introduction of technology can greatly affect the organisation’s productivity and agility. It helps keep the process flow on track and identify, remove and reduce waste. The Technology Pillar is a great leverage for companies to improve its business processes and to become more efficient and effective by doing more with less and therefore improving productivity.
How do we address agility?
An agile organisation can be easily identified if they have these characteristics:
Innovation. Agile organisations foster innovation in every aspect especially on their organisation.
Transparency. The problem on clarity of roles and responsibilities can be solved with transparency. Transparency in communication, documentation and procedures is key to make sure that everyone knows what activities they are to do. Agile companies can quickly evaluate the impacts of change in the organisation and address the concerns immediately.
Creativity. Agile organisations are four times more likely to support creativity and ten times more likely to support taking risks.
Collaboration. This helps improve an organisation’s employee engagement and in turn improve responsiveness.
All of the components above help improve your organisation’s productivity and agility. Having even two or three of those components will have a significant improvement in your productivity and agility. As discussed, technology can provide solution to the productivity challenges and agility issues in your company. PRIME BPM can help you solve your problem with its cloud-based end-to-end business process management and business improvement software. Get your FREE TRIAL of what we can offer now!