StrategyDriven Entrepreneurship Article

Why Your Business Should Become More Like Orwell’s Big Brother

Monitoring your business, whether you’re a sole trader, entrepreneur or small business owner is essential. It’s often the difference between turning a profit and failing to break even.

But what does “monitoring your business” mean in practice?

In general, when gurus talk about monitoring, they’re referring to the ability of your firm to optimize its workload and achieve greater productivity simply by analyzing and refining its processes. It means going over your processes with a fine tooth comb and trying to find whether there is anything that you can improve using the data available to you. Here’s how to make your business more like Orwell’s Big Brother.

Analyze How You Spend Your Time

The biggest problem most businesses face isn’t their toxic workplace “culture” or their lack of skilled staff: it’s how they’re spending their time. Most managers just assume that their employees are working for the entire 7 – 9 hours they’re in the office every day. But when you actually look at how they are spending their time, you’re lucky if you even get 6 hours out of them.

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The reasons for this are twofold. The first is that employees spend a lot of time doing unproductive things in the office, like walking from their desks to the water dispenser or yawning during in meetings. Most of this can’t be helped, so it’s not an obvious target for monitoring.

The second reason is that employees are wasting a lot of time performing tasks that could be done more quickly and efficiently by either another team member, software or a different department. Sometimes, the issue is training – for instance, employees not knowing how to save time filling out cells on spreadsheets. These are the types of activities for which it is worth collecting data because it can result in a substantial uplift in productivity.

Monitor Your Accounts

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Getting paid is another major headache for businesses. Clients often pay late or not at all. Monitoring and managing accounts receivable, therefore, is essential. The problem for most small businesses, however, is that they are still relying on old-fashioned methods which make it difficult to keep track of clients. With monitoring, however, you’re immediately able to view client payment histories and get alerts if a customer is late with a payment. By monitoring your accounts, you’re able to identify patterns in high-risk customers and alter your premiums accordingly.

Monitor Staff Performance

With more and more work being completed online, it’s getting easier for companies to monitor staff performance. Monitoring workers is key to ensuring that you get maximum performance out of them every day, not just when they know you’re watching.

But it’s not all about Orwellian monitoring of their daily activities: it’s also about finding strategies to boost their productivity and waiting to see whether they have any effect in the real world. Something as simple as having a policy of saying “please” and “thank you” to workers could have a measurable effect. Find ways to keep your team feeling valued and help new recruits slot into the organization. Track the effects of guidance and training and find out whether it has any positive effect on your bottom line.

StrategyDriven Tactical Execution Article

Cut Your Expenses Without Cutting Quality

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So hey, here’s a shocking newsflash for you: starting and running a business is expensive. And if your expenses aren’t being eclipsed by your profits, then your business isn’t going to last very long at all. This is why you need to ensure you’re not making mistakes when it comes to those expenses. Here are some of the smart ways that new business owners can start cutting expenses – without cutting quality.

First up: keep track of your business expenses!

You’re definitely going to have a hard time cutting your business expenses if you can barely remember how much you’re actually spending! Gathering the required data is the first step to improving many areas of business, and finances are definitely no exception.

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The mistake that a lot of new business owners make is that they underestimate the importance of all this. That, or they assume they can keep track of expenses – or do all the bookkeeping – by themselves. But when your business starts taking off a little and starts buying assets and making deals, then those costs are going to get a lot more difficult to track, and very quickly.

Don’t make the mistake of trying to do all of this without an accountant. Work with them to track your expenses in as detailed a way as possible. Only then will you know what areas are costing the most money and where you can start making some cuts.

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Telecommuting is the way

There are loads of benefits to having your employees physically there in the office with you, no doubt. But when you that’s a requirement to run your business with the model you’ve chosen to use, then you have to introduce so many expenses.

The costs of running a business are often so high because you have to account for all those employees! The biggest expense in this area, of course, is the total cost of labour in the form of employee salaries. But there are loads of other costs to consider. For one, you need to ensure that you have an office big enough to house the employees. You also need to consider utilities – electricity and water usage.

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There are also problems of time. How many times have you seen employees – or even yourself! – show up late due to commuting problems? And time is money, after all. The key could be to have workers telecommute, i.e. work from home. This is easier than ever with cloud computing and portable technology. Telecommuting has also been found in many studies to increase productivity – which means that you’re getting more bang for your buck when it comes to paying those salaries!

Proper inventory and supply management

Your business is going to have to buy a lot of things. If you’re an office, then you’ll have to buy loads of stationery, furniture, food, all that sort of stuff. If you’re in construction, then you’ll need to acquire equipment and permits. Regardless of your specific field, there are always going to be things you need to bring into the business.

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All of these things need to be sourced, investigated, and purchased (sometimes via auction!) at the best possible price. You need to ensure that you get the most quality from the inventory and supplies that you’re procuring. Tracking orders, shipments, and invoices is also required. If all of this is done wrong, it can get very expensive – and without the quality to support how much you ended up purchasing.

Mistakes in this area will cost your business a lot. Even the smaller mistakes eventually build up over time and reveal themselves to cost a lot in total over the course of a year or so. When business owners are having a hard time finding out precisely where they’re losing money, the fault is often found in bad supply management. This is why you should put a focus on find a supply (or procurement) manager that is highly experienced. Companies like Portfolio procurement can help you find who you’re looking for.

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Hiring the right people

If an employee isn’t very productive or simply isn’t very good at their job, then you’re losing money. A lot of business owners don’t see it this way, even though they’re not happy with the situation. They don’t think of employees in terms of an investment, or an asset.

To some extent, maybe we can be thankful for that. It’s nice to be seen as, y’know, a human being instead of an asset or an investment! Still, this is the world of business and finance, and sometimes you need to abstract the human element to gauge just how well something is working. And if an employee simply isn’t doing their job all that well, then you’re not really getting what you paid for, right?

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One of the ways this can be tackled is by improving training when new employees begin. But a lot of business owners prefer non-formal methods of training; being guided by a fellow employee, for example. And if you do currently have employees that aren’t pulling their weight, then you need to have a word with them about their performance. The better the feedback you give, the more the employee will take on board. Hopefully, this will result in much stronger performance in future!

But perhaps the best way to ensure that costs are saved to the greatest extent is to hire the right people in the first place. You may wonder how such a thing is possible – can’t you only really tell how well someone will work once they’re on the job? The problem here is that business owners aren’t always as discerning as they should be. Especially if they’ve set themselves a date by which they need to have an employee.

Unless things are extremely urgent, you should be willing to take your time. Don’t fill that vacancy until you’ve found the best damn employee you possibly can. This can sometimes cost more when it comes to actual search methods, and you may feel that the empty position is, in itself, a loss of potential earnings. But in the long run, the expenses connected to that employee will seem better spent – and will really be worth it. This is one of the most underrated methods of reducing business expenses – by hiring the right people to boost your profits!

StrategyDriven Business Performance Assessment Program Best Practice Article

Business Performance Assessment Program Best Practice 16 – In-Progress Assessment Briefings

StrategyDriven Business Performance Assessment Program Best Practice ArticleBusiness performance assessments lose their value if the recommended performance improvement actions are not fully implemented. Consequently, it is not only important for executive leadership accept the recommendations; the mangers responsible for providing the time, capital, and labor to implement the actions must also buy-in. Because these managers tend to be those whose area was cited as needing improvement, their buy-in can be difficult to earn.


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StrategyDriven Business Performance Assessment Program Best Practice Article

Business Performance Assessment Program Best Practice 15 – Large Group Closeout Briefings

StrategyDriven Business Performance Assessment Program Best Practice ArticleAn effective business performance assessment program does more than simply identify performance improvement opportunities. Highly effective programs reinforce management's commitment to and fosters a culture of continuous performance improvement among all organizational members.


Hi there! This article is available to StrategyDriven Personal Business Advisor Remote Access and Dedicated Advisor clients and those who subscribe to one of the article's related categories.

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StrategyDriven Business Performance Assessment Program Video

Value of Evaluating Business Operational Performance

Does your organization need to improve its performance to remain competitive? Do you have a process to continuously identify the most value-adding improvement initiatives that will keep you ahead of the competition at a cost you can afford?
 
A lot of business leaders recognize a need to continuously improve their organization’s performance but either haven’t established a formal program to do so on an ongoing basis or worse yet, just don’t know how.

At StrategyDriven our experience working with leading companies around the world reveals that a formally defined, well-funded, and effectively executed business performance assessment program is the centerpiece for continuous performance improvement. Through this program, the business leaders we work with have enhanced productivity, reduced costs, and raised revenues by double and triple digit percentages.

Our Value of Evaluating Business Operational Performance video describes how to calculate the financial benefit of having a business performance assessment program that enables you to identify the actions needed to make your organization’s performance rise above the rest.

Business Performance Assessment Programs play a key role in the identification of value-adding performance improvement opportunities that will keep your company on top. If you don’t have such a program or are looking for ways to improve the value of your business performance assessments, register for StrategyDriven’ FREE Maximizing the Value of Business Performance Assessments video series. In this free, five part video tutorial, we’ll show you how to optimally synthesize your organization’s data into actionable performance improvement information.


About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal, and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.