Productivity is the main driver of profits for any business. But working harder isn’t always the answer.
In small and medium business it can be tricky to extract more output from the same inputs – be that people or resources. But maximising productivity has never been more important.
Kevin Fox, director of the Centre for Applied Economic Research at UNSW Sydney’s Business School, says firms with high productivity have proven more resilient during downturns, including the pandemic. But he warns that while productivity and profitability are linked, they’re not synonymous and it’s risky to conflate the two.
“Firms trying to make more profit may try to get workers to work longer hours – but that doesn’t equate to productivity because productivity is about getting more for the same input.” Improved productivity, says Fox, comes from better resources management and providing the tools to help people do their jobs better, faster.
In some cases, even the most simple technological fixes make a big difference. Alongside his role at UNSW Sydney, Fox runs his own consulting business and saw demand for services rise from clients who wanted to understand the economic impacts of the pandemic. His Microsoft licence provided free access to OneNote, a digital note-taking system, which gave him access to his notes on the go. He also invested in a digital notepad by Remarkable. Across his university and consulting work, he estimates that tools like these have freed up as much as four hours per week.
Oisin O’Callaghan, director of Sydney marketing communications firm Watterson, agrees technology reduces friction in a small business. Watterson, for example, is building a cloud-based system to help a team of nine manage timesheets and accounts. “The aim is to make it a faster experience – moving some of the pain points and boosting productivity,” says O’Callaghan.
Watterson’s weekly team meeting helps identify those pain points so the company can then bring in specialist consultants in areas such as accounting and technology to get the ball rolling on productivity projects like the new cloud platform. O’Callaghan and his team also tap their wider network of clients and partners to learn about other productivity tools, such as work-design platform Beamible and list-making and project tool Trello.
O’Callaghan adds that it’s important when striving for productivity to think about the quality of work coming into the business, not just the quantity. “Left unchecked there can be a build-up of the wrong sort of work or people carrying the burden of others… Put wellbeing first and productivity will flow; if you reach burnout then they are both shot.”