6 Ways to Make Your Business More Efficient
A business is like an airplane: It has to work all the time. Well-oiled or finely tuned, the business must work and keep working for both owners and consumers alike. Unfortunately, inefficiency is a reality. It comes in a variety of flavors that can cost businesses up to 30 percent of their revenue each year.
Few have fought inefficiency as well as Sergey Petrossov, CEO of Jetsmarter. The global, mobile marketplace for private-jet chartering has changed its industry by rooting out efficiency. In just a few years, Petrossov has capitalized on the charter-jet industry's capacity and established what many have hailed as “the Uber of private jets.”
Petrossov shared with me six ways you can make your businesses run more smoothly and with less wasted time and effort.
1. Start with what just isn't working.
Before you change anything, you must learn how to accurately identify inefficient processes in your current business model.
As a young entrepreneur, Petrossov came into an industry plagued with inefficiency. Its services were poorly utilized, and the consumer set was very small and highly niche. In 2009, the average private plane was flying only 200 hours a year -- and empty-leg flights with no passengers accounted for one-third of that time. To put that in perspective, planes optimally could fly 1,500 hours a year, with passengers on every flight. Petrossov resolved to change the game.
Having identified what was wrong with the industry, Petrossov sought out what was causing it. He noticed nearly every charter group conducted its business with customers purely via phone, with no digital integration and no real-time pricing. As Petrossov tells it, “I thought there had to be a better way, where more people could take advantage of this service.” Having identified the problem, he was in a position to fix it.
Inefficiency can pop up in many places. You might find redundant processes, important but hard-to-find information or out-of-date procedures. Many companies also struggle with needlessly complicated processes. Others, in an effort to run on the cutting edge, try to implement too many new systems and get stuck trying to do it all.
Avoiding these pitfalls requires a keen awareness of your business’s capabilities. If your business already suffers from these issues, your ability to improve efficiencies in the future depends largely on how well you can spot what's slowing you down today. A “there-must-be-a-better-way” mindset is invaluable to help open your eyes.
2. Democratize the market.
Even the best aircraft has trouble flying through a storm. You can’t do anything about the weather, but you can do something about the market. Before Jetsmarter, patrons had to work through agents to schedule a flight or trip. Petrossov's business plan democratized the market by allowing patrons to schedule flights on their own through a simple phone app. That singular act speeded the process and also freed up Jetsmarter agents to handle other tasks.
Jetsmarter now moves up to 20,000 people per month, and 60 percent of its customers are new to private aviation. Enabling customers to choose and book their own travel created a real movement. It also yielded a billion-dollar business. “That’s what we were building in the process," Petrossov says, "a community, people all looking for a new alternative to travel.”
This principle applies to almost any business. An Aberdeen Group study revealed organizations using democratized methods had 30 percent higher levels of customer retention and revenue increases as large as 55 percent. The easier it is for customers and employees to access technology and information, the faster and smoother the business runs.
3. Explore digital integration.
According to Gartner, inefficiency in digital integration will cause 25 percent of businesses to lose competitive ranking this year. Petrossov already has ensured Jetsmarter won’t be among them. His mobile app streamlined the work that took much longer over phone lines, cutting down on wasted time and unanswered calls.
Doing so had a pleasant side effect: It created connections with people outside of the industry. “I was excited to do this with like-minded people, and what has spawned out of this is a community," Petrossov says. "There’s a great social networking aspect of the business, but also in the ability of people to meet. It gives them even more than transportation.”
Properly integrating digital solutions can improve efficiency in numerous ways. As Jetsmarter demonstrates, technology can automate time-consuming tasks, allowing employees to focus on things that require human attention. Faster, easier communication is a consistent result of digital integration. Reports are generated and shared more quickly, problems come to light sooner, and employees can collaborate more easily with one another and your customers, too. Thorough digital integration is truly a must-have to boost efficiency.
4. Build an end-to-end solution.
Your plane might fly, but if its landing gear doesn’t work, you're much better off taking the bus. Consider the entire machine and how your business and product fit into a larger picture. Jetsmarter began when Petrossov examined jet-charter solutions available at the time and realized they didn’t do enough. In some ways, these "solutions" were removed from the travel process.
More fully integrating the whole machine revealed still more ways to increase efficiency. Research supports this. A study commissioned by Google found an 81 percent positive correlation between collaboration and innovation within a business.
At Jetsmarter, this innovation developed what Petrossov calls “the world’s greatest travel and lifestyle community.” That description covers everything from how you reach your destination to whom you meet along the way and what you do when you get there. Even better, this process developed naturally. As Jetsmarter members arrived in cities, they often reached out to one another to navigate the city. Jetsmarter recognized and quickly filled this need, creating an internal concierge population.
Perhaps not every industry can be so thoroughly involved with its consumers and not every department can integrate with others. Limitations can be perceived or very real. Either way, being aware of the bigger picture is an essential part of providing efficient services. Understanding where the need for your services comes from and how they will be used allows you to anticipate and respond more authentically to consumer needs.
5. Build communities and resources.
One of the best things you can do for your business is to create communities. “You can’t put a price on it,” Petrossov says. “The people you meet are a reflection of how successful you will be. ...Opportunities open up naturally.” In Petrossov's case, it was a simple matter of encouraging communities that were already developing around his product.
You might find it necessary to foster community development. This can be as simple as creating public forums for discussion -- which in turn can generate new concepts, replenishing resources and invaluable feedback. Consumers of businesses with communities spend as much as 19 percent more than other consumers. In short, communities are good for customers and great for you.
Make no mistake: A community can be difficult things to manage, particularly if it encompasses members outside your business structure. But feedback from employees and consumers is a goldmine of data you can use to streamline your business model. A community is well worth the effort you put into it.
6. Explore unexpected opportunities.
Risk is a necessary component of business. Jumping into the jet-charter business was a risk unto itself for Petrossov. What if he was mistaken about which kind of changes were needed? Maybe the industry worked the way it did for a reason. Would his changes make a positive difference? His willingness to explore the possibilities led to his role in shaping a new transportation movement. As Petrossov likes to say, “We are a company made for disruptors by disruptors.”
Related: Be Comfortable Taking Risks
Taking risks is an important part of exposing inefficiency. It can be daunting to move away from processes that seem to have stood the test of time. Your reward, though, is discovering which practices no longer are relevant to modern business needs. Every entrepreneur must learn to evaluate unexpected opportunities and have the courage to explore them. Doing so drives industries forward and propels individuals and companies to success.Every plane needs some fine-tuning now and then -- a little oil to keep it running smoothly. Even a very successful business stands to benefit by proactively searching for new, more efficient methods. Petrossov's tips make for an excellent guide on your journey, whether you’re just beginning to investigate or you're always on the lookout for different tools and strategies.