How to Ditch the Inefficiencies That Are Eating Your Revenue
These four changes can help you zap revenue-sapping inefficiencies.
Small organizations have their own problems, but they don’t have to worry about miscommunication or repetitive processes when the whole team can fit in a single room. As more people join the company and more rigid organizational structures arise, troubles and inefficiencies can creep into the day-to-day grind.
Frustrating though these issues may be, they’re also avoidable. To optimize operations, you don’t need to rebuild everything from the ground up: You just need to focus on the main issues behind your stress.
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Entrepreneurs have a lot on their plates, which means they rarely have time to review existing processes. However, these reviews can produce results comparable to landing several major clients. Market research firm IDC found that companies lose 20 to 30 percent of their revenue to inefficiencies every year. If you could spend a small amount of time to land a client that would increase your revenue by even 5 percent, wouldn’t you?
Inefficiencies become more impactful the longer they exist, so don’t let your revenue slip away without a fight. Follow these tips to optimize your internal processes and create scalable workflows.
1. Streamline human resources before a crisis, not after.
Founders love employees who work for more than a paycheck and benefits, but the reality is that people need the business to hold up its end of the deal as well. One wrong move could cause a star employee to leave, so human resources (HR) processes merit close consideration upfront. HR procedures that ensure timely pay and create a positive work environment are essential components of any company with happy employees.
To keep HR running smoothly at your business, consider using better tools to streamline common processes. APS Payroll offers an intuitive product that serves as a one-stop shop for payroll, tracking and benefits, while 15Five offers a unique approach to feedback to maximize employee development.
"Manual data entry is no longer a required payroll task. Automated data syncing in a single-system platform eliminates the potential for data errors," wrote APS Payroll CRO Christian Valiulis on the company website, in a blog post about limiting inefficiencies. "Not only will this save your HR and payroll administrators time, but it will reduce the risk of human error and paycheck inaccuracies."
2. Invest in leaders, then trust them.
Your company might have plenty of managers, directors and vice presidents, but if they feel as though their roles don’t come with the appropriate authority to act, they will harm the business more than they help it.
Don’t just promote your best salesperson to lead the sales team and the best programmer to lead the development team. According to a study from the National Bureau of Economic Research, top salespeople who earned promotions to manager caused their departments’ sales to decline an average of 7.5 percent.
Choose your leaders not based on how well they do now, but on how well they inspire others and handle the pressures of leadership. Look for people who know how to coach and encourage, then develop those abilities through training, new experiences and bigger projects. When your leaders are in place, step back and let them handle things their own way. They won’t do everything the same way you would, but if you give them the tools and the autonomy, they will still do it right.
3. Provide much-needed backup to your customer service team.
Today’s customer service is an always-on proposition. Here’s a place where a small investment in new technologies like artificial intelligence can dramatically improve efficiency while making customers’ lives easier.
“Fortunately, bots don’t sleep, eat or go off-script,” wrote Entrepreneur guest writer Vince Lynch, who is also CEO of the machine learning agency IV.AI. “Of course, grooming your bot to serve customers requires front-end data -- ideally hundreds of thousands of example conversations -- but you can get started with a human-chatbot hybrid. With this approach, the bot answers run-of-the-mill questions, while a human takes over for the more complex ones. Then, as the data builds and the model matures, you can phase in full automation.”
4. Hold fewer meetings, then make them shorter.
Bad managers hold meetings so they feel as though they’re contributing. Good managers hold meetings because the team needs to meet. If something can fit in an email, use that medium. If the conversation only involves two people, don’t invite others to the meeting to keep them informed. Instead, schedule a phone call with the other party, then send a follow-up email to anyone else who needs to know what you discussed.
Wasted meeting minutes aren’t just a problem for contributors. According to researchers at the London School of Economics and Harvard Business School, CEOs spend nearly a third of their working hours in meetings -- more than any other area.
The easiest way to hold fewer meetings is to get more from the ones that happen. Start the meeting agenda with a question. What is this group here to accomplish? Brainstorming counts as an accomplishment: simply informing the audience of new facts does not. Keep meetings to seven people at maximum to avoid over-inviting. When fewer people get together with clearer goals, meetings become more productive.
These four tips won’t solve all your workplace inefficiencies, but if you take these steps, you will experience happier employees, stronger leaders and less wasted time at work. Don’t let bad processes steal your revenue: Take it back by slashing waste and leading a leaner, more effective company.