Many people talk to me about productivity – they want more of it but are unsure how to get it. Back in the good old days you could measure it by time and motion studies but today it's far more complicated. If you can’t measure it easily what can you do?
Whenever I am faced with a question like this I take it up a level. In my world Productivity is the measure of a mix of resources. It’s not how “fast” something gets done but rather how “effectively” it is carried out.
The system I adopt is very simple. Business is a mix of three types of resources: those required to run the “back office”, HR, accounting, premises… everything that costs you money; those resources that generate revenue, sales, training, marketing…everything that brings you money this year; and those resources that build the equity value of the business, joint ventures, new products, branding.
To make it easier to remember I call them Red, Blue and Black. Red is for the Back office, Blue is for Revenue and Black is Equity Growth (tomorrow's wealth). Adopting this colour system means I can easily colour each of the resources I’m using in the business and get a idea of the mix of colours.
Depending on what stage of growth I am at in my business I know that there is a certain mix of RBB I should have. If I am in the start-up phase I’m looking for an overweight in Blue versus Red and not much Black. As the business grows I need to invest in more Red to build the platform to support expanding revenues. As the business expands I’ll need to think about the endgame and this is where the time allocated to Black resources fits.
How are you allocating your resources and measuring your productivity?
Whenever I am faced with a question like this I take it up a level. In my world Productivity is the measure of a mix of resources. It’s not how “fast” something gets done but rather how “effectively” it is carried out.
The system I adopt is very simple. Business is a mix of three types of resources: those required to run the “back office”, HR, accounting, premises… everything that costs you money; those resources that generate revenue, sales, training, marketing…everything that brings you money this year; and those resources that build the equity value of the business, joint ventures, new products, branding.
To make it easier to remember I call them Red, Blue and Black. Red is for the Back office, Blue is for Revenue and Black is Equity Growth (tomorrow's wealth). Adopting this colour system means I can easily colour each of the resources I’m using in the business and get a idea of the mix of colours.
Depending on what stage of growth I am at in my business I know that there is a certain mix of RBB I should have. If I am in the start-up phase I’m looking for an overweight in Blue versus Red and not much Black. As the business grows I need to invest in more Red to build the platform to support expanding revenues. As the business expands I’ll need to think about the endgame and this is where the time allocated to Black resources fits.
How are you allocating your resources and measuring your productivity?
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