In a Covid world, the old efficiency rules don’t apply. The ways of working that organizations established to make the most of their resources and grow business in the past are no longer relevant. A mix of government guidelines and a massive shift in customer behavior have combined to create change on such a massive scale that we are back to Efficiency Square One. For some businesses, new operating models and efficiency transformations are the only way to survive.
This isn’t slow and steady evolution; this is business revolution. Old operating models aren’t profitable anymore, and the tried-and-tested rota patterns and daily schedules that underpinned how we match people and their skills to demand are useless.
Managing efficiency often ends up belonging to the finance nerds and operations geeks. But it is also an HR issue.
Having a strategic people view is essential. Everyone in your organization is going through massive change at work and at home, so if ever there was a time for strong people leadership, it’s now. Efficiency underpins a strong, agile operation that can cope and thrive in challenging times. And adopting the most efficient routines and ways of working helps re-establish the rhythms of the workplace so that your employees know what they need to do and to feel secure.
To understand how to manage efficiency, you first need to measure it. The old-fashioned way was men with stopwatches timing a production line in a time and motion study. These days, as fewer of us work in manufacturing, modern work study uses a combination of techniques to measure efficiency and surface insights.
Time Studies
Standard time study measurement tells you how long it takes to complete a task. That’s essential information for resource planning, like when you change processes or if you are considering a move from office to remote work. Time study breaks tasks down into their component parts, creating a deep dive look that shows how much time is lost through slow systems, when the need for duplicate data entry adds unnecessary work for colleagues, or how much time could be freed up with automation and digitization. Basically, you need to know how long things take so you can plan resources efficiently.
You can also undertake time studies to examine the role of other variables, like whether task completion varies with tenure. (We generally find that it takes longer to get to peak performance than most business training plans assume.)
Efficiency studies are also a diagnostic snapshot of how time and resources in relation to customer demand. If resource levels exceed demand, this pulls down productivity and creates demotivating down time for colleagues. On the other hand, too few resources leads to poorer customer experience stresses teams and limits business growth at peak times.
Oftentimes, efficiency studies reveal unexpected results; Many businesses have told us, “We thought we had a problem with this process, but we never realized just how much time it was costing us.” Or, “We weren’t sure we had the resource distribution right, but we never imagined we were causing this much variation for our customers and colleagues”.
One global retail client has measured their operation with an efficiency study for the past seven years. They now spend 40% more time with customers than they used to by ruthlessly eliminating tasks that didn’t add value.
Role Studies
Role studies produce fascinating insights into roles and their variability within a business. They entail shadowing workers and undertaking a “day in the life” study to quantify how people spend their time in given roles. The data and resulting analysis can inform decisions around layers of management or whether a specialist is fully occupied vs whether a generalist could achieve similar results.
The study creates an evidence base of both how long tasks take and how time is spent. For example, we studied a retail business that was management heavy, where managers were spending less than 10% of their time on pure management tasks, which created a strong case for change.
Role studies also examine role differentiation. For instance, if the assistant team leader and the team do largely the same things, why do you need both roles?
Such studies show the degree of variance between locations, too. If you have clear job descriptions and role responsibilities mapped out, you would hope to have some consistency in how people spend their time. Yet we often see a wide variation in where and how managers spend their time, which suggest that there is an opportunity for role clarification.
In a role study we did across a mix of in-house and outsourced call centers, the data showed that in-house team leaders spent a third of their time coaching their teams to drive sales and deliver great customer satisfaction scores. In the outsourced centers, the focus was on managing KPIs rather than leading the team, which resulted in lower customer scores and commercial results.
You can also study field-based roles, such as area managers and sales account managers. An analyst will shadow someone for the day and provide useful insight into the split of admin, travel, and customer time observed. Findings frequently include time spent on extra reports and admin, wasted due to poor systems, and dealing with emails phone calls. All of which can leave little time for value-adding activities.
Lastly, it’s worth pointing out that you can benchmark role-study data, which can provide useful external context to inform decision-making.
Determining KPIs
Measuring efficiency is usually done as a periodic exercise to create a useful baseline and allow you to scientifically measure the effectiveness of future changes. The challenge, then, is to select the right set of KPIs that allow you to track your operations continually.
This starts with your strategy and unique proposition. What is it that you do for your customers that no one else does? If great service is your differentiator, then customer-experience measurement is a priority. If it’s about getting a great cup of coffee into commuters’ hands as quickly as possible, then metrics such as percentage of coffees pre-ordered via an app or maximum coffees served per hour might matter more.
Whatever your customer proposition, there are three measures that always matter:
- Workers vs customer demand. You may be able to use data around as customer footfall and call volume, as well as a workforce-management system’s schedule-effectiveness metrics to ensure that you have the right colleagues available at the right time. As an alternative, you can look at wait times and queue lengths as a proxy, since they will show when you don’t have enough people at peak times and when there are too many colleagues at quiet times.
- Customer experience. Customer satisfaction scores are an important metric at any time, and smart organizations will pore over their scores and comments even more during turbulent times. It’s important that your program for obtaining such information encourages rich customer feedback and goes beyond just capturing a score or basic comment (“it was okay”) from customers.
- Colleague satisfaction. There has long been evidence of a virtuous circle between employee satisfaction, customer experience, and growing revenues. Employee surveys that provide insights and suggestions will help you support your teams through changes
Efficiency is an indication of a smooth-running business — which happens only HR plays its full part.