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Productivity

November 17, 2009

On the surface baseball is a simple game; throw the ball, hit the ball, and catch the ball. Much like many businesses however, scratch beneath that surface and you will find a vastly complicated game.

Statistics play a big part in baseball. At first, the measures of performance were fairly simple. A player’s productivity was measured by his batting average. Then, in recognition that a double was worth more than a single, a new measure of a player’s productivity called slugging percentage became common place. Then there was the “on base average” and even more esoteric measurements like “batting average with runners in scoring position in tie games.” As the stakes have grown and the competition has become more intense, the measurements of productivity have become more specialized.

While the baseball fan enjoys the statistical aspect of the game, these statistics weren’t developed for the fan’s enjoyment. They were developed by managers attempting to improve performance. Accurate measurement of a player’s productivity is essential to fielding a lineup that maximizes offensive performance. Winning! That’s what fans really enjoy.

The message is to measure. It’s still the final score that counts, but if you want to improve overall results, a team’s performance must be broken down into discrete elements. Those elements must be measured, objectives established for future performance and programs implemented to meet the objectives. The games may change, but this rule for productivity remains the same.

If you want to improve the operation of your business, take it apart and identify the individual elements that contribute to the whole. Measure your current performance and set attainable goals for improvement. Initiate actions that will cause that performance to improve. Measure the results to evaluate your improvement.

The fact of the matter is that if you can’t measure the results of an activity, it’s going to be hard to improve your results Sports team do it, big companies are doing it and small businesses are doing it too. If you want to improve performance, you need to quantify the individual elements that contribute to the overall results in your organization. How many calls were made? How many rejected parts were produced? How many letters were sent? How many claims were processed?

Simply put, productivity is the measurement of the amount of input needed to generate any given amount of output. It is the basic measure of the efficiency of a business.

Every business must develop their own customized measure of productivity. Productivity can be looked at for the business as a whole as well as for individual segment of the business. For example, an all encompassing measure would be computed by dividing gross revenues by total hours worked.

It is not uncommon for a manger to understand the importance of productivity and how to measure it, but when it comes right down to doing it in his or her business, the changing mix of outputs causes a paralysis of perfection. Don’t get paralyzed. Your measurement of productivity is designed to show direction. It needs to be broad enough to compensate for the normal changes in your business and flexible enough to be computed quickly. It is not meant to be an accounting statement, accurate to the decimal but delivered six weeks after the fact.

After you have solved the problem of measuring productivity, you need to develop strategies that will have a positive impact on it. Productivity is the composite result of the proper combination of money, manpower and machinery.

Communication and fairness have a special impact on productivity. Simply communicate to everyone in the business how productivity is measured. Create a sign or a score board in an area frequented by all employees. Let them see the goals and the results. Then listen to what they have to say. Take action as appropriate. When positive results begin to occur, equitably share the rewards.

A focus on productivity is not just for big business. It is for all businesses. Productivity is not achieved by simply increasing output or by decreasing costs. It is accomplished by favorably altering the relationship between the two.

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