In today’s competitive business landscape, organizations often have to work within tight margins and navigate many challenges to be successful. That’s why operational efficiency is so vital to success. Balancing a productive, engaged workforce with a lean budget can be challenging without sacrificing product or service quality. Still, efficient organizations will find they can better set and exceed realistic operational performance goals.
Becoming more operationally efficient and building a culture of continuous improvement can help organizations produce more, provide better customer experiences, and gain a competitive advantage in the marketplace. Here are ten strategies for improving operational efficiency that can help your organization thrive this year and beyond.
10 Strategies for Improving Operational Efficiency
Implementing an operational efficiency improvement strategy requires taking a holistic, honest look at your organization and making practical changes. You don’t have to overhaul how your company does business entirely, but you should be open to making some radical changes. We break down some key strategies below.
Strategy 1: Conduct a Thorough Efficiency Audit
Before making changes, you must understand your organization’s current operational efficiency. This requires a thorough assessment of all aspects of your company, from the sales to content marketing teams and everyone in between.
Take the time to examine internal processes, materials, technology, and human resources to deeply understand how your company operates. You should know the complete development, production, and sales lifecycles of your goods or service, the materials and technology that go into supporting your employees, how teams are built, and what they’re responsible for. By getting a bird’ s-eye view of how your organization works, you can start to hone inefficiencies and amplify strengths.
Utilizing tools like user activity monitoring software and data analytics software can make identifying inefficiencies and work patterns less manual.
How This Benefits Your Organization
- Transparency: An efficiency audit gives you a deep look into what’s happening in your organization, tearing down silos and bottlenecks to gain deep insight you won’t get in the day-to-day operations.
- Baseline: All projects should be measured over time to gauge success, and conducting an audit gives you a baseline from which to work.
- Finds obvious errors: By simply taking the time to search for inefficiencies, you may quickly find glaring ones with simple resolutions.
Strategy 2: Streamline and Optimize Processes
Efficient organizations require efficient internal processes. Every organization has myriad ongoing processes, from fulfilling orders, resolving customer issues, adding new product features, and building new updates. An efficiency audit will help you find opportunities to improve operations processes, set up performance metrics, and then streamline and optimize business processes.
Improving internal processes can reduce waste and increase productivity, so many organizations invest in project managers with process improvement techniques, like lean management principles and Six Sigma.
Experts with process optimization skills can improve cross-departmental collaboration so long as they have employee and executive support. Rank-and-file employees should understand that process improvement isn’t about correcting something they’ve done wrong but getting their help fixing an organizational shortcoming.
How This Benefits Your Organization
- Reduce waste: Better internal processes will save time, money, and support better resource allocation.
- Increase productivity: A major goal of process improvement is to allow teams to complete operations processes faster, increasing productivity.
- Saves employee time: Many repeatable processes can be automated, freeing employees time to focus on more complicated tasks.
Strategy 3: Embrace Automation and Technology
Speaking of automation tools, implementing AI and machine learning tools is a great way to streamline internal processes. A robot probably can’t do someone’s entire job. Still, automation technologies can save time and reduce manual labor by performing the more tedious routine tasks that drag an employee’s productivity down.
Technology can automate manual data entry or transcription, basic customer service inquiries, and approval processes to save human employees time. Anything that requires a simple click or quick data entry may be small tasks, but they add up over time to create excessive waste.
When you do implement technology, take the time to adequately train employees on any new tool and show them how it will save them time and improve their work experience.
How This Benefits Your Organization
- Makes little tasks even easier: Small, repetitive tasks often become the most time-consuming, and automation ensures that time doesn’t come from an employee’s schedule.
- Improved morale: The small, repetitive tasks are also often the ones that make employees feel the most disengaged. Saving them from monotony to work on bigger projects will make them feel more engaged.
- More time for innovation: When employees aren’t tied up with simple, brainless tasks, they’re better able to think creatively to solve your organization’s problems.
Strategy 4: Foster a Culture of Continuous Improvement
The best organizations are never satisfied. Fostering a culture of continuous improvement demonstrates to employees that you expect innovation and business growth mindsets and believe they’re capable of doing more than they presently are.
When the entire organization values efficiency and innovation, employees feel empowered to think outside the box, experiment with potential process improvements, explore new ideas and technology, and more.
Leadership should encourage employees to participate in new initiatives, utilize new technology, and attempt to resolve issues or inefficiencies themselves before escalating. A strong organization has regular employee and operational performance reviews and a strong positive feedback loop throughout the organizational hierarchy that contributes to sustainable growth.
How This Benefits Your Organization
- More engaged employees contribute to a range of positive business outcomes, including fewer errors and a 23% increase in profits.
- Greater opportunity for innovation: Organizations where employees feel empowered to experiment and think outside the box are more likely to discover new innovations and process improvements.
- Identify talent: Organizations that value continuous improvement may find that the best talent is just waiting for the right motivation.
Strategy 5: Invest in Employee Training and Development
It’s one thing to preach a culture of continuous improvement; it’s another to back up the rhetoric. Employees who are well-trained and onboarded with care are less likely to make mistakes that negatively impact operational efficiency.
However, employee training shouldn’t stop after onboarding. In an organization that encourages continuous improvement, employees should be encouraged to pursue professional development opportunities and rewarded for doing so. They should have ongoing training programs in new trends, technology, and tools that the organization plans to implement in the future and feel motivated to learn new skills that can help both their own careers and the company’s future.
Many organizations also employ cross-functional collaboration and training so that employees can more easily work across multiple teams. This makes an organization more flexible and adaptable to staffing or company changes.
How This Benefits Your Organization
- Less employee turnover: There are many estimates to the cost of replacing a departed employee, from $4,700 to four times the departing employees’ salary. Whatever the number, it’s more expensive to replace an employee that it is to keep them.
- Retain strongest talent: Not all employees are the same, of course, and you want to retain your best talent for as long as possible. Investing in that talent can make them feel more loyal to the organization.
- Increased productivity: Employees who know how to handle their (and others’) responsibilities well are more likely to be more productive.
Strategy 6: Leverage Data and Analytics
How can you know if your organization is more efficient if you aren’t gathering data? Simply thinking you’re more efficient isn’t a scientific outlook. Leveraging your existing analytics tools, as well as other tools like user activity monitoring and employee monitoring software, can provide valuable insights into employee behavior and operational performance.
These metrics will identify your most and least productive employees, illustrate bottlenecks and obstacles that are making specific repeatable processes more challenging, and give you a wealth of data to make decisions about where to invest for future growth and where to cut budget.
Each organization must determine the most relevant operational efficiency metrics, but some key performance metrics often include productivity, operating cost, and customer satisfaction (CSAT) metrics. Using data will help you improve business operations, process mapping, and process efficiency, streamline cost management, and more.
How This Benefits Your Organization
- Measures success and failure: You can’t know if your operational efficiency initiative is working if you don’t have hard data to back up your hypothesis.
- More actionable insights: Gathering data will give you insights into parts of your business you thought were working well but may actually be inefficient. You’ll gain actionable steps to improve business performance.
- More informed decisions: Data-driven decision-making is a hallmark of efficient operations that systematically identify opportunities and capitalize on them.
Strategy 7: Optimize Workspaces and Equipment
The remote work revolution has led many companies to reevaluate their workspaces and how they optimize talent. While some companies may benefit from having a fully remote workforce, others prefer or need at least some in-office presence. Creating a workspace that’s conducive to operational excellence and providing the best equipment for employees will help them reach peak productivity.
Workspaces designed to be open, free-flowing, and well-lit will help employees feel less cramped and more inspired. Amenities like ping-pong tables or fully stocked kitchens are nice bonuses, too!
As for equipment, if you provide employees with laptops, smartphones, or other company devices, make sure you’re updating tech regularly and ensuring they have the most recent software updates and upgrades. Heavier machinery, appliances, or other pieces of equipment that employees must use frequently should be regularly maintained and upgraded to ensure there’s no lost time to equipment failures.
How This Benefits Your Organization
- Increased productivity: Research shows that employees in attractive, well-designed workplaces are more productive.
- Improved culture: Many employees would prefer to work from home, but if you provide an awesome place to work and the best tools to work with, you’ll get employees excited to come to work and contribute to a winning culture.
- Reduce waste: Outdated or broken equipment that’s essential to job functions will lead to lost time and money.
Strategy 8: Foster Employee Engagement and Well-Being
Optimizing your workspaces and equipment is a good way to support this strategy. Simply put, engaged employees work harder, are more productive, and put more pride in their work. That can have a variety of positive business outcomes, from reduced employee turnover to higher quality work and higher project completion rates.
Leadership is a critical aspect of creating a positive and supportive work environment, both by setting the tone for how employees treat one another and by developing initiatives designed to boost employee morale. The best types of morale-boosting initiatives are ones that can also increase productivity, like employee recognition programs like a monthly reward for high performers or wellness activities to support employees’ physical and mental well-being.
How This Benefits Your Organization
- Happier employees: Research shows that employees in attractive, well-designed workplaces are more productive.
- Reduced employee turnover: Engaged employees are more likely to remain loyal to their employees, reducing operating costs and waste.
- Happier customers: Happy, engaged employees are far more likely to be positive ambassadors for their companies. People like companies that treat their employees well.
Strategy 9: Prioritize Effective Communication and Collaboration
Poor communication leads to mistakes. Organizations with poor cross-team collaboration or cross-functional operations may have teams doing the same thing twice, wasting time navigating poorly organized asset management systems or failing to utilize the right data or tools. Lacking effective lines of communication and collaboration leads to reduced operational efficiency.
It’s imperative to improve asset management systems and break down communication silos to ensure that everyone has access to organization-wide information and foster cross-team collaboration. Leveraging communication tools like Slack and project management tools like Asana can help foster teamwork and keep teams aligned when working toward common business goals.
How This Benefits Your Organization
- More efficient projects: Effective communication promotes an environment where everyone knows their role and everyone else’s role on a given project. That way, there is less back and forth, fewer concerns over who is doing what, and more checking items off.
- Better information sharing: Company knowledge can sometimes wind up siloed with certain teams or individuals. When you have a strong collaboration culture, information is a superpower available to all team members.
- More chance for innovation: The better your organization’s asset management systems, the more opportunity it is for individuals to interpret that knowledge differently, leading to new ideas and innovation.
Strategy 10: Regularly Monitor, Measure, and Adjust
Simply implementing an operational efficiency plan isn’t enough. Your organization’s key goals and operational strategies change over time, and so should your operational efficiency plan. Likewise, it’s entirely possible that your plan doesn’t meet benchmarks right away, or falls short in some areas while exceeding in others. Operational efficiency is an evolving journey with no end — the journey (and regularly improving operations) is the prize.
Leveraging technology like user activity monitoring software, employee monitoring software, advanced analytics platforms, and human resources tools will help you continually assess and improve your operational efficiency program.
Regularly track progress against key performance indicators (KPIs) and update your key metrics accordingly. To keep employees engaged, set up regular performance reviews and continuously refine strategies to increase engagement and reward high performers.
How This Benefits Your Organization
- Continuous improvement: This strategy reinforces building a culture of continuous improvement by regularly showcasing areas that you have improved and areas that you can improve, from better digital tools to higher profit margins.
- Motivation: Regularly monitoring and adjusting goals is a great way to inspire the competitive spirit in employees to continue to beat the numbers from the previous week, month, quarter, or year.
- Accurate goal-setting: Organizational goals should be realistic, practical, and achievable. You won’t know what is realistic unless you’re frequently assessing the data after implementing specific changes.
Conclusion
Boosting operational efficiency requires a holistic, organization-wide effort. Assessing all aspects of your company will help you identify inefficiencies and develop a comprehensive plan to improve efficiency. From streamlining core business processes and investing in employee happiness and engagement to regular goal-setting and adjusting, these ten strategies will help your organization boost operational efficiency.
