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The efficiency obsession
We live in an efficiency-obsessed world. Countless books, TED Talks, workshops, and frameworks are designed to help you wrest every extra ounce of efficiency from your life. Business is no different. There’s a significant focus on efficiency, and automation is a tool used to usher in new waves of it. But when it comes down to your specific automations and workflows, how do you know when something is genuinely efficient? How do you even measure it?
To evaluate your efficiency, you need metrics and goals, and you need to document all of your core processes. This evaluation is a big undertaking, and you probably don’t relish the thought of spending hours in meeting rooms with your team racking your brains for plans and essential questions. But the outcomes of those meetings are gold and could be the key to whether or not your business thrives.
Here’s how to think about measuring your efficiency, with accuracy and strategy dictating your path.
The gifts of measuring process efficiency
Measuring your process efficiency isn’t just administrative work. When making the case to put hours aside to think about it, here’s what you will be getting at the end of the evaluation process:
- Greater accuracy for managers and stakeholders to make decisions
- More efficiency and speed to business processes
- More effectiveness in the business processes you decide to use or keep
- Faster time to market
- Greater transparency into areas where your organization is excelling
- Tangible data to feed into dashboards, reports, and decks that communicate the current state of your organization
What should you actually measure?
Your performance metrics will indicate how a task performs in reality versus the original goal you hoped it would achieve. These specific metrics will differ from organization to organization, so we won’t generalize. But no matter what, you can still group your performance metrics into several different categories:
- Effectiveness. Did you achieve the expected results? Did you achieve the best results you could while using the fewest resources possible? The metrics around effectiveness will usually present in the form of reduced costs, ROI, or higher profits.
- Capacity. How many products do you make per month? How much data do you process per minute? How much staff does it take you to get through a consulting project? Capacity metrics will usually present in the form of a ratio between the work being produced and the time it takes that work to occur.
- Productivity. If one worker completes a kick-off process with one client in a day, and another worker completes three client kick-offs in the same day, the second worker is more productive. Productivity metrics present as a ratio of an output generated by a job compared to the resources required to complete that job.
- Quality. How much are you producing, and how much of it is usable? Is there a specific percentage of something produced that failed? Quality metrics present themselves as the relationship between total output produced and the outputs that are suitable for use, or appropriate to be customer-facing.
- Compliance. Is your team complying with your processes, or are there inefficiencies? Is compliance the easiest way for team members to get their job done, or are they finding quick hacks and shortcuts to circumvent the compliance process? Compliance metrics might take the form of mean time to issue recovery, compliance expenses per issue, or severity gaps between predicted and actual risk.
- Competitiveness. What percentage of the market share have you captured? Competitiveness metrics will consider your position compared to other companies in the market. Market share and conversions will be your best competitiveness metrics.
Automation and process efficiency
As long as we’re discussing efficiency, we need to interject a word about automation. As you find efficiencies, you’re able to renew your focus on the strategic work that matters versus the repetitive, manual data entry that shouldn’t require human resources. Undergoing that process is one of the most valuable and efficient things you can do.
As you implement new automation tools and processes, you also get better at tracking. All of the metrics we listed above need to be documented, tracked, and analyzed if you want to act on them to become a more efficient business. It’s easier to track vast troves of data and get a clearer macro picture with automation. In other words, nearly everything you measure can improve with the right automations.
Automation is your edge
In an efficiency-obsessed world, automation is the secret weapon that gives you a competitive edge in the market. Automation allows you to do handy tasks like track your progress, making it easier for stakeholders to analyze data and make better decisions. If you’re looking to become more efficient, get better at two things: First, become experts at measuring the results of efficiency experiments with laser-like precision. Second, after those experiments are complete, boldly incorporate automation into your workflows.