In our previous article of this set we talked about the role of productivity in the context of reaching business success and the importance of measuring it. Also we mentioned the difference of productivity metrics used for the IT sector. If you have missed it, you can find more details here. 

Today we’re going to consider the most common reasons for low company productivity and its consequences, as well as the benefits of high productivity, since this knowledge can help you avoid financial losses and keep your business successful. So let’s start.

If your team is low-productive, eventually you need to evaluate your management principles and strategies, and to drive the necessary changes. Note that the most common pitfalls on the way to high productivity are:

• Poor time-management - our daily routine is filled with distractions: work emails which are not always aimed primarily at our attention, meetings which even don’t require our direct contribution, web surfing that is not work related, coffee breaks a dozen times a day and so on. Having no daily to-do lists, multitasking and setting wrong priorities lead to the waste of our precious time while the tasks that really matter have little progress;
• Toxic work environment - a pushy style of management that requires from employees brilliant results but at the same time lacks of involvement in their work and fails to value their ideas, concerns and needs - such things give poor motivation and, consequently, diminish productivity. According to the research, one-fifth of the workers have quit their jobs because of the toxic work culture;
• Perfectionism - aiming to create a perfect product or service you may stuck on unnecessary details making the whole team nervous with constant task iterations. One more negative side of perfectionism is your strong disbelief in others’ professionalism, due to which you attempt to undertake a whole bunch of work giving yourself extra “busyness” and giving others no chance to take on a part of responsibilities and prove their professional skills. Thus you lose focus on what is really important for the project success and go around in circles somewhere behind your competitors who keep on going ahead by leaps and bounds;
• Lack of expertise - if you aim to raise by yourself a beginner into a good specialist with proper skills, you should be ready that for a certain period of time such a worker will remain low-productive since they may require extra time and resources to complete a regular task due to their little expertise. Besides, you will have to encharge a more experienced worker to spend the time on supervision instead of their direct responsibilities, which eliminates their efficiency as well;
• Human factors - often the well-being of company members is underrated and put behind the overall company productivity goals, however, as a study shows, various “bad life events” often cause a low work productivity for up to 3 years depending on certain aspects. As well, discomfortable working climate, bad health condition, professional burnout and other mental and physical issues may also lead to significant productivity decrease;
• Inefficient workflows - misadjusted teamwork processes with poor team interaction, unclearly set tasks and deadlines can make even the most productive workers stressed and disoriented; operational routine processes performed manually, instead of being automated and technologically optimized, waste your precious time and investments. Such organizational issues take a heavy toll on your company’s productivity.

It may be quite challenging to control productivity in all its aspects, especially if you have your time schedule full of other core responsibilities. Although, if you are not doing enough to keep company productivity on high levels, you may face a range of undesirable consequences:

• Expenses exceeding profit - having low performance you spend more time on product/service development which increases labour expenses and all other associated costs. In its turn, production of less goods in a longer period of time reduces your profits as well;
• Lower compatibility - as mentioned above, low productivity results in fewer quantities of goods/services production. Beside that, when not working at your best you lose your creative spirit and, consequently, chances to create something innovative. Along with low good/service production it brings your business poor competitive opportunities;
• Talent turnover - as the team’s low spirit decreases productivity, as a bad productivity lowers team engagement. When team members see departamental estrangement and no significant progress in their work for a long period of time, they lose their inspiration to continue the work. Having neither significant accomplishments, nor feeling of their contribution valued they may get disappointed of working within your team and quit;
• Dissatisfied clients - working inefficiently you may provoke delays in the project, and risk to disappoint your clients who expect from you to deliver certain results within preset deadlines. If your team constantly fails to reach the goals in a timely manner, chances are your clients will choose your competitors who perform much better.

As you can see the reasons for low productivity and its consequences are interdependent, so to not get walking in circles you should keep in mind this stuff and do your best to keep your company productive at all stages and levels.

In contrast, by increasing productivity levels, you get a chance to be one step further than your competitors and generate more revenue. High productivity positively affects all aspects of your company performance:

• Most entrepreneurs start their businesses with the aim to gain revenue, and thus increased profits is the main benefit of having high productivity. Working at your best you reduce the time-to-market and increase sales of more qualified goods/services with less expenses and resources and, consequently, generate larger revenue;
• High productivity brings you the opportunity to raise salaries to your team and provide them with various extra social benefits and incentives, which will certainly motivate your team to work harder. Moreover it also makes your company more attractive for hiring new skilled specialists;
• Generating more profits you can make larger investment in further improvements of your products/services, operational processes and so one, which will drive your business growth;
• Enhancing the measures of company productivity results in a more rational management and planning of your expenses, including costs of resources for product/service production and operational processes which are commonly associated with expenses on administration and maintenance of your business;
• A well organized and structured workflow (as one of another high productivity consequences) makes your team inspired and more committed to company processes at all levels, including customer interrelationships. Thus, your customers’ needs get treated with higher involvement and care which makes them more satisfied with your customer service and more loyal to your company;
• Having good productivity you get the chance to build an ecologically increased competitiveness. Moreover producing your products/services with higher quality than those of your competitors’, or the same ones but in less costs you tend to generate a larger client base and become #1 in your industry.

Obviously, the level of productivity is one of crucial factors of business development, which can either ruin your company or lead it to success. So take your time to analyze how well your company performs and whether there are any points that you can improve. Share in comments what productivity pitfalls you have found in your company, how they’ve affected your business and what methods you use to manage them.

Next time we will share some most working tips on how to increase company productivity level, so don’t miss it!