Are you too busy to plan? Are you and your team spending all your time trying to keep your heads above water?
Being busy is not necessarily a good measure of productivity. If you are too busy to set goals or objectives, then how can you measure achievement? You might believe increased sales or revenue are the only true measure, but if half your time is spent ‘fighting fires’ or fixing problems what is the cost of reaching that revenue target?
Take the example from the construction industry where the customer expects to be able to change their design on the run. The first few times the construction company may accommodate the changes to win favour with the customer for future projects. However, on the next project they need to factor in the costs of potential changes so the price goes up and they lose the bid.
If the construction company sets an objective to minimize variations by improving up front planning, the customer’s expectations will be set from the beginning of the project, the costs associated with managing all the changes will be reduced, thereby increasing profitability for the project.
W. E. Deming was an American engineer who in the 1950s became renowned for working with the Japanese manufacturing industry post WWII. He taught about the Shewhart Cycle which evolved into the Plan-Do-Check-Act cycle and then his Plan-Do-Study-Act cycle as illustrated below.
The Study segment in the above cycle represents the analysis of how well you ‘do’ your business. The Act segment assumes you learn from your mistakes and make improvements in the next planning cycle. If your company spends a lot of time Doing and not enough time Planning, you can’t expect to improve efficiency or productivity, which ultimately impact profitability.
Everyone loves to say how busy they are, but perhaps that really reflects how poorly they have planned. Try setting objectives around the areas you or your business should focus on to improve and then measure if you achieve them. You will start to see productivity improvements and ultimately profitability.