Focused production Featured

7:00pm EDT February 23, 2009

The biggest key in any business environment is having a good understanding of what the strategic focus of the business is. There must also be an understanding of what is affecting each process, both upstream and downstream.

But, sometimes it gets cloudy when you talk to employees as to what they contribute to the company’s bottom line. Many employees maintain a heads-down approach and just focus on their jobs.

“I’ve spoke to hundreds of employees in multiple industries to understand what they were seeing on a day-to-day basis,” says Fred Pratt, CEO of DYONYX. “Each one had so much to do they could only concentrate on getting those tasks done; there was no knowledge or caring of what was happening around them.”

Smart Business spoke with Pratt about this employee/productivity business dilemma, technology’s role in it and how to make it better.

If employees aren’t as productive as they should be, shouldn’t they be let go?

In an effort to reduce overhead costs, many companies have cut back their staffs to the point that the remaining few are so concerned about keeping their jobs they are working longer and harder to pick up the slack. They are working longer and harder, not smarter and faster. Rather than focus on cost reduction, a company should focus on productivity improvement. If the product you produce is truly in demand in the marketplace, producing it better and faster will gain you a competitive advantage.

The problem with just reducing staff to cut costs is that the productivity contributions by each employee are not capable of increasing as rapidly as the layoffs occurred. Instead, the cost reduction allows for a short-term backlog of revenues and this will make it appear that things are better. Eventually, productivity levels return to match the staffing output levels, and it becomes a death spiral.

Employees in these situations usually feel uncomfortable because they don’t see anything changing as far as how the work is going to get done; all they see is that it means more work for them, and they were already working hard. Instead of better methods, they get bigger and faster computers.

Doesn’t new and better technologies only enhance employee productivity?

I believe that many times a new technology comes into the marketplace, IT installs it, and the business is negatively affected. There seems to be a lag time of new technology being introduced until productivity catches up. It seems to take about a year per major introduction. For instance, in 2000, the business world was blitzed with new technology as a result of the Y2K bug. In 2001, there was a huge decrease in productivity on a worldwide basis. Do you believe in coincidence?

How can this productivity problem be solved?

In order for the productivity problem to be solved, we must find a way to measure productivity and then bring in methods for increasing the individual productivity of each user. By increasing the production of the individual, we can then affect change where it will be most effective — at the single-user level. The only kind of change that will have a lasting impact on performance is to change each user, one at a time. By increasing a person’s output, we may save jobs and heal a wounded production environment.

However, the thought of optimizing one user at a time is scary to most IT people, especially since IT typically thinks in terms of technology, not productivity. Not to mention the fact that each user will probably have his or her own ideas about what he or she needs to do their jobs.

How can a company get started with this process?

Present solutions that will cover the most important bases first and then assign teams to optimize work group by work group, employee by employee. Once the business processes are optimized, the IT group overlays the optimized business workflow with technology. This is the best scenario since you do not want the IT group dictating how the business workflow moves based on the package they select as a core system.

The key is to get the business units involved in the definition of the problems and then assist them in the definition of the solution. If you get the business units to define how they do things now, and then give them the opportunity to optimize their processes, you just created a requirements document for productivity improvement. It may be optimized technology, but more likely it will be the optimizing of business processes. Either way, the business will become more efficient.

By instructing business unit members on how to document their workflow and then allowing them to tune their own workflow activities, they become part of the solution. This also helps them see upstream and downstream inside the corporation. This experience is invaluable in creating an educated employee base. The most important education an employee can have is in how the business operates. That, coupled with the strategic objectives of the corporation, makes each employee work toward a better company.

FRED PRATT is the CEO of DYONYX. Reach him at (713) 293-6305 or fred.pratt@dyonyx.com.