How To Increase Small Business Productivity

Published on:

March 19, 2021

Small Business Productivity

We’ve written about the importance of business productivity extensively to say the least. But for this article we’re focusing exclusively on small business productivity and why it’s so important, not only for your business, but the whole economy.

Small Business Productivity and the Economy

Small businesses are the driving force of the UK economy; making up a whopping 99.3% of private sector businesses. They employ over 16.3 million people and account for £2 trillion of annual turnover in the UK.

All this is to say, if we could improve small business productivity in the UK, the benefits would be far-reaching. Not just for businesses and employees themselves, but for wider society. It means increased taxable income for the government, increased wages for employees and more money circulating in society. All in all, it’s good news for everyone if small businesses increased their productivity.

The same paper cited above states that there are two main roadblocks for SME productivity — access to finance and poor management practices.

The government has introduced a whole host of financial support to address the former. But the latter remains problematic for many small businesses.

While management styles aren’t the only thing hampering business productivity, they’re certainly the largest one. Despite research and studies showing that the old command-and-control management style produces poor results in regard to productivity, many SMEs seem reluctant to let go of it.

For us, addressing productivity in small businesses, or large, means addressing the way you think about business in general.

Improve Small Business Productivity By Becoming a Learning Organisation

While most of the articles around small business productivity will address basic tips like organisation and delegation (and we’ll get to those), we actually think it needs to be thought of more broadly.

So many businesses are stuck in a traditional mindset. A strange idea that management should do the thinking, while employees do the tasks. It’s profit-driven and while many might proclaim to be customer-centric, the reality is that it's profit-centric.

This has been the prevailing mindset in SMEs and larger businesses for years. Yet, UK productivity has still continued to lag behind the G7 nations.

Clearly, something’s got to give.

This is where the idea of a learning organisation comes in. It’s by no means a new concept, in fact, it’s been around for decades.

In simple terms, a learning organisation is a company that continuously facilitates the learning of its employees and transforms itself accordingly. It’s a hard concept to get your head around if you’ve not seen it first hand, so we’ll use some examples, albeit from larger companies.

Business Productivity Examples to Inspire You

Adobe is the top of their game when it comes to business productivity and this all comes down to the fact that they’re a self-proclaimed learning organisation. They’re continuously recognised as one of the best places to work for by Fortune Magazine due to their commitment to their staff.

They do all the things you’d expect of a leading tech company. They offer incredible benefits for their staff, insist on transparency and communication and recruit from under-represented communities. 

But more than this, they’ve created their award-winning programme Kickbox. This programme encourages innovation and risk-taking, whatever the outcome. Any staff member can request it and they’re given a box containing a $1000 prepaid credit card to explore an idea. No questions asked. It’s an incredible amount of trust and faith in your employees that inspires and engages them to bring their best ideas to the table.

Next up, another tech company that should be no surprise, Google. Google is a model for corporate learning culture. Employees set their own schedules and collaborate as they see fit across departments.

Similar to the above, they’ve gone beyond the expectations of leading tech company benefits with their management research. Google wanted to find out what made a great manager. So they found the data through reviewing performance ratings and employee surveys to find a pattern in what made them great. All said, they found 10 behaviours that consistently made for great managers. 

The behaviours themselves are all the things you’d expect to find in a great manager; good communication skills, inclusivity, vision, technical skills and more. The important thing is they then took this information and applied it to their recruitment processes. So they’d only get the very best for their employees and their business.

There are plenty more examples, often from tech companies. But the takeaway shouldn’t be that tech companies have a commonality in their benefits and work culture. They’re not succeeding solely because they’re in the tech industry, they're succeeding because of the work culture they create.

The takeaway should be that all businesses, regardless of industry, should be striving to create the same culture so they might also be as successful. 

How to Improve Small Business Productivity

We’ve explained the overall concept of a learning organisation, and we’ve given examples. But how do you realistically implement it in your own small business?

It’s a good question. You haven’t got the resources that the market leaders above do. But that doesn’t mean you can’t make changes to your organisational structure to transform your business into a productivity powerhouse. 

Know Your Team

This could be differently phrased as delegation, but we hate the terminology. The reality is you’ve hired certain individuals because they’re great at what they do. So why are you still so involved?

Trust your staff to do the job you hired them to do. This means knowing your team members and their strengths and delegating to them wherever possible. Don’t demand constant updates or always need to be involved in a project. Ask for periodic reports and ensure if your staff need support or have queries, they can come to you anytime.

Hire Well

Hiring is a tricky business. It’s why recruitment agencies do so well, there’s almost an art to it.

Hiring the person who will work for the least amount of money isn’t always your best option. Hiring the manager with great corporate experience doesn’t mean they have the best people skills. Hiring the person bursting with ideas doesn’t mean they’ll be able to strategise.

Hiring requires a certain balance of the right skill and the right person to fit into existing teams. They need to match your company values and ethos. Advertise in the kind of areas you would want your potential employees to be searching, such as LinkedIn or other social media. Use personality tests to better understand yourself and your employees.

Motivate Your Staff

A happy, engaged employee is every businesses’ dream. They’re more productive, creative and innovative. All that energy is given back into your business.

Much of staff motivation revolves around empowerment and incentive. But overall, it means looking beyond the bottom line to figure out where you can improve your employees well-being. 

Let employees work remotely and flexibly wherever possible. Invest in automation to free up staff time so they can focus on more creative and interesting activities. Recognise great work every time you see it, instead of only at annual reviews. Settle for nothing less than open communication, both positive and negative, but then actually implement solutions and ideas. 

Make Your Work Space Beautiful

Businesses have too often been focused on only improving office spaces due to client visits. It shouldn’t be the case.

Imagine you’re stuck in a windowless room. There’s no decoration, one fluorescent light, the walls are beige and the floor is grey. Imagine how quickly your creativity would be sapped out of you.

This is the bleak reality many office workers face. The environment is drab, stale and uninspiring. The bare essentials like a desk and a computer are provided, but there’s little else to inspire them.

This is why market leaders are investing in their office space. By making it somewhere people love to be, they’re not just impressing clients, they’re looking after their employees.

If your employees are remote full-time, you can even consider offering a bonus to help fund their home office space.

Learn From Your Team

As we said above, it’s great to know your team and it’s great to communicate with them. But even if you’re listening to concerns, you need to learn from them.

Your employees are on the frontline of your business. They go through the same processes every day. They are the best-placed people to think of new opportunities, resolve bottlenecks and suggest new practices.

Listening to and learning about the daily challenges your employees have is what drives your company to the next level. Processes become more streamlined, customers receive a better service, your employees are happier. Overall, your company is more productive.

Business Productivity Experts

As you can see, small business productivity is incredibly important, both to the business and the economy. But it isn’t a quick fix to do with being more organised or running specific marketing campaigns (though neither hurt!). Improving small business productivity requires changing the way we think about business from obsolete practices to learning organisations, where high productivity work systems reign supreme.

If it sounds daunting, don’t worry. We can help you transform your business with The Awardaroo Way. Just get in touch for a free, no obligation consultation.

About Paul Freudenberg

Paul Freudenberg is a business productivity coach and consultant with a focus on operational excellence delivering improved profitability and business performance, and Founder of Awardaroo in 2005. With over 20 years experience in complex project and programme management and 15 years in business improvement, Paul has set the mission of Awardaroo to raise UK Productivity from one of the lowest in the G7 to one of the highest by 2030.