Productivity keys

Family members and friends may well be feeling that they are not getting adequate attention but need to be encouraged to appreciate that their best contribution is to be more self-reliant and understanding. Saving time is saving money in the productivity equation for business in the coming year.

It is relevant to note that family business advantages over larger companies tend to decline as the company shifts from small to medium enterprise because efficiency and effectiveness benefit from the application of professional management and systematic cost containment.

Small business owners need to use the next three months to go through the books and identify the sources of effective demand and establish the downstream value of their products and services. This is the time to consolidate the value chain and work with key customers to identify the business partnerships that deliver growth prospects offshore and offer cost-effective uses of imported materials.

As indicated in earlier columns, this also provides the opportunity to manage risks, review credit policies and confirm forward orders for the next financial year. It is important to remember that longer-term contracts and satisfied customers justify price discounts against savings in marketing and distribution.

That is why the real keys to the next few years lie in enhancing unit productivity, expansion into emerging and offshore markets and process innovation to generate new customers. Around the world, the GFC has relied less on stimulus packages and more upon stimulating an existing workforce to be more proactive and productive.

Many businesses around the world have been running down their inventories to conserve cash and are now gearing up for expansion in the coming year. This makes it a good time to seek longer-term replacement contracts that have extended terms of trade in return for confirmed orders.

Smart companies are always looking to reduce costs but need instead to be seeking out ways to increase productivity. This starts with a series of transparent team meetings that ensure that everyone in the business and family members understand that efficiency, effectiveness and effulgence are the energizers of competitive performance.

Team member help increases sales and cuts down unwanted costs when they know how what they are doing keeps the doors open, builds customer loyalty and that their rewards come from personal recognitions of their contribution. Innovation and business renewal sessions held in slow periods in the week pay off in the same way as a half-time review by a coach has been shown to convert pessimism to courage and optimism in a sporting contest.

Structured efforts by owners to apply time-management techniques and focus on growth rather than paper work and complaints management delivering better contact with suppliers and better relationships with distributors. Smart companies may need to use the next year to jettison projects that are not growing and making a productive contribution to company growth and development. Going for growth, hiring quality staff and investing in new marketing efforts are the best way to plan for the coming private sector expansion.

While gold prices remain high and consumer confidence is heading in the opposite direction, there is a tendency for small business owners to use the equity market as the indicator for their forward advertising and investment decisions.

This represents a victory for short-term myopia over longer terms strategic thinking that applies a mixture of commonsense and closeness to customers as the only true guide to business success. Growing the business in tough times requires advertising and promotion efforts to attract new clients and develop ranges of products that enhance customer productivity.

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Dr Colin Benjamin is an entrepreneurship and strategic thinking consultant at Marshall Place Associates, which offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship. Colin is also a member of the global Association of Professional Futurists.