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Thursday
Jul022009

the business of busyness

Productivity is topical as organisations try to slim down in the face of shrinking budgets. Private sector enterprises can track their success using simple metrics with public benchmarks. Revenue and profit per employee, for example, are useful for comparisons. Recent research (CNBC) shows these for best and worst brands across a range of sectors in the US S&P500s. For the public sector, the measures are complicated by lack of a simple and common benefit metric. Productivity may be tracked over time for an organisation in terms of impact per employee, however, unless the organisation has a common category - such as a charitable cause, relative performance relies on judgement of relative value of the impact.

Either way, while increasing the top-line is clearly a positive way to improve productivity ratios, reducing headcount is a faster and obviously more often available cost reduction tactic. The unforeseen consequences, however, of a rapid reduction in staff numbers can be very negative for performance:

...these reductions can add further stress to struggling operations, make it quite difficult to ramp back up during recovery, and the negative public response can be devastating (Bradley Staib).

Better to focus first on improving efficiency itself. Maximising operational efficiency increases chances of survival when times are tight but it is also the secret to riding growth when the opportunity returns. The best responses further consider efficiency within their overall strategic framework - how can resources released by waste reduction be redeployed to best effect, to achieving better quality benefits or new related impacts?