Is there a difference between improving business efficiency and improving productivity? Explaining the benefits, key points, and precautions

Reference: Ministry of Health, Labor and Welfare | Japan's population, employment situation, labor productivity, and the introduction of new technologies | Page 5 (as of February 16, 2024)

*1: Real labor productivity is an indicator of productivity calculated excluding price fluctuations.
*2: Nominal labor productivity is an index of productivity calculated including price changes.

The above is only for the G7. However, even if that is the case, Japan's labor productivity cannot be said to be high. Based on the above data, France's labor productivity is about 1.5 times that of Japan. This is not a very favorable situation for Japan.

In addition, business is becoming more globalized these days. Competition with overseas companies will become even more intense in the future. In order to survive in competition, it is essential to have labor productivity that is on par with countries such as France and Germany.

A must-see for companies! The benefits of improving productivity

There are four main benefits for companies to improve productivity:

• Can improve the working environment
• You can concentrate on more core work
• Reduce costs
• Can promote DX

Can improve the working environment

Improving productivity has the benefit of improving the working environment.This is because in order to improve productivity, it is essential to review operations for any "unreasonableness, inconsistency, or waste" and reduce input.

For example, let's say that many employees are unable to complete their assigned tasks within working hours and are working long hours. If this continues, labor costs per working hour will increase, leading to low productivity. If the work can be made more efficient by reviewing the content of work and introducing a system, this will lead to improvements in long working hours and the working environment. It is also expected that employee satisfaction will increase as overwork and stress caused by overwork will be reduced.

In addition, improving the working environment can change the atmosphere in the workplace to a more positive one, which will ultimately lead to increased employee engagement and reduced turnover.

You can concentrate on more core work

Another benefit of increased productivity is being able to focus on more core tasks.By increasing your productivity, you can free up time, which you can use to focus on your core business.

For example, tasks such as data entry and collation can be performed by non-humans. If you can automate these tasks with a system and reduce the time spent on them, you will have more time and human resources available. With this extra time, you can focus on tasks that require creative thinking and strategy planning, as well as other tasks with higher added value.

By focusing on core operations, companies can increase their competitiveness. The quality of goods and services improves, leading to the establishment of uniqueness and superiority in the market. It also helps employees make the most of their skills, which may contribute to improved motivation and performance.

Reduce costs

Improving productivity leads to cost reduction.

For example, as labor productivity increases, the amount of time required to perform the same task decreases. This may reduce total labor costs. Additionally, more efficient production processes tend to optimize the use of materials and reduce waste. As a result, disposal costs will be reduced.

Not only that, increased productivity also means more efficient use of equipment. The payback period for capital investments may be shortened and the proportion of fixed costs related to equipment may be reduced.

However, increased productivity may require an initial investment. For example, implementing new technology and training employees is costly. Whether these investments result in future cost savings depends on the quality of the investments and the effectiveness of the improvements implemented.

Therefore, while productivity improvements can contribute directly and indirectly to cost reduction, appropriate investments and measures are required to achieve them. Also, please note that the benefits of productivity improvements should be evaluated from a long-term perspective, not just in the short term.

Can promote DX

Improving productivity has the benefit of ultimately promoting digital transformation*.

*DX refers to the use of data and digital technology to transform business models, business processes, corporate culture, etc. DX conversion refers to the state of change that has been achieved as a result.

This is because improving productivity and digital transformation are closely related.

What I mean by this is that to improve productivity, streamlining and automating business processes is essential. For example, by utilizing technologies such as cloud computing, artificial intelligence, and machine learning, it becomes possible to automate tasks and speed up data processing, improving productivity. And such efforts are synonymous with building the foundation for DX. Aiming to improve productivity will inevitably promote DX.

In addition, promoting DX can be expected to further improve productivity and realize sustainable business growth. Improved productivity and DX will be mutually beneficial, creating a virtuous cycle where one accelerates the other.

For more information on DX, please refer to the article below.
Improve business efficiency with DX! Explaining benefits such as reduced work time, implementation procedures, and examples

What's the point? How to further improve your productivity

There are three main ways to further increase your productivity:

• Cut unnecessary tasks
• Relocate and train human resources
• Implement employee motivation management

Cut unnecessary tasks

To further improve productivity, it is important to review the content of your work and cut out unnecessary parts.By cutting out unnecessary tasks, you can focus your time on the core tasks you should be working on.

For example, let's take a look at regularly scheduled meetings. It may take a lot of time to reach a conclusion, or even employees who should not be attending may be participating. You may also be spending a lot of time preparing materials for meetings. Of course, not all meetings are wasteful. However, depending on the meeting, it is often possible to take measures such as shortening the meeting time, omitting the preparation of materials, and carefully selecting participants.

By finding areas that can be simplified and cutting out unnecessary tasks, you will free up time to work on core tasks, such as planning new services and considering business negotiations tailored to customers. The more time you have to work on your core tasks, the more you can expect to improve your productivity.

If you are unable to determine which tasks are unnecessary, it is a good idea to ask the site manager.

Relocate and train human resources

Redeployment and training of human resources are also ways to improve productivity.This is because optimizing the allocation of human resources while checking the aptitude and skills of each employee will make it easier for operations to proceed smoothly.

For example, if you work in sales, you often propose your company's products and services to customers. You need to put yourself in the other person's shoes and think about how to make a proposal that is easy to understand, and choose your words.

On the other hand, research roles require technical curiosity and creativity, a strong desire to learn about new technologies and tools, and the ability to generate new ideas to meet a need.

As mentioned above, the characteristics required, or human resources, differ depending on the job. If there are many members in your department who are less apt or need guidance, extra work may increase and training and guidance may take more time. If highly skilled members follow up on work or provide educational guidance, they will not be able to spend time on core work, which may reduce productivity. Relocation and training of human resources is considered important in order to make the work of each employee smoother.

However, redeploying personnel can lead to backlash from employees. It may be difficult to obtain consent smoothly due to anxiety about change and difficulty adjusting to a new role or environment. First, it is important to provide opportunities and forums for employees to express their questions and concerns, and to respond honestly. It would be a good idea to communicate clearly before proceeding.

Implement employee motivation management

Implementing employee motivation management is essential to improving productivity.Motivation is directly linked to high productivity.

Highly motivated employees take proactive steps toward their own goals and concentrate on their work. Productivity will also increase as the quality and speed of work will improve. On the other hand, when motivation is low, it becomes difficult to feel rewarding about work, which reduces the quality and speed of work. In some cases, it may have a negative impact on the morale of the entire department. For this reason, it is necessary to keep employees highly motivated in order to improve productivity.

To increase motivation, we recommend introducing telework or a flexi system. Flexible working styles make it easier for employees to balance their personal and work lives. If you have an environment where you can spend your days fulfillingly, your motivation for work may increase more easily.

It is also effective to review the personnel evaluation system to ensure appropriate compensation and evaluation, and to maintain a positive atmosphere within the company by increasing opportunities for communication. In order to further increase the productivity of your company, be sure to manage employee motivation.

Things to keep in mind when trying to improve productivity

There are two main things to keep in mind when aiming to improve productivity:

• Avoid excessive multitasking
• Follow up to ensure that the introduced IT tools are established

Avoid excessive multitasking

Avoid excessive multitasking when trying to increase productivity.This is because excessive multitasking puts a lot of stress on employees and risks reducing productivity.

For example, depending on the industry, the following tasks may be performed simultaneously:

• Multiple Application Development
• Project progress management
• Project member assignment
• Adjusting the workload of members
• Reply to emails and chats
• Creation of reports and explanatory materials

Continuing to multitask as described above can impair your judgment, lead to mistakes, and slow down each task. Furthermore, the workload increases considerably, making it easier to suffer from physical fatigue and mental stress. Depending on the case, there may not only be a drop in productivity, but there may also be a risk that some employees will be absent from work. In the worst case scenario, an increase in the number of retirees could lead to a shortage of human resources.

Excessive multitasking like this can actually reduce productivity. Please be careful not to add too much when adding it.

One way to prevent multitasking is to prioritize your tasks. Create a task list at the beginning of the day and prioritize them. You can work more efficiently by tackling the most important and urgent tasks first.

However, depending on the case, simultaneous progress may be unavoidable. It may be necessary for those around you to cooperate so that you can concentrate on one task as much as possible. It would be a good idea to discuss this with the site manager and establish a policy.

Follow up to ensure that the introduced IT tools are established

When an IT tool is introduced with the aim of improving productivity, it is important to follow up until it becomes established within the company.Even if you introduce excellent IT tools, if they are not established, they will not lead to improved productivity.

For example, let's say you introduce a chat tool to improve communication between teams. At first, many employees will not know how to use the chat tool and will not be able to use it properly. If you leave it in such a state, more and more employees may give up using it. Before you know it, no one will use the chat tool, and you may not be able to expect any improvement in productivity.

In order to prevent such situations, it is necessary to support the use of the IT tools that have been introduced and provide training so that they can be used effectively to encourage retention. It would be a good idea to conduct regular surveys and hold training or seminars to resolve the issues and concerns identified.

summary

So far, we have discussed how to improve business efficiency and productivity. Improving productivity is essential for companies to achieve sustainable growth, and improving operational efficiency is part of this.Achieving both requires a multifaceted approach, including introducing technology, improving skills, and optimizing the work environment.

However, when aiming to improve productivity, it is important not to focus too much on short-term results and to be careful not to put an excessive burden on employees. We need to take a long-term perspective and improve productivity in a sustainable way. If you are aiming to improve the efficiency and productivity of your business, please contact us.