Operational efficiency is all about producing high-quality results with fewer resources. Learn four steps to measure and improve operational efficiency on your team.
Consider this: what does it look like when you “do work”? Do you have a set process or order of doing things? Was this process set by your manager? Is how you do things the most efficient way to do it?
Most of the time, team members are trained to do things a certain way. Managers establish these processes to increase operational efficiency. But what is operational efficiency?
Here’s what you need to know.
Operational efficiency is a team's ability to deliver a quality end product with fewer resources. It's measured by an “efficiency ratio” between what you put into your project— often referred to as inputs— and what you get out of it, called outputs.
Inputs—such as operating costs, people, or hours worked—are the resources you invest to make a project successful. Outputs are the end result of your initiative, such as deliverables or an end goal your project achieved.
Operational efficiency is often used by manufacturing companies, but it can benefit any type of team or business model. In project management, operational efficiency can help you gauge—and then improve—the efficiency ratio of your projects. Over time, this maximizes resource utilization to improve profit margins and your company’s bottom line. In other words, you can reduce the amount of resources you invest to get a quality end product.
Operational efficiency and operational productivity are sometimes used interchangeably, but they mean something slightly different in context. Operational efficiency is the process of generating the same output with fewer resources. Operational productivity is the process of generating more output with the same amount of resources.
Let's look at an example of each of these with one team:
A manufacturing team of 20 people regularly creates 100 garments in one hour. Implementing an operationally efficient strategy would mean cutting down your team to fewer than 20 individuals while still creating 100 garments in one hour. Operational productivity is finding ways to streamline the process so that 20 individuals can make more than 100 garments in an hour.Läs: Effektivitet vs ändamålsenlighet i näringslivet: Varför ditt team behöver båda
Optimizing your operational efficiency can help your team in many ways, including decreasing human error, increasing profitability, and cutting overall production costs. Here's how you can get started:
The first step is to identify the major functions of the team you'd like to streamline. What are the goals that this team is trying to achieve? What are the key performance indicators (KPIs) or metrics that this team regularly tracks? You can use the answers to these questions to identify the baseline output of this team, which you will use to calculate operational efficiency.Read: 7 functions of operations management (plus the skills you need to master them)
As an equation, operational efficiency is calculated by the output (revenue, sales, leads, etc.) divided by the input (resources, number of hours worked, number of team members, etc.). When you're creating this ratio, make sure that the units you choose make the most sense for the team you'd like to streamline.
For example, measuring revenue for output if you're trying to create a more operationally efficient talent acquisition team wouldn't be the best unit of measurement to track. A better measurement for would be the number of offers made to candidates over the hours recruiters spent sourcing.
After choosing the best units of measurement, use this ratio as your benchmarking tool.
A content marketing team of 5 currently creates 20 articles in one month
Input: 5 team members
Output: 20 articles
Baseline ratio: 4:1
This step is where you will begin to increase efficiency within your operational processes. Begin by looking at your current business operations and how team members are completing their tasks.
A few good questions to ask are:
How much of your team’s work is easily repeatable, such as administrative tasks or correspondence?
Are your team members all completing their tasks in the same way?
Can you identify any current bottlenecks in your current processes?
Automation is operational efficiency's best friend. If you're looking to streamline any processes, identify easily repeatable tasks that you can automate. Workers are spending 13% of their time on pure duplication of work. This is an easy process improvement that can quickly decrease any time-consuming inefficiencies or human error.Läs: 11 projektmallar som ser till att arbetet får rätt start
Creating standardized business processes is an easy and cost-effective way of streamlining operational workflows. This can help create a more uniform end product while also decreasing the amount of time it takes to deliver results.
A content marketing team of 5 currently does not have a standard process for how articles are created. Here are a few ways that the team can optimize their workflow:
Create templates for repeatable work: Content writers agree on a consistent writing process and workflow with dependencies and review cadences. Everyone knows which step they are responsible for and who they should hand off their pieces to for editing.
Find opportunities for automation: The team uses a tool to help establish dependencies and route work to the correct person as soon as dependent tasks are completed. This minimizes the need to communicate back and forth regarding article status.
When implementing a new standardized process, be sure to monitor your team's workload to prevent burnout. With new processes comes a change of workflow, and it’s important to monitor your team’s workload as you go. Process changes do require an adjustment period, and ensuring you give your team members both adequate time to adapt, and the ability to complete tasks outside of the change is important to keep their workload balanced.
If you notice that your team's workload is starting to get overloaded by your new workflows, adjust the process to ensure that your team members aren’t doing too much work at once. Striving for operational efficiency can also mean continuous improvement along the way.Läs: Hur man effektivt hanterar teamets arbetsbelastning
If your new process shows that your team's workload is consistently too heavy, take the time to adjust goals or processes. This will prevent burnout, but also give you a more realistic expectation of what output you can expect in the future. Use this new ratio as a way to inform future decision-making processes as your team takes on new projects.
A content marketing team of 5 is currently striving to reach a goal of 25 articles total in one month.
Here’s how a manager could monitor employee workload:
Adjust processes: The content team identifies that staging new articles on the website takes the bulk of their time. After monitoring the bandwidth of the web production team, the team decides to reassign the staging step of the content production process to the web production team since they have more hours available to them.
Adjust goals: With the web production team now handling staging, the content marketing team no longer has to worry about that step in the process. The team adjusts their goals to 30 articles a month instead of 25.
Compare and contrast your team's output operating under the new process against your benchmarked ratio. If your output to input ratio increased, that's a sign that your optimization strategy worked.
Now, it's time to set new goals for your team. As mentioned above, operational efficiency is an opportunity for continuous improvement. After establishing your baseline, try to do what you can to increase efficiency. After a set period of time that your team decides, start the process over and try to increase efficiency even further.Läs: Skriv bättre SMART-mål med de här tipsen och exemplen
Going through the process of operational efficiency takes time and work, so what's the benefit? Here are four main benefits of implementing operational efficiency strategies.
Examining your team’s operational efficiency helps uncover opportunities to automate repetitive, time-intensive processes. If your team uses a work management system like Asana, you can use dashboards to see a bird’s-eye view of task completion rates across all your projects, in real-time. That info makes it easier to identify—and implement—automation opportunities.
Going back to the example of a content marketing team, a writer may have to receive final legal approval before publishing their content. By using business process automation (BPA) and the right work management tools, this team can automatically notify the legal team that a review is necessary as soon as a draft is complete.Read: Business process automation (BPA): How to eliminate busywork
Automation can also help your team by making sure everything that needs to be done is completed. By creating a complete end-to-end workflow, you can establish all of the steps necessary for a project early on and automate every step along the way.
Using the previous example, a content writer will never forget to submit their draft through to the legal team for review, as it’s an automated part of the process. As soon as a writer marks their draft as complete, the legal department receives a notification, ensuring that this review doesn’t fall through the cracks.
Minimizing human error helps your team produce better products—which in turn boosts customer satisfaction and retention. By using operational efficiency to optimize and automate workflows, you can get higher quality results with fewer operating expenses.
According to Asana's Anatomy of Work Index, 60% of a worker's time is spent just on “work about work”—tasks like chasing approvals from stakeholders, searching for information, or communicating about work. Cutting back on these tasks gives your team more time to spend on the skilled work they were hired to do.
Employees are a valuable resource, and optimizing their time is an important part of operations management. Reducing work about work allows you to produce the same quality results with less back-and-forth and manual coordination.
Make sure team members aren’t overwhelmed and projects are properly staffed using Workload. See a complete picture of your team’s capacity at a glance, and easily drill down into tasks for additional detail. Prevent burnout, and make sure your team gets the right work done at the right time.Prova Asana gratis