Almost daily you have challenges in your business. Most are relatively small, time-consuming tasks and seemingly manageable but some are more complex and can have a major impact on your business.
Big or small, all these challenges will impact you and your business to some degree and could be costing your business more than you think.
You need to think about this cost and decide if it’s better to do nothing or better to find a way to minimize the frequency or impact of these challenges or to eliminate them completely.
It’s usually easier to simply work through a problem or task and move on to the next one. Well, easier anyway than trying to initiate changes that result in the task having minimal impact or the problem being all but eliminated.
After all, this problem only arises occasionally or the task is only one day out of every month. And, though it’s a pain at the time and takes your energy and time away from what you should be doing, it’s not like it occurs everyday.
Challenges can range in size, frequency and necessity.
You could have regular tasks, from getting your blog post and marketing messages out to as many people as possible each week to having to generate a financial report for your investors or bank each month or quarter.
These tasks are clearly necessary and therefore your aim isn’t to eliminate them but to make them work as efficiently as possible. One of my weekly tasks is to have my blog posts out there on social media. In this case, I write the content but outsource the mechanics of getting my messages out there. This is far more efficient than if I tried to do everything myself.
Ad-hoc challenges present themselves less frequently but can cause disruption to you and to others, can take away your precious time and can potentially result in lost revenue. These types of challenges tend to be reactive and could stem from an unhappy customer, an unreliable supplier or a poor employee.
In all these cases you need to work out the time, effort and cost to managing each of these challenges versus the time and cost investment to you in reducing their impact and/or frequency or in eliminating as far as possible.
How Much Does a Challenge Cost You To Manage?
How much does your time cost? Take the revenue you aim to generate in the next 12 months and divide that figure into days and hours. Now you have an idea of what your time is worth as a daily and hourly rate. I go into this in more detail in this post.
For me, especially as I am no expert in social media, it would take me far longer and hence cost me more, to disseminate my message than to find another who could do it for me. And the results would be far less effective.
Look at the repeated tasks that you or someone else in your business must do. Can they be done more efficiently?
For example, if you have weekly meetings with people in your company, do they provide only the information that you need to know? Or do you have long, unstructured meetings out of which you need to decipher what is relevant for you to know?
If the latter then make the process more efficient and effective – create a short template report showing what information you need. Have your people email you the completed template in advance of the meeting so that you can scan the information. Your meeting will be more structured (only relevant information is provided), shorter (you may have all you need from the report and only have a couple of questions) and more effective (you can focus on information that highlights a problem that needs discussing).
When I help clients build a stronger business, part of my process is to help identify how the business flows and where costly bottlenecks and inefficiencies are.
One client had a big problem working out people’s hours. The company had around 500 staff and 3 shifts covering a whole 24-hour period. Different staff had different hourly rates, then there were day and night-time rates, covering for an absence rates, bank holiday rates, weekend rates and so on.
To work out how much each member of staff should be paid each month, one of my client’s team took all the shift rotas (that at the time were paper-based) and manually worked out how much to pay each person. She locked herself in her office for an entire week each month. (Even though they had a clocking-in system, it couldn’t handle this level of complexity enough to eliminate the need for manual intervention and checking.)
We worked through the challenge and I helped create a system that calculated how much people should be paid based on the rotas, which were now completed as a spreadsheet.
The week’s work was reduced to a day and mistakes reduced from 10s off to the odd one or two.
My client now had an extra 4 working-days each week (plus time taken to rectify payment mistakes) for this team member to focus on other important tasks.
How Much Does a Challenge Cost Your Business?
Back to my social media example I spoke of earlier… Not only would the results of my efforts be worse but all the time that I’m working on this I’m not focused on the revenue-generating aspects of my business. The loss of this time and effort would have a measurable impact on the growth of my business. Hence I outsource that task.
So, in addition to the cost of your time you need to add the cost to your business.
An owner of care homes approached me after I gave a talk at an industry event and asked if I could help her because she seemed to spend too much of her time sorting out problems with staff.
Some staff were unreliable, disruptive and put in the minimum of effort. This impacted colleagues who had to cover for them, who had to put up with their disruptive behavior and who had to work harder to make up for their lack of effort. Even though the good people did this because they knew that it was the wellbeing of the residents that mattered, it wasn’t how things should be and it needed addressing.
Up until now, my client would work to manage out the poor staff whilst staying within the sometimes-stifling rules of employment law and work to placate and keep the demoralized and weary good staff.
We resolved the problem through a combination of re-structuring and a more effective recruiting and induction process. The result was that good people stayed and were better rewarded for their efforts, the bad apples were managed out, new staff were better trained and prepared after induction and fewer bad apples her hired in the first place.
My client had far fewer problems to resolve and her staff turnover reduced dramatically which reduced her recruitment and training costs. The quality of care returned to the high standard my client expected and she has almost no genuine safeguarding issues or complaints from relatives to investigate
Even though there was a direct cost to achieving this, compared with the cost of continuing the way things were and the eventual impact to the reputation of the homes, my client’s ability to maintain full occupancy and hence to the success of the business, the investment was a drop in the ocean.
Look at the challenges you face and the bottlenecks in your business flow. List them and prioritise them according to their impact on your business.
List the regular tasks that could be carried out more efficiently and the more reactive ad-hoc challenges, which tend to take more time and effort to resolve and have a greater impact.
For example, if you have to spend more time than you should resolving unhappy customers, eventually you won’t have those customers so instead address and where possible, eliminate their reasons for complaining.
How much does it cost – and don’t forget this cost could include loss of business – to continue with the challenge as you are versus the cost of reducing or eliminating it?
Most challenges can be relatively easy to overcome. They just require you to stand back and give them some thought and to put some time into addressing. This in itself can often be a major challenge that business owners face.
Other challenges can be more…well…challenging. But they too can be addressed and, if not eliminated, at least reduced to having little impact. Find the time and address them.
And if you do struggle to find a solution, don’t sit on it or give up – get help. The cost will always be worth the return.
What are your top challenges? What would be the benefit to you and your business if you were to resolve even one of them? If you need help then drop me an email. I guarantee my help will be worth it.
Photo Credit: Lucy Orloski