According to the 2013 KPMG and FBA Family Business Survey, 72 per cent of family businesses reported they felt they were outperforming their competitors in the area of productivity. This may be attributed to their entrepreneurial nature and constant drive for innovation in an effort to compete against larger players. While it's great news that family businesses feel they are succeeding, productivity is an area that needs constant attention to ensure changes can be sustained as day to day operations evolve.
Many firms struggle because they equate productivity improvement with cutting costs. Simple cost-cutting is a short-term response that concentrates on doing things cheaply, not better. It's akin to a crash diet that fails to deliver a lasting reduction in weight. True productivity is about changing and refining how things are done and ensuring they add the most value, with the least amount of resources. Sometimes the change may even cost more initially, but will ultimately deliver more value to the business.
Slowing top line growth and pressure to sustain costs is a common challenge across almost all industry sectors and I’ve seen many organisations embark on productivity programs to create a leaner cost base. In many cases these programs are once-off, or targeted at isolated areas, rather than undertaken as an ongoing organisation-wide initiative.
Family businesses need to turn their recession-induced crash diet into a sustainable lifestyle change. Sustainable productivity improvement requires cultural change and for everyone in the organisation to view their role from that lens.
Six levers of productivity can help businesses identify where the greatest gains reside and develop a tailored approach to realise those improvements and achieve sustainable change.
It's time for family businesses to move beyond one-off initiatives and adopt a lifestyle change that lasts – one that delivers a leaner and more customer focused way of doing business in which continuous improvement becomes the norm and adding customer value is everyone's primary goal.