We are witnessing the rise of slimmer, smarter businesses that operate in new ways, taking advantage of new collaborative technologies and a globally available resource base. These organisations are ‘just big enough’, highly focused on delivering value, and use data to drive insights and innovation. Some of these businesses were start-ups not that long ago and some are long-established, but all share a new mindset and belief that growth does not mean the number of people you have in your organisation, but the value you create. We call these organisations, Size Zero Enterprises.
Making your company a Size Zero is all about doing more with less, maximising value by cutting costs, saving time and ultimately boosting efficiency. The phrase ‘Time is Money’ still today rings true, and creating time by cutting waste and inefficiencies combined with a productive culture will help to create a high value business. Here are five ways to achieve this:
1. Zero stock
Borrow from Toyota’s just-in-time manufacturing process so that you only buy stock (or talent) when you need it. Translate stock to people and make sure you’re not carrying passengers. Imagine how this could work for your business. Aim for Zero stock.
2. Zero inefficiency
In the analogue world, size mattered and business success was reflected in your headcount. Things must be good because we are hiring more people, was the boardroom logic. However, in business, success is not about how many people you employ – it’s about how much money you make. Using a revenue per employee measurement offers the most accurate way of assessing business performance provided you can benchmark yours against your competitors. Make revenue per employee one of your most critical KPI’s.
3. Zero technophobia
Make those technology changes you’ve always been meaning to. Move your business into the cloud, get fully mobile and automate some of the functions currently handled by people. Get yourself a more radical technology strategy, accelerate innovation cycles and add a Zero to your R&D budget.
4. Zero waste
Learning about Lean business- the reduction of waste. Put sustainability at the heart of everything you do and hire a Chief Sustainability Officer. And don’t forget that this is not about working harder- just smarter. Aim for ZERO carbon footprint. Manage all suppliers and costs across your business without slowing your business down. Aim for Zero unmanaged tailspend? It is a fact of business life that 20 per cent of noncore transactions go unmanaged, usually due to a high volume of suppliers and limited in-house resources dedicated to managing them.
5. Zero dead time
Ban all but the most important meetings. They are the biggest drain on productivity and create a culture of delegation. A Bain and Co study reckons on average an organisation’s workforce spends about 15% of all collective time sitting in meetings. Make sure the meeting you are about to have will earn the company more money than it spends in time lost by all the participants, including travel. Good utilisation of staff time is key to a Size Zero business. Use advanced data and analytics on employee productivity not just customer behaviour.
Creating a culture of maximum productivity is a key component of Size Zero theory, the benefits of which are significant. Imagine if there were no inefficiencies within your organisation. Think what this could do to your profit. Size Zero is not about downsizing, it’s about re-shaping to create more value. Slimmer, smarter, faster- not smaller. This can only result in a better, higher value business.
By Philip Letts, CEO blur Group