One of the grails of entrepreneurs and business owners is to increase business efficiency. After all, time is our scarcest resource.
If you’re trying to scale your business right now, you must know the feeling of being strangled for time.
That’s how I felt when I was scaling Vodien. Everything in your business is demanding time from you and as a result, time becomes such a scarce resource.
I felt so frustrated at the shortage of time that I started looking at how best to manage time, free time up, maximise productivity, and increase business efficiency.
I wanted to squeeze every single amount of productivity out from the time that I was spending on my business.
It’s difficult to do because there are so many moving parts in a business and things change all the time.
If you are doing things ad-hoc and reactively most of the time, I can assure you that you’ll soon get overwhelmed, because that was exactly what I did initially.
The only way to improve things is by having a systematic approach when you’re thinking about how to increase business efficiency.
Systematically Improving Efficiency
If you have the mindset of being systematic in order to increase business efficiency, you start developing structure and sustainable ways to make permanent improvements in your business.
This was one of the more important concepts that allowed me to transform and scale up Vodien successfully.
I call the methodology that I use to create this hyper-focus to increase business efficiency the ARSAD funnel.
The ARSAD funnel has these 5 steps: Analyse, Remove, Simplify, Automate, Delegate.
The first thing that you need to do is to take a step back and analyse the work that is being done in your business.
A good way is to do this is with every person in your organisation, individually.
Everyone will have to log all the tasks that they’re doing so that the type of tasks and the the time used for each task is clear. With this, you can spot the inefficiencies and the areas of improvement.
The easiest areas to increase business efficiency can be found in recurring tasks and the tasks that take up too much time.
It’s crucial to understand where time is being spent, and then you can move on to answering the following questions:
- What are the assumptions that you have with regards to the tasks, why they exist, and their utility?
- What is the purpose of every task, and is this purpose being met?
- What tasks are being done regularly?
- How long does each task take to completion?
Next, you need to look at doing is removing any process that’s unnecessary or low-impact. This is essentially trimming the fat from the operations in your business.
I find this an absolutely crucial first step to take, and I don’t see enough people following this sequence of action. Too many people look at automation or simplification or delegation first, which ends up overly complicating matters.
The importance of the sequence reminds me of road bicycle racing enthusiasts. In road cycling, the weight that the cyclists carry affects their cycling speeds.
Some road cyclists try to improve their cycling times by investing in really expensive gear, such as carbon fibre parts in order to reduce the weight of their bicycles. These parts are typically very expensive, but can result in 50%-500% savings in weight.
However, because bicycles aren’t very heavy to begin with, these percentages translate into absolute amounts of a few hundred grams.
It boggles my mind, because these same cyclists aren’t the leanest that they can be. If they lose some body fat, they can get much more weight savings.
This not only makes the weight on the bike lower – it’s cheaper than buying expensive gear, and much better on your health and fitness.
But it’s the same thing as scaling up businesses and trying to increase business efficiency. Losing body fat is painful and not as fun as buying new gear. However, the ones who truly are committed and dedicated to improving themselves will do it.
I can guarantee that not everything is necessary in your business operations. You might find that you might even be able to close down entire product lines and come out leaner and faster and more profitable as a result.
Here’s a simple example. One of the things that we removed was the payment method of cash. Cash was something that we thought was a requirement to deal with traditional businesses.
However, cash, as a payment method, was a hassle. We needed someone to attend to the clients who came down physically to hand over the cash payment. We had to count the cash accurately and provide accurate change. We had to hold an amount of cash in the office as a result also, and spend time depositing the cash at the bank.
Besides the time that was required for this whole process, there was also huge risks of human error in counting the wrong amount of cash, or of theft or loss.
We decided to take the plunge and remove cash as a payment method, thinking that we could re-introduce it even if it failed.
We never had to.
All the objections that we thought we’d encounter, all the business that we thought we’d lose out on, they all didn’t materialise.
What happened was we achieved great improvements in risk, efficiency, and productivity instead.
Find out what assumptions you’re running on, and test to see if they’re valid. It could save you tonnes of time and resources when you’re trying to increase business efficiency.
Once you’ve removed all the tasks that aren’t necessary or are distracting your business from its goals, you have to now simplify whatever tasks that are left.
Simplification is an art. A lot of times, things get more complex over time. I’m sure you’ve experienced a brand new computer being super fast, but slows down considerably over time.
That’s when you have to start cleaning up your computer and removing unnecessary junk.
Left unchecked, business processes are the same. You’ll need to simplify and streamline processes so that they can run optimally.
Here are some steps that you can follow in order to optimise your processes so that you can increase business efficiency.
The way to start is to clean up all the clutter and organise everything clearly. Take a look at your processes and have everything mapped out.
See if there are convoluted processes or processes needed unnecessary steps.
A good example is asking for approval. For example, perhaps you can state that all expense claims for amounts less than $10 can be automatically approved.
This will not only save time for your employee but for your administration department.
In addition, make sure ownership is clear for every step of your processes. Never put a team or have multiple owners for any step. This will ensure clear ownership and responsibilities, as well as reduce confusion.
Match the right task with the right talent
Your processes might be perfectly structured but might still be sub-optimal because of the people who are working on them.
Maybe you don’t have the right talent in your company because your hiring processes are flawed.
Maybe you have the right talent but they aren’t at their full potentials because they aren’t getting the right training, or your leadership isn’t optimal.
Whatever the case is, you need to fix it in order to increase business efficiency. Get the right people working on the right tasks, and you’ll see an immediate improvement.
Evaluate processes regularly
Processes aren’t fixed in stone. In fact, as a business scales up, it is normal to find that it outgrows previous processes.
Therefore, you need to regularly review processes to see if they can still meet their objectives efficiently.
A lot of companies have embraced the policy of “unlimited leave days”. This means that leave days don’t have to be tracked.
This makes sense because after all, the organisation doesn’t really care about how many days the employee is around. Instead, the employee’s is appraised based on how well he/she performs.
This means that if the employee is away for half of the year, he/she likely won’t have the performance to fulfil their job scope and will be terminated anyways.
Therefore, being intentional and evaluating your processes for the intent that you want can greatly simplify things.
Remember also that while systems may be led by you, processes are run by your team members. Get their feedback about processes regularly and understand if any processes are broken or need improvement or deeper investigation.
Promote better communication
Good communications is essential for good teamwork. If you can’t communicate well, you can’t increase business efficiency.
If you’re doing things by yourself, communications is pretty easy — hopefully! After all, you only have to make sure that you understand what and why you’re doing things.
However, introduce one more person to work with, and it gets much more difficult. Introduce a team, much less a large team, and it becomes exponentially difficult.
This all has got to do with the difficulties of communicating. There are many ways to improving this, or at least, making it no more difficult than it has to be.
The first thing to do is to ensure that everyone on the team shares the same values and believes in the company’s vision. If there is a fundamental misalignment in values or vision, then it makes communications even more difficult.
As an extreme example, if you are running a steakhouse, then perhaps hiring a vegan might not be the best fit for your team.
You have to understand that communicating intentions and decisions are probably more difficult when there is a fundamental conflict in an individual’s way of living and the business’s vision.
In more every day situations, we have to ensure that our hires match the values and vision that our companies have.
Secondly, invest time and effort into creating communication systems. This doesn’t mean software systems. It just means having a standardised way of communications.
- Only having meetings with clear agendas and objectives
- Ensuring meetings have a facilitator, who also ensures that meetings do not overrun
- Having guidelines on how projects are detailed so that there’s low chance of misunderstanding or miscommunication
- Having a meeting cadence for regular communications upstream and downstream
- Use common file naming conventions. E.g. (company name)(document type)(date), which results in ABC_Pte_Ltd_Proposal_051420. This removes the mess of having many individual naming conventions in your company, resulting in people being able to find and identify files easier.
- Use common file repositories, like a shared drive, or cloud storage.
If need be, you should invest in communication software that promote the right kind of communication, such as chat software or project management software.
Software can potentially help increase business efficiency, but be careful of how you go about doing it: software should always be seen as a tool, not a solution.
Super Scaler Pro Tip: Don’t purchase software with the intent for it to be a solution to solve your problems. Always try to fix problems manually or the non-scalable, tedious way first, then invest in software that enhances your current working methods.
For me, automation is fun! Personally, I don’t like doing manual and time-consuming processes, especially if they happen on a recurring basis.
These sort of tasks are perfect to be automated using technology. Sometimes maybe the activity can’t be automated easily, but you can automate the decision process or the trigger for the activity.
The key is to break up the processes and find the easiest parts to automate. These are your “low-hanging fruit”, so always start with them first.
You don’t even have to be an automation expert. Google for more information about basic processes that you’d like to automate. For example, you can try:
- How to automate report generation in Excel
- How to automate PowerPoint slide creation
- How to automate logins to a website
- How to automate a file download
When you get bigger, you can even hire developers to help you with larger-scale automation projects. These can really help increase business efficiency dramatically!
In Vodien, one of our core functions was customer support. To augment the manpower that we had supporting this function, we built an automated troubleshooting wizard.
This helped our customer support officers by automating the process of troubleshooting and identifying common faults with customer accounts.
This greatly reduced the time it took to handle customer requests. Not only that, it greatly reduced human errors, and improved customer satisfaction.
The very last component of the ARSAD funnel is Delegate.
Efficiency is obtained by having the right people do the right tasks. You can’t increase business efficiency if the wrong people are working on the wrong tasks.
Delegation should be a key consideration for anybody in your organisation. If someone else can do your job better, delegate the task to them.
I grew up in a family that valued hard work and grit. When I started Vodien with my co-founder, the two of us would handle and do everything that was necessary – accounting, marketing, finance, sales, product, research and development, literally everything!
When the business grew, I had trouble initially wrapping my head around letting go of my tasks. I used to think that delegating my tasks away would mean that I’m lazy.
However, on the contrary, it was actually the more responsible thing to do. My role as CEO wasn’t to be busy. My role was to grow the company, and I couldn’t do it if I was bogged down by doing day-to-day tasks.
This is especially true of your leadership team, not just the CEO. If any high-level executive is actually spending their time designing graphics or writing copy or anything like that, then your business is not utilising your manpower well.
If you find that you are the only one able to do the work, then you are the bottleneck in your company.
You should immediately look at hiring or developing a system around that task so that you can have that functionality handled by someone else in the company.
Find ways to delegate tasks so that you can focus on the higher-impact tasks. Your organisation will come out stronger as a result.
Increase Business Efficiency
The way to increase business efficiency is not by ad-hoc or one-time tricks and tactics.
The focus on increasing productivity and efficiency in a systematic manner is fundamental to the successful transformation of your business operations.
2 responses to “How To Dramatically Increase Business Efficiency: 5-Step ARSAD Funnel”
Dang, this is super insightful. Once again, Alvin, you're absolutely killing it!
Glad you found it helpful! Efficiency is one of the key things that must be looked at once the fundamentals of the 5E Scale Engine are in place.