Gap Analysis: Mind Your Inefficiencies

This topic is one that resonates with me on several levels, as an independent consultant and as a consumer. Am I the only one who has noticed that customer service is declining as rapidly as my favorite bank stocks?

My wife had a gift card left over from Christmas. We went to the regional department store here in South Florida to spend it on some items we needed. We were standing in line with three other customers to check out when cashier looks up and says in an irritated voice, "The line is supposed to be over here!" To which my wife says back to her, "But the money you want is over here!" As if that wasn't bad enough, the cashier goes on about how she hasn't been to lunch yet. There wasn't one pleasant comment that fell from her lips. The other ladies in line were just shaking their heads. One even put everything back and left.

While in line, my wife explained to me that last week she stopped in to purchase some things and was again standing in line while someone was being checked out in front of her. After completing the transaction, the cashier then told my wife that she was going to lunch and that my wife would have to go get in another line. Again, my wife was trying to give them some money in exchange for some goods!

Stories like these are becoming more and more prevalent as businesses are cutting back and asking employees to do more with less. Layer on the media onslaught of the most negative news barrage in modern times and it would be easy to be accepting of such behavior. But let me ask, if the economy is such a challenge and someone is trying to give you some money, isn't it important to take it in a way that doesn't turn them off to your brand? Will these abused customers return to your business when there are other alternatives?

If you own a business or are responsible for a business unit, you're probably closer to the profit and loss reports than you've been in years. As you are pouring through the reports looking for savings, I would challenge you to add another line of reasoning: look for the gaps!

Let me explain. Every business has some inefficiencies built into it. There are the gaps of employee productivity, sales performance gaps, client service gaps, etc.

One example is the employee productivity gap. Here are the steps to calculate the productivity gap:

1. Determine the amount of time, in hours, each day that you believe the employees are not actively engaged in their work (not knowing what to do due to lack of direct supervision, Internet surfing, smoke breaks, chatting, being late, leaving early, personal business, lack of engagement, etc)

2. Multiply the answer in #1 by the number of employees in your organization.

3. Multiply the result in #2 by the average wage for each employee (including taxes, insurance, Social Security etc). This is the amount per day that is lost productivity.

4. Multiply the result in #3 by 220 (or your average number of business days) to get the annual number.

The results in this one analysis can be quite large, even for small businesses. The resources captured here are resources that can be used for more productive actions - to increase efficiencies, increase sales opportunities, enhance customer service, or mitigate any planned cutbacks.

After calculating this number, focus on saving 25% of that in the first year. What could you do with that savings? The next step is to contact a business consultant who can help you close that gap and gain a positive return on investment in the process. It is prudent to cutback in recessionary times; though I would add that it is equally important to utilize the resources that are currently employed efficiently.

Jim O'Brien is the President of PalmBeach 360. We work with organizations who believe their employees are a solution. Jim has spent more than 10 years in management roles turning unsuccessful business units into successful business units. He can be reached at PalmBeach 360 at 561-743-3399 or by email at jim@palmbeach-360.com.