Costs matter. Spending matters.
Knowing the real costs of your organisation matters if you want to be efficient.
Of course, it’s not about drastically reducing every cost or cut every source of non-productivity, the objective is certainly not a mechanic organisation. But a clear knowledge of your costs is the key to making good decisions about projects, meetings, productivity and globally on how people spend their time.
Calculating the hourly or monthly cost of any employee is easy if you simply base your calculation on the wage. But does it represent the real cost? And more important is it linked with the real value of the work delivered? Whether you are taking over an organisation or need to improve your results, getting an objective view of the value you are getting from your team can be difficult. There is a lot of factors involved, starting with the common resistance and taboo when it’s coming to people’s efficiency.
How can the individual and collective work be evaluated with total objectivity and fairness? How to find the right evaluation recognised and accepted by your team without reluctance? And the problem is exacerbated with specialist and niche sectors, less people, less experience and less proven data to be used as standards. You will also be confronted with the common reflex of justification and explanation for any gap or delay.
That’s why it’s crucial to capture the cost of your teams, utilising the data in an actionable way, to measure the real ratio between the cost and the work value. By creating a framework to capture people’ costs and work’s value, you set up an indisputable approach for your organisation. No more justification, time-consuming analysis or debate when it’s not necessary. By linking costs to work being carried out, you can assess the work your teams are doing in a consistent way across the organisation – not just at individual process or role level. Indeed, individual productivity matters but the productivity as a whole organisation needs to be taken into account.
Working effectively as a team brings a different set of challenges, like communication, delegation, task sharing, and more globally all people interactions. When working with a framework based on delivered work’s value and not on individual productivity, you’ll gain a clear and factual vision of your current projects whatever the context and the team involved. Calculating the cost of tasks to the business lead to the opportunity to embrace an organisation-wide view of cost drains on productivity. And it’s the beginning of developing strategies to respond and improve, by assessing work products against automation, optimisation and improvement opportunities
Then comes the virtuous circle of productivity improvement, buts it’s another story …