For struggling businesses, eliminating waste and increase efficiency are two of the most important responsibilities. While a business textbook may make these tasks sound easy, they are rarely simple. If you want to increase efficiency in your business, you must be willing to investigate the root cause and find a solution.

Operational Efficiency: The Key to Growth and Survival

While operational efficiency isn’t the sexiest topic, it’s one that needs to be discussed more than it is. Without operational efficiency, it’s impossible for companies to grow or survive. Just take the global oil and gas industry as an example.

There are currently only 53 years worth of global oil production left in reserves. And with eight percent of the U.S. economy directly tied to the industry, increasing efficiencies in drilling and production is important on a national scale. Unless processes are improved, it’s possible that this entire industry could be gone in a matter of decades.

While your issues may not be as big as the oil and gas industry – on a national or global scale, that is – it’s still important that you increase efficiencies if you want to see continual growth and profitability. Here are four tips for practically enhancing operational efficiency within your organization.

1. Improve Cross-Departmental Communications

When divisions exist between various departments within your organization, it’s impossible to experience optimal efficiency. The first thing you need to do is ensure all team members, departments, and groups have open lines of communication between them. One tip is to develop cross-functional hybrid teams that consist of employees from different departments. These teams help close gaps and give each department representation.

2. Use and Update the Right Technologies

Keeping your technologies updated plays an important role in your company’s ability to remain efficient and relevant. Just having the right technology isn’t enough. It actually needs to be updated and improved on a regular basis. Otherwise, these tools and resources will become more of a hindrance than a benefit.

3. Identify and Overcome Bottlenecks

In almost every case, there is an identifiable bottleneck at the root of operational inefficiencies. Successfully finding and removing these bottlenecks is the key to improving.

The theory of constraints is an important tool that many companies use to improve their processes. While Eliyahu M. Goldratt popularized the theory in his famous book The Goal, the theory is actually used by thousands of businesses in many different industries. It consists of a five-step process:

  • Identify process constraints
  • Decide how to exploit the process constraints
  • Subordinate everything to these decisions
  • Evaluate the process constraint
  • Remove the constraint and then reevaluate the process.

If you feel like there’s a bottleneck holding you back, it would be wise to study the theory of constraints in detail. You can learn a lot from this idea.

4. Create Incentive Programs for Employees

While a company can spend a lot of time focusing on improving operational efficiencies, the reality is that growth happens on the ground floor. Unless your employees are on board, you won’t be successful.

One of the best ways to implement a plan for improving operational efficiency is to directly tie it to an incentive program. Rewards give employees a vested interest in the outcome of a project or task. As such, it’s helpful to give employees something they can tangibly enjoy.

Enhance Operational Efficiency

Enhancing operational efficiency is a unique issue. Every organization is different and requires unique solutions for unique problems. With that being said, the tips mentioned in this article are useful across the board. Keep them in mind and find ways to strengthen your business.