The effectiveness of the company’s management is an important indicator of how a business transforms its resources into profit. This can be viewed through the financial statements of the company including turnover rates for fixed assets, inventory and accounts receivables. But, just because a company has high efficiency ratios does not necessarily indicate that a business is earning money. Other indicators of profitability should be considered, like net income, cashflow or gross margins.
Effectiveness and efficiency are important aspects of management but they are more effective when used individually. While efficiency is concerned with otherboardroom.com/what-is-better-boardmaps-or-diligent-board-portal-software/ the achievement of long-term goals, effectiveness is concerned with achieving those goals in a cost-effective way. Efficiency improvements include such things as automating repetitive labor costs or increasing yields using fertilizers.
In the process of improving efficiency, it’s essential to remember that it is not just about saving resources and time, but also about improving the quality. If two people are working on the identical task, and they do not communicate effectively, there is plenty of wasted time. Communicating openly and honestly between employees will increase productivity and allow managers to spot and resolve issues quickly.
Employees are at the heart of every business. Increasing employee engagement can increase efficiency by reducing absenteeism and turnover. Tools such as Happieteams which provide managers the ability to see data from weekly surveys lasting a minute, can boost the level of engagement of employees.
