The Day-to-Day Business Minutia That’s Sapping Productivity and Dollars

The layoffs, office closings and other cost cutting actions that are becoming more frequent in recent months are certainly one effective way for businesses to lower expenditures. But more and more companies are finding that streamlining their procedures can have a big impact as well.

Every job has routines and tasks that are accepted as part of the day-to-day, even if they seem like time-wasters. But in this particular round of corporate belt tightening, some executives are experimenting with doing away with those old habits.

The results have been encouraging, with both notable productivity boosts and the revenue increases that accompany a more engaged workforce.

AT&T, for example, had long required employees to enter the names of attendees at every retirement and service anniversary party into its expense-reporting system. But an internal audit by the company found that practice alone chewed up 28,500 worker hours per year—roughly a full year’s worth of work for three employees.

Over the last two years, The Wall Street Journal reports, the company has eliminated 160 similar tasks at its offices, resulting in savings of 3 million hours per year—or, to put that in human terms, a year’s worth of work for 300 people.

AT&T is not alone. Shopify, earlier this year, declared war on meetings, deleting 12,000 events from the calendars of their teams. That added up to 322,000 found hours.

And Waste Management redesigned the routes its drivers take, based on their expertise, preferred customer pick-up times and traffic, which resulted in drivers saving roughly 30 minutes of driving each day and being able to pick up one additional dumpster per shift. (They’re incentivized with pay bonuses.)

Even restaurants are finding new ways to be more efficient. Chili’s Bar & Grill’s new CEO ordered staff to do away with the individual metal baskets that French fries were previously served in, eliminating both the need to wash them after every meal, which saved workers plenty of time, and the paper that was used to line them, cutting expenses.

The dine-in fast service restaurant also did away with its practice of counting out shrimp and putting them in bags for orders later in the day, which it estimates will save $6 million in labor costs by the end of the year.

Productivity is one of those terms that’s often bandied about as a buzz word, but isn’t always a chief focus for companies, who focus instead of expenditures and income. But a study from McKinsey finds that boosting productivity at U.S. companies could represent a $10 trillion opportunity between now and 2030.

That’s the equivalent of an income gain of $15,000 per household.

Productivity in the U.S. labor market has grown at a fairly disappointing average rate of 1.4% since 2005. That’s far below the 2.2% growth rate the country saw prior to that (The drop isn’t contained to the U.S., either).

There’s precedent for the productivity boosts we’re starting to see from companies like AT&T. In 1995, five-year productivity growth averaged 1.6%, but jumped to 3% the following decade. It takes more than just doing away with time-sucking tasks, but that’s a good start.

“[Companies] whose productivity is not where it could be can emulate leading firms, which do a few things consistently well,” McKinsey wrote. “They commit to their digital strategy and devote sufficient resources to it as a core organizational priority. They mobilize the entire organization around their transformation, sharing responsibility and ownership of the transformation. They are flexible and agile, focusing on continuous development and making bold bets to reinvent themselves. And they invest in the right technology-ready talent to help execute these bets at both the frontline and managerial level.”

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