Invest in Productivity
Start with what I consider low-hanging fruit—any investment in productivity that pays for itself in less than one year.
Think about that return: 100 percent in one year.
If you bought a portfolio of stocks and it went up 15 percent in one year, you would be a savvy investor. Earn 20 to 30 percent, and you are either very lucky or you are investing in a pyramid scheme.
In your business, you can reach for much higher returns—returns that either increase profits, lower costs compared to your competitors, or both.
Some low-hanging fruit is simple to pick in almost every company. Start with the basic technology used in virtually every office.
For example, I read in the Wall Street Journal that the average employee loses about five days every year to slow computers. What a waste—especially when fast systems are so cheap. More importantly for morale, nothing says "We don't care about your productivity" like a slow computer.
Think about how good you feel when you're working on a new, fast computer. If you have access to a great computer, don't you get more done?
In my opinion, new computers are great morale builders. A great computer costs maybe $800; a nice 28-inch monitor, maybe $250 or $300. So you invest $1,100 in your $40,000 to $100,000 employee, and you get to depreciate it. Over the three-year lifespan of a PC, what is your net cost per year? Almost zero! What do you gain? Your employees can move more freight, answer more calls, and give quicker answers.
Multiple monitors should be considered low-hanging fruit. Every extra monitor you provide your employee is a $200 to $300 investment. The more monitors each employee has, the better. Having multiple monitors is amazingly beneficial. You can see more; copy and paste faster between two applications; monitor your in-box more easily; and greatly increase productivity.
Now let's take it to the next level: A super-fast computer with four video heads is maybe $1,600; three extra monitors cost another $750. For a total of $2,350, you can equip an employee with a top-of-the-line, super-fast computer and four monitors. Yes, you can upgrade for half that price, but why would you when you can gain productivity?
Another smart investment is faster Internet service. I have been to offices where the Internet is not nearly as fast as it could be. Those owners are paying while their people wait for screens to draw and files to upload. Upgrading the Internet connection saves everyone time—from top executives to summer interns. The Internet is your link to your customers and vendors, to your GPS systems and your EDI partners. It's crazy not to get the fastest service in your area.
Another great investment is updating to faster software. You're not really saving with slow, inefficient software. Sure, you spend less on the software, but you are paying for the time it costs your employees. And their time is very expensive—by far your number-one expense.
If you had to dig a very big hole, would you hire a person with a shovel or would you hire a person and provide them a bulldozer? Why not give each employee the most productive tools out there? If you can get more from each person, why not equip them with the most efficient tools? The economics are the same as those for faster computers, monitors, software, and Internet.
Every second that someone is waiting instead of working is lost forever, and a good percentage of any investment that speeds up high-cost employees goes directly to your bottom line.
Don't be an employer who is penny wise and pound foolish. Instead, put a pound of that low-hanging fruit to work for you today.