While my 22-year-old daughter Miranda, THE Buck, made her breakfast yesterday, she had a little extra spring her step. A bounce which said “today is a good day!” I felt compelled to ask, “What’s going on?"
“I’m just having such a productive day!” she explained. “I have a list of things I want to accomplish today and I already got the first one done!”
And’s it’s only 11:30!
After the breakfast cleanup, a short task for her which gets done without “sweating the small stuff,” Buck moved with purpose, past my “desk” (AKA the kitchen counter) and into the backyard.
When her stomach called her back into my kitchenoffice for a bite a few hours later, the extra smile and energy she continued to exude made me do something which experience should have taught me not to do; I asked her a question!
“What’s up with you? You seem to be so energized today?”
“I am just really excited about how today is going so far!” she explained. “On my list of items I wanted to accomplish today, I've already got the first two done!"
Thinking that she must have been busy in her room before I saw her for the first time at 11:30 I asked what was on the list which she was so happy about getting to?
Turns out number one was making a big breakfast and number two was sunbathing!
So yes, she’s having a VERY productive day!
Productivity is a bit like beauty I guess; in the eye of the beholder!
It will be interesting to see if how she ‘beholds’ productivity changes as she transitions from student life to one as a member of the working world.
But in the coming months and years, she won’t be alone in redefining productivity.
In a world now dominated by changes brought by the internet, computers in general and even e-commerce, the definition of productivity is going through some changes!
During my years at the helm of Tremont Paint, I used different formulas to measure my business' efficiency. One of those formulas was “employee-per sales dollar.”
For me and my stores that number was $300,000 per FTE or Full-Time-Equivalent. Nobody got fired or hired based on that formula; it was only guidance. But I used that guidance to ensure that I was not over staffed while also ensuring the most important detail for any retailer: making sure that I had staffing in place when a customer walked in, called or faxed.
Looking back, I should have used a “transaction count” metric rather than one which measured productivity against sales volume! I would have had “X” number of employees per “X” number of transactions.
Simple: it’s a measurement of efficiency which I can work towards improving! If I have one employee per 50 transactions per store, then each time I can do 51 transactions per employee I am becoming more efficient, and therefore am making more money!
Of-course formulas such as these expose one of the great weaknesses of a retail business venture: they're inefficient!
In retail, you need to have an employee there when the customer needs one; whether they want a two-inch chip brush or a pallet of eggshell! When the phone rings, a customer walks in or engages with your business in any other way, you have to pay someone to be standing there to meet them.
And then you have to pay that person, even if the customer does not come in!
But how many more transactions could each employee handle if the phone never rang? Or if a customer never walked in?
If a single employee in a traditional phone-ringing doorbell-chiming retail environment can handle 50 transactions per day, then in a store which gets 50% of its sales volume from the internet, where there are no phone calls or doorbells, each employee could handle 50% more transactions. Perhaps even more than that!
That creates an opportunity for retailers to make money!
Driving some of your most inefficient and more expensive to handle existing sales volume (for example, deliveries) to the most efficient handler of that volume, your website and e-commerce platform, is more than wise it’s prescient! In a few years, if you have failed to do this others who have will pass you by. I have shared my view that independents have several advantages in a post-Covid world. But you will still need to be active and engaged to reap them! And one way to reap those advantages is to measure your business using the metrics which make you the most money!
How are you most profitable? And then do business THAT way!
Or, you can be like Buck: if you had a good breakfast and caught some rays, it’s a great day!