Every ambitious business craves success. You've got the vision, the team, and the drive. But raw effort alone isn't enough – productivity is the fuel that turns potential into tangible results. And a strategic approach to productivity increases the chances your team's hard work translates into reaching goals. It's about working smarter, not just harder.

So what can a business do to improve its productivity?

Now there are countless ways to improve business productivity, but which one is right for your team? We've compiled the 12 best strategies from proven and effective business use cases to help you take action on your own work processes and operations. Let's explore what makes a productive workplace tick.

What is business productivity?

Business productivity is a measure of how effectively a company uses its resources to produce goods or services. The key resources involved in business productivity usually include:

• Capital resources: The tools, technology, machinery, buildings, and financial assets that a business uses to operate.
• Labor resources: The workforce – their skills, knowledge, time, and effort.

Ultimately, a company with high business productivity can create more output (products or services) with the same amount of input (resources), or the same output with fewer resources. This can lead to increased profitability, and give the business a competitive advantage.

Key business productivity metrics

So what’s most important to measure in terms of productivity? Before a business can start making decisions and identify areas where they can improve – they need to look at their existing productivity metrics at their company. 

And this goes beyond simply tracking labor costs. It requires a multi-factor approach that incorporates various inputs such as materials, overhead, capital equipment, and time. Business metrics should be clear enough for managers and employees to easily understand and apply to their daily operations.

Here are the most common examples of business productivity metrics:

• Output per labor hour: Measures how much product or service is created per hour of work.
• Revenue per employee: Tracks the revenue generated relative to the size of the workforce.
• Inventory turnover: How often a company sells and replaces its inventory, revealing efficiency in supply chain management
• Customer satisfaction scores: While not a direct production metric, a strong indicator of overall effectiveness.
• Production downtime: Tracking production interruptions due to equipment issues or process bottlenecks.

Ultimately, no matter which metrics are relevant to your business, they should focus on maximizing outputs while reducing inputs – not simply fixating on labor costs. Multifactor indexes, in particular, which incorporate various inputs (materials, overhead, capital) alongside labor hours can provide a more comprehensive view of a business's true productivity.

Why is business productivity important?

When a business gets better at producing more goods or services using the same amount of resources, amazing things happen. Profits increase, allowing businesses to invest in expansion, research, and creating new jobs. This promotes a healthy and growing economy for everyone.

The best part? Highly productive companies create a ripple effect throughout the entire economy. They generate more money, which leads to new jobs and better paychecks for everyday people. All that extra cash flow means people have more to spend, which helps other businesses thrive too. Basically, increased productivity is a total win-win situation, fueling a healthy, booming economy for everyone.

Top 12 ways businesses can improve productivity

1. Take a close look at your current processes

Boosting productivity in your business is a lot like a grand renovation project – you wouldn't start swinging hammers without first understanding the existing structure. That's why the first step is all about taking a long, hard look at how things currently work within your organization. Analyze your processes, procedures, and the systems that support everything.

There is an old logging aphorism, oft-attributed (incorrectly) to Abraham Lincoln, that says "Give me six hours to chop down a tree and I will spend the first four sharpening the axe." 

Here's a breakdown of some key processes to evaluate for productivity: 

1. Core Operational Processes: The backbone of your business. 

• Production or service delivery methods
• Sales and marketing processes
• Customer support workflows

2. Administrative Processes: The behind-the-scenes work that keeps things running. 

• Financial management and accounting
• Human Resources processes (hiring, onboarding, payroll, etc.)
• IT infrastructure and support

3. Communication & Collaboration Processes: How does information flow within your organization? 

• Team communication methods (email, messaging tools)
• Client communication protocols
• File sharing and collaboration platforms

4. Decision-Making Processes: Who makes decisions, and how? 

• The flow of information for decision-making
• How decisions are communicated across teams.
• Whether decision-making is centralized or distributed.

This first step, then, is like sharpening your axe — it may be rather time-consuming, but once it's all done, you can identify bottlenecks, inefficiencies, and areas ripe for improvement. This sets you up for targeted, effective changes that truly transform your business's productivity.

2. Invest in your people

Your workforce is the heart of your business. It's your people who transform ideas into action, who drive those processes, and who ultimately achieve those all-important goals. So, one of the most impactful ways to boost productivity is by investing in employee well-being and engagement.