Why Being Productive Doesn't Guarantee Higher Profits

The Netherlands looks small on the world map. It has a population of around 17.5 million people.

Despite its size, it's the second-largest exporter of agricultural products in the world. This is according to a study the CBS did.

After the Netherlands, Germany, Brazil, and France follow. These are countries with significantly larger land masses and populations.

The United States is the largest exporter of agricultural products. For context, the landmass of the Netherlands can fit into the United States 237 times. The US population is 19 times larger than that of the Netherlands.

If you think about mass agricultural production you quickly think of big farms with lots of hectares of land where either cows graze or crops grow. It’s also easy to think that the more farmland you have, the more you produce.

But this idea doesn't match reality. The Netherlands actually produces a lot of agricultural products on a small amount of land. In fact, 110 other countries have more farmland than the Netherlands, yet the Netherlands still outproduces many of them. This shows that having more land doesn't always mean producing more food.

This means that the Netherlands can produce more agricultural products with less land. In other words, there is more output per unit of input than in most other countries.

I found this concept of producing more with fewer resources fascinating. That's one of the most important things in business, right? If you can produce more with fewer resources, it leads to increased profitability.

Or, if you can sell your products for less while maintaining high quality and profitability, the client will be stoked and will return.

All great, but how can we produce more with fewer resources? It’s not an easy answer because there are many pitfalls.

The biggest pitfall is the thought of “just work hard”. Through observing people who work extremely hard, I've learned that “working hard” isn't the most important thing.

What you work on and how you work is just as important, if not more so.

Let's figure out the best strategies for maximising both productivity and efficiency in our daily tasks.

How to Actually Get More Done in Less Time

To produce more with fewer resources you and your processes need to be both productive and efficient. Not one or the other.

Productivity is about maximising output,. While efficiency is about optimising resources and minimising waste.

As I see it, there are four ways of working/producing. To illustrate this I created the Productivity and Efficiency Matrix. (I’m considering naming it The van Waas Matrix like The Eisenhower Matrix, let me know if I should😉)

Each of the four ways of working leads to different results:

1. Productive and Efficient: High output with low waste.
2. Productive but Inefficient: High output with high waste.
3. Unproductive but Efficient: Low output with low waste.
4. Unproductive and Inefficient: Low output with high waste.

Let’s break them further down:

1. Productive and Efficient.

This is the "sweet spot" in the matrix. People here achieve valuable goals while using resources wisely. They:

• Eliminate or delegate tasks as needed
• Use smart processes and digital tools effectively
• Focus on high-impact tasks that produce results

Operating in this quadrant means balancing "doing the right things" with "doing things right". Maximising output while minimising waste.

Most folks think they work this way, but they likely don't. It takes ongoing hard work, honest self-evaluation and a willingness to change. Most people don't like change because of the discomfort and uncertainty it brings, so they don’t change. If you are willing to change, you are rare.

2. Productive but Inefficient.

In this quadrant, people are getting things done, but at a higher cost than necessary. This often results from:

• Multitasking
• Poor organisation
• Not working with the right smart digital tools that are available these days.

These are mostly the older generation who have a ton of experience but refuse to change the way of doing work because "it's always been done this way." This includes resisting to implement new digital tools and processes.

3. Unproductive but Efficient.

This is the opposite of being productive but inefficient. People who work this way use resources well but often achieve little of value. This could be because they:

• Are organised with a paperless desk
• Turned off all the notifications to focus on the tasks ahead but focus on the low-value tasks
• Use smart tools but spend too much time on their features instead of doing important work

This is “busy work” or perfecting the wrong task. A trap the younger more digital generation can fall into.

4. Unproductive and Inefficient.

This is the worst way to work. People who work like this are accomplishing little of importance and are often too late. They are likely:

• Constantly distracted
• Working on the wrong things
• Confused why they are overwhelmed all the time

If you are operating this way as a business owner, something needs to change or you will go out of business soon or later. If you are an employee and working this way something needs to change soon or you will be replaced.

From experience, I know the pain of working hard without seeing the desired results. I've often found myself stuck in the Unproductive but Efficient quadrant. This is where it's easy to feel busy without meaningful progress. When you're starting out independently, it's an easy pitfall. You're motivated to work hard, but you do not have enough experience and knowledge to identify which tasks will contribute most to growth.

Strategies for Optimising Operations

I can't specifically identify which tasks in your workflow will yield the most output, but I can suggest strategies for optimising your workflow.

The following factors help determine if you're working productively and efficiently:

Get clear on the productive and efficient goals

• Productivity goals: The main aim is to boost output or performance. This can be done by:
  • Providing more services
  • Producing more products
  • Increasing profits with the same or fewer resources
• Efficiency goals: Aim to streamline operations. This can be done by:
  • Reducing waste
  • Improving quality
  • Optimising processes for cost savings

Track metrics

• Productivity metrics: Is measured by output per input unit. Metrics like revenue per employee, products per hour or drawings made per day.
• Efficiency metrics: These measure time, cost or resource use. Efficiency can be indicated by shorter task completion time, less rework or less material waste in production.

Review metrics

Reviewing your metrics is a critical step in optimising both productivity and efficiency. It is not enough to simply set goals and track metrics. You must also regularly review these metrics to see whether you are moving closer to or further away from your goals.

This review process allows you to identify areas of strength and weakness. It helps you understand the impact of changes you have made and whether changes are having the desired effect.

Also, the review process can help you identify trends. You might notice that your productivity tends to dip at certain times. Or that certain tasks consistently take longer than expected. These insights can guide you in making further adjustments to your operations.

Remember, the goal of tracking and reviewing metrics is not to judge performance but to inform decision-making. By regularly reviewing your metrics, you can make evidence-based decisions that help you work smarter, not harder.

Example

Let's look at a manufacturer example:

• Productivity goal: Increase products produced per day. So, a manufacturing company buys a robot that can work 24 hours a day without breaks, replacing two employees.
• Productivity metric: The number of products produced per day doubles due to the continuous operation of the new robot.
• Efficiency goal: Minimise machine downtime. So, the manufacturing company optimises the supply chain logistics. They do that by making sure raw materials are always available and ready for production.
• Efficiency metric: The hours of downtime of the machine are significantly reduced.
• Review metrics: The company regularly check machine downtime and product output. This helps them see if their strategies are working and make improvements as needed.

By setting clear goals, tracking key metrics and regularly reviewing these metrics, you can identify areas for improvement and make informed decisions.

The goal is not to work harder, but to work smarter. You have only so much time in a day, you have to make the hours worked count.

The example of the manufacturing company gives you an idea how focusing on both productivity and efficiency can lead to significant improvements in your business.

Digital Leverage

To work productive and efficient, I operate my small business with the digital tool Notion.

Notion is a handy project management tool that lets me run my operation smoothly.

It helps me plan, organise, and track tasks and projects.

Tasks can be broken down, assigned to team members, and set with deadlines, priorities, and statuses for better workflow.

You can let Notion track key performance indicators (KPIs), custom metrics and goals. It's useful for monitoring productivity like tasks completed per day, project hours or time spent per task.

It provides easy-to-understand reports to see how well you're doing, you can find where you can get better and monitor progress over time.

How Notion boosts overall output is for another article. But If you are looking to optimise your operations, reach out and I might can help you leverage this tool.

I run a relatively small operation. If you are running a large operation I would consider using a dedicated project management tool like ClickUp. I’m really impressed with the capabilities of this tool. However, it’s just a bit of an overkill for my smaller operation.

Action Steps

To start improving your productivity and efficiency today, consider taking the following steps:

• Set your productivity and efficiency goals. Write them down.
• Determine the metrics that will help you track these goals.
• Implement strategies aimed at improving both productivity and efficiency. Not one or the other.
• Regularly review your metrics to assess your progress.
• Make necessary adjustments based on your review to continuously optimise your operation.

Remember, it's not just about working hard. What you work on is just or even more important. Be honest with yourself. If you keep having the same results month after month. You need to change. Recognising you need to change, is most important. If you need help in implementing these strategies, don't hesitate to reach out and I can help you.