2017-03-08 00:00:00 Running a Business English Understand key organizational concepts such as Parkinson's law to run your small business more efficiently. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/People-Having-a-Productive-Day-at-Work-on-Business-Project-in-Office.jpg https://quickbooks.intuit.com/ca/resources/business/responding-to-parkinsons-law/ Responding to Parkinson's Law in Your Business

Responding to Parkinson’s Law at Work in Your Business

2 min read

You want to operate your business efficiently, and understanding some of the basic forces in any organization, including Parkinson’s Law, can help. Eliminating the impact of these forces on your business is probably impossible, but being aware of them gives you more control over productivity.

What Is Parkinson’s Law?

Parkinson’s Law is a business principle that sheds light on how organizations tend to develop and function. The insight is named for Cyril Northcote Parkinson, a naval historian and management theorist, who noted that the staff of the British Admiralty continued to expand during a time when the British Navy was downsizing significantly overall. In 1955, Parkinson wrote, “”Work expands so as to fill the time available for its completion.”” That statement became known as Parkinson’s Law. It’s the tendency within organizations to expand to fill whatever amount of time is set aside for completing a project. In other words, businesses tend to generate work to justify their continued existence, even without increasing their productivity.

How the Parkinson Principle Works

How does the Parkinson principle show up in businesses? Imagine when you started your business you needed a large marketing campaign to launch and build brand awareness in your target market. Creating the campaign required considerable work by several employees. Now your business has grown to the point that your marketing campaigns are automated, requiring a lot less creative work and hands-on management. But the department is still the same size, or maybe you even added a staffer or two.

Here’s an even simpler illustration of Parkinson’s Law. Your employees tend to complete their work just within the maximum time you give them. Say you ask employees to test a product and review it within two days. You can count on your employees taking exactly two days to get the job done, even if they could do it in a few hours one afternoon.

Combating Parkinson’s Law

Now that you’re aware of Parkinson’s Law, you’re empowered to minimize its effects on your business. One change you might make is shortening the amount of time you allow for task or project completion. You might start with implementing shorter time frames for tasks you know take much less time than you allow. Tracking time you spend on the task and how you or your employees spend the time you save yields valuable data for boosting productivity and efficiency. It may even lead to more time off for you and your employees.

Knowing that most employees tend to do only what’s expected of them rather than tapping into their full capability, you can set higher performance standards. Offering extra incentives for increasing productivity may spur your best employees to boost their performance. And now that you know organizations operate inefficiently sometimes, you might want to conduct periodic reviews of departments and processes within your business to ensure they’re operating efficiently. You can use your findings to move staffers around to different departments to generate maximum output, which increases efficiency and revenue.

While no business operates flawlessly, if you stay mindful of the natural forces contributing to inefficiency, you can improve your business operations. And as your business functions better, you increase your bottom-line profit margin. Software and apps make a difference too. QuickBooks Self-Employed app helps freelancers, contractors, and sole proprietors track and manage business on the go. Download the app.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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