2017-03-08 00:00:00ProductivityEnglishUnderstand 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.jpghttps://quickbooks.intuit.com/ca/resources/productivity/responding-to-parkinsons-law/Responding to Parkinson's Law in Your Business

Responding to Parkinson’s Law in Your Business

2 min read

To operate your business efficiently, you might benefit from understanding some of the basic forces that manifest in any organization, such as Parkinson’s law. Truth be told, it’s almost impossible to eliminate the impact that basic organizational forces have on your business but being aware of them can give you a bit more control over productivity.

Understanding Parkinson’s Law

Parkinson’s law sheds light on the way organizations tend to develop and function. The insight is named after Cyril Northcote Parkinson, who noted that the staff of the British Admiralty continued to expand during a time when the British Navy was overall significantly downsizing. Parkinson’s law can be understood as the tendency within organizations to expand to fill whatever amount of time is allotted for project completion. In other words, businesses tend to generate work to justify their continued existence even without increasing productivity. To better understand how this principle shows up in business, consider the following example: In the beginning, your small business may have needed a large marketing campaign to launch to build brand awareness among your target market. Creating the campaign may have required considerable work by several employees. However, your business may have since grown to the point that your marketing campaigns are automated, requiring significantly less creative work and hands-on management. But, the department may still be the same size, or you may have even added a staffer or two. Here’s an even simpler illustration of Parkinson’s law: Employees tend to complete their work just within the maximum time allowed. So, say you ask an employee to test a product and review it within two days. You can count on your employee taking exactly two days to get the job done, even if it could be done in a few hours one afternoon.

Combating Parkinson’s Law

Being aware of Parkinson’s law empowers you to take steps to minimize its effects on your business. With the knowledge that most employees tend to do only what’s expected of them rather than what they’re fully capable of, you can set higher performance standards. It may also help to offer extra incentives for increased productivity to spur your best employees to boost their performance. As you now know that organizations sometimes operate inefficiently, you may want to have 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 as needed for maximum output which increases efficiency, and revenue by extension. While no business operates flawlessly, staying mindful of the natural forces contributing to inefficiency can help you improve your business operations and ultimately increase your bottom-line profit margin.

References & Resources

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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