How do I know if my team is producing enough? In the world of business, productivity isn’t just about keeping everyone busy—it’s about ensuring that your team’s efforts translate into tangible results that drive growth and success. The journey through the 3.3 System takes us deep into the realm of team productivity, exploring how to gauge, improve, and maintain your team’s output to achieve sustainable success.
One crucial factor to evaluate team members’ performance is their ability to generate revenue or save costs that exceed their own expenses. This metric, known as the “team production multiple,” is the backbone of success in the workplace.
Understanding the Team Production Multiple
The team production multiple is a powerful concept that helps you determine if your team is pulling its weight financially. Simply put, it’s a measure of how much value each team member adds compared to their cost. Let’s take for example, team member Anne, who unfortunately, had a low team production multiple, as she failed to deliver the value that justified her salary. Her coworker, Lisa, on the other hand, seamlessly absorbed Anne’s responsibilities, showing that she was more productive in comparison to her cost.
This metric can be calculated both on an individual and company-wide basis. For a team to be deemed productive, the Forbes Ramsey spectrum suggests that the team production multiple should be between two and four times. Achieving this multiple ensures that your team is contributing enough to cover their costs and contribute to the company’s growth.
Balancing Profitability and People
It is important to find the right balance between profitability and taking care of your team. A thriving business requires profit to provide for its team, but that profit should not be amassed at the expense of employee well-being. By positioning your company within the 3.3 zone of the Forbes Ramsey spectrum, you strike the equilibrium needed for long-term success.
Calculating and Improving the Multiple
Calculating the team production multiple involves simple math—revenue or cost savings divided by team member cost. While a two-times multiple is the minimum goal, Four-Star Fits should aim for a four-times multiple, except for sales reps who could aim for a ten-times multiple due to their specific role. New team members need to cover their cost within their first ninety days and strive for a two-times multiple within six months.
Improving the team production multiple is a multifaceted process. Upgrading your team to Five-Star Fits, streamlining processes, and providing effective training all contribute to this goal. Proper use of job descriptions, performance metrics, training systems, and encouraging innovation can enhance team productivity, driving the multiple higher.
Profitability and Compassion
Profitability is essential, but not at the cost of employee well-being. A company with massive profits and an overworked or underpaid team needs to realign its priorities. Applying the 3.3 Rule means either hiring more staff to support the workload or offering raises to adequately compensate the team for their efforts.
Tailoring the Approach
It’s further critical to recognize that different scenarios require distinct strategies. If you lack massive profits, you can still enhance your team production multiple. Focusing on improving processes and delivering more value with the existing team can boost profitability.
Considering Remote Work
Remote work is a topic that ignites passionate debates. Five-Star Fits perform well regardless of the work environment. Open communication, proper training, and clear goals empower team members to choose the environment that suits them best.
Maintaining the Multiple
Sustaining a healthy team production multiple involves continuous effort. Monitoring metrics like team member production multiple, total team production multiple, team production multiple per department, team production per deliverable, revenue per full-time equivalent, and total capacity keeps you on track. These metrics provide early indicators of shifts in productivity trends, allowing you to address issues promptly or continue with effective strategies.