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Wednesday, 24.04.2024, 10:30
Latvian entrepreneurs raise efficiency by investing in people and processes
Almost a half of the surveyed entrepreneurs admitted that they have tried
to increase efficiency of the company: 35% of them applied the efficiency
increasing experience of their parent company, only 14% outsourced services.
Meanwhile, almost one third of the Latvian entrepreneurs consider that for now
they have no need to improve efficiency.
Asked what activities have Latvian entrepreneurs applied for improving of
efficiency during the last 5 years, respondents acknowledged the importance of
their everyday processes and people. In order to increase the efficiency, most
of the respondents want to optimize inefficient operations (56%) and increase
motivation of employees (39%). Meanwhile, only one third of Latvian
entrepreneurs associated efficiency with processes automation. “The following
effectiveness increasing activities – investing in employees and business
processes – complies with the global practices, therefore Latvian entrepreneurs
are moving to the correct path. Modern businesses turn their focus from
structures and infrastructures to their daily organizational processes and
people that implement them. This is also the milestone of the process
improvement system – Lean”, - explains Head of Lean.lv Vidas Petraitis.
It is significant that several companies with the number of employees up to
50 are willing to optimize inefficient operations, but companies with the
number of employees above 50 pay more attention to the employees’ motivation.
“It is wrong to think that only huge companies invest in process management and
the employee motivation is easier managed in small companies. This study shows
that Latvian business is trying to find such efficiency increasing practices
that work best exceptionally for them – with no matter of the company size or
structure”, - says V. Petraitis.
Lean and Quality Management are efficiency improving methods Latvian
entrepreneurs know the most. 36% of Latvian entrepreneurs are informed about
improving efficiency with Lean system, but only 4 out of 10, of those who are
informed, implemented Lean in everyday practice. “If business owner wants to
increase efficiency, it is essential to keep up the efficiency increasing
practices. Lean systems philosophy says that managers must integrate these
initiatives in everyday activities and make them a part of organizational
culture. Leaders also need to actively engage with employees and co-workers in
order to achieve results,” - says V. Petraitis.
Trends proving that the size of the company or its profits do not determine
how successfully efficiency can increase were found amongst Latvian Lean users
as well. It is interesting to acknowledge that currently Lean is implemented
mostly by Latvian companies with the number of employees up to 50. Also,
research showed a correlation between company’s turnover and Lean
implementation: the bigger the company’s turnover is, the larger the number of
Lean users (19% companies with turnover 500 001 – 1 000 000 EUR and 13%
companies with turnover above 10 million use Lean).
Study was performed by Gemius Latvia
on May 2017. 312 entrepreneurs were surveyed for the study purposes, 27% of
them are owners of small business.