Setting Up an Office in Bangkok Part 4

From Location to Productivity

How location matters in term of Productivity

Simplified the productivity of a company can be broken down into three factors and written in this formula.

Leadership x Employee Skill x Tools = Productivity

Good Leadership inspires and pushes Employees to do the tasks that need to be done. With a bad leader in place the employees will waste their time solving unimportant tasks, don’t know what needs to be done and at worst case work with contradicting instructions, this is usually expressed with a value of below 1. A good leader can compensate other factors by splitting and delegating tasks efficiently and effectively to be handled by Employees and Tools, this is expressed with a value greater than 1.

Employee Skill factor is to be easily expressed with a value greater than 1 if the knowledge of the employee fits with the required productivity (meaning the employee knows how to perform his duties and can also handle exceptions when they arise). An unskilled employee (value lower than 1) does not have the required knowledge to handle the tasks given appropriately and reduces the productivity.

Tools is a summary of tools used for the task (e.g. computers), complexity of workflows and the location itself. A good location is enhancing the general company productivity (value greater than 1) while a bad location, unfitting tools and overly complex workflows reducing the productivity (value lower than 1). Seen from this perspective it becomes more obvious why picking a good location for your operations is important.

Having the best leader and the most skilled people for a job will be destroyed when equipped with substandard, cheap tools and ordered to work in a place than wears down the employee’s health rapidly.

Putting it into Numbers

Expressed in the formula above this might look like this:

Leadership 1.5 x Employee Skills 1.5 x Tools 0.3 = 0.675

Means, the work that needs to be done does not get done (below 1). This expresses itself that timelines don’t get met because computers run too slow, not having the required software which would make their work easier, people get often sick or are just busy fixing mistakes done due to environmental factors. When investing in adequate Tools (1.0) you get potentially this productivity.

1.5 x 1.5 x 1.0 = 2.25

Means your productivity overachieves the set tasks which can be a good thing or a waste of good resources since the task could have been achieved with less productive/lower cost resources. Finding the right balance is hard. Most of the time the required task is underestimated by stating that just ‘simple’ work needs to be done and ‘lower skilled’ staff can do this work while most of the time not even a proper task description exists to make this kind of call. This concludes the macro factors on setting up a new Office in Bangkok. In the next part we’ll investigate the smaller details.