By Wayne Rivers

Charles Schwab, the well known investment firm, recently undertook a study of its investment advisory firms to analyze what constitutes best management practices. The study’s key finding was that superior, effective time management allowed the top 15% of firms to generate 50% to 80% more revenue per professional than the other 85%. Top performing key employees put in about the same hours as their less productive peers, but achieved far more during work hours than their less efficient counterparts.

Deborah Doyle McWhinney, president of Schwab Institutional, said, “the most successful firms are tenacious about time management in the face of accelerating growth. They’re not necessarily working harder, they’re working smarter.” Interestingly, the study found that the best managed firms had a support staff to professional ratio of 2 to 1, while their peers ratio stood at just 1.2 to 1.

We’re convinced this study could be replicated in virtually any industry, and the results would be largely the same. We’re constantly amazed at the lack of awareness of effective time management techniques which could radically increase the productivity of family and closely-held business leaders. Executives who are efficient time managers and who delegate routine or low impact activities well are much more productive and successful than executives who try to do it all. Often, the growth of family firms is constrained by the individual work capacity of its leader or leaders. When the leader runs out of time or energy to take on more and more, the company runs out of steam too. Other constraining factors on family business growth and profitability include:

• Lack of strategy and techniques for recruiting, hiring, training, and managing world class employees
• The view of new hires as expenses rather than investments producing return (ROI)
• The lack of specific accountability measures for employees other than work hours
• The lack of understanding and appreciation of fundamental time management techniques
• Reliance on outdated management practices which allowed the firm to grow to its current size but which are incapable of supporting future growth
• The constant focus on daily tasks and firefighting which crowds out time and energy which should be utilized for big picture, strategic thinking.

Here are some simple ideas which family business leaders can use to improve their own productivity and to model productive business behavior to other family members and employees:

 Develop an awareness of the need to manage your time effectively. Think of it this way. If you were suddenly given the gift of five extra hours per week, how would you invest the time in order create the highest payoff for your business? For many family business executives, five extra work hours per week, invested wisely, could be worth hundreds of thousands of dollars in increased revenue to their companies.

 Keep a time log. This is a time management technique as old as time management science itself. Keeping a time log is a pain in the neck administratively, but doing it for a week would shock most executives. Until you really, truly analyze how you spend your time during the course of a given work week, you can’t conclusively know how little time you’re actually spending on productive activities. Stephen Covey recommends that successful executives spend 25% of their time on planning, strategy, preparation, prevention, values clarification, empowerment, and relationship building. When family business executives analyze their time and are really honest with themselves, they find they spend virtually no time whatsoever on these high payoff strategic activities.

 Right-size your support staff. Years ago a family business dad would not consent to allow his son, the president the company who earned over $1 million per year, to hire an administrative assistant. The dad thought that having an administrative assistant was a luxury and an unnecessary expense. This kind of thinking is penny wise and pound foolish. A high quality executive assistant could free up many executive hours per week dealing with mail, email, interruptions, telephone calls, correspondence, and administrative and clerical tasks. The executive then has a choice; he can invest the newfound five to ten hours per week in new business activities, or he could choose to go home early and be a better husband and father. Either choice represents a huge potential payoff.

 Keep a notebook for one month noting each of the discrete tasks that you perform. After the month is over, go back to the notebook and highlight the tasks that you hate doing, find distasteful, find draining, or simply don’t do very well. Resolve over the next twelve months to delegate all of those tasks to others on the team reserving for yourself only the jobs you love doing or at which you are uniquely gifted. This will have (at least) two benefits. The first is that by eliminating things you don’t like to do, you will increase your enthusiasm and happiness at work. A happy, enthusiastic executive is more productive. The other benefit is that you will have freed up a significant chunk of your time to focus on high payoff activities. You’ll not only create more productive results, you’ll also improve the quality of your life.

Many family businesses seem to measure the quality and commitment of family members and key executives by the number of work hours they’re willing to put in. In the 21st century, is this really the way an executive should be evaluated? Ultimately, shouldn’t executives be measured on the results they produce rather than the volume of the time and effort they contribute? Since time really is money, is it worth a little critical self-examination to determine if you’re investing your precious time as productively as possible? ■

Wayne Rivers is the president of The Family Business Institute, Inc. FBI’s mission is to deliver interpersonal, operational and financial solutions to help to help family and closely-held businesses achieve breakthrough success.
May 2008