Use This Simple Hack to Dramatically Increase Your Organization’s Productivity

The following is adapted from Building an Elite Organization.

One of the biggest challenges facing any organization is that there just aren’t enough hours in the day to get everything done. Productivity means profitability, but when you’re faced with tons of tasks, it can be hard to figure out how to increase productivity without wasting time on things that might not be quite as crucial.

My team and I experienced this firsthand when we started growing DLP Real Estate Capital into a high-profit organization. We found ourselves spending untold amounts of time putting out fires and handling what seemed to be never-ending daily tasks. While it’s true that we were getting stuff done, what we were doing wasn’t translating into high growth, high productivity, or the kind of profitability we knew we were capable of.

Once we realized that, we spent a lot of time working through the challenges of how to increase productivity and thereby increase profitability and the strength of our company. It paid off: we’ve consistently grown between 50 and 80 percent each year.

While there are multiple factors that go into achieving and maintaining that type of high growth, there is one hack that we found had a dramatic impact on our productivity. I’d like to share that hack with you as well, because I believe that once you master it, you will be much closer to turning your organization into a high-growth, scalable company as well.

Measure Productivity to Increase Productivity

Essentially, this hack boils down to measuring our productivity in a way that helps us understand the strength of our organization and to what extent we can withstand anything that comes at us.

This measurement is what we call productivity per person, or PPP. 

We realized that, to increase our productivity, we have to know what our productivity is in real time. Without that information, we can’t tell whether what we’re doing is actually impacting productivity, or if we’re just spinning our wheels. That’s where PPP comes in.

To establish PPP, we take our net revenue (gross revenue minus cost of goods sold) and divide it by our total number of team members. We then track that number over a trailing twelve months. 

So every month, we pull a trailing twelve-month report tracking our net revenue each month for the previous twelve months and the number of team members we had each month during that time. This gives us our PPP number. 

The Numbers Don’t Lie

When DLP started this tracking a few years ago, our PPP was $108,500 per person for the previous twelve months. At that point, that number did not tell us much, other than that was the starting point for our analysis. We had no way of knowing if it was a good number or not. 

That number became our baseline, and the goal became trying to improve upon it, to become more productive per person as we became bigger. We use the PPP as a gauge of business strength and a litmus test for whether we are growing the right way and becoming stronger. 

Say, for example, that your organization is doing $10 million in net revenue, and you have a hundred people in your organization. That would mean you have a baseline of $100,000 PPP. Over the next two years, let’s say you grow your net revenue from $10 million to $15 million. 

If you are just looking at that one metric—net revenue—it’s easy to conclude that your business is strong and healthy. After all, you grew your revenue by 50 percent. But what if, in order to reach that $15 million mark, you went from a staff of 100 people to 250? If you divide $15 million by 250, you go down to $60,000 per person. 

Even though your net revenue went up by 50 percent, your number of people went up by 250 percent, meaning you’re actually earning 40 percent less per person than you were when you were 50 percent smaller. If you find yourself heading in a similar direction, you are not on a scalable path of growth. 

The fact that it is taking significantly more resources to achieve significant growth is a sign that you are building bureaucracy and, at the same time, diminishing your ability to execute. This is an indication that your company is at risk. 

Look for the Patterns

After our first year of tracking PPP at DLP, we had added a total of seventy-three new team members while increasing our productivity per person from $108,500 to over $131,000. That was a 23 percent increase in productivity per person. 

Instead of just looking at our increase in net revenue and wondering whether we were actually in good shape, we were able to conclude that our rise in revenue was accompanied by a rise in productivity. That allowed us to proceed with executing our growth plans. 

At DLP, we continue to track our PPP every month, pulling an updated T12 so we can see how we are faring as we bring on additional resources to handle our business expansion. There was a time this past year that our PPP declined for two straight months, something that had never happened before at DLP. This set off alarm bells to me and DLP’s entire leadership team, leading us to drive corrective actions throughout the organization. 

We focused on encouraging each team member to develop into a top talent. We focused on accountability. We made sure everyone in the organization was aware of the PPP setbacks and focused on driving individual productivity and, in turn, company productivity. In just three months, we were able to realize a PPP increase of more than 15 percent. 

Information Makes All the Difference

Because we have this tool in our arsenal and review it monthly, we know exactly what our productivity is. Because we know that, we know how strong our company is, and we know whether our plans are working or need revision.

To build a high-growth, high-profit organization, you need this kind of data too. You need to review it on a monthly basis, and then adapt your plans and processes accordingly to make sure you stay on track. It all starts with having the right information—and this hack makes that easy to get.

For more advice on increasing productivity in your organization, you can find Building an Elite Organization on Amazon.

Don Wenner is the Founder and CEO of DLP Real Estate Capital, a leader in real estate investing, private direct lending, construction, management, and sales. DLP has been ranked as an Inc. 5,000 Fastest-Growing US company for eight consecutive years, with an average three-year-growth rate exceeding 400 percent and more than $1 billion in assets. Named one of the top fifteen real estate professionals by REAL Trends and The Wall Street Journal for seven years straight, Don has closed more than $4 billion in real estate transactions. He resides in St. Augustine, Florida, with his wife and two sons.