December 28, 2020 6 min read
Opinions expressed by Entrepreneur contributors are their own.
“Getting organized” usually ranks high on new year’s resolutions lists. But like working out and dieting, organizational systems can easily fall wayside by February. For most people, anyway. At some point during the decades of my entrepreneurial career, I realized my lifelong OCD tendencies didn’t just help me organize my company. They actually made my business more profitable. Here’s what I’ve learned along the way.
For over a decade, I ran a production company that employed dozens of full-time staff and contractors. I insisted on keeping all our digital media assets meticulously categorized using spreadsheets. Footage would be stored on our main server before we downloaded it onto external hard drives — of which we had hundreds.
One day, I received an email from a past client who asked me for some footage we’d shot a while back. As it happened, my team knew exactly where it was, and got it delivered to the client immediately, which opened up a new work opportunity and repeat business. Being organized literally made my company money.
It’s difficult to pin an exact number to the ROI of being organized. It will depend on your company size, workflow and strategies. But the true benefits are more than just financial, and the costs for ignoring organization are significant.
The cost of being disorganized
Excuses for disorganization are myriad. The old joke about having “a system only I understand” is a bad business philosophy. In the corporate world, executives often focus on bottom-line costs — this is the line I’d hear most often whenever I consulted for larger agencies, as I’d try and convince executives to migrate their data to a reliable content management system. They felt the upfront costs were too high and brushed off tighter organization as optional.
This is a big mistake. Organization should be mandatory. There is a simple reason for this: When workflows are organized, employees and contractors spend less time looking for files and more time doing their actual jobs.
That basic tenet stands behind one of the only studies on the cold, hard ROI of being organized. Express Employment Professionals, a staffing agency, surveyed 18,000 business leaders to learn that company-wide disorganization cost 57 percent of respondents six working hours per week. Disorganized employees can cost their company more than one-fifth their actual salary: $11,000 per year out of their $50,000 annual earnings. Elsewhere, a report by SaaS company MediaValet says employees spend eight percent of their workdays searching for files, and end up wasting time recreating between five and 15 percent of their company’s digital assets after giving up the hunt.
The true benefits are immaterial
Beyond financials, disorganization costs companies in ways that are impossible to quantify but cannot be underestimated. Poor mental health and disorganization go hand-in-hand, leading to unnecessary stress and anxiety. If an employee spends an hour searching for an old document and ends up spending another hour to recreate it, that’s not just a waste of time and money — it’s bad for morale.
In the work-from-home era, rock-solid organization can also bring colleagues closer together. Collaborative tools make it easier for remote employees and freelancers to feel like they’re sharing the same space. In the creative industry, this is essential for creative collaboration, which many worry will weaken in a remote workforce. After all, working remotely precludes those serendipitous moments that occur when you can pop into someone’s office and riff off an idea. Getting organized means less administrative busywork, so your team can focus more on the work they enjoy.
A strong virtual culture also helps when you are working with new team members. It means there is an established, common language into which they can integrate smoothly. Our brains are naturally driven to follow rules. Smoother collaboration means less downtime, saving you money and making your company’s output more efficient.
An inevitable future
When discussing organizational systems in 2021 and beyond, it’s impossible to ignore the skyrocketing popularity of cloud-based and A.I.-driven software. I mentioned earlier how my production company, once upon a time, used spreadsheets to manually track external hard drives that housed our archival storage. Two decades later, A.I. can catalog all this information in the cloud automatically, while also adding custom metadata fields and audio transcriptions.
The trajectory is obvious to industry watchers. According to a May report by Data Center Dynamics, during the first quarter of 2020, cloud spending shot up 37 percent to $29 billion over the same period in 2019. That same month, industry analyst Gartner predicted a 19 percent rise in cloud spending by the end of 2020, despite overall IT spending dropping by eight percent due to the pandemic. Indeed, despite the unsettling numbers of small businesses shutting down, worldwide spending on cloud infrastructure is on the rise.
I expect another spike to occur in mid-2021, by the time businesses begin opening up and entrepreneurs feel comfortable again taking risks with new ventures. Future-looking entrepreneurs will kickstart their new projects with a strong, cloud-based foundation.
The reasons for this are clear: it makes good business sense. It is no secret that the cloud is the future of digital organization. No one is moving in the other direction, though many companies are adopting hybrid solutions, especially to collaborate with independent entities that splinter off from larger ones. However, if cloud adoption isn’t on your radar, simply creating a more efficient manual system is better than doing nothing at all.
But I’d urge all entrepreneurs to look at the software available to them in their industry. Odds are good that someone has found a way to save you time, which ultimately will save you money, speed up your workflow and improve the mental health of your workforce. If that’s not a strong enough ROI, nothing is.