Operational efficiency is more important than ever for investors and the funds they invest in this year. Few seem to be getting it right. So, why is this factor such a big deal right now, what are the right and poor ways to do it?

·        Why Operational Efficiency Is So Important

Target returns, assets, and strategy are all important. Yet, operational efficiency can often trump all of these when it really comes down to your net and your investments meeting your expectations.

 

There are two key parts to this. One is agility, flexibility, speed, and effectiveness of decision-making. It’s no secret that organizations can get too big to truly be effective. Their success can often be their downfall. In times like these, being lean and fast is vital.

 

The second part is the financial factor. This is again why so many larger institutions deliver such measly net returns to their end investor clients. There is just so much administration, and layers of admin and fees and costs, that especially when things get tougher, returns are seriously compressed.

 

Superior operational efficiency and improvements can make up for these other pressures, and increase net profitability and security.

 

·        Successful Versus Self-Sabotaging Changes

When the economy becomes uncertain or tightens up, most companies and individuals seek to make changes. Some make wise adjustments. Others flinch, overreact, or simply tighten up and kill off the wrong things, to their own demise. Of course, others keep beating their head on the brick wall and expect to get through it, despite the damage they are doing to themselves.

 

Flogging a dead horse won't make him perform any better. Such as some big institutions desperately trying to cling to old ways of doing business, and demanding people be in the office so they can be micromanaged when the best talent is remote. More companies are finding flexibility in this area, and shedding the burden of large amounts of office space, which makes them far more profitable. Be smart, not stubborn.

 

Tightening up on overhead and spending can be necessary. Some just confuse slashing spending and investing with truly improving efficiency. And that’s really about getting more done, with less, and doing it more profitably. Not giving less and charging more, which is what so many doomed organizations fall into.

 

If you just decide to be cheap, slash marketing or customer service, and burn your most loyal clients, then you are sabotaging your own business, not protecting it for the good of anyone.

Do trim the waste, consolidate positions, and drive even better ROI on everything you do. Just don’t sacrifice the long term for the short term.

Investment Opportunities

 

Find out more about investing in secured debt and real estate, go to NNG Capital Fund.

Photo by Burak The Weekender

Article Source: https://nngcapitalfund.com/operational-efficiency-for-funds-and-their-investors-in-2023/