EffectiveBusinessTools.com: Improving Productivity by Clarifying What a "Product" Is

When a business owner thinks of the word “product,” he is likely to think of a physical object that has been produced for consumption, such as a pizza, a box of cereal, a cell phone, a computer, or a car.
While those items certainly fit with the concept of a product, not all businesses create products like those, such as service businesses for instance. And yet those businesses create a product. We need a bit broader definition of “product” that will not only fit the output of any business, but also the output of any person’s position in any company.
L. Ron Hubbard has defined “product” in this way:
“A completed thing that has exchange value within or outside the activity.
“Someone or something that has been brought into existence; the end result of a creation; something or someone who has been brought into existence.
“A product is a finished high quality service or article, in the hands of the individual or group it serves, as an exchange for a valuable. That’s a product. It’s a finished high quality service or article in the hands of the consumer as an exchange for a valuable.
“In other words, it isn’t a product at all unless it’s exchanged. Unless it’s exchangeable, it’s not a product at all. Even the individual has to put his service or article in the hands of some other staff member before it could be called a product. Product is exchange, exchange is product.”
So we see that this definition is broader than just a physical item produced for consumption, and also encompasses things like services. This definition is very useful because it can be used to determine if a service job or a job within an organization is being done well.
For instance, let’s take the example of a receptionist in a software company. The receptionist does not write code for the software or ship it to customers, but she produces a product just the same. She provides a valuable service – in this case correctly routed and speedily delivered phone calls – to other staff in the company. She does this in exchange for a valuable, in this case a weekly paycheck. And one can see that if the calls are incorrectly routed, or too much time passes and the person angrily hangs up, that that would not be a product per Mr. Hubbard’s definition.
Let’s take another example of a salesman for the software company, selling to large corporate accounts. His correct product would be something along the lines of “properly informed and closed customers, who sign a contract and pay by check or credit card.”
So if the salesman makes incorrect promises about what the software can do, or reports that a person is closed when the customer is still unsure, or doesn’t get a signed contract or payment by check or credit card, then that is not a proper product from the salesman. But when he does produce “properly informed and closed customers, who sign a contract and pay by check or credit card,” then that is a proper “product,” and the salesman gets an exchange from the company. In this case it’s a sales commission.
So this definition is useful in determining the quality of work from a given employee. You could create definitions of the correct product from any given post, and then determine by inspection if the employee was routinely producing that product on their job.
You could also use the above definition of “product” to create a definition of the correct product for the whole organization. If the product is a pizza, that’s easy. But even then, the definition of the product has to include that it’s fresh and properly prepared and hot and tastes good, and also that the customer has paid for it. You might even want to expand the definition of the product to include that the customer enjoyed himself while in the restaurant.
If the organization is a service organization whose final product is service, then you can create a definition of the service and also the result that it is supposed to achieve. For example, a management consultant is supposed to improve the condition of his client’s company. So the product definition should include what the service is, what conditions are supposed to be improved, and of course also that the company has received proper exchange.
This definition of the word “product” can be used to improve the quality of the overall product and also individual production in any company.

Stan Dubin is the author of The Small Business Success eBook. For more information on this eBook, go to: http://www.EffectiveBusinessTools.com Copyright (c) 2007 Workable Solutions. All Rights Reserved. Quoted material by L. Ron Hubbard: (c) 1976 L. Ron Hubbard Library. Grateful acknowledgment is made to L. Ron Hubbard Library for permission to reproduce selections from the copyrighted works of L. Ron Hubbard. I/A: 07040303



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