Can a company have productive employees and still be failing in their overall productivity? In an article for Harvard Business Review, Ryan Fuller explains how there are different types of productivity that mangers need to begin to recognize.
One Hand Does Not Wash the Other
Fuller states that productivity is “the amount of value produced divided by the amount of cost (or time) required to do so.” This formula is deceivingly simple in structure, but the truth is that productivity strategies are far more encompassing. Technology has driven productivity to new heights and led people to believe that, as long as employees are performing their work better and faster, productivity will increase as well. The truth of the matter is that U.S. government data indicates that overall labor productivity has only grown 1-2 percent each year during this new tech age.
According to Fuller, there are different types of productivity, and people have been focusing on the wrong one. Rather than personal productivity, people need to shift to see enterprise productivity. As an example, Fuller explains how he worked with a multi-billion dollar technology firm to help them better understand their partner ecosystem. The company stated that 700 employees were interacting with their partners, but they wanted to make sure they did not miss anyone. The reality was that closer to 7,000 employees were interacting with customers, which is collectively 2,000,000 hours and close to $200 million of employee time.
This huge number is not necessarily a bad thing as long as the company has revenues that make it worthwhile. Fuller helped this company to find correlations between the employees’ time and their success. Unfortunately, in this case the time did not pay off. It was uncovered that roughly 50 percent of the employee time spent with partners had no correlation to enterprise value. The employees were doing their jobs and doing them quite well. This is why the company was inclined to believe their productivity was superlative. However, the overall enterprise productivity could use some real work.
In order to change productivity and make the organization run more efficiently, one must first be honest and have self-awareness about what work is actually creating value. This is a more difficult task when it comes to knowledge work.
Individual productivity is still important, but the productivity of the enterprise as a whole needs to be equally analyzed. You can read the original article here: https://hbr.org/2016/04/the-paradox-of-workplace-productivity