Thoughts on Managing Productivity

In Leadership, Execution, Strategy Insights by Steve Sliwa

As mentioned in The Law of Minimal Growth for Organizational Health, employee productivity is one of the things you need to protect as a manager. In fact, if you don’t have the resources to invest in employee productivity growth, the law states that your business is probably going out of business.

In Establishing Spending Priorities with Constrained Resources, I talk about investing in things that generate revenue first, then in activities that reduce costs. After that, focus on strategically important projects and the unmet needs of the organization. Once those resources are freed up, a key part is understanding the sources of productivity growth. 

  1. Better Tools
    To be productive, ensure that your employees have the software and hardware necessary to do their jobs. Also, create an office environment conducive to high output.
  1. Training and Education
    Invest in providing new capabilities to the workforce. Sometimes, this may be general education, but often, it is specific skills training or knowledge-based training for a particular task. These courses may be internal or external to the organization. 
  1. Process and Organization Optimization
    I find that organizations often get in the way of the employees, so it is essential to minimize the impact. Find ways to optimize the processes that affect employees and look for ways to create sufficient freedom for those who are motivated.
  2. Morale and Passion
    A fundamental part of productivity is the overall morale of the organization and the passion employees have for their jobs. Managers must work on morale issues and motivate people. Direct their passions to get the job done. 

Compound Growth

Note that the compound growth rate adds up. In other words, if employees have productivity growth each year, it becomes an incredibly valuable resource for any manager. Stack this 5-10% growth improvement over a couple of years, and pretty soon, there’s a significant amount of increased productivity in terms of getting the job done and accomplishing more for less.

I think it’s a manager’s job to find the resources to invest in the source of productivity growth and pay for those better tools, training and education, and organization optimization. Occasionally, the revenue can come from the budget, but often, that’s not possible. So, resources must be freed up to invest in growth.

One way to do this is to end losing projects. To be an agile company, one must create an active system to identify the winners and losers. Organizations only get better when they don’t continue to invest in the losers. Those projects need to be cut.

  • Create an experiment
  • Learn from those mistakes
  • Invest more in the winners
  • Take away from the losers

Many processes have extra steps that add more thoroughness and completeness but don’t contribute much to the overall mission. Trim these. Get rid of any busy work where things are being done simply because one has extra resources. In these cases, many leaders say, “Why the heck not do them?”

Unload activities that don’t contribute enough to the organizational goals. Free up those resources to invest in productivity growth. Ditch duties that don’t count much even if they are done magnificently right. Organizations sometimes have processes that are well-managed and run smoothly, but they aren’t really necessary.

In Curtailing Bureaucratic Growth, I included an anecdote about a well-run department at Ford. Their mission was matching up paperwork to ensure that they received the correct materials with the proper quality, and once confirmed, they provided payment to the vendor. By switching it around a bit, they pushed this responsibility off to the supplier and only needed to conduct random audits. This eliminated an entire department. Sure, they did a great job, but now, the product came in faster with higher quality, and people received payment sooner. Ford saved a lot of money, and the suppliers were much happier even though the original process was well-run.

These are the opportunities we’re looking for to contribute to employee productivity growth.

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