Productivity and Workforce

Over the past twenty years, companies, and particularly American companies, have emphasized growing productivity as the means to greater profitability and growth. Yet, in most cases, the growth in productivity has been the result of staff reductions and putting greater stress on the remaining workforce to achieve the same results as a larger workforce had achieved in the past.

Obviously, such a strategy has limitations in that it is not creating anything, is not innovative, and produces diminishing returns over time. In fact, pushed too far, the strategy backfires with the best and most productive employees leaving for greener pastures and less stress.

Innovation and Creativity

The Wall Street Journal indicated in March, 2002: “The next great improvement in productivity will not come from reducing the workforce but increasing the creativity and innovation of the employees and managers…”

The same article found, however, that the very reductions of workforce which had accompanied the previous increases in productivity, actually reduced creativity and innovation, as time was filled with just getting done what had to be done. No one from the top of the organization down had time to think and work “on” the business, because everyone was too busy working “in” the business.

Productivity in the Organization

In their study of the American workforce, the Gallup Organization found that most companies only obtain 30% of the potential productivity of their workforce. Among the most important reasons identified is the lack of time to work “on” the business, to innovate, to think about how to do the work better. In addition, most workers did not know how their work (or what in their work) contributed to the goals of the organization.

In a major study of the workforce, the Harris Polling Group found:

1. Only 15% of workers could identify the most important goals and top priorities of their organizations.
2. Even when the goals were identified, only 19% felt passionate about those goals or that they had a significant commitment to or involvement with them.
3. Workers reported that they only spent an average of 49% of their time on goals and activities that they identified as “important.”
4. Finally, 51% reported that they did not understand how they could or did contribute to the achievement of the organization’s goals.

Imagine a football team in which only 1 of 11 knew where the goal was, he was not too keen on it and didn’t see how he could make a difference.

What can we do?

This is the crisis facing us in trying to become more productive and profitable. The solution comes at two levels:

Ø First, we must develop the methods and skills to cascade goals down the organization and build commitment up the organization to “put all the wood behind the arrow.”

Ø Second, we need to develop every manager’s ability to coach and to inspire at every level the passion, commitment, and understanding of the importance of each employee’s contribution to the achievement of the organization’s most important objectives.

Ø Finally, we must grow our people to allow our organizations to grow. It is an old adage, but a true one, that the chain is only as strong as its weakest link.

The solution to this “crisis of productivity” is going to take more than a simple canned workshop. It cannot be fixed in a day. In fact, what is really required is that we commit our organizations to learning as a long-term strategy. This learning strategy will include carefully selected workshops and training programs. Even more important, however, is the creation of a culture of continuous learning and improvement that requires customized solutions and interventions.

On the horizon:

The bright spot in this picture is the development over the past 10 years of the understanding of this learning culture and our ability to create and sustain it. It is a process which will become even more important as the next generation begins to dominate the workforce. Their focus is often on how a position helps them develop for their future and how their work really contributes beyond the bottom line.

Take a careful look at your company. Is it ready to grow?