The Productivity Paradox

The media is alive this morning regarding the long standing issues we have on productivity. Emphasis is on how lack of productivity is restricting income growth which is restricting the economy. First port of call is whose fault it is, and the default route that it’s all about low cost labour.

Probably, all of these things have a degree of truth to them, but in the scheme of things are secondary.

Productivity is low because we are still trying to improve the things we have been doing or making, rather than doing or creating new things.

at GrowHouse, we understand the power- and the limitations – of improvement better than most. We keep our process excellence ninjas keen and hungry, but in the end, improvement is an exercise in diminishing marginal returns. Get even close to six sigma measures, and getting incremental improvement on 97%+ levels of efficiency is an exercise in rock breaking.

Innovation on the other hand creates a class of activity that resets the game. Not only do we start with new services and products, but we have a whole new field on which to let loose the ninjas.

But innovation – and it’s big ugly sibling invention – require different skills, mindsets, and leadership. they have higher levels of risk, and require purpose and passion.

We have a paradox – most of the measures we take to motivate improvement kill the creativity on which innovation thrives:

  • Have people work for an expected reward.
  • Focus people on the expectation of being evaluated.
  • Deploy lots of checking and surveillance.
  • Make them follow a limited range of processes
  • And make it a competitive exercise.

(a major nod to Margaret Heffernan – “A bigger prize”)

If we really want to improve productivity, we need to innovate at every level. To explore possibility, and let people’s imagination loose.

Most of our structures, management processes and leadership practice pay lip service to this, and fall back on an evaluation mindset. It is the same principle that applies to the way we are educating tomorrows staff – and it’s substantially flawed and counterproductive.

The fast growing economies have cottoned on to this – China, Korea, and the like. they are changing the way they collaborate, create and lead. We need to do the same. Doing more of what we’re doing won’t solve it.

We’re running a series of exploratory conversations with people to explore possibility. The first is in Derby on 28th May, and we’ll be running the next in London. If you want to explore that space where knowledge ends, and possibility begins, we’d love you to join us.