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.

Every business needs a Jester

One of the key challenges we face is the “inattentional blindness” that is created by working under pressure.

One of the most effective ways of becoming (notionally) efficient is to allow our ability to label things full rein. We do most of it naturally and unconsciously, and has been the subject of much research and publications – my own favourites include Margaret Heffernan (Willful Blindness) Daniel Kahnman (all of his work, most recently “Thinking Fast and Slow”) Adam Morgan (A Beautiful Constraint) and Gerd Gigerenzer (Risk Savvy).

The point is this – unless we are attentive to this tendency, we end up stuck in a rut.

As we become successful, we focus on what works well, and that quickly becomes a preferred way of working, which morphs into “the way we do things around here” which very quickly becomes our culture. What started out being exciting and vibrant becomes set in the aspic of what worked in the past.

In the connection economy, where everything is linked, and inherently dynamic this is not only a dangerous thing to allow, it positively cuts us off from the next stage of growth.

There is an aspect of the creativity that drives today’s successful business that, to borrow from Adam Morgan’s book, requires us “to walk in stupid every morning” – in other words, to take nothing for granted, and to test the assumptions that we make – consciously and unconsciously.

The best protection against the rigidity that comes with habit is diversity – gender, race, culture, background. More than ever we need the equivalent of the “Jesters” in the courts of the Middle Ages – the only ones in the court who could speak (or act or parody) truth unto power. They were key to bringing those inconvenient truths out into the open.

We can access this in so many places, from Linkedin Groups to Professional Coaches.

It takes effort, and sometimes money, but the opportunity cost of inattentional blindness makes it a key investment.

In my own work with a wide range of businesses, there is often much attention paid to strategy, but much less to questioning the assumptions upon which those strategies are based. The difference that can be made by engaging with these assumptions is often huge, and drives breakthrough insights.

Every business needs a Jester.

Image Credit

Signal to Noise

In physics, the SNR – signal to noise ratio is the basically the power of signal (the information we want) divided by the power of noise (the information we don’t want).

In our business and personal lives, maybe the same principle applies. And therein lies a challenge.

The signal we look for – things that are meaningful to us – the art, relationships, meaning and the contribution we can make, amongst many others, is pretty much a constant. when we have clarity of purpose, when we are loved, we don’t go round saying I need more of it. These things are not consumables.

On the other hand, the noise in amongst which we look for signal has increased exponentially. The ability to communicate , social media, advertising, a drive to consume, and spam in all it’s forms has changed our signal to noise rations out of all proportion in the last twenty years. When we don’t understand that, we can lose signal altogether in trying to deal with the noise.

But there’s an upside. Without noise, we wouldn’t be able to identify signal. It provides the contrast, the background that allows us to separate one from the other.

But we have to give signal a chance. Processes to get rid of noise are all very well, but they may just take signal with them. Penzias and Wilson in 1964 tried for three years to get rid of background noise in their experiments, only to find that it contained the information that would win them a Nobel Prize.

To separate signal from noise we need to give it space. Time out. An opportunity to reflect. The time to discuss with others without an agenda – time to let our brilliant brains do what they do best – make connections that computers can’t. As yet, digital devices process brilliantly, but don’t wonder about things.

It’s Sunday. Use it to advantage.

Have a great week ahead.