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.

Productivity – it’s a mind game

It’s budget day in the UK, and there’s a lot of chatter about productivity – or more accurately, the relative lack of it in the UK. I suspect that, as with many large organisations, including governments, they’re looking in the wrong place.

In the industrial economy mindset, productivity is measured mechanically – outputs – mainly framed in money as a function of inputs – again, mainly measured in money – capital, labour costs etc.The pursuit of it has also taken a mechanical, process path. Quality, Process, Lean, Six Sigma. All very valuable, but finite tools.

In a connection economy, the prime driver of productivity is bandwidth – measured as the efficiency and lack of friction in the creation of value. If creativity is the process of turning ideas into value, then the determinants are allowing and enabling people to think creatively, and connect those ideas to places – people, businesses, universities – wherever – where they can thrive.

Most businesses are structured to strangle creativity at birth. Goals (particularly SMART ones) create the focus and pressure that stops creativity in its tracks.

We do not have ideas for money – we have ideas. Everything we know about idea generation, from Dan Pink’s work DRIVE, and the more detailed PUNISHED BY REWARDS (Alfie Kohn) tells us that applying extrinsic rewards to intrinsic motivation kills it.

Great sports coaches don’t teach players to kick a ball, or play a shot – they are working with people who know how to do that. Great coaches work with people to understand their game.

In business, most of our Learning, Development and coaching is focused on behaviour – how to kick the ball, and that’s an industrial era approach.

The answer to the productivity paradox is right in front of us. Helping those we work with to understand their game. It’s about inputs. We know how to process the hell out of inputs, we ‘re just very poor at enabling them.

If we want to increase productivity, we need to do more work, and more getting out of the way, on enabling their generation.