4 Settings to benefit from productivity improvements
We know that technology-driven productivity increase mostly enhances prosperity.
While many people across the world, continue to benefit from technology, numerous others also end up losing their jobs. The enterprising ones transition to other gigs with retraining, though it is a more significant transition for a truck driver to become a yoga teacher.
Among other things, we use our cell phones to scan documents, share files, take pictures, edit and communicate, which makes us more productive. On the other hand, it has rendered the neighbourhood phone booths cum printing and scanning shops almost redundant. Some owner-operators of these print shops have transitioned to helping design marketing and communication material, including book covers and flyers.
While we can look at productivity improvements differently for Capital productivity and People productivity, technology interventions benefit both.
At the country level, exports support economic growth. At a business level, going international helps with economies of scale. In today’s globalised world, we as individuals need to market our skills globally.
So we need to increase our productivity and become cost-competitive at all levels. Here are four contexts to benefit from productivity improvements.
1. Can we improve productivity at a business organisation level?
Yes, we can introduce technology, improve infrastructure, including hard and soft infrastructure to increase productivity in our businesses.
However, by only inducting a new machine or implementing a software package would not automatically help the whole business. Among other things, assisting the operators, supervisors, and managers catch up with and internalise technology is essential.
While it is essential to implement productivity improvement measures, we need to be mindful of the softer aspects. We found that taking the time to help workers and supervisors internalise the objective of the technology intervention program, explaining how will it benefit them and their teams are very helpful. Further, training people in the new technology-enabled processes and staffing forward in the project, i.e. building a team with members from the next project site has been beneficial in our projects.
Interestingly, investing in training and entrepreneurship also help build skills like nurturing, caring, coaching. It is like what we call a bi-product or co-product of the interactions.
We can also increase productivity by reducing organisational complexity.
There is a growing perception that investments in process excellence, automation and employee engagement initiatives have not resulted in the proportional improvement in actual employment, productivity and customer satisfaction.
A possible cause is the increasing complexity of org-structures, processes and performance management systems. Businesses introduce structures and performance management measures, corresponding to the external stakeholder organisations and add to the complexity.
So what can we do to reduce complexity and improve productivity in organisations instead of adding new boxes/functions?
Ensure that the teams understand what other groups do. Reinforce middle management as an integrator. Enhance delegation of authority. Outline what good will look like. Reward cooperation. Instead of blaming failure, challenge failing to ask for help or to provide assistance. As usual, leadership is essential.
2. What about productivity improvements in the public and government sectors?
While we generally consider that technology interventions and concepts like lean are only relevant to the private sector, the public sector, including the government, can significantly benefit from the improvement in productivity.
This sector is usually supplier led, rather than being customer-led. The government sector goes mostly by what can be done and not what the users need.
The public and government sectors have a different set of challenges in identifying cost, quality and time objectives. Instead of transferring the risk by merely outsourcing and increasing costs, we could look at inducting technology along with the rigour of initiatives like ‘lean‘ to bring in productivity improvement.
Initiatives like staffing forward and setting up holistic process improvement objectives are equally applicable to this sector as well.
3. Can emerging economies learn from their developed counterparts?
Globally population and productivity growth are both expected to slow down in the next 50 years.
While developed economies have better deployment and use of technology, they have demographic challenges, i.e. an ageing population, which has slowed down the rate of productivity growth in developed economies.
Emerging economies have lower people productivity because of a shortage of skills, training, infrastructure and investment in technology. Therefore to take advantage of technology-driven productivity, emerging economies need to invest not only in technology but also into infrastructure, education and skilling.
Comparing two major emerging economies China and India, studies have found that people productivity is significantly higher in China, whereas capital productivity is higher in India.
Within emerging markets, India is a supply-constrained market, not a demand-saturated market. We may infer that introducing technology is expected to increase productivity and value addition instead of taking away jobs overall.
4. So what do we see changing with Covid-19?
In the low touch economy, technology interventions are becoming even more critical. In the continuum of digital and analogue, the digital side has helped to make business organisations more resilient and anti-fragile. Productivity tools, including health care and supply chain tools, have become even more critical.
Considering Education as a series of physical events, technology is helping us distribute knowledge about the events by making lectures cheaper and more accessible.
We see technology interventions accelerating healthcare delivery, including less crowding at OPDs with the help of telemedicine and off-premise screening.
However, if we leave the market on its own, the benefits of improved productivity won’t automatically get distributed.
Perhaps we need to create institutions to help redistribute the benefits.
It would perhaps be better for governments to protect the worker and support employers to preserve jobs.
Take away for leading self and leading others.
We need to think of productivity is not just about doing the most but also about getting the most of what you have done.
Inter-personal skills, including leadership and mentoring skills, continue to be in demand and cannot be delegated to machines.
To increase your success as a leader, correspondingly increase your investment in personal improvement and productivity.
Have posted an earlier version of this article on Medium.
