Defining Modern Productivity

A quick reference to the meaning of the word productivity is:

“a measure of the output of an organisation or economy per unit of input (labour, raw materials, capital, etc.)”

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Productivity. It’s certainly the buzzword of the week. And with AI, WFH and IR (some more thrown in for good measure), how we measure output when it’s increasingly not based on the time it takes to complete a task but on the outcome (and the value) of the task delivered, it's clear we are wading into interesting times.

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Here we have a front-seat as to how things in the world are changing. We deliver a service-for-subscription model in an area that has been turned on its head by time-saving tools and tricks. It’s exciting to be part of how this business function is changing. But what’s clear is that the benefits promised by automation for business (particularly SMEs) have yet to be realised. In short, the cost reductions are just not hitting the bottom-line.

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More broadly, in our mainly service based economy, business commonly exchanges pay for time. But in a modern economy with tools that redefine our relationship with time by continually expediting what can be done for less, how will this affect the way we remunerate roles that are service-based?

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Gone will be the current antiquated measures and metrics that are based on the task vs. time calculation – the hourly rate, the billable unit, the TOIL system. And in its place comes services charged and delivered based on Value.

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On the basis that most people in this country are employed in delivering services, how does our current employment framework allow business to refine how they engage people and how employees assess one role with other to work out what is better for them?

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The challenge here is that Value is much more difficult to quantify than Time - a unified and standard measure that's been used for forever. Value means different things to different people (and for some it means nothing at all). Which makes it challenging to put it into an employment model. How does an employee know whether they've done a good job? Fulfilled their role description and boss’s expectations? How do they know that they are not being taken advantage of (a common objection of the salary model, after all, and I would imagine behind a lot of the quiet quitting right now).

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And for employers – how do they measure output if it’s not based on time on the job (regardless on whether this is in the office or at home)? How do they navigate ongoing performance? In short, how do they know whether they’ve got the best person for the role in the face of alternatives? It’s easy to blame low productivity on a response to COVID, work-shy Gen Zs, low unemployment levels (take your pick…) but none of this reduces the cost of doing business when tech has done what it said it would. I wonder how much of the push back to the office return in some sectors is about ensuring that their team are 'doing their hours'.

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We’re human beings not machines. We have good days and bad. Days where we smash out our To-Do list and days we don’t. Days we feel like working, days we just won’t (pick your procrastination drug of choice, of which there are many...). Productivity for factory lines producing product is much more easily measured but human beings? Where do we start.

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