From Outputs to Outcomes: Rethinking Project Productivity

Do you think your project is productive? How do you know?

Do you think you’re productive? How do you know?

It’s not the same as being busy. It’s not even the same as producing. That last one is going to take a bit more explaining.

The history of measuring productivity

In New Zealand, we measure productivity as some measure of the volume of output, over some measure of the volume of input.

For example, in manufacturing in New Zealand, in 2023, output fell 6.8% and input rose 2.8%. We produced less and it cost more. Total productivity in manufacturing fell 9.4% in 2023.

Some other sectors are rising. In the Accommodation and Food Services sector, output rose 11.1% and inputs rose 8.5%. As outputs rose more than inputs, productivity increased by 2.4%. Again, this was 2023 data.

I’m pleased to see that all of this is based on hard data. But there are 2 issues that I have with this.

Firstly, not all outputs can be measured. Education outputs, or Healthcare outputs are not measured in productivity. In fact, only about 75% of all things produced are included in the productivity measure and it’s assumed that the 25% not measured is similar enough to the 75% that is measured. That’s one hell of an assumption.

But that’s not even my biggest gripe.

The folly in measuring output

Let’s say that I am in the business of extracting gas. The more gas I extract, for a defined cost, the higher is my productivity. If no one is buying the gas, but I get more and more efficient at extracting it, or I am able to increase the amount I extract every year, productivity goes up. If I stockpile gas that no one is ever going to use, harming the environment in more ways than I care to mention, but continue to do so more efficiently, it’s seen as a productivity improvement and a good news story.

Don’t worry, this gets back to projects shortly.

If I have an epitome and decide to change my business to a carbon capture business, the productivity rating is going to tank. Firstly, I’m going to stop producing gas which is going to affect the numbers negatively. Secondly, as I set up a new business, I have a lot to learn. There’s a lot of experimentation. Or to put it into a productivity sense, there’s a lot of inputs for little output. The productivity measure is going to tank again.

We can do something which delivers bad results, but is seen as highly productive. Or we can do something which delivers good results, but is seen as poorly productive. So, by doing something which is seen as progressive and a good thing, I hurt productivity.

Hence the title. If we only look at productivity, but we’re not looking at the results from producing, the number is meaningless.

What does this mean for my project?

In projects of all types, possibly even more so in technology projects, we’re really good at measuring productivity. But we measure it in the same lousy way.

Earned value would be an obvious place to point a finger, but there are others. If each week on your project you are completing a further 2% of the work for a cost of $50,000, you have a productivity measure. If in the current week you only completed a further 1% of the work for a cost of $50,000 (productivity halved), expect the negative connotation and the interrogation. If you’re in technology and you’re measuring product cycle times, or deployment frequency, or mean time to change, you have a similar jaundiced view of productivity.

And here’s why this is wrong

Productivity, including in most projects, is a measure of output over input. But I don’t care about the output. I care about the outcome.

If my project is producing lots of things, that are not contributing to the outcome, that’s not a good news story no matter what the numbers tell me.

If the week where I only produced 1% of the work instead of my normal 2%, actually moved the dial on the outcomes more than any other week, then that was my best week on the project even though traditional measures might flag it as the worst week on the project.

So how do you know you are being outcome-productive and not work-productive on your project? Are you looking at ways of achieving the outcome through doing different work - less work? Are you measuring achievement to outcomes rather than the quantity of work being done? When you start measuring outcome-production instead of work-production, you’ll be amazed at what you can really achieve and how much wastage there was before that you weren’t even aware of.

To learn more about outcomes, and how having an outcomes-focused project will help you be more successful, register your interest for the outcomes webinar.