PART 1: KNOWLEDGE WORK AND KEY PERFORMANCE INDICATORS: ARE WE MEASURING PRODUCTIVITY OR ACTIVITY?

“The most valuable assets of a 21st-century institution, whether business or nonbusiness, will be its knowledge workers and their productivity” (Peter Drucker, 1999).

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Towards the end of his life, Drucker called on organizations to improve their understanding of knowledge worker productivity; indeed, he argued that the very survival of developed economies would depend on increasing the productivity of these workers. And yet, over 20 years later, we still know very little about it. How does one define productivity of knowledge work? How can it be measured? Why, in spite of all of our technological advancements since Drucker pointed out the challenge, are we still so poor at defining and measuring knowledge worker productivity?

This was the subject of much discussion at the 2024 Global Drucker Forum, held in Vienna in November. The subject of the conference- The Next Knowledge Work – was the perfect backdrop for formal and informal debates on knowledge worker productivity. In this newsletter, I’ll give you some of my impressions and thoughts, and share with you those of some of the many excellent panelists and speakers at the conference.

Improper Definitions

We really don’t know what productivity looks like for most knowledge workers. Manual worker productivity was easily measured in terms of output (as a function of labor input). Can productive knowledge work be defined by outputs? Over twenty years ago, Drucker wrote that defining the task was the first step of understanding knowledge work (and that only the knowledge worker could define the task). Unlike manual labor, where the task was obvious, knowledge work is usually complex and requires decisions about priorities where time is spent. What should I be focusing on? What is the best way for me to contribute? What is holding me back? (Drucker, 1999). Until we actually define the nature of the work, we can’t possibly begin to define productivity.

For example, what happens when there is a problem with access to information systems within an organization? How do we define the work to be done, and the nature of productivity? It depends on whether you are responsible for customer service, IT, or some other area. Each type of knowledge work is defined differently in this situation, but each area plays a role in managing and solving the problem.

Incorrect Measurements

Drucker also pointed out that, in many cases, knowledge work productivity should be measured by quality more than quantity. In many cases, however, knowledge worker productivity is measured by KPIs that are based on quantity. As a result, what gets measured (output, time spent) is what gets done. This translates into more emails, meetings, documents – even mouse clicks (see below). Alexander Alonso of SHRM notes that the US Bureau of Labor Statistics still tracks production, not productivity. The private sector is better but is still more comfortable with tracking time and output. In the Drucker Forum session on knowledge worker productivity, Alonso pointed to the lack of productivity in the average one-hour Zoom meeting: 21 minutes of the meeting is spent daydreaming, and 22 minutes is spent critiquing one’s own appearance. In the same session, Claudio Fernandez-Araoz, Executive Fellow for Executive Education at Harvard Business School, argued that many of the tasks of knowledge work are increasingly complex and difficult to measure.

Pandemic Hangover

The transition from in-office to remote work during the pandemic, followed by a call for knowledge workers to return to the office, has sparked an intense discussion about knowledge work and productivity. What perhaps best characterizes this discussion is a breakdown of trust in many sectors. Because our tools to measure knowledge worker productivity are so limited, the data on the productivity of remote workers is primarily driven by self-reporting and managerial attitudes. In general, remote workers self-report that their productivity is much higher, while management tends to believe that remote workers are less productive. Management concerns with monitoring remote workers has given rise to new technologies, including software that track such things as computer activity and work time. Knowledge workers typically driven by autonomy have developed their own technologies, such as mouse jigglers to foil employer monitoring. It begs the question: if knowledge work is defined solely by time spent in front of a computer screen, why couldn’t a good portion of this be done remotely? Until we can have honest discussions about the nature of productivity, we will continue to frame this conversation as a “battle,” as Amy Edmondson noted.

Attention Deficit

A ubiquitous theme at the Global Drucker Forum was the constant shift in attention that knowledge work demands, in large part because of the new digital tools of productivity. As Lina Zemaityte Kirkman brought up, whereas we used to shift our attention to a new task every 2.5 minutes in the 1990s, that now occurs every 47 seconds. Emails, messages from Teams and Slack, texts, meeting notifications – all of these connectivity tools now result in what Brigid Schulte coined “time confetti” – tiny bits of time consumed with unproductive activities that sap our attention and energy. There is very little time for what Cal Newport termed “deep work” – the ability to focus on difficult tasks without distraction. Instead, we wade in shallow work that is relatively mindless. In fact, because knowledge worker productivity is often measured in activity, it rewards distraction and penalizes deep work or mind wandering. These newsletters are evidence of this; I typically work on them in the very early morning hours, just as I awaken, when my mind is not yet jarred into the busy world of KPIs. This “unproductive” time of thinking through complex topics and pondering others’ ideas works best while others are still sleeping or not yet “productive.” This kind of thinking also helps with decision making and problem solving in our world of information overload; stepping away from the minutia of data allows for our human qualities to engage and emerge.

What Can we Do?

·???????? Create conditions for people to flourish even if we can’t measure their productivity.

Most knowledge workers who are high performers know their work better than anyone else. As Drucker pointed out, knowledge workers can’t be managed the same way as manual workers; they need to be motivated and given the conditions they need to produce. Monitoring and measuring things that don’t really matter (like computer use) is demotivating and eventually results in burnout or quiet quitting.

·???????? Increase autonomy and reduce meetings.

We have clear evidence that this improves productivity and engagement and reduces stress.

·???????? Rethink role and nature of KPIs.

Performance is important. But if we can’t even define it, there is no way we can measure productivity. We need to be creative in the development of performance indicators, emphasizing quality over quantity. What actually adds value to organizations?

·???????? Rebuild trust.

We need to stop viewing the relationship between knowledge workers and management as an adversarial one. In our economy and society, knowledge workers are the means of production and an asset, not a cost. Organizations should be working hard to retain and build those assets.

Towards the end of his book, Management Challenges for the 21st Century, Peter Drucker asks, “What does ‘Capitalism’ mean when Knowledge governs – rather than Money? And what do ‘Free Markets’ mean when knowledge workers – and no one else can ‘own’ knowledge – are the true assets?” Drucker’s queries force us to examine what constitutes value not just in organizations, but in society. In the next installment of this newsletter, I’ll take up Drucker’s concept of “post-capitalist society” and what it might mean for knowledge work in the 21st century.

Drucker, P.F. (1999). Management challenges for the 21st century. HarperBusiness.

https://www.druckerforum.org/blog/the-productivity-paradox-of-21st-century-knowledge-workby-isabella-mader/

https://www.druckerforum.org/blog/the-future-of-knowledge-work-what-drucker-can-teach-usby-karen-linkletter/