You won’t create 21st century enterprises measuring productivity!

I’ve been beating the “stop measuring productivity” drum since the response to my 2012 blog post, “Velocity is killing Agility” crashed my website.?

This morning I started off the day reading “From Knowledge Workers to Creative Powerhouse Professionals: How AI is Redefining the Future of Work ,” by Mark Béliczky in which he defines the next level of worker beyond Peter Drucker’s “Knowledge Worker” as “Creative and Imaginative Worker/Team Member/Professional.”

I then read Pete Behrens ' post, “The AI Productivity Paradox which questions if AI is driving productivity or just productivity expectations?” Pete makes the point, “According to Will Lockett not only isn't AI driving productivity, it's driving a wedge between leaders and employees about productivity. From a new survey from over 2,500 participants, 96% of executive-level managers expected AI to boost worker productivity and reported high hopes for the technology. Yet, in the very same survey, 77% of employees reported that AI had increased their workload, 71% of employees reported being burnt out.

In “EDGE: Value-driven digital transformation” I elaborated on the productivity issue.?

“Was James Michener a better writer than Ernest Hemingway because his books are longer? Or because he could type 20 words-per-minute faster? Makes sense—right? Assessing the effectiveness of writers based on per-unit productivity (activity) measures makes no sense. If your job is to write Java code “words” rather than English (or French or Polish) words, similar productivity measures make no sense either.

Productivity measures are meant for tangible things, such as how many widgets a machine can manufacture in an hour. Productivity measures were never designed to access intangibles such as ideas and innovations. But measuring intangibles is hard and measuring tangibles is easy, so naturally people gravitate to what is easiest, even when it’s wrong. Better to have some measure rather than nothing—right? No! Give me a fuzzy metric of something valuable (an outcome) rather than a precise metric for something unimportant (an output) any time.

When we are exploring new products, services, marketing programs, or business models, productivity measures make even less than no sense. Innovative ideas, valuable stories, high-quality code, reduced cycle times—these are better measures of success in today’s environment. Evaluating two teams who are working on two different new products in two different business functions, using two different technology stacks, based on their story velocities makes as much sense as typing speed makes Michener a better writer than Hemingway. There has to be a better way.”

That better way for enterprises of all types, is to transition to “Value Creation” measures and demote or delete productivity measures. As Curt Carlson explains in his extensive tutorials on value creation , value creation must be the dominant measure of success in today’s enterprises..

For your enterprise to thrive in the AI era, a fundamental component of 21st century management will be shifting to a culture of value creation based on customer centricity, flattened, collaborative organizations built around cross-functional teams, an adaptive culture, and more. To find out more about the “more” check out Steve Denning , starting with “In 21st century management, everyone is expected and empowered to be a leader and a value creator . And executives are not spending their time in luxurious corner offices, issuing edicts to their distant underlings, far below them in the vertical hierarchy. The organization is a horizontal network, not a steep multi-layered hierarchy. In 21st century management, executives are expected to pitch in as needed to solve practical problems.”

In the future we will need “Creative and Imaginative Professionals, whose success, no matter their position in the enterprise, will be measured by Value Creation, working within a 21st century management model. To learn more about reimagining management, join Curt, Mark, Pete, and myself at the World Management Agility Forum in Lisbon in September.?

Heidi Musser Hugo Lourenco Richard Straub Tamara J. (Tammy) Erickson ) Jeffrey Pfeffer Julia Kirby Dr. Julia Raupp Curt Carlson, Ph.D. Darrell Rigby Rita McGrath Amy Edmondson Hunter Hastings World Management Agility Forum Julian Birkinshaw Bob Sutton Geoffrey Moore Barbara Brooks Kimmel Edwin Korver - Polymath ? Michael Lurie Timo Meynhardt Steven Kotler Ilse Straub Margot Tschank Roger Martin Pete Behrens Jim Highsmith Mark Béliczky Tarang Amin Gina Drosos Chet Hendrickson Stephen Forte Andrew Holm Joana Afonso??