What is productivity?
This is the first in a series of posts on productivity.
Productivity is one of those terms that has a number of different definitions, the one I’m going to focus on is:
Productivity is an average measure of the efficiency of production. It can be expressed as the ratio of output to inputs used in the production process, i.e. output per unit of input.
In national economic terms productivity is often defined as the “GDP per hour worked”. That’s not a great measure for me as an individual worker because my work is a number of steps removed from national GDP; my units of output and input are different and I’m not the only one in that position.
Work is becoming nonroutine
This separation of work from GDP is a common challenge for a workforce where routine work is diminishing; being replaced by manual and cognitive non-routine work.
For more information see: Is Your Job ‘Routine’? If So, It’s Probably Disappearing
If you do routine manual work, like assembly in a factory, it’s easy to see that the input of materials results in the output of a product, the difference in the value of the two and the amount of time you spend assembling is your productivity. If you work in a nonroutine cognitive role like coding it’s not as easy to draw the line from input to output, there isn’t a clean link between the hours that you spend on code and the economic value of it, especially when that code forms part of a larger system, but it is this type of work that is increasingly generating the new GDP.
What’s the impact of productivity in a nonroutine world?
In 1987 Tom DeMarco and Timothy Lister wrote a book called Peopleware in which they stated:
Three rules of thumb seem to apply whenever you measure variations in performance over a sample of individuals:
- Count on the best people outperforming the worst by about 10:1.
- Count on the best performer being about 2.5 times better than the median performer.
- Count on the half that are better-than-median performers out-doing the other half by more than 2:1.
This research is based on nonroutine work of the type that is increasing. Their assessment was that the difference between the worst and the best was 10x, a phrase that has become a popular management axiom. The more interesting rule of thumb, for me, is the 2.5x that differentiates between the median performer and the best performer, even if you are middle of the road someone else is going 2.5 times better than you. When your top speed is 50mph try catching a car that is going at 125mph. These best performers have a huge advantage.
That was then, but this is now!
DeMarco and Lister did their research in the 1980’s, a lot has changed since then. The technology capabilities that are available to individuals and teams today were unimaginable then. Our ability to automate has changed beyond recognition. These technology capabilities act as an amplified of our own productivity and in many ways define our place in the productivity spectrum which is dependent upon how we use them. Technology capabilities have traditionally been focused on automating the routine but now capabilities that empower the nonroutine are commonplace.
They are all multipliers
- We have an increase in nonroutine work
- A massive variance in the performance of different nonroutine workers
- An accelerating set of capabilities to empower the nonroutine workforce
Each of these factors multiply together to make hyper-productive workforces that will be many times more productive than the mean workforce. This has the potential to have a massive impact on national productivity and will make or break organisation. That’s why productivity matters more now than ever.
Graham Chastney is a Technologist in CSC’s Global Infrastructure Services. He has worked in the arena of workplace technology for over 25 years, starting as a sysprog supporting IBM DISOSS and DEC All-in-1. Latterly Graham has been working with CSC’s customers to help them understand how they exploit the changing world of workplace technology. Graham lives with his family in the United Kingdom.