While productivity is relatively easy to measure on a factory floor, or on the farm, we have yet to develop good metrics for measuring the productivity of the knowledge workers of the Exponential Era. Regrettably, we continue to largely rely on hours worked and face time in the office—or in virtual spaces—as markers for effort, which I consider a pseudo-productive work. The harsh reality is that with the advent of technology and the ability to work remotely, being connected and responsive at all hours is the new face time.
In business, we have been universally using productivity to account for the amount of work completed, the quality of that work, and its worth in terms of organizational objectives. For over two centuries, productivity has been related to the number of hours worked or the money invested. In this way, productivity is almost always quantitative. Notionally, companies are looking for the highest possible outcome for the minimum amount of input/resources.
At the dawn of the Information Age, aka Digital Age, about 60 years ago, it was the first time we could depend solely on our cognitive abilities instead of our physical ones to produce work. However, we stubbornly continued to define productivity based on units processed per time period.
Measuring productivity in the Exponential Era seems to be an elusive target. Companies are not necessarily tracking hours for salaried employees. Truth is that knowledge work is less standardized and structured, and time spent working is increasingly blurred as a mobile workforce integrates their professional and personal lives. Moreover, outputs are intangible and difficult to define; the results often based on team output rather than individual.
It is an accepted notion that the most valuable assets of a 20th-century company were its production equipment. That said, the most valuable asset of a 21st-century ecosystems, whether business or nonbusiness, are the productivity of their knowledge-workers—those that “think for a living.” Which makes productivity challenging to define and to measure.
That makes coming up with applicable KPIs very difficult or even impossible. Some suggest that measuring knowledge worker productivity is situational, since outputs and how to calculate them varies widely across an organization. Fact is that unless we have a very good and accepted definition, measuring sustainable productivity and subsequently improving it, will be almost impossible.
The paradigm, hence, is that productivity in today’s Exponential Era must mean something different for the organization—at the individual and team levels.
Productivity in today’s world must focus on quality, adaptation, innovation, critical-thinking, interpersonal awareness, teamwork, and collaboration.
It is about working on what matters most: value-adding activities, in alignment with the business objectives and strategies.
In today’s ecosystems, individuals are more autonomous, with enhanced socio-emotional skills, with sharp critical-thinking skills, hyperconnected, creative, equipped with a myriad of tools, with acute social and cultural expectations. Their roles and responsibilities are more fluid. Moreover, today a high amount of work is produced in teams and in collaboration.
This begs the big question: how to measure employee productivity? Well, there is no single straightforward answer to that question. Yet, before attempting to define metrics and KPIs, there are some principles to be observed:
- Employee’s productivity can mean different things to different people. Clarify to them!
- An important factor to consider is whether an employee’s job focuses on quality or quantity. That’s why it’s important to remember the focus of an employee’s job when measuring their productivity.
- The definition of employee productivity varies from industry to industry, form organization to organization, from country to country, and from culture to culture.
- Since productivity is now based on even more specialized cognitive functioning, we need to factor in different abilities and create new metrics.
- It’s up to the organization to come up with the way to define, to measure, and to reward productivity.
Organizations need to embrace a more organic view of productivity in value-creation processes in ecosystems. The change from the old way of measuring productivity to the new won’t be easy or quick. Our current habits and standards were built for the past, not the future. Moving to a new paradigm might feel weird and challenging, but it is essential if we are going to build the future we want.
We need to banish the idea that more time in the office—or logged in—equals more work. Breaking the strong connection between work and time is crucial.
We need to counter our deeply ingrained mental model that human workers should be paid per hour or that their pay is tied to sitting at a desk—or logging in from home—for long hours. Instead, we need to foster a model that rest on the importance of rest and disconnecting. A model that factor-in working smart, taking breaks, vacations, family leave, getting good sleep, and not responding to messages after hours.
Empowering great work throughout the organization will actually empower a different type of productivity. Productivity aimed at creating value for stakeholders, delivering new and innovative solutions, and fostering a high-performance culture that strengthens teams and boosts sustainable organizational success.