Blindspots, productivity and value

Three different concepts intersected this week – blindspots, productivity and value – although it took going for a run to work out the intersect points in order to make sense of them.  The concepts came from different meetings.

Blindspots came up three times this week.  Once as a book recommendation  – I’ve downloaded a sample chapter to my Kindle.  The book is Blind Spots: Why We Fail to Do What’s Right and What to Do about It. The blurb about it says ‘When confronted with an ethical dilemma, most of us like to think we would stand up for our principles. But we are not as ethical as we think we are. … From the collapse of Enron and corruption in the tobacco industry, to sales of the defective Ford Pinto, the downfall of Bernard Madoff, and the Challenger space shuttle disaster, the authors investigate the nature of ethical failures in the business world and beyond, and illustrate how we can become more ethical.’

The second time blindspots came up was in a meeting on the future of work when we were talking about employee surveillance and some of the blindspots in recognising the upsides and downsides of it.

And the third time in relation to the concept of linkages and interdependencies between workstreams in a project.  Each of this project’s workstreams is operating as a silo. The person I was talking with had noted the blindspot around the benefits of mutual support and collaboration and was wondering how to talk about it to workstream leads. As one blog writer on the topic says, ‘When a work stream cuts itself off from the other work streams and thinks of itself as a fully autonomous independent entity, it turns into a silo. Silos are great for storing grain, but, in organizations, silos are dysfunctional.’

Productivity came up in a meeting where we were wondering how to increase it.  I wondered what our individual assumptions are around it.  How would we recognise increases in it?  And what constitutes it?  On the last, The UK Government calculates labour productivity, ‘by dividing output by labour input. Output refers to gross value added (GVA), which is an estimate of the volume of goods and services produced by an industry, and in aggregate for the UK as a whole. Labour inputs in this release are measured in terms of workers, jobs (“productivity jobs”) and hours worked (“productivity hours”).’

That’s not an easy calculation to work with if we’re thinking of redesigning an organisation to increase productivity, the calculation misses some of the complexities of it, which are  illustrated in a post  by Rick, ‘Productivity and Bad Bosses’, and his follow up one ‘Productivity: why worrry?’.  Rick mentions the Mayfield report, How Good is Your Business Really, commissioned by the UK Government.  The report notes that  ‘the UK went from having the fastest growing productivity in the years before the recession to the second slowest growing in the years since’, and says ‘We need more of our businesses learning from our high performing frontiers in the UK, thinking afresh about what they can do to make workplaces more competitive, more innovative, more high-tech and smarter, with workforces that are more motivated and ultimately more productive. A key question, then is how to create the conditions for this to happen to transform business performance in scale and, in what areas do we need to focus?’

Good organisation design is not mentioned as one of the transformation conditions, but developing management capability is.  The report notes that ‘Evidence from the World Management Survey shows that managers’ intuitive evaluations of their own business practice are often wide of the mark’ – they have a blind spot.  This is picked up in a speech by Andy Haldane, Chief Economist, Bank of England, who says that ‘not only is there a long tail of [of low-productivity non-frontier] companies, but that many are unaware of that fact. For the same reason most car-owners believe they are above-average drivers, most companies might well believe they have above-average levels of productivity.  In fact, we know most companies have below-average levels of productivity and a large fraction of them have seen no productivity improvement for several decades.’

But some companies do measure productivity. The third concept ‘value’ came up when we were discussing employee engagement and voice.  Someone mentioned an article about Amazon where reportedly ‘fulfillment center workers face strenuous conditions: workers are pressed to “make rate,” with some packing hundreds of boxes per hour, and losing their job if they don’t move fast enough. … productivity firings are far more common than outsiders realize. … Critics see the system as a machine that only sees numbers, not people.’   We wondered if Amazon, in its drive for productivity, has a blind spot around the value of people. See also the 996 organizations that appear to value productivity over human value – is this ethical? What blindspots are in that equation?

We debated how to balance the Amazon-type tension between productivity and human value moving on to discuss what constitutes organisational ‘value’ anyway.  If we are thinking that value is about productivity – what is the ‘product’?  There are endless papers and arguments about this.  The World Economic Forum offers five measures that are better than GDP (the standard measure of productivity) and veers into value territory: Good jobs, well-being, environment, fairness, health.   While the Bank of England’s definition of GDP  makes the point that ‘some things have a lot of value but are not captured in GDP because no money changes hands. Caring for an elderly relative would be one example of this. As Einstein once said, “Not all that can be counted counts”.

Others link productivity (doing more with the same) with efficiency (doing the same with less). For example, The Economist makes the point that ‘A better measure [for productivity growth] is multi-factor productivity (also called total factor productivity) which tries to capture the efficiency with which inputs of capital as well as labour are used. If workers are given better machines and equipment, this will automatically boost output per man-hour, even if there is no gain in overall economic efficiency once the extra capital spending is taken into account.’

Roger Martin picks up some of this in an HBR article The High Price of Efficiency.   He says ‘Smith, Ricardo, Taylor, and Deming together turned management into a science whose objective function was the elimination of waste—whether of time, materials, or capital. The belief in the unalloyed virtue of efficiency has never dimmed. … Eliminating waste sounds like a reasonable goal. Why would we not want managers to strive for an ever-more-efficient use of resources? Yet as I will argue, an excessive focus on efficiency can produce startlingly negative effects.’   (Another HBR author argues for productivity over efficiency).

All of this has left me asking whether organisation designers have blindspots around  sufficiently considering and discussing how their designs impact and relate to value and productivity.  I’m wondering if we make assumptions around the concepts and what we’d learn if we opened debate on the topic.  What’s your view on designing for value and productivity, do you think we have blindspots around it?  If so, what are the ethical implications of that? Let me know.

Image: Baseball tee

One thought on “Blindspots, productivity and value”

  1. Wow, that is quite a post Naomi, thanks for sharing. Certainly what we measure and how we measure it is important. I think the WEF AND Bhutan have developed more comprehensive approach to what we pay attention to. Cheers to measuring what we can and appreciating what we can’t, reducing blind spots along the way.

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