Unlocking Workplace Productivity: Understanding and Overcoming the Productivity Paradox

Productivity is defined by the Bureau of Labor Statistics as the value of goods manufactured divided by the amount of labor input. “Productivity” is the same as a measure of manufacturing employees’ performance. And while this equation seems simple enough on the surface, the strategies for optimizing it have evolved dramatically over the last two decades. 

Today we see everything from books to podcasts to whole research papers dedicated to decoding the mystery of productivity. We hear stories about Elon Musk planning his days in five-minute increments, Tim Cook getting up at 3:45 a.m., and Tony Robbins plunging into ice water every morning.  Then there is the marvel of modern-day technology that has enabled massive personal productivity gains — computers, spreadsheets, email, and other advances have made it possible for a knowledge worker to seemingly produce more in a day than was previously possible in a year. (Read our article on that here: Link) It’s tempting to conclude that, if individuals are able to perform their work much better and faster, overall productivity must be soaring.

But what if we tell you that at the heart of productivity lies a paradox?

What is the Productivity Paradox?

The Productivity Paradox, also known as the Solow paradox, is the observation that productivity growth has not kept pace with the expansion of information and communication technologies.

Robert Solow, a Nobel Prize-winning economist, coined the term “slow stagnation” to describe the phenomena he identified in which significant and widespread technological improvement has not resulted in a matching gain in general worker productivity.

When information technology advanced dramatically in the late 1980s, the “productivity paradox” became apparent for the first time. Is there anything fresh to report on this front today? It remains an issue of great interest to corporate leaders and a persistent stumbling block to expansion.

The productivity paradox stems from the discrepancy between the rate of technological advancement and the effect it has had on GDP growth.

Consider the impact that utilizing productivity software to monitor productivity has on your work output. Exactly.

You’re on the money if you don’t know the answer. The use of technology is not always simple. It needs regular tweaking.

What is Workplace Productivity?

The productivity paradox, also referred to as the Solow paradox, could refer either to the slowdown in productivity growth in the United States in the 1970s and 1980s despite rapid development in the field of information technology (IT) over the same period, or to the slowdown in productivity growth in the United States and Developed World from the 2000s to modern-day 2020s; sometimes the newer slowdown is referred to as the productivity slowdown, the productivity puzzle, or the productivity paradox 2.0.

Yet today when you visit any company you see so much energetic attention to productivity starting from the top and ricocheting all the way through organizations it’s insane. This is American hustle and determination at its best. Productivity committees, productivity czars, productivity seminars, and productivity campaigns abound.

But not only is the productivity approach to manufacturing management not enough (companies cannot cut costs deeply enough to restore competitive vitality); it actually hurts as much as it helps. It is an instinctive response that absorbs managers’ minds and diverts them from more effective manufacturing approaches.

Production experience regularly observes a “40 40 20” rule. Roughly 40% of any manufacturing-based competitive advantage derives from long-term changes in manufacturing structure (decisions, for example, concerning the number, size, location, and capacity of facilities) and basic approaches in materials and workforce management. Another 40% comes from major changes in equipment and process technology. The final 20%—no more—rests on conventional approaches to productivity improvement.

What this rule says is that the least powerful way to bolster competitive advantage is to focus on conventional productivity and cost-cutting approaches. Far more powerful change in manufacturing structure and technology. The rule does not, of course, say “Don’t try to improve productivity.” These well-known tools are easy to use and do help to remove unnecessary fat. But they quickly reach the limits of what they can contribute. Productivity is the wrong tree to bark up.

So what can you do as an individual and as a company to break from this paradox?

Recognizing that the approach to productivity is not efficient 🎯

This recognition allowed managers to seek strategic objectives for manufacturing other than those determined primarily by cost.

About 12 years ago, a key division of American Standard adopted a “become the low-cost producer” strategy. Its productivity-driven focus did little to reduce costs but had an immediate negative effect on quality, delivery, and market share. What Standard needed was a totally new manufacturing strategy—one that allowed different areas of the factory to specialize in different markets and quality levels. When this approach replaced the low-cost strategy, the division regained its strong competitive position within three years.

Accepting the fact that manufacturing needs to be run differently. 🏢

In the mid-1970s officers of the Copeland Corporation, a large producer of refrigeration compressors, decided that their industry was fast becoming mature. An analysis of their nearly obsolete production facilities and equipment made it clear that manufacturing had become a corporate millstone. Without a major change in the number, size, location, and focus of these facilities, long-term survival would be impossible. Copeland made these changes. The results (described later) were remarkable.

Developing and implementing a manufacturing strategy. 📏

When production managers actively seek to understand (and, in some cases, to help develop) the competitive strategy of relevant business units, they are better able to work out the objectives for their own function that will turn it into a competitive weapon. The requirements of such a manufacturing strategy will then determine needed changes in the manufacturing system’s structure and infrastructure.

Adopting new process technology. 👩‍💻

Changes in equipment and process technology are powerful engines of change. Bringing such technology online helps force adjustments in workflow, key skills, and information systems as well as in systems for inventory control, materials management, and human resource management. There are a few more effective means of loosening up old ways of organizing production.

One of the easiest ways to adopt new technologies is by involving everyone in the change. Tackle provides the best team collaboration tools in the market. Measure and track your company’s meeting health with meaningful analytics. Tackle gives you the numbers to optimize for (like Meeting Fatigue Score or Deep Work Score). Track and compare your progress over time across different teams.

To know more about Tackle and how it can help you boost productivity, click here.

Making major changes in the selection, development, assignments, and reward systems for manufacturing managers. 💵

The successful companies I looked at decided they needed a new breed of production leader—managers able to focus on a wider set of objectives than efficiency and cost. It was, however, no simple matter to find or train this new breed.

Some, in fact, turned up in unexpected places: marketing, sales, engineering, research, general management. As a group, they were good team builders and problem solvers and had broad enough experience to hold their own in top corporate councils. Their companies considered them among the most promising, high-potential “comers” for future leadership at the highest levels.

Don’t just offer a wellness program, truly customize it. 😊

Sixty-two percent of respondents to the Workplace Index said the availability of a wellness program is a selling point. But not all programs are created equal.

Poll your staff and understand their goals. While installing an onsite gym may seem like the obvious answer, smaller changes, like the availability of fresh foods, can have a great effect on the office. According to Ringel, better health behaviors increase the mental, emotional, and physical health of workers and generate more effective and valuable employee performance.

Eliminate distractions with smart office design. 🎭

Workplace distractions can get in the way of employees doing their best work. Respondents cited noise from co-workers as their top distractor for the second year in a row. Employers should offer a variety of workspaces conducive to different types of work, including private, quiet spaces for focus and larger areas for collaboration and group discussion.

Provide employees with the technology they need to do their jobs. 👷‍♀️

Even productive employees believe that the right tools and technology can help offices to become more efficient. Three out of four respondents said their employers do not give them access to the latest technology that would help them do their job more efficiently. This could be a wearable device, smartphone, or technology that enables them to telecommute or recapture lost time in airports or hotel rooms.

Offer office perks and encourage breaks. 🥓

Employers should create a culture that encourages short breaks throughout the day and office gatherings to disconnect. Seventy-eight percent of employees said they feel more productive after a break. The overbearing problem is that workers are reluctant to take breaks because of guilt. That’s why, when asked for solutions to burnout, over half of the employees surveyed said they wished breaks were actively encouraged.

Recognize employees and help them be heard. 👨‍⚖️

According to Ringel, the survey found that employees want recognition for their work, which can improve office morale. Recognition can re-energize employees, boost confidence, and improve motivation and productivity. Employers should also create an open-door environment where employees can speak their minds and be heard. People feel good when they are acknowledged and valued and will, in turn, work harder to reach company goals.

Summary

To be clear, personal productivity is frequently a worthwhile goal. However, leaders must shift their focus away from an individual — and even team — productivity. It’s time to adopt an organizational attitude and set of technologies that can provide complete insight into what work is actually being done in aggregate, and where it does (or does not) create value, however, you define it.

The ultimate — albeit difficult-to-achieve — the goal is to create a huge organization in which all knowledge workers have complete context, tools, and support to focus their time on the business’s most important value drivers without being slowed down by overhead and bureaucracy. This is exciting not just because of the actual productivity increases that will be realized at the organizational level, but also because each individual will finally have a clear understanding of what matters and how to succeed. When individual productivity increases add up to corporate productivity benefits, a corporation will know they’ve arrived at this point.