Issue #84
#84 - Work More, Produce Less! The Curious Case Of Falling Productivity 🕵️‍♂️
September 22, 2023

#84 - Work More, Produce Less! The Curious Case Of Falling Productivity 🕵️‍♂️

Fix the inputs and the outputs will fix themselves. - James Clear, Atomic Habits

Many of the companies Usman and I get to work with suffer from a lack of a well-defined culture. They lack a set of codified values and behaviors, and this, in turn, impacts their ability to hire well, but also to manage, inspire, and motivate their teams.

Some of these orgs are simply young: they're startups that haven't gotten around to it, and rely on culture to spread osmotically, the way it did in the early stages of few employees. Other firms are more mature; they may have defined something before, but it's been a while and the company has evolved; and/or the team now works more remotely, so a lack of clarity on who they are, how they operate, and what they value and reward is exacting more of a toll.

So one of the exercises we run involves mining the histories of where leaders have worked (and studied, and played) in the past. Where and why did work almost not feel like work? Which settings energized them? What types of leaders, managers, or advisors did they flourish with?

The goal is to understand the styles that resonate and environments they enjoy; to ID the traits those environments have in common. From there, we can discern values and behaviors, and then set about tying those to performance, compensation, and promotion. 🙌🏻

It's nuanced, rewarding work! But it's also easy to forget how simple and intuitive the goal is: an environment in which leaders and their teams can produce, and thrive. Clarity, for everyone, as to what it means to thrive in that environment, and how you'll be rewarded if you do.

Ultimately, we all want to thrive, right? As team members, we want an environment in which we feel included, challenged, and impactful. And as employers, we're keen to ensure our teams produce!

But here's the thing, folks: our collective productivity is down right now. As in, the amount of work we're getting done in our jobs is falling. Not just falling, but plummeting, and without much end -- or explanation -- in sight. MSNBC explains:

Worker productivity is falling at the fastest rate in four decades. This has been the first year since 1983 to include three straight quarters of year-over-year drops in average productivity per worker, ADP chief economist Nela Richardson said.

Simply put: people are working more but producing less.

A statement like that gets a big TalentStories "hmm" 🤔 emoji. Three of them, this time: 🤔 🤔 🤔

And it prompts us to ask: why? How can it be that we feel like we're working more than ever, if we're producing less?

Last week, we looked at personal productivity, and whether we were measuring the right aspects of our lives and our work. We explored how mindsets were shifting from an external "getting things done", to an internal: "Am I working on the right things?".

This week, we question productivity again, but this time at the org level. And again we explore: are we measuring the right stuff? Do we need a shift in corporate mindset? We dig into three arguments as to why productivity is falling to shed light on what employees achieve -- and how we achieve it:

🎯 Story #1 - Management guru Peter Drucker said, "What gets measured gets managed." So what are we measuring -- and managing -- when it comes to productivity? A timely article points out that measuring the inputs to our work, instead of actual output, is inherently flawed in 2023. Even as it reminds us that we stubbornly focus on those inputs. 😔

🎯 Story #2 - A new book by an operations professor at MIT argues that productivity is falling because employee turnover is so high. It's a simple and intuitive narrative supported by reams of data. Oh, and you'll never guess what the #1 cause of employee turnover is. Oh, wait, you did guess it: it's (still) your boss. ⬇️

🎯 Story #3 - A behavioral scientist makes an impassioned case that the key driver of productivity is classic, time-honored trust. How and why do trust -- and its partners-in-crime, flexibility and autonomy -- lead to such productive teams and organizations? Get that right here, from our last Story. 🙌

Thanks for reading and exploring with us -- and have a great end to your week!

Aki + Usman


#Productivity #Measurement #InputsVsOutput

When I left Netflix to start TalentStories, a good friend -- someone who held corporate jobs before starting his own company -- asked me: "Don't you love all the time and energy you get back now, as an entrepreneur on your own, that used to go into politics and posturing and personalities?"

To be honest, I hadn't thought of it in those terms at that point. I think I just got lucky: the firms I worked for were small in the years I worked for them, and were "fast-moving" tech companies, so I never felt clobbered by bureaucracy and politics.

Even then, I could appreciate how spot-on my friend was: work is highly performative. What we do, what we say, how we say it; when we show up, how we show up -- a lot of energy goes into all of it. Our meetings, Zoom calls, email, Slack messages -- you name it. His question struck a chord, and I thought of it again when I read an article called "Your boss is so obsessed with productivity without knowing what it means", which I suspect will resonate with many:

Some 71 percent of business leaders say they’re under immense pressure to squeeze more productivity out of their workers, according to a new Slack survey of 18,000 knowledge workers, including managers. But most are measuring what workers put in, rather than what they put out. In turn, workers say they’re spending a third of their time “performing” work — that is, making an effort to look like they’re working rather than actually working. That includes focusing on supposed productivity signals, like speaking up in work threads regularly and responding to emails more quickly than necessary, even after hours.

One would think that a given company would have a better idea of its own productivity, but that isn’t necessarily the case. The Slack survey found that 60 percent of executives were tracking activity metrics — things like emails sent or hours worked — as the main way to measure productivity. The problem is that doing so incentivizes things like sending more emails or staying at your desk longer, not [doing better work].

The point of the article is that managers and organizations constantly conflate inputs and effort with output, making the entire productivity debate flawed. (And since so much of the return-to-office argument is predicated on productivity, by the way, this becomes a very relevant and timely observation).

Now, it might strike us as naive for managers to fixate on such a dated definition of productivity, despite working and leading in a knowledge economy. (When hunting for quotes about "inputs and outputs" to kick off this issue, what came up was something James Van Fleet said: "Output always equals input." Curious, and skeptical as to his logic, btw, I Googled James Van Fleet. He was an officer in the U.S. Army -- in World Wars I and II. i.e. a leader who served in an organization defined by command-and-control, nearly 100 years ago.)

The more you think about it though, the more managers' equation of productivity with inputs and physical presence makes sense. In fact, I think bosses know exactly what productivity means; for them, it just happens to mean a performative, grindy version of productivity. You know, the one that made them the boss.

Factor #1 then, in our effort to understand falling productivity, is measurement; how the term "productivity" is being defined -- and who is defining it.


#Productivity #Turnover #BadBosses

Zeynep Ton is a professor at MIT, and an expert in supply chains and operations. No surprise then that studying how companies optimize production led her to investigate how they manage their highest-leverage resource: their people. She wrote a book about it, and uses a ton of data there to argue that:

If you want to understand why productivity is falling, we need to look first at high levels of employee turnover. If we want to solve productivity issues, the first step needs to be to lower the resignation rate.
When people quit their jobs, a period of unproductivity commences: bosses and colleagues need to cover the work of the person leaving, the recruitment process takes unproductive attention, and new starters take months to ramp up. High employee turnover is ruinous for productivity.

It all seems plausible, if not obvious: quit rates are high right now, the labor market is extremely tight, and people are taking longer and longer to opt into new roles. So it follows that turnover could well be one of the factors causing productivity to decline.

And by the way, the leading cause of workers quitting is? Bad bosses, ill-equipped to be able to engage their teams. Let's posit here then that factor #2 in the quest to understand falling productivity is the crippling effect of high turnover -- and the poor management that so often causes it.


#Productivity #Trust #Autonomy #Engagement

Gleb Tsipursky is an author and behavioral scientist, and we dig the clarity and candor of his headline, even if it's a bit click-baity. 👆🏻

Let's close the loop straight away then: what are "the two ways in which we're failing employees"?

  1. Trust: forced return-to-office mandates are eroding trust between employers and employees. And when trust is low, productivity suffers. Whereas high-trust organizations get increased productivity and are more likely to have healthy cultures.
  2. Autonomy: When companies mandate a return to the office, they risk unintentionally removing employees' autonomy. High-performing organizations, on the other hand, offer higher levels of autonomy, which is closely tied to trust, and acts as a "catalyst" or enabler of productivity.

For Tsipurskym productivity comes down to trust, autonomy and flexibility. And while the devil is, always, in their implementation, his article deftly links the three concepts to one another, and to productivity. I highly recommend it, but for those short on time:

Tsipursky brings data to his case, and the data are clear as to the decline in productivity that's plaguing us, on the one hand:

According to a recent report by the Institute for Corporate Productivity (i4cp), worker output in the U.S. has seen its worst drop since 1947, with labor productivity growth at a historically low rate of 1.1% from 2019 to 2023.

And on the other, the data are just as clear on the correlation between productivity and trust:

The i4cp report found a clear correlation between trust and productivity. High-performance organizations prioritize both the "what" and "how" of goal achievement. These organizations understand that empathy and productivity are not mutually exclusive. They cultivate a culture of trust by providing flexibility and considering employees' needs and preferences.

According to the i4cp's Organizational Trust Index®, trust in an organization is composed of five key elements:

* Senior leaders trust employees.
* Managers trust their team members.
* Managers are trusted by their direct reports.
* Employees trust their team members.
* The senior leadership team is trusted by employees.

These elements are like the five fingers on a hand — each one is crucial for the hand to function effectively. And it's not just theory. The presence of these five elements explains an 18% increase in productivity since the start of the pandemic for participating organizations.

[Emphasis added, because 🤯 ]

Tsipursky goes on to explain:

A healthy organizational culture is marked by a strong presence of trust. Those who perceived their organizations to have very healthy cultures reported that they have leaders who lead by example, are held accountable for employee outcomes, regularly communicate values and address poor behavior immediately. So, the writing on the wall is clear. Trust is the secret ingredient in the productivity recipe...[it is] not a nice-to-have; it's a must-have.

And he ends with some fantastic insight on autonomy, and the way it links to trust -- and productivity:

According to the i4cp report, companies with the highest productivity provide the highest levels of autonomy to their individuals and teams. This autonomy is closely tied to trust, and together, they account for a significant proportion of productivity. Specifically, the autonomy of individuals and teams explains 15% of the variability in productivity.
The message is clear: If we want to boost productivity, we need to rethink our approach to the workplace. Autonomy, trust and flexibility should be at the forefront of this transformation.

In the end then, it's very likely that productivity is falling, perhaps even steeply. Let's bear in mind though the extent to which leaders define productivity; how much power we have to influence it; and how much leverage trust, autonomy and flexibility offer us to be able to do that. ✌️

Thanks for reading. 🙏

Work moves pretty fast. If you don't stop and look around once in a while, you could miss it.
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