Thursday, 27 July 2017IMS HomepageHome

Productivity in a Connected World

As part of their planning and preparation for the next world Productivity congress (Hong Kong/China, November 2001) the World Confederation of Productivity Science recently held a 'think tank' session in Boston, USA.

Participants were senior members of the WCPS and a group representing the Hong Kong/China hosts of the Congress. However, importantly there was a small number of 'external' facilitators/catalysts, there to make sure that, in drawing up the draft programme, we addressed current productivity issues, and issues of interest and concern to potential delegates.

The meeting was held in the Ernst & Young Center for Business Innovation, which provides 'think tank' facilities for the consultancy. One of the facilitators was Chris Meyer, the Director of the Center and the co-author of the recent book 'Blur' and the just-about-to-be-published 'Future Wealth'. He was joined by Alan Grant, of a Boston consultancy Exchange Partners and also by John Jordan, another member of the Center for Business Innovation. Rather than discuss the (less interesting) planning arrangements for the Congress, this article concentrates on the views that emerged from the session on the changing world in which we live and its impact on current and emerging productivity trends. The result is my synthesis of the various views put forward and includes thoughts, material and issues raised by both the facilitators and the rest of the members of the meeting. I have not tried to construct a balanced article, merely to reflect the spread of the discussion - this itself shows the changing nature of the environment, and signals the kinds of issues we, as a profession, must address. Each point is made briefly - it is up to you to give it some more thought and develop policy/action around it!

The Information Age

Chris Meyer started by describing a discontinuity in economic development - the shift from the industrial age to the information age. He did this by drawing the life cycle of each of these ages (see Fig 1) and using this to suggest that we are currently at a point where the industrial age is reaching its plateau of maturity, but that the information age is at a period of maximum growth and development.

Figure 1This leads to emerging new forms of business and business organisation. These new forms can lead to a significant change in performance but require new performance measures. As yet we do not have appropriate yardsticks for these new forms. For example, Chris suggested that a measure of innovation might be the percentage of company revenue that arises from products less than one year old - but is this an adequate measure?

Value perception

The changing nature of products, and the increasing sophistication of customers, means that concepts of value are changing. The value of a product now often lies in less tangible attributes. For example, a buyer of a new car may particularly value the keyless entry, the traction control, the in-car navigation system, etc. The value of these intangibles is subjective but can be very high - in terms of shaping the 'buy decision'.

An alternative (though not new) view of value suggested was based on scarcity and availability. When what was once scarce becomes plentiful (e.g. network bandwidth) or what was once plentiful becomes scarce (skilled labour), organisations are slow to respond. For far too long, they act as if the former situation still applies, then they are often forced to over-compensate and over-react because of the delay in adapting.

Talent is now scarce and therefore expensive. Law firms in the USA are paying recent graduates salaries that are higher than those earned by state attorneys-general.

New forms of business

An example of a new (though actually very old) form of business is barter. If Yahoo and The Economist do a deal on providing content from The Economist on the Yahoo portal website, no money may change hands - Yahoo gains content (and readers more likely to stay with the website and read the associated advertising): The Economist gains exposure and (hopefully) more subscribers.

Such transactions would not figure in current productivity models - yet obviously consume inputs in the creation of value. Such transactions also may not enter the taxation system - this may be very attractive for the parties involved in the transaction, but of considerable concern to governments.

The dotcom (.com) phenomenon created some discussion. These startups have to prove their longevity by evolving into real dotcompanies. Similarly, established organisations have to embrace the technology, and the culture, of the internet and move their established companies to being dotcompanies. The two must learn from each other and form true, new (or at least effective hybrid) organisations.

Developing and rewarding talent

Over the last few decades the issue of job satisfaction has been raised several times - though many organisations have paid lip-service to enhancing it. Yet in a time of increasing competition for skilled labour and real talent, keeping employees satisfied, and developing, becomes very important. Also, perhaps luckily, in an economy that is getting richer and increasingly sophisticated, more people end up doing jobs they like (most of the really dangerous and unpleasant jobs have gone - or have been 'exported' to other parts of the world) and are working harder and over longer hours.

Organisations have to create value both with, and for, their employees. In a fast-changing world, long-range plans become out-of-date all too quickly. An individual assigne