- Why Your Organisation Needs to Focus on Productivity
- Organisations Haven't Changed Much, But The Work Has
- Productivity is Far More Complicated Now
- Organisations Haven't Changed Much, But People Have?
- 5 Steps To Getting The Most Out Of Your Workforce
- Case Study
Why your organisation needs to focus on productivity
Let’s go back to the old days when productivity was plain and simple. When businesses were in the business of making as much profit as possible and the more widgets workers made and sold within as short a time as possible the better. Then, the formula for productivity involved taking the average output of the production line and dividing it by the total costs (input) and coming up with a productivity figure. Easy. None of that mucking about with human motivation and workforce woes. It was all about getting the maximum number of widgets out to the waiting market in the shortest possible time. If your worker didn’t do that they didn’t work and then they didn’t eat. Motivation enough for anyone. Fast forward to now and it looks a whole lot different. Now it is increasingly being looked at as overall human capital productivity. It has become the assessment of human and business efficiency – and, in particular, the focus is on workforce productivity.
Organisations Haven’t Changed Much, But The Work Has
Organisations still want to make profits and for that they still need people to be productive. But, add into the mix the fact that now many more jobs are:
- Knowledge based.
- Services provision rather than selling products.
- Done by workers whose mindset is completely different to the old ‘no work = no food’ equation.
- Changed radically by the huge impact of faster, cheaper technology….
And it is like you are not even living on the same planet as before!
Productivity is a far more complicated now
Productivity has become a formula you apply to individuals and teams to measure how well they produce what is necessary. Do they work hard and or smart at their knowledge based tasks? Do they deliver a service powered by a commitment to excellence? Workforce productivity is linked with their performance, which is about how they function as they produce their targets. Due to this link between productivity and performance, Performance Management Systems based on Key Performance Indicators (KPIs) as for each role or team give a good picture of workforce productivity. They cut down on the clutter of all the things that could be measured and just focus on the essentials of each role. The KPIs focus on the tasks and targets that have to happen in order for work to flow throughout the organisation. They make managing the metrics easier because you have a system already in place. Even if you don’t there are some well-developed PMS’s off the shelf. They will need some tweaks but they get you going quite quickly - and you can make them even easier by concentrating only on team metrics. What is clear is that every individual’s and team’s performance must be the best it can be. That means that every manager is faced with the challenge of making this happen and there is a lot more to that than giving people their top three KPI’s and leaving them to it. Your teams must work:
- to deadline
- at a high level of quality.
And for that you DO have to take into account human motivation.
Organisations Haven’t Changed Much, But The People Have
The problem with productivity? People! This is why strong managers shudder at the thought of increasing productivity. They know the metrics of productivity depend a great deal on human motivation. It can be like herding cats trying to get a team of individuals to do the right thing at the right time to hit the targets and deliver the company’s objectives. Multiply that many times by the number of teams, departments and objectives any organisation has and the cat analogy goes crazy. It’s no wonder many executive teams just give up assessing productivity at anything other than the highest level of a company (such as earnings per share) or using an off the shelf Performance Management System. Sometimes they just blindly hope that a lucky combination of the HR department, a new Flexi working protocol, a new, hot consultant and the correct alignment of the Sun with Jupiter will do the job. Well, there is good news and bad news. The bad is that the lucky combination will never happen! The good is that there are a number of ways to get improved productivity in the workforce as long as these are integrated with one another. It is not going to work if sticky plaster solutions are stuck on haphazardly. This needs an integrated, personalised approach which will deliver improved productivity. You need to be measuring one or more of the following:
- Tasks completed – or not. For example, sales converted. Upsells made.
- Activities completed – or not. For example, number of calls made.
- Service supplied – or not. For example, customer feedback.
- Sales achieved – or not. For example, number of new customers.
- Team effectiveness ratio. For example, how much total gross profit gets made for every dollar spent on salaries. Keeping an eye on the money!
This last is a very simple metric and is growing in popularity because it is so simple. In the spirit of ‘integrated and personalised’ being the best combination it works well alongside a good Performance Management System. It is a quick, easy metric to give as a one-liner to the exec team or Board. You will notice that some of the above are quantifiable (number of new customers) and some are qualitative (customer feedback). Using no more than 3-5 metrics and having a mixture of quantitative and qualitative measures works well. Not too much data. However the key to success is in the Integration: Everything you are measuring and tracking MUST be linked to the company Objectives. More on this below in the 5 steps.
5 Steps To Getting The Most Out Of Your Workforce
This is where things start coming together. How do you get the most out of each individual, team, manager so that there is a critical mass of improvement moving all your company’s high level metrics, like the EPS, sales revenue or ROI into a healthy upward trend?
Step 1. Understanding your changed workforce
It’s all about that mindset we discussed earlier. These statistics reflect the global changes in mindset dramatically. And they are the result of having a workforce made up of different age groups, each of which wants different things and each of which has a different work history with employers. Take a look around you. Look at who is working with you. You are likely to have some old late-Boomers, more Generation X'ers, some Generation Y’ers and an increasing number of Millennials. These folk want independence, freedom and opportunities to make a difference socially respectively. In other words each age group, roughly, is motivated by something different. Acknowledging their needs and expectations is a ‘must have’ these days. As you see, there is too much competition from your competitors already to not serve your internal customers. Along with harnessing the capability of new cheap technology, some good solutions are very possible. Think telecommuting and Flex programs, onsite health support. These things make life easier for the production or front line customer facing staff.
Stop worrying about time spent by the workforce on the job
Start giving them the freedom of how, and where, they do it and your Boomers, Generation X’ers and Y’ers will appreciate it. They want to work from home, spend time with their children, have the freedom to be creative and make their own structure, have a laptop lifestyle and not spend hours commuting. They will stay on task longer and more efficiently than if they’d battled through the rush hour to sit at their desk, resenting every moment of the experience – and therefore hating the company that requires them to do this! Millennials, who will become a bigger part of your workforce over the next few years are different again. In their daydreams they are valuing independence too but they are social beings who like communicating. They also are a generation who care. They want to make a difference to the planet or see social impact positively changing the lives of groups of vulnerable people as a result of their work. Millennials want to serve overseas or be proud that their company contributes to the quality of life of some poor child in Africa. They want to be part of something bigger. Today’s millennials are ready and willing to work in teams and are so tech savvy they can do that remotely, keeping in continuous contact via social media. They are used to that. They are doing it anyway – harness it! Your organisation has to change. It is no longer enough to be concerned with profits and shareholder wealth. The added value that organisations need to be thinking about now lies in Corporate Social Responsibility programmes and engaging the loyalty of their internal customers – their workforce!
Step 2. Work with social media, not against it.
In a culture where 70% of a workforce are there in body, but not in spirit, productivity is bound to take a dive. Given that 70% of the costs in a company are workforce related the waste of salaries, time and talent is scary for any CEO. This is fuelling yet more change in organisations as companies try to fix this problem. There are different levels at which change can be made; from a full scale change program to a smaller change in communication channels. Before we look at some of the big change program solutions to productivity here is a smaller scale intervention. Social media is here to stay and, yes, it does cause enormous distraction to work time. It’s a large part of the reason why 70% of your workforce is largely disengaged with their work. 70% of your people are present, but absent. So much to distract them, so little expectation of staying in one job for long, so many different aspirations means that they are daydreaming their time away. By the way, 30% of that 70% are actively sabotaging others at the coffee station by taking up their time; tattling and complaining. This is another good reason to get the folk out of the office as well as meeting their needs for freedom and independence. . Use Social Media as an effective communications tool for check in’s and catch ups about work. Collect updates at the end of the day and use easy tools such as ‘IDoneThis’ software to amalgamate the feedback and send a round up to everyone on the team via social media. This is far better than desperately trying to monitor their time spent on Facebook and getting frustrated and resentful at the waste of it all.
Step 3 - Get Clarity
Clarity helps human beings relax and with that comes more creativity, more energy – and more engagement: And much greater productivity. This clarity helps at many levels and is the third step for getting the best out of your workforce. We are talking about clarity concerning:
- The company’s objectives.
- The job description.
- The expectations.
When asked only 40% of the workforce sampled knew what their company’s objectives were. It is very hard to get engaged with your job when you don’t know how what you do fits into the whole. What about you as you read this - do you know how your work makes the whole company flow and bring in profit? There needs to be a direct link between what the company is trying to achieve and what any person or team is engaged I doing at any time. And for that everyone needs a good job description. So much of getting the best out of the workforce comes down to working with psychology. Human beings, of every generation, like a degree of certainty and they get that through knowing what is expected of them. If they know these things they have more control over how they get rewarded – and how they avoid punishments or criticisms. Also a highly motivating feature for some. Check out your job descriptions and find out what your people think of them. Are they helpful? Do they guide appraisals? Do they make sense or has the job changed?
Step 4 - Get even more clarity
Today in the workforce it’s not about time spent on the job, it’s about delivering the deliverables. These are the deliverables that will push the company forward by building their reputation and their profits because they will give results. Anything that is being produced that doesn’t tick either, or both, of those boxes should be scrapped. The deliverables are:
- The tasks.
- The targets/results.
- The activities.
- The deadlines.
If the objectives of the company are known, communicated and shared every department will have sets of targets to meet which are completely focused on the company aims. If the department has a set of targets to meet then it becomes much easier to spell out what each individual or team needs to do, reach and deliver. This gives more detail than a KPI which only shows if someone is performing below, as expected, or beyond the norm in that role. In order to consistently produce more than the norm they need to have that good job description and complete clarity about what their targets are. That’s the way they can produce the results. Employed staff’s performance and productivity is best tracked by targets reached or exceeded and linked to the Performance Management System. It is a little different for the next step.
Step 5. Increasing productivity by using external talent.
In an ideal world all managers would be great communicators, good at understanding different psyches and needs and inspirational in their leadership so that they would motivate and engage their people every day. On site or off site. In the real world managers are people too and they are not always at that level of performance themselves. They can be as disengaged, distracted and as ready to jump ship as the rest of the workforce. For many reasons companies have had to pare right down to be lean, mean machines, dumping buildings, capital equipment and people on their way to survival in a world economy gone mad. This has fitted well with the changes in work habits such as telecommuting, flexitime and hot-desking. It also fits well with the more recent focus on deliverables and results as measures of productivity instead of using what is accomplished in the 8 hour day as the only gauge.
With this has come another solution to getting the most out of your workforce which is an explosion in the use of ‘Just in Time Talent’. In the same way that Just in Time purchasing changed inventory control and Just in time training gave a far better ROI than a training calendar of events. External (or Just in Time) Talent is changing the workforce requirements of companies. Freelancers, contractors and temporary contract workers need to know the parameters of their project just as much as an employee needs to know the expectations of the company about what they should deliver and when. The beauty with the freelancer is that they deliver what the company requires and leave! No more costs. Contractors, freelancers and temporary project contracts are being used by the vast majority of companies now and this is set to grow even more. People like this arrangement as it gives much more freedom to the talent and allows companies to draw from a worldwide talent pool. It also makes productivity easier as it is project based for external talent. There is a clear result the company needs to have delivered and this makes tracking productivity simple. Did it happen, when it was supposed to happen – or not? Onboarding external talent quickly is important and the clarity gained from the objectives and targets above make it simple to set out the projects and create meaningful metrics to track progress along the way. They work alongside the employed staff, usually virtually, and their productivity is easily tracked on a project management system where deadlines become the deliverables.
To get meaningful metrics set up a process is needed that:
- Is integrated with performance management and/or any other change program such as a Result Only Work Environment.
- Is personalised as much as possible
- Has clear and communicated company objectives
- Has clear and communicated department objectives and targets
- Has clear team and individual job descriptions, targets and tasks
- Uses project based contracts for external talent
To give you some encouragement to do these things a study by Global Workplace Analytics showed that the implementation of a Results Only Work Environment Change initiative had a significant impact. To make Productivity Metrics meaningful you need to consider a change program and the type of change you bring in will depend on what objectives you want to focus on long term and short term – and what information you need to know that everything is on track. Link this with managers who work well in a ‘No surprises’ environment. (This is where the workforce is trusted and management stops micromanaging time.) Managers move to supporting the completion of tasks, activities and projects:
- Through using technology to track timelines and communicate.
- Through using their relationship skills to engage loyalty and interest.
- Through using their problem solving skills to ‘get boulders out of the way’ for their people.
- Through using outcomes/results as the focus and holding everyone accountable.
- Through using company objectives as the guide for action and giving everyone clear goals whilst providing the tools and training to help everyone achieve.
- By 'baselining' at the start so trends are obvious.
A Case Study In Productivity
A medium sized food manufacturer in a rural area started to recognise that all was not well with their productivity. They had some ideas about why this was the case.
- These included the poor quality local labour pool.
- A worker mindset that was fixed on ‘let me work as little as possible for as much money as possible’. (In this they certainly reflected the international picture of ‘presenteeism’)
- Constant delays caused by communication breaking down because of cultural misunderstandings
Clearly it was time to go back to the drawing board! A quick survey showed that well over 50% of the workforce were not aware of the company’s mission, value or objectives. This company began at executive level and revisited their ‘mission statement’ with a blank sheet of paper. From that they found that in fact they were committed to a triple bottom line approach. There were things in each category of profit making, people and planet they wanted to achieve and those things became their company objectives. The first framework ended up looking like this. They began to fill it in and this is an early draft. After they worked out what the department should be delivering it got easier to work out what each team or individual needed to be doing (activities, tasks or projects) and/or what targets they need to reach in order to do their part in the whole. Heads of department began to work out their objectives and targets based on the key objectives of the company looking at both long term and short term objectives. Here is an early draft of the HR Department framework that was filled in at the time All of this took time and two years down the line the effort is paying off. As a processing business working from home was not an option for production teams but more flexible working hours and a shift option plus a Health Clinic coming on site once per week helped workers have more choice. It also helped them have less time away from work waiting in doctor’s surgeries. Productivity has improved as seen by:
- Reduced number of delays due to communication channels breaking down and less union action.
- Employees staying in jobs longer and engaging better with their tasks, teams and KPI’s. (Using tasks, activities and deadlines as metrics made sense to people once they saw how their part related to the whole).
- Project based work increasing with external providers becoming the norm in every department.
- Engagement with the Facebook page for the company as the Social Club posts updates shows a growing pride in the company.
The Finishing Touches for Integration and Personalising in the case study company Once clarity had been established at most levels the PMS was expanded by:
- Including regular appraisals and feedback on team performance at production level.
- Including appraisals at individual level for middle management upwards.
- More visuals were used around the company building, and online on the Facebook page, showing movement towards big company targets. These were updated weekly or monthly by the Social Committee.
- A monthly competition was introduced to reward the winning team where everyone exceeded production targets and had the lowest number of rejects or re-writes.
It’s Time For Technology What tools are useful? This can differ according to the size of the company and their department objectives but managers are reporting that they like:
- Asana and Basecamp for project management
- They also like Producteev and Atlassian for Team management
- Idonethis works well for communications and touching base at the beginning or end of the day
- Expert360 for managing and hiring external talent
Individuals can be helped with a tool for managing their ‘to do list’ such as:
- Using an electronic calendar with alarms and reminders: (Outlook or Google)
- Having an email inbox cleaner/organiser (which are often part of the company task organiser) or having their own. Good ones are Mailstrom and Sanebox which help clear that inbox of ancient history in a click or two. Sanebox also offers a snooze feature which allows the non-essential, but interesting, emails to snooze on for now and pop back up at a better time.
- Followup is a great tool for reminding the sales department about follow up calls, leads and enquiries.
Remember this is all a process. It is not a one shot activity. Think about your objectives, work out what gives you the best prediction of how productivity is going right now and how it might rise or fall in the future - and look at the systems you already have in place. That is enough to get you started on the road to meaningful metrics and improving productivity!