Measure productivity in a way that makes sense

In today’s fast-paced world, everything is for yesterday. All the hints that we get say that we’re behind, that we’re late, that we fall short. And we crave being more productive, getting more done for less money and in less time. Hoping that we’ll catch up, that we’ll win, maybe.

I often think about my own productivity, as well as that of teams and organizations. About to measure it and how to improve it.

Productivity measurement is useful but flawed

whatProductivityProductivity is classically defined as the ratio between output and input, where input is labor or capital and output is the object being produced. According to the OCDE, it measures how efficiently inputs are being used to produce a specific output.

At the macro-level, it is used to forecast economic growth and inform policies. At the organization and individual level, productivity measurement can help identify trends, forecast progress and analyze the impact of organizational changes.

However, the power of productivity metrics is often overestimated, especially when they are used to judge individual performance, establish comparisons and justify bonuses. Focusing too much on them can actually backfire.

“The measurement of productivity on a time/task basis is a 19th century obsession carried into the 21st century.” Forbes, Liz Ryan

I see two main risks to consider when measuring productivity:

  1. It is not completely accurate, so it should not be taken as an absolute truth
  2. It can become a distraction if it takes too much of a protagonist role

It is not 100% accurate

In the context of a factory, where work is mechanical and people are understood to be interchangeable, measuring productivity is pretty straightforward: technical upgrades or persuading people to work harder is all there is to efficiency. But nowadays, for an increasing number of organizations, what to measure and how to improve is blurry at best.

In terms of input, narrowly focusing on hours worked per person to deliver specific tasks fails to take into account the power of collaboration. Dynamics between people in a team are so important that we can no longer expect productivity to be stable and output to linearly multiply as teams grow and change. For example, it might be that adding an extra person to a team reduces the average productivity, not because of that particular person but because the size of the team makes communication harder. Similarly, the more collaboration there is between teams, the more difficult it is to track the direct impact of one individual on the final product.

Measuring output is also complex. The less repetitive tasks are, the less we can focus on the amount of output and the more we need to be looking at the value generated by this output. In many software development products, for example, we measure the value created in the form of engagement and usage of a product rather than the amount of features shipped per developer.

Focusing on measuring value is even more important for businesses that are committed to doing social good. Beyond financial and usage metrics, these organizations will also need to look at the impact of their activities on a sector and on people’s lives with other metrics such as percentage of government data accessible through APIs (transparency) or the gender pay gap (gender equality). As more consumers and organizations care about the social impact of their purchases and activities, the “output” is increasingly multifaceted.

It can be a distraction

The reason to measure productivity is ultimately to become more productive. What matters the most is not the exact truth of the number, but the story behind it and its ability to impact behavior.

“When deciding whether you need greater measurement precision, ask first whether greater precision will make a real difference in subsequent actions to improve productivity.” Harvard Business Review, W.Bruce Chew 

We all want to be productive, but the mere number associated to our productivity and the pressure to improve it, is a weak driver to make anyone work harder or better. Focusing too much on it can even come in the way of being productive.

When measuring productivity is understood as a form of control and focused on individuals rather than teams, it will

  1. demotivate people, giving the impression that they’re just considered labor units
  2. discourage people from spending time helping others or thinking about new ideas

If creativity and collaboration matter a lot to your business, you should find a way to frame and use productivity metrics that encourages this behavior.

Focus on the learning opportunity

Despite all its shortcomings, paying attention and measuring productivity is still useful, if done in a way that makes sense for your organization.

First, we can look at productivity metrics that are clearly quantifiable as long as we understand that they are only a part of the story. We can use them to understand general trends and to test ideas for improvement. For example, we can look at things like the amount of people working on a product at the same time, the technologies used, time spent in meetings, financial metrics, value related metrics such as usage, among others.

Second, we can use productivity metrics to empower the team rather than controlling individuals. If we see one of the metrics we monitor on a worrying path, we can engage the team in a conversation to understand why it is happening and to collectively come up with ideas to change the negative trend. Having the team own it is likely to be more successful than blindly pressuring people to deliver a certain number.

Third, we can look not only at the problems but also at the spikes of productivity. These are a wonderful occasion to learn about what makes a team work better.  It could be something as simple as less meetings, good mood or good communication. The challenge will then be to amplify the effect of these positive elements that you have identified.

The key in making productivity measurement useful is in moving away from a control paradigm and into a collective learning paradigm. We can be more productive. But it will not come from fear or from a monetary incentive. It will come from learning about our mistakes and about each other. From being open about our hassles, as individuals and as a team, and from being committed to continuous improvement.



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