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Defining productivity – what does productivity mean to you?

Defining productivity | LMA

For as long as most of us can remember, there’s been a concerted push to improve the productivity of our organisations and the people within them. Governments of all persuasions have set in motion initiatives designed to stimulate economy activity, drive productivity and enhance national and organisational balance sheets.

Private enterprise has up-sized, down-sized, right-sized. It has invested in technology, equipment, human capital and all with the notion that productivity is something worth striving for and to deliver upon.

Yet there’s an elephant in the productivity room that needs to be acknowledged – we don’t all share a common definition or understanding of productivity. We’re not all on the same page when it comes to determining what it is we’re seeking to improve.

For some, productivity equals profitability – the bottom line is their best indicator of their productive use of resources. For others it means getting more output in the same time or for the same cost.

The range of definitions used by leaders, managers and employees in the latest Leadership, Employment and Direction (L.E.A.D.) Survey provides a clear paradox – how can we measure and improve something that is so inconsistently understood or defined as productivity is currently?

  1. There are lots of ways to define and measure productivity in organisations. Which ONE of the following definitions comes closest to how productivity is defined/ measured in your organisation?
Leaders
%
Managers
%
Employees
%
Profitability262122
Achieving greater output in the same time or for the same cost181316
Efficiency of production101213
Achieving the same output in less time or for less cost101513
Some other definition and measure989
Effectiveness of production776
Rate of output per unit of input675
Positive cash flow665
We don’t define or measure productivity in our organisation674
Not sure258

Despite the lack of a unified definition of productivity, more than half believes their organisations are actually meeting or exceeding productivity expectations – the largest proportion meeting rather than exceeding expectations. Further, the vast majority in all groups is able to rate their organisation’s productivity by their own definition:

  1. How would describe the productivity of your organisation currently?
Leaders
%
Managers
%
Employees
%
We’re exceeding productivity expectations161411
We’re meeting productivity expectations404343
We’re a little below productivity expectations352929
We’re well below productivity expectations697
Not sure359

And further, the majority of leaders and managers believe that their productivity is improving. Leaders in particular claim to be seeing improvements in productivity well ahead of managers and employees who are more conservative in their ratings of productivity improvements.

  1. Lately has the productivity of your organisation generally been…?
Leaders
%
Managers
%
Employees
%
Improving a great deal15129
Improving a little403337
Holding steady253131
Worsening a little151614
Worsening a great deal344
Not sure246

So does this mean it is of little significance how we define productivity, so long as we’re meeting whatever expectations have been placed under its banner and that it is improving over time?

No – the consistent definition and measurement of productivity is a vital starting point to improvement. What gets measured gets done and what gets measured well gets done well. If we hope to improve the productivity of our organisations and nations, we must first understand what it is and what we can do to impact on it in a positive way.

Look out for the latest L.E.A.D. Whitepaper to be released next month for more L.E.A.D Survey findings and insights into productivity.