Defining productivity – what does productivity mean to you?

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?

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 %
Profitability	26	21	22
Achieving greater output in the same time or for the same cost	18	13	16
Efficiency of production	10	12	13
Achieving the same output in less time or for less cost	10	15	13
Some other definition and measure	9	8	9
Effectiveness of production	7	7	6
Rate of output per unit of input	6	7	5
Positive cash flow	6	6	5
We don’t define or measure productivity in our organisation	6	7	4
Not sure	2	5	8

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:

How would describe the productivity of your organisation currently?

	Leaders %	Managers %	Employees %
We’re exceeding productivity expectations	16	14	11
We’re meeting productivity expectations	40	43	43
We’re a little below productivity expectations	35	29	29
We’re well below productivity expectations	6	9	7
Not sure	3	5	9

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.

Lately has the productivity of your organisation generally been…?

	Leaders %	Managers %	Employees %
Improving a great deal	15	12	9
Improving a little	40	33	37
Holding steady	25	31	31
Worsening a little	15	16	14
Worsening a great deal	3	4	4
Not sure	2	4	6

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.