Three productivity myths

Productivity has become one of the Great National Issues that everyone agrees is a key to our future. Yet discussions about productivity are surprisingly unproductive. Beyond the broad generalities there seems to be little confidence that anyone really knows what to do.

In our work as consultants with the managers of large organizations, we have found that discussions of productivity are often confounded by three myths -- myths which need to be dispelled before effective action can occur.

The first myth is that productivity efforts should focus where performance is poor. In fact, the greatest gains can generally be made where productivity is already high. For example, international competition has stimulated the readiness to act in automobiles, steel, and telecommunications. In other sectors where the potentials stagger the imagination -- government, defense, health care and education, for example -- there is little sense of urgency and thus little probability of significant progress.

The second myth about productivity is that if we're in trouble, there must be a villain. Managers blame workers while unions and employees blame management; citizens blame "the bureaucrats"; and everybody blames the Arabs. But the search for villains does nothing but divert energy.

The third and perhaps the most pervasive myth is that, if a problem exists, then there must be a matching "solution." It is part of our national character to search for "the" cure for a problem, such as energy dependence. Thus many organizations try first one major "program" and then another in the search for the Holy Grail. For some it is a new approach to employee "motivation." For others it is the use of computer systems.

In short, each of the three myths contains elements of truth but they are at best half-truths. Although some unproductive organizations do reform, in the short run we must look to the best performance to do better. Even though there are identifiable causes for productivity declines, the search for villains does more to relieve anxiety than to generate progress.Finally, effective solutions have to be put together painstakingly of many ingredients. There is no one "answer."

We have found that productivity can be increased, often dramatically, through an evolutionary strategy based on controlled experimentation and learning rather than across-the-board solutions. There are two elements to such a strategy.

First, productivity improvement should begin by tackling a few critical goals rather than by a "grand design." One steel mill began by extending the time between overhauls for the ladles which transport molten steel. A railroad express operation began by loading a single daily train more effectively. Instead of wasting time and energy gearing up for the big fix, carefully designed, short-term steps are launched to produce measurable improvements in selected areas.

These initial "breakthrough projects" are designed to provide new skills and experience for participants. They also produce the reinforcing confidence bred of success. These modest successes are followed by more ambitious projects, each based on the learnings of the previouys ones.

The second element of the developmental strategy is the gradual creation of an overall strategic plan that integrates the specific productivity projects into a coherent program. This plan may also encompass capital investments, training, technical innovations, reorganization, worker involvement in management, and new information technology. Insights gained from individual projects should guide the creation of this overall strategic plan.

A key ingredient of this developmental strategy is the active involvement of people at all levels. In the steel mill we found that the workers and supervisors in the melt shop had the most immediately applicable ideas for increasing productivity. These ideas were used in launching a series of "breakthrough projects" that took the mill to a new level of output. Such involvement enables people to relate to "productivity improvement" not as an abstraction but as a concrete experience in which they are engaged.

This strategy can work in individual organizations or government agencies or even as a national program. But to succeed, corporate profit improvement committees, municipal productivity councils, and national commissions on productivity must be tied into, and contributing to proliferation of, solid, measurable, individual productivity improvement successes.

Public scoldings and lamentations, as well as skyrocket programs that flare then fizzle, all reinforce our sense of futility. But a succession of even modest successes which demonstrate that the challenge can be met effectively have the power to mobilize widespread action.