A new definition of productivity

by HCA23 Sep 2009

The relationship between organisational learning, speed, flexibility and productivity has never been stronger. A company's ability to learn and innovate is increasingly linked to the firm's capability to increase revenues, profits, and economic value. For instance, the launching of new and superior products, continually improving operating efficiencies, and creating more value for customers, requires the ability to learn. Applied learning enhances speed, which is increasingly linked to productivity. There are three kinds of speed that companies need today in order to be productive. HR professionals need to take these into account when implementing and rolling out L&D programs.

Innovative speed
Innovative speed refers to being in the marketplace first with the goods and services that customers want; to be constantly innovating and experimenting with new features that give the customer what the customer desires, before a company runs the risk of loosing the customer. Product lifecycles are shortening and, therefore, first-mover advantages will become ever more important. Agility means taking advantage of opportunities as they arise.

Processing speed
Processing speed means processing everything through the organisation as quickly as possible. For instance, this could mean shorter cycle times for designing training programs, restructuring companies, and implementing new products or services.

Recovery speed
Recovery speed refers to the time it takes to respond to and fix problems. Speed is therefore a fundamental yardstick by which a modern company's productivity can be measured.

Speed is dependent on a high degree of organisational flexibility. Organisations that are faster moving are also more flexible in how they use their workforce. Employees are much more likely to have broader rather than narrower definitions of their job. In many occupations, versatility in dealing with varying demands and situations is more highly valued than work volume in some given activity. For instance, dealing thoughtfully and effectively with a customer complaint rather than chasing new business requires adaptability. It could be considered a better investment of time and consequently more profitable in the long term. Effective managers tend to treat every employee as a professional who knows and understands their work. So, organisational leaders wanting to foster flexible work practices see their role as primarily one of providing workers with adequate tools and systems to solve problems and get results.

Cross-functional work teams are another HRD process for creating quick decision-making in the workplace. Modern managers, in their quest for organisational flexibility, encourage, promote and build project teams that bridge functions and departments. Companies that move faster, innovate quickly, progress things through the organisation quicker, and solve problems quicker, are much more likely to be organised around cross-functional teams than they are to be structured in old fashioned hierarchical departments. Today's organisational structures are more likely to emphasise the horizontal dimension of the company. The horizontal dimension brings people together across departments to tackle something new or to solve a problem. In contrast, an emphasis on the vertical dimension up and down the hierarchy is likely to slow the pace of decision-making.

The concepts of learning, speed, and flexibility support a new definition of productivity. Productivity is broader and more pervasive than the old concept of profitability. The concept of productivity is based on changing from a mindset of accuracy and precision to one of innovation and risk taking. The traditional manager/employee relationship is ill-equipped to accommodate this new notion of productivity.

This is an extract from Dr Tim Baker's latest book: The 8 Values of Highly Productive Companies: Creating Wealth from a New Employment Relationship (Australian Academic Press). More information about the book can be found at www.winnersatwork.com.au

About the author

Dr Tim Baker is an international consultant specialising in workplace culture and managing director of WINNERS-AT-WORK. Email: tim@winnersatwork.com.au


  • by Stacey Martin 24/09/2009 1:16:33 PM

    That was a very interesting read.
    Some great concepts around productivity discussed.

  • by Stacey Martin 24/09/2009 1:16:55 PM

    That was a very interesting read. Some great concepts around productivity discussed.

  • by Stacey Martin 24/09/2009 1:17:10 PM

    That was a very interesting read. Some great concepts around productivity discussed.

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