Is the status quo standing in the way of productivity?
Accepted orthodoxies are being challenged every day by companies forging a path through the barriers any global event necessarily triggers. In the first half of 2020 businesses were forced to act fast, but many organizations are now reflecting and taking stock of the fallout any type of unanticipated crisis can bring; is there a better way to operate?
What we’re seeing represents a real acceleration in the adoption of trends predicted to take years to come into effect on such a scale. For businesses to make the most of this chance to change, they must first focus on doing more with what they have. Increasing productivity and eliminating waste by challenging long-held assumptions about the nature of work, operations, and digitalization will ensure firms have the best chance of success in a rapidly changing market.
Work assumptions
Almost overnight, worldwide lockdowns meant businesses had to embrace remote working in way never seen before. Old orthodoxies about the need for workplace supervision and having workers together in a physical space were thrown out as businesses quickly mobilized an entirely remote workforce.
Although a few organizations, primarily in the tech industry, had already made the transition to fully remote working, most workplaces viewed remote or hybrid working as supplementary to their traditional working practice – something to be earned as trust develops between employee and employer, or an occasional event when required. One early adopter of a fully distributed workforce is tech company Buffer, which has been fully remote since 2015. They say their workforce is “about ten times more productive”.
Lockdown provided the legitimacy and incentive needed for businesses of all shapes, sizes, and sectors to make the move to remote. And, to the surprise of some, this forced experiment in new ways of working proved to be a success.
Studies show that remote workers are more productive than those in an office environment; compared to office workers, remote team members lose 10 minutes less every day to distractions and are 20% more likely to complete their daily tasks. They also experience a 4% daily increase in time spent on their core work and an 18% decrease in time spent on communication.
This enhanced productivity is accompanied by a boost in morale: remote workers report that they are 17% more likely to feel accomplished in their daily work. However, there is a balance to be found if a remote working strategy is to be as productive as possible.
Research indicates that around 75% remote and 25% office-based work is optimal.
Buffer 2020 State of Work report
Operational assumptions
As well as challenging where we work, organizations are now seriously considering how they operate. Long-held assumptions about the nature of developing and selling products and services are facing increasing scrutiny under the productivity microscope.
Improving productivity involves eliminating waste while increasing output, and many companies have begun to turn towards partnerships as a means of generating cost savings, spreading risk, and enhancing output capabilities. Other companies and even competitors are no longer the enemy, but a source of real potential for creating additional value. Pharmaceutical giant GlaxoSmithKline and consumer goods company Unilever, for example, now have Open Innovation present in over 50% of their R&D initiatives.
As the Harvard Business Review puts it, innovation partnerships were sometimes met with “multiple gatekeepers, skepticism regarding anything ‘not invented here’, and turf wars”, but Open Innovation has been shown to positively impact an organization’s output in three ways; knowledge sharing, risk reduction and speed of development, all of which directly or indirectly contribute to enhanced productivity.
Swedish heavy vehicle manufacturer Scania and the Karolinska University Hospital recently demonstrated the effectiveness of such partnerships. Using Scania’s logistics expertise combined with the Hospital’s cutting-edge healthcare services, the two organizations came together to find, purchase, and deliver protective equipment for the Stockholm region.
“Together, the experts from Scania, Karolinska and Region Stockholm have in a short time set up efficient working methods with fast decision paths. With all the necessary skills in the same room, the work becomes efficient.”
Scania
Digitalization assumptions & productivity
Stereotypical thinking on digitalization is two-fold: firstly, doing more things digitally will increase productivity, and secondly, automation will cause the loss of significant numbers of jobs. But is this really the case?
Research shows that companies lose an average of 5 days, or 43 hours, annually per employee due to procrastination and sick leave resulting from data- and technology-related stress. This equates to billions in lost revenue around the globe – $109.4bn in the USA, $10.9bn in France, and $13.7bn in the UK, to name but a few affected countries.
While 87% of workers recognize that data is an asset, just one quarter believe they can use it effectively, and only 21% are confident in their data literacy skills. Nearly three-quarters (74%) report feeling unhappy or overwhelmed when working with data. Data-driven organizations are three times more likely to report significant improvements in efficiencies and decision-making effectiveness, making data literacy a fundamental part of improving productivity.
It’s clear that, while technology brings manifold benefits, it is not enough to implement new software or innovations and walk away; comprehensive training, change management, and new processes must accompany any roll out if it is to deliver the best possible results. Raising the data skill levels of workers to enable them to use data confidently should therefore be a priority for any organization seeking to boost its productivity levels.
As for the automation question, around 40% of human productivity potential is lost to multitasking and task-switching, which makes automation very appealing as a productivity booster. However, many businesses have already felt resistance to rolling out automation due to fears over significant job losses – nearly a third of American workers worry that their job will not exist in 5 years’ time.
In fact, the automation paradox holds that the more complex the automation, the more crucial human input becomes. Furthermore, over half (57%) of companies say that their main goal in automating processes is the augmentation of worker performance and productivity – not to replace workers themselves.
Although around 75 million jobs will be lost to machines, around 133 million will be created, effectively negating any losses and delivering crucial productivity increases.
World Economic Forum
For companies seeking to do more with what they have amidst challenging market conditions and a somewhat uncertain economic future, enhancing productivity should be their first step.