Productivity is the key driver in making our economy grow and our companies hum. So when the U.S. Department of Labor reports that worker output fell in the first two quarters of 2011, the first back to back decline since the crash of 2008, alarms sound. In fact, many economists now believe productivity in the U.S. is likely to limp for the foreseeable future.
Why? Companies continue to pull back spending on new equipment, technology and labor—a perfect cocktail for killing productivity. There are lots of reasons for doing this, but the results are still the same—and that’s the problem.
While each of us cannot cure the overall economy, we can address productivity in our own organizations. As I noted in writing Uncomplicating Management, there are four strategies that will increase productivity in your organization:
- Invest in technology: technology increase labor productivity by increasing efficiency, reducing errors, and allowing people to focus on essential activities.
- Train your people: while many organizations are pulling back here, a 10% increase in the average education of workers is associated with an 8.6% increase in productivity (National Institute of Literacy).
- Focus on teamwork: apply teamwork rather than emphasizing individual contributions to many work processes has proven to accelerate productivity while reducing cost of production.
- Emphasize continuous improvements: if you simply improve your operation by 1% each day, in 70 days, you’re twice as good (Alan Weiss).
Productivity growth is the key to profitability and survival in these tough economic times. You have the ability to control it in your organization.
What are your thoughts?