How to avoid the risks of ‘productivity paranoia’

Of all the mantras used to guide business development and growth, one of the most popular is “improving productivity”. Business leaders are constantly on the hunt for ways to achieve more with existing resources while also keeping a lid on operational costs.

In times of global economic volatility, the instinct to focus on productivity above all else is understandable. After all, everyone wants to get all they can out of their assets, including people.

However, all too often, instead of increasing revenue, it leads to what’s known as “productivity paranoia”. This disconnect between employer and employee perceptions of productivity destroys trust while not ultimately creating anything of value for the business.

Focus on the wider attributes

Productivity only measures a single aspect of a person’s contribution to the team, and it can be far from the most important. As some workers returned to offices post-pandemic, many bosses were already complaining that hybrid working made it hard to be confident their teams were being productive. Regardless, the majority of knowledge workers signalled they were performing just fine. Traditional productivity measures are no longer enough.

They can also lead to the wrong incentives. For example, productivity can’t measure if the work being done is the right work. A sales contact centre manager may resolve a number of customer issues in a day but have their sales drop as a result. If the company incentivises the sales and upselling, helping customers with issues will have little material impact on revenue. However, retaining customers protects revenue and potentially avoids an escalation, or engineer visit.

What about a person who inspires others by making the workplace a better, more creative place to work, or uses their experience to coach teammates who inevitably get stuck? What about the individual whose fresh thinking breathes new life into the business?

Focusing on productivity alone means missing out on all the attributes a person brings to the business and could well lead to people feeling alienated. No one wants to feel like a machine. Productivity is just a measure of output, so unless teams are given new tools and the right technology to do their jobs, pushing them to be more productive induces more stress. This is likely to drive an epidemic of “quiet quitting” as employees feel nothing but productivity is valued; and ultimately will drive them, and their talents and institutional knowledge, out of the organisation.

Quality v quantity

Part of the solution is to focus on quality over quantity. In other words, don’t just look at an employee’s productivity but at the value they bring to the organisation and their colleagues. This includes shifting from monitoring outputs like employees’ time to outcome-based management. Instead of managing towards deadlines, managers should provide employees with the destination, milestones and the expected standard the team should achieve to reach them — without micromanaging the journey.

This may include productivity, but also factors such as the level of support they provide others, unique perspectives that nobody else in the organisation can offer, or creativity and an understanding of new markets and opportunities. It doesn’t mean removing all quantitative measures but rather supplanting them with more meaningful ones.

Broadly, focusing on value and outcomes requires new approaches to broaden what a company measures beyond productivity. Each company will be different. To succeed, the business has to define how it measures value, establish the baselines for employees, clearly articulate its expectations and ensure it is offering the right support to succeed.

Psychologist Mihaly Csikszentmihalyi’s pioneering work on flow – a state where people are their most creative, productive and happy – was used by McKinsey to conclude that when people are “in flow”, they can be up to five times more productive. Flow, they added, is most likely to happen at work when employees feel in control and feel highly valued.

For instance, the majority of employees need to use technology to do their jobs. Just giving the support and guidance needed to overcome any hurdles and fully adopt the tools in front of them should help the majority of employees feel more in control. Different people have very different levels of knowledge and comfort with technology.

The smart approach is to invest in the right digital adoption strategy, often centred around a digital adoption platform (DAP) that can provide on-screen guidance across applications to improve the user experience and increase user adoption. Rather than obsessing over productivity, forward-thinking leaders should ensure that their employees can fully harness all of the technology at their disposal to do their jobs to the best of their abilities. The result is really win-win, with better business outcomes and a better employee experience.

Better digital adoption and in-app guidance free up more time to concentrate on the core task — identifying exactly how individuals add value to the business, and the goals they need that will help them reach their full potential. Companies can use this to boost employee flow and help others. For instance, if an employee is exceptionally gifted at helping others understand technology and processes, can the company replicate their practices and teach them to other team members?

Other measures of value

In today’s businesses, productivity has clear value as a metric, but it is not the only measure of the value an individual brings to the business.

Many companies champion their culture, wellness, and work/life balance to prospective employees, but their overreliance on output measures inevitably harms team performance and generates productivity paranoia. The companies that can demonstrate how employees add value to their businesses, while empowering their teams, will instead see better outcomes.

By Clarence Dent, ANZ regional vice president, WalkMe