According to a report by the London School of Economics, there are three reasons for the stagnant or declining productivity:
1. Management practices
2. Adoption of technology
3. Flexible working
According to the research, in the absence of good management practices the other two can improve productivity marginally but when management practices improve as well, there is a synergistic effect on productivity, increasing up to 20%.
I’m not surprised that the adoption of technology and flexible working have minimal impacts on productivity.
Why do I say that? Well, let’s look at some other facts not addressed by the LSE report.
There is no doubt that technology, such as communications, databases, automation, etc., increases the potential to be more productive. However, the fact is that productivity is almost the same today as it was in 1998. This in a period in which access to the internet went from dial up modems to superfast broadband, the internet of things was “invented” and computing speed has increased such that we all, apocryphally, hold enough in our pockets to send a man to the moon. Clearly the potential is there for technology to increase productivity, but the evidence doesn’t clearly support it.
Research also shows that flexible working can increase the productivity of individuals, but is that realised in practice? The ultimate in flexible working is self-employment and the last ten years has seen a huge increase in the numbers of people who are self-employed. Are they more productive than they would be as employees? Well the evidence suggests not. The average earning (revenue of their business) of a self-employed individual is roughly one-third of the average revenue generated per employee. It appears the self-employed are far less productive in economic terms than those employed in teams, departments, divisions, companies.
Logic supports this view, after all there are certain things that can only be done in teams. So what is the relevance to flexible working? Well, if you allow Bob to take Friday’s off and Sue doesn’t come in until 11am and leaves late, how does that affect team productivity, team cohesion and workflow? What is the net effect of flexible working? Sure it may increase contentment and well-being for individuals, but is it enough to offset the disruption to team performance and increase organisational productivity? Flexible working is becoming more and more common and there appears to have been no net effect on productivity which is static or declining. Don’t get me wrong, flexible working is important and valuable, but not in and of itself.
The most important thing is to treat people with respect, dignity and trust in general. If you do that, then it’s not a question of management practices or flexible working. Employees will do their best for their company when their company does its best for them in a mutually respectful, trusting culture. Employee engagement has become the latest management trend, but employees become engaged when communication, involvement and inclusion happen in a respectful, trusting way – treating employees like adults not children, like humans not resources.