Tuesday, March 8, 2016

Productivity and the Mormon Busyness Ethic (Part 1)

Several moons ago, Sunstone published an essay of mine with the title above. In this post and next week’s I will reproduce the original essay I sent them. What the good folks at Sunstone actually printed included some material they insisted on adding. Since I was sort of partial to the unexpanded version, I’ll post it here. This week’s installment is about productivity. Next week’s will tackle the more intriguing topic of the Mormon business ethic.

For nine years I taught operations management at Brigham Young University’s Marriott School of Management, and one of the topics I taught was productivity. The first year or so I preached the corporate party line, namely, that increasing productivity is a near cure-all for woes experienced by both businesses and economies. But then I took a closer look at the idea of productivity and discovered something unexpected. Not only does productivity improvement produce some distinct disadvantages for both the labor force and the economy in general, but also, when it comes to measuring productivity, the numbers get as slippery as a greased pig and are as meaningful as mud. Even more important, the way we measure productivity in businesses sometimes produces unintentional results, such as encouraging unfocused activity instead of the productive use of time. This organizational tendency has ramifications beyond our workaday lives and can even affect how we live our religion. (Bear with me; I’ll get to this last point eventually.)

Playing with Numbers
Let’s take a quick look at how productivity is measured. The basic formula for calculating productivity is the simple ratio of output/inputs. On a national level, this simple ratio can become a quagmire of confusing statistics. For example, when the Bureau of Labor Statistics measures productivity, it excludes many categories of economic endeavor, such as general government, nonprofit institutions, and paid employees of private households. Compounding the difficulty is the fact that in our economy less than 20 percent of workers produce tangible (read “easily quantifiable”) goods. The rest of us are secretaries, salespeople, lawyers, bus drivers, editors, insurance agents, managers, custodians, computer support technicians, and others who perform services to keep the economy running. The only way to estimate the output of this majority is to translate their services somehow into dollars. This dubious figure is then adjusted for inflation and divided by the number of hours these people work. And here we run into a second problem. The Bureau of Labor Statistics has no idea how many hours most people work. The government doesn’t know how many lunch hours stretch to 70 minutes, how many workers leave the office early for a dentist appointment or soccer game, or how many managers burn the midnight oil. In addition, the government doesn’t even pretend to know just how a manager’s activities affect the company’s product or service.
To compound the measurement dilemma, the mixture of outputs and inputs in the economy is not constant from year to year. In fact, as manufacturing declines as a portion of the economy, easily measurable production and labor figures make up a smaller portion of the whole with each passing year. This means that the government’s productivity statistics can’t be compared to themselves accurately over time, and they certainly can’t be compared with productivity statistics from other countries. In other words, the numbers are virtually meaningless or, worse, deceptive. Every time I see a newspaper article boasting of America’s productivity gains, I am reminded of the quip “Torture numbers and they’ll confess to anything.”
This predicament improves only slightly for an individual business. Corporate executives may feel they have a pretty good handle on the quantity of product their workers turn out and how many hours these people work, but total product/labor hours is still a single-factor measurement. In other words, it measures only labor productivity. But what about all the other factors that influence productivity, such as capital investment, research, energy, raw materials, and technology? If a manufacturer invests in new equipment and the firm’s labor productivity rises dramatically, does this mean the laborers are working harder or more efficiently? No. It may mean the exact opposite. The entire productivity gain may be due to technology, and the workers may be underutilized. Because of this dilemma, some have tried to come up with a total-factor measurement, translating all inputs into dollars and using this figure in the denominator of the ratio. This presents a different view of productivity, but with total-factor measurements, how do you know which factor is actually affecting the final quotient? It’s extremely difficult to quantify exactly how much of the productivity increase is due to one factor and how much is due to another.

The Service Economy and Quality
Perhaps the most significant issue regarding productivity measurement for the economy as a whole and for many individual businesses is that the United States has increasingly become a service economy. Measuring the productivity of service workers is notoriously difficult, to say nothing of increasing it. For instance, how do you measure the productivity of a bus driver? Number of stops per hour? Can you increase her productivity without destroying the quality of the product? How do you measure the productivity of a night watchman or a customer service clerk at Walmart or a receptionist? How do you even define their product?
Behind these questions, however, lies an even more important question: Why do we want to measure the productivity of workers in the first place? The only reason an organization might want to measure productivity would be to increase it. Why? Because increasing productivity is seen as a universal positive in business. But what if the attempt to increase the productivity of most workers is actually counterproductive? Hold that thought for a moment.
Some businesses produce a tangible product, and yet the work that goes into that product is inherently unquantifiable. Take the work of a magazine editorial staff, for instance. How do you measure an editor’s productivity? Pages edited per day? Articles per month? If the total printed pages of the magazine are fixed and do not vary from week to week or month to month, you can’t really increase the total output. You can decrease the input by reducing staff, but this may affect the quality of the product and the morale of the remaining editors. What about circulation? Obviously there’s a connection between editorial work and circulation, but measuring that connection accurately is impossible. Is the level of a magazine’s circulation a function of quality, or of effective advertising, or of overall economic conditions, or of something we would have to call serendipity or dumb luck, or of some completely undefinable factor? How do you assign the credit for increasing subscriptions (or the blame when they decrease)? With a magazine, as with many other products, quality is perhaps the most important issue. But measuring quality statistically is virtually impossible. It is too subjective. Quality, like beauty, is largely in the eye of the beholder. Robert Pirsig, author of Zen and the Art of Motorcycle Maintenance, went crazy trying to define quality. For these reasons, trying to measure the productivity of a magazine editor is an exercise in futility, and the very act of measuring work may create stress, deflect the editor’s focus toward meaningless activity, and therefore be counterproductive.

Frederick Winslow Taylor
In spite of the difficulty (or impossibility) of measuring productivity in a meaningful way, most managers feel compelled to measure it anyway. If they are not increasing their organization’s productivity, as evidenced by some sort of mathematical proof—even if the numbers are a complete fiction—they somehow feel they are not doing their job. Where this managerial measurement compulsion comes from is debatable, but my money is on Frederick Winslow Taylor, who in 1892, with his stopwatch, single-handedly ushered in the era of scientific management. Taylor’s intention was to prescribe the most efficient way to perform factory production tasks by eliminating any wasted motion. The assumption driving his efforts, of course, was the notion that people are machines and should be treated as such. His theory, that an engineer could devise the most efficient way to perform a production task, totally ignored the fact that most workers, on their own, will instinctively find the easiest, most efficient way to do the work they are assigned. Workers are incredibly ingenious, they understand the work processes better than any manager or engineer can, and they hide their ingenuity only when their job security is in danger. So, what puts their job security in danger? Productivity improvement. (Remember that thought you were holding? This is where it comes in.) As productivity goes up, a business can produce the same amount of product with fewer workers. But if workers have job security, know that they are trusted, and receive rewards for their innovative ideas, they will come up with all sorts of ingenious ways to save the company money and increase the quality of the product. Do most managers understand this? No. Instead, they lay people off as a reward for being more productive.
Taylor’s scientific management, which still lies behind most managerial attempts at making sure the workforce is efficient, is a theory based on the belief that people can’t be trusted. And when irrelevant measurement tools are used in an attempt to quantify essentially unquantifiable types of work, employees hear the message loud and clear that their jobs are in jeopardy. Why else would management focus on efficiency when quality is the major issue? They simply want to “do more with less.” What that really means is “less money for the workers and more for the owners and executives.” But when workers understand what management is up to, they do two things: they hide their ingenuity (because efficiency rather than innovation is being rewarded), and they become activity oriented instead of results oriented. In other words, they act busy to preserve their jobs.
More on encouraging pointless activity, or busywork, next week.

1 comment:

  1. Work is, or should be, a humane endeavor. No one ever refers to something as warmly efficient, which I think means we're doing it wrong.