What Productivity Improvements Make The Most Positive Impact In An Organization?

I am often asked: In what areas of an organization can productivity improvements make the most positive impact? There is no one correct answer to this question, but here are some things to consider.

Productivity improvement is a broad field and can include anything from looking at how to increase organizational capital for better innovation, to effects of government policy on an organization’s productivity, to organizational design and how that impacts productivity, and to how to use technology to improve an organization’s competitiveness.

Where productivity improvement can make the most positive impact in an organization depends on what area of the organization is performing most poorly. The way to determine which area is performing poorly is to assess each organizational area and determine where outputs are weak. There are two ways to do this. 

  • The first is using a task level analysis to determine whether a task can be done more quickly. Let’s say it takes an average of five days to initiate and approve a request to purchase and install a computer in your organization. Breaking this task down into its component parts, you may discover that by eliminating redundancies and the number of people involved in the task you could reduce this number to two days. You’ve just identified a task that could improve productivity.
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  • The second way for determining areas of productivity improvement is at a structural or ‘big picture’ level. The big picture approach is top-down and looks at the business vision and strategy, culture of the organization, core business competencies, and management systems. Productivity improvement at the structural level is more difficult to determine since its inputs are more philosophical such as the organization’s vision and its culture. But it wouldn’t be impossible to determine how the vision and culture are affecting what staff are working on and how they are working on the vision. 

 
Here are 8 steps that an organization can take to identify where productivity improvements would make the most impact: 

  1. Conduct a diagnosis and needs assessment to identify the systems and processes contributing to poor productivity in the organization. Include critical issues that may be impacting current levels of productivity and what needs to be addressed to improve productivity in each area. For example, if strategic projects are usually not completed on time or within budget, ask “why” several times until you drill down to the answer(s) as to why this is happening. This will inform what needs to be addressed to correct the situation.
  2. Based on the “what needs to be addressed” items discovered during diagnosis, prepare an action plan that details how you will improve productivity in problem areas including alternatives for each action item. Continuing from our example, if you discover that one of the reasons for projects not completing on time to be lack of staff, then a possible action item is to “hire more staff.” Other reasons may include: lack of knowledgeable staff, or perhaps there is sufficient staff, but more project management training is required, etc.
  3. Based on the alternatives presented in your action plan, select the appropriate action items for implementation.
  4. Prepare an implementation plan outlining how to implement each action item including how productivity improvement for each action item will be measured.
  5. Implement the action items and manage the change by training all staff in new policies, processes and procedures that reflects how the action items will improve productivity in the organization. Include measures of success for each implemented action item. This will ensure greater compliance and productivity improvement.
  6. At three, six and 12 month intervals, conduct an audit of the implemented action items and using the established measures of success, determine if productivity has improved. If productivity could be better, review the item and tweak the process or system as necessary to gain more productivity.
  7. Manage the change by conducting regular audits of each implemented action item to ensure that productivity is sustained or continues to improve.
  8. Every one or two years, repeat the process in the same or other areas to gain continuous improvement across the entire organization.

If you follow these 8 steps, you will gain improvements in productivity in your organization in the areas that are in most need of improvement and therefore, where your organization will see the most positive impact. However, remember to also follow sound change management principles and implement regular training of all staff. Training is the key by which organizations create process improvements and since it’s the organization’s people that are responsible for productivity, including your people in the process will make the difference between productivity and profit or non-productivity and bankruptcy.