It’s going to take more than traditional productivity for organizations to thrive in the post-Covid 21st century. Customers, employees, investors, and our communities are now more than ever asking us to consider other “big picture” societal and environmental outcomes we produce.
APQC has always defined and measured two aspects of productivity: efficiency and effectiveness. Why shouldn’t this be expanded to include what matters to our stakeholders: our investment in our employees; the elements of the environment which we consume and the traces we leave behind; and the communities that allow us to operate and buy what we produce?
I suggest these three are essential to evaluating the productive capacity and impact of a 21st century organization:
- sustainability;
- diversity, equity, and inclusion (DEI); and
- knowledge creation, management, and transfer.
Some industries will argue that the appropriate use of technology belongs on this list: – e.g., sensors, IoT, RPA, collaborative platforms, machine learning and AI.
Element 1: Sustainability
On Earth Day April 22, 2021, APQC published the article Sustainability: APQC Definition and Resources. Our concept of sustainability goes far beyond traditional environmental, health, and safety elements. It includes the stewardship of resources, equitable and safe treatment of people, human rights, and ethical management and financial practices.
Coming out of the pandemic, sustainability is top of mind for many consumers and corporations. IBM found that 93 percent of consumers had rethought their views on sustainability. Consumers, some flush with cash, are willing to pay more to buy from, work for, and invest in companies with a commitment to sustainability. Investor activism is expanding. The World Economic Forum and the Global Reporting Institute, among many others, provide monitoring, benchmarks, and comparative data for judging how well we do.
Element 2: Diversity, Equity and Inclusion
Diverse organizations and teams are often more innovative and produce better decisions and results than more homogenous ones. Even if they weren’t, giving people opportunity is the right thing to do. And it will pay off in engagement and productivity, and profitability.
Corporate boards are making CEO pay and incentives increasingly tied to gender and racial equity targets. Indicators of productive DEI strength include the ability to:
- attract, retain, and promote a diverse set of employees reflecting the communities from which you draw and serve;
- provide equitable learning and development opportunities to upskill and reskill employees; and
- promote trusting cultures. Trusting teams are more productive and agile in a remote or hybrid workplace.
Element 3: Knowledge Creation, Management, and Transfer
Collaboration and knowledge transfer (and the tools and approaches that enable them) are essential in a broader definition of productivity. Good knowledge management (KM) helps organizations be both more productive in the short term and more sustainable in the long term by codifying and replicating critical knowledge. APQC has been creating, collecting, advocating, and sharing best practices in KM for over 25 years. We have the largest repository of robust processes, benchmarks, and stellar members stories in the world.
Innovation and knowledge transfer are more important than ever with the rise of remote knowledge work and the loss of so many people from the workforce as people leave by choice or by necessity. The knowledge that walked out the door has to be replaced now that many economies are roaring back. Attracting a diverse cadre of employees is key, but some of the gap has to be closed by automation both as labor replacement and as smarter KM platforms.
According to the Wall Street Journal, this rapid and widespread adoption of automation and machine learning is projected to boost productivity by a full percentage point after it had stagnated at 1.4% per year from 2006-2019. U.S.’s Long Drought in Worker Productivity Could Be Ending - WSJ
How We Move Productivity Forward
It is going to take robust and resilient processes to build capability in these three elements of productivity. We all know the pandemic was a litmus test for resilience. Organizations discovered how quickly they could “pivot” (the buzz word of 2020) and work differently. Some made it. Others died.
For supply chains and manufacturing organizations, reopening is proving to be equally challenging. It is easier to shut down a plant than to re-open it. Shortages are becoming a limit to economic growth. For example, there has been a ten-fold increase in the price of lumber in 2021, not because there is a shortage of timber—there isn’t—but because the sawmills have not yet recovered and reopened enough to keep up with demand. The story is repeated in semiconductor shortages and many other sectors including food. And don’t forget the global consternation and disruption that ensued when a single container ship got stuck in the Suez Canal.
Temporary price hikes should subside once the supply chain and manufacturing finally become unstuck. Those who have built-in resilience will bounce back faster to full productivity and reap the profits from impatient consumers and customers. Once again, fortune will favor the prepared.
Just adding elements to the concept of productivity doesn’t help much without measures and methods. The key is to find measures that demonstrably tie to the mission and values of the organization and its stakeholders. Benchmarking internal and external best practices and measures is the fastest way to ramp up with the least wasted effort.
Adrenaline, heroics and improvisation got us through the pandemic until brilliant scientists gave us a shield in the form of vaccines. Let’s keep the innovation going and expand our sights to include the values we hold.
We invite you to join with us in the quest for sustainability, fairness, and knowledge. Some of you will be the benchmarks and best practices APQC showcases going forward.
Check out more APQC resources for the post-pandemic world on Productivity Reimagined | APQC.