A lack of definition and understanding of productivity is a common problem in most organisations. It can mean different things depending on what part of the business someone is from. But a definition is actually simple: it is an efficiency measure.

However, it should not be used as the only measurement in an organisation.

A good balance of these measurement criteria are needed with a sharper focus on efficiency.

There are four common reasons why productivity should be measured:

1. An important tool to assess the efficiency of your organisation
2. An important lens on your relative competitiveness
3. To assist in making investment decisions
4. To help identify where to make interventions/improvements

When organisations are ready to measure productivity, they should ask:

• Is our productivity agenda bold enough given our market and competitive landscape?
• Do management dashboards effectively report our organisation’s productivity performance?
• Are we more productive than last year?
• Is executive compensation linked to specific productivity measures (ie.not just cost savings)?
• Do we know the productivity performance of our competitors or peer organisations?
• Is enough being done to remove all wasteful non-value work?
• Do we have an ambitious program for process automation?
• Are we developing and utilising the full talents of our workforce?
• Do we have a deliberate and audacious innovation agenda?

Contacts

• Braden Dickson
  New Zealand Performance Improvement Leader
  Tel: +64 9 308 1064