Efficiency drives have become popular, with big names such as Meta and Google using them to placate shareholders and adjust to a changed economic outlook. But many leaders can easily find themselves going down a ‘rabbit hole’ chasing illusory efficiencies and ultimately coming up short.
Here we will explore how you can prevent this from happening. In particular, the 6 delusions regarding productivity that lead leaders astray.
Mark Zuckerberg declared 2023 ‘the year of efficiency‘. That, together with better-than-expected revenues was exactly what investors wanted to hear, with Meta’s beleaguered share price rebounding as a result. But should this be your year of efficiency? Before you answer ‘yes’, take a moment to consider the common pitfalls in planning an efficiency drive.
If you don’t, the results are likely to be disappointing. Indeed, it could hinder rather than help performance in the long term, compounding the issues of engagement and well-being.
Leaders often find themselves ‘going down a rabbit hole’ when attempting to boost productivity. They end up puzzled and confused, unable to find the solution or the benefits they expect. While a short term uplift in performance is common, the longer term impact is much less certain.
Driven by short-term expediency, longer-term costs often overshadow the immediate gains regarding the organizations health, level of trust or engagement, etc. Indeed, the more zealously leaders pursue efficiency, the greater the risk that their efforts may have significant longer-term indirect costs.
There are 6 mistaken assumptions that get productivity initiatives into trouble.
Efficiency drives are often underpinned by a number of flawed assumptions. The strategies employed are at odds with the new reality of work, the workforce and the workplace. There are ill-suited to knowledge work, the more sophisticated modern worker (incl. Gen. Z )and the demand or WFH flexibility.
The solution is to drive up activity to make people more productive. That is a primary illusion regarding productivity and efficiency drives, and this presents two challenges:
Simply doing more work is not the answer. Organizations don’t need more busyness; effectiveness is required instead. This is only possible when people are doing the right work – value-adding work. Yet, our data shows that:
What is productivity or efficiency for a knowledge worker, a white-collar employee, or, more importantly, what is it for a senior executive? It is not just the activity level – this is where productivity tracking software gets it wrong.
Being productive and being busy are two very different things, and looking busy is something else entirely. To assume a link between mouse movements on a pc, or the number of emails or IMs and efficiency or effectiveness is very dangerous. At a minimum, productivity tracking risks incentivizing the wrong behaviour. To see this in action, look at the trend called ‘productivity theater’.
A de facto efficiency drive is underway in most organizations, with executives being expected to do more with less. That is a challenge because, in many cases, they were already trying to do too much and struggling to get everything done. It also has a significant impact on the level of well-being and engagement.
The reality is that many organizations struggle with priorities and making trade-offs. A more disciplined approach to prioritization is essential, enabling a focus with new intensity on those priorities and initiatives most closely linked to success. Focus and prioritization are vital to ensuring a link between efficiency and effectiveness or activity and results.
Traditional productivity and efficiency drives tend to see people as the problem rather than the solution, and this is a fundamental flaw and a key point of failure. This happens in many ways:
When talking about efficiency, leaders need to stop playing the blame game. If there is a productivity problem, the leader must accept their share of the responsibility.
Efficiency is an ongoing challenge within large organizations – that is a natural law. The miracle of the modern corporate structure is its ability to manage the ‘unmanageable’ – tens of thousands of employees and customers worldwide. It does this in a way as to maximize management visibility, predictability and control. But no large organization is perfect. The uniformity and control that the structure of a large organization provides inevitably come at a cost in terms of speed, agility and even efficiency.
As structure and bureaucracy grow, getting the work done can become more complex. It generates a lot of additional work (internal meetings, processes, reporting, etc.) on top of the work itself. Before you know it, this ‘work about the work‘ can take up almost two-thirds of the week k3. This is what is draining productivity within most work environments, yet it gets little attention. Meanwhile, sideshows like the battle to get people back in to the office and the crisis of disengagement get all the attention.
In reality the majority of executives are about as efficient and productive as their processes, systems and structures allow them to be. More focus is required on the efficiency of processes, systems and structures.
People need and want to feel like they are making progress to invaluable work which leverages their skill and talent. This is a key source of motivation denied to those in environments that are unproductive bureaucratic and inefficient.
While the focus is generally on the cost to the organization, people also pay a cost for inefficiency in terms of waste of time and effort, unnecessary pressure and stress a sense of helplessness and frustration.
It is not enough to say that people are lazy. Leaders must first check that people are in the right roles, doing the right work, with the right rewards, resources, etc.
Individual work now accounts for less than one-third (30%) of all work; the rest (70%) is taken up by teamwork and collaboration. Where to focus if you are looking to boost performance or efficiency? Would you focus on the 70% (team) or the 30% (individual)?
Based on the numbers above, most leaders would focus on the 70% – as it accounts for the majority of work, it can deliver the majority of improvements. Yet, most organizations are still focused on productivity or performance at an individual level.
Traditionally the issue of performance has focused on the individual, rather than the team. That includes the annual review, the performance improvement plan and the mixture of carrot and stick incentives. All have been designed to manage individual performance. For example:
With up to 70% of work now being collaborative, looking at productivity or performance on an individual basis doesn’t make sense. Individual and team performance go hand in hand. Indeed, the impact of teams on personal performance is difficult to underestimate:
Teams are increasingly seen as crucial to the organization also. The modern organization’s success depends less on the heroic solo run of individuals and more on the collaborative effort of networks of individuals and teams.That is because today’s new products, technologies and business models are brought to life not by individuals working in isolation, but by high-performing teams that cut across functions and silos.
The Way We Work (as a team) must be optimized if individuals are to be more productive and efficient and enjoy high levels of engagement, job satisfaction and lower levels of pressure or stress.
When it comes to productivity and effectiveness, engagement (or, more precisely, disengagement) is often held to be at the core of the problem. This misdiagnosis isn’t very helpful for several reasons:
There has been so much talk about engagement, particularly disengagement, recently. There are suggestions that half the workforce may suffer from a condition unheard of just one year ago. Revealed to the world in a Tiktok video, it is ‘Quiet Quitting’.
‘I wish people would stop quoting Gallup’s Engagement survey. It is lazy!’ says one of our coaching colleagues. ‘ I think it is one of the most over-used pieces of research. I don’t want to get drawn into a debate about the survey’s 12 questions or even what ‘engagement’ is or how much it matters. All I know is when something is as universally quoted as the Gallup research; one should take care.
There is no question that engagement matters. After all, today’s work is heavily dependent on discretionary effort. It is knowledge work that requires creativity, innovation and perhaps even imagination. These are things that are difficult to command.
People cannot be persuaded or compelled to perform at the top of their game – it may result in a short-term uplift that can be difficult to sustain. Tapping into human motivation is essential, and pressure and coercion are the least effective ways of doing this.
The good news is that people want and need to be engaged – they need to feel that they are making progress in doing work that matters and learning, developing and growing. This essential intrinsic motivation isn’t just a requirement for Gen Z but for all workers.
There is a tendency to oversimplify the issue of engagement. However, it is a complex leadership challenge. For example, when it comes to engagement, the real problem is not ‘how?’, but ‘why?’ That means helping people to answer the ‘Why? Why does the work matter to me, the organization, our customers, and the broader society? It is about connecting with purpose, meaning and passion. Engagement will become a powerful ally of productivity when the debate about efficiency embraces these issues. However, as they are focused on delivering short-term results, few efficiency drives will go there.
Here is one of our more cynical coaching colleagues talks about engagement: ‘Do you remember the millennium bug? People feared that the power would go off, phones would stop working, computers would crash, banks would stop and so on. Then came Jan 1 2000, and what happened? Nothing, or at least very little. It turned out to be a damp squid! I am not saying that engagement is not a real business challenge – an ongoing business challenge – what I am saying is that it is being blown up out of all proportion. Enough talking about the problem. Let us focus on the solution’.
Beware illusory savings and hidden costs– those are vital messages for leaders as they pursue a strategy of efficiency. These can arise because:
Traditional budget allocation can be a relatively crude process, often centered on last year plus or minus 5 or 10%. A top-down bureaucratic (often highly political) approach driven by finance can struggle to align resources with strategy. These traditional resource allocation and alignment challenges are multiplied in the face of short-term pressure on numbers.
Typically, it starts with a number. We need to save x or y. But where exactly will these savings or efficiencies be achieved?
The pressure is on to ‘over-egg’ the savings, but what about the longer-term cost? For example, how do you calculate the cost of the lost trust or safety or the damage to the fabric of the organization and its culture.4
An efficiency driven often results in a short term uplift in performance, but can it be sustained? Moreover, what about the longer term cost?
There is one hidden cost that is often overlooked. Traditional productivity and efficiency drives generate much noise and interference, making it difficult for people to keep their heads in the game. The disruption to the everyday running of the business can be significant, especially for efficiency drives that roll out slowly, involve a lot of politics and fail to generate dialogue or engagement.
We need a bigger picture view of efficiency, one that looks beyond short-term savings, looking at the hidden and indirect costs, as well as the longer-term implications
Behind most efficiency drives, there is a short-term financial imperative, so it is not surprising that leaders turn to quick-fix solutions. They are looking for a magic bullet, such as:
•Get everybody back into the office
The problem is that most quick fixes are imaginary, and they address the symptoms but fail to address the root of the problem.
The result is that leaders end of applying 2019 solutions to the challenges of 2023 and 2024. At odds with the new reality of work, the workforce and the workplace, they have the potential to further aggravate the crisis of trust & engagement.5
Need help in this area? Our analytical tools and frameworks enable leaders to make better and faster decisions by illuminating hidden KSFs and risks with the power of data.
Footnotes & References: