Productivity: What Happened to the Missing 33%?

Leaders put the level of productivity and efficiency within their organizations at 67%.  So, what’s happened to the remaining 33%?  Has it been lost due to hybrid working, a lack of engagement, or something else? Well, the data paints a more complex picture.

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Is productivity what it should be?

Let’s cut to the chase: Is executive productivity what it should be? If not, why not? These are the central questions in all the pages written about topics from ‘Performance Theater’ to ‘Quiet Quitting’. Please pause for a moment to reflect on how you would answer these questions for your organization, project, department or team.

With growing paranoia around performance, many managers would answer the first question with a ‘no, productivity is not what it should be’. This naturally leads us to the second question: ‘Why not?’

If not, what is hindering productivity?

What is hindering productivity? Is it that people are unwilling or unable to do their work – i.e., disengaged? Is it because of remote working – that people slack off, are less connected, or efficient when they are not in the office? That is another form of disengagement. This is a topic that has dominated the headlines, but is it enough to fully explain what is hindering productivity?   

‘Performance is suffering due to a lack of engagement’. That has been the dominant narrative over the past year. Some surveys even suggest that more than half the workforce is ‘quiet quitting’¹. All this makes for exciting headlines, but it doesn’t quite stack up for leaders in the real world. At best, it is too simplistic; at worst, it’s just plain wrong!

What is the reality ‘on the ground’?

In reality, few teams would say they are operating at 80% or 90% productivity or efficiency. Indeed, our data puts the figure at between 65% and 75% in most organizations. So, there are valid grounds for suggesting a significant ‘productivity problem’ (or opportunity) in the workplace. However, it is not the one most pundits are talking about.

So, you may be right to be paranoid about performance, but not for the reasons you may think! It is too simplistic to say it is an ‘engagement crisis’, or a battle between returning to the office and working from home. For many leaders, the reality on the ground is much more complex.

When you ask leaders why they are not operating at 90 or 100% productivity or efficiency, you will hear an entirely different set of reasons. It is not due to a lack of skill, motivation or engagement, and it is not that they don’t want to be productive or efficient. Rather, it is because so many things get in the way of them doing their work.

What is working in a large org. really like?

The factors that leaders say are holding them back from peak performance or productivity concern the daily realities of working (or ways of working) within a large organization. That includes the give and take of teamwork, the diversity of priorities, the challenges of dealing with bureaucracy, juggling a growing workload, and so on.

Inefficiencies bound and the larger organizations the greater the inefficiencies. But the source is not what you would expect. It is not lazy or disengaged employees.

‘Standardizing and measuring work is what they are good at, and most are more comfortable reading surveys about employee engagement than talking to people about what it feels like to work in their company.‘

Margaret Heffernan².

What is really draining productivity?

Our research and data (gathered from thousands of teams) point to 10 factors draining productivity and efficiency in large organizations. These are shown in the “What’s Draining Productivity” (WDP) model below:

Every day, right across your organization, productivity and efficiency is being drained by these organizational factors. Alter being drained is talent, ideas, energy and engagement.

A lot of productivity (ideas, talent and energy) goes down the drain. This is surprisingly true in most organizations. That is not a negative news story. However, instead, it’s the opposite. If tackled, these factors can significantly boost productivity (typically 5-25%), benefiting not just the organization but its people too (reducing their frustration, making their work more rewarding, improving their well-being and so on).

What does this analysis reveal?

Despite their importance these 10 factors are often overlooked by managers in their quest to drive engagement or to boost productivity and efficiency. The message is if you’re looking to tackle waste, start here.

The 10 factors that drain leader productivity are almost universal – there are few organizations or teams that don’t have at least 6 of the 10 factors.

The loss of productivity or efficiency is not because the individual is lacking in skill motivation in or commitment. The most engaged person in the world will come up against these factors. They are systemic – they are part and parcel of working in a large organization (and many smaller ones too).

Tackling the 10 factors that drain productivity presents the opportunity for a real win-win, benefiting not just the organization and its shareholders but it’s people too. It’s about enabling people:

• To do their best work
• To bring out the best in each other
• To learn, develop and grow through that work
• To balance all that with a healthy and full life for themselves, their families and their communities.

What is the potential impact?

You can navigate through the first 5 factors that drain productivity by using the slider below. For each factor, there is an explanation and some metrics relating to the potential impact.

Explore the final 5 factors that drain productivity by using the next slider (below). As you review the model, which factors represent the greatest opportunity or challenge for your strategy, project or team?

From reviewing the details behind the factors (using the slides above) you may be surprised at the level of waste or inefficiency involved. Some data points (data gathered by Pitstop Analytics^TM) include:

• Executives are 43% of their time doing low value or non-value adding work
• Executives spend 70% of the working week on internal collaboration, 50% of which they say adds ‘little or no value’.

Based on numbers such as these, it is easy to see that the payback can be is significant—for a typical organization it ranges from 5 to 25%.

This is something that should be driven by numbers – something that our clients use Pitstop Analytics^TM for.

Want to delve deeper?

What does this analysis reveal?

On the surface at least, the factors that are draining leader productivity have little to do with remote or hybrid working. They appear to have little to do with engagement either. These factors are ‘timeless classics’ that existed before the pandemic and will exist long after the pandemic is but a memory. Moreover, they impact on people whether they are working from home or the office.

As the above list shows – the ‘work’ isn’t just ‘the work’! It is also all the other stuff that goes with it – the meetings, the reports, the internal processes and so on. This ‘other stuff’ can account for up to two thirds of the working week³. Let’s be clear this ‘work about work’ is vitally important, it is just that it has expanded so much and isn’t necessarily efficient.

How to plug the productivity drain?

Most of the 10 factors are immediately within the control of leaders and their teams. A notable exception is cumbersome processes, internal bureaucracy and the level of noise and interference (e.g. internal politics). However, teams can often find creative work-arounds in these areas too. Regardless, a team can always control how it reacts or responds to any of the factors in its work environment.

Teams may say they have a high level of autonomy (72%) over how their work gets done, yet them seem reluctant to leverage it. People (or to be more precise teams) need to be empowered to tackle these factors and adapt the Way We Work together. Although at first they may be weary and skeptical that these factors can really be changed. There is very little that one person can do about these factors, it requires collective effort. It is the work of a team.

It those closest to the work that must make the changes. Those at the top of top are often too far removed from the daily realities of the work to know what is required.

There is no magic bullet, however.  The solutions to these challenges are adaptive as well as technical. In other words, new tools or strategies wouldn’t, of themselves, be enough. Old habits die hard and a change of mindset or behavior is likely to be required.

Why tackle these factors?

Why tackle these 10 factors? Well, the real question is ‘why not tackle them?’ They are an impediment to people doing their best work, they drain productivity, innovation, speed and agility. They waste time and energy. So, ‘pulling the drain’ can deliver the following benefits:

• Boost speed, agility and innovation
• Risk to performance
• Barrier to transformation
• Boost engagement
• Improve well being – reduce frustration
• Free up time for strategic work

Unlike the typical efficiency drive, taking these factors is a real win-win. Indeed, those who are doing the work are most affected by this waste. After all, it is their time, energy and talent that is being wasted.

Who will benefit?

The primary focus is on the cost of the organization of waste and inefficiency. Yet, there is an equally important, but largely hidden cost. It is measured in terms of lost time, energy and frustration and is borne by all those who work within the organization.

Indeed, the failure to enable people to perform at their best has an important societal and human cost.

‘We all laugh, a bit nervously, at jokes about the inherent insanity and wastefulness of life in a modern corporation. I’m here to tell you that it shouldn’t be funny. It should be shameful. We should mourn the lives and potential we’re wasting.’

Jeff Sutherland⁴

Executives are expected to do more with less resources. They’re working longer and longer hours, meanwhile the inherent inefficiencies within the environment in which they must operate are left addressed. The result is burn out and frustration.

Why hasn’t this issue been dealt with before?

The question often arises: If there is so much inefficiency or waste then why hasn’t it been tackled before?  We asked leaders this question and they offered The following perspectives:

• It is not a key management priority.
• The impact of this on the performance of the organization is much less clear than the implications of Pursuing the wrong strategy or failing to meet the number.

• Senior management are two far removed from the day-to-day running of the organisation.

• We take these inefficiencies for granted accepting them as simply being an inevitable part of working in a large organization.

• Nobody has put a number on this a number on the number of hours wasted in effective meetings the cost of bureaucracy and so on.

• Primary cast of this inefficiencies and waste is borne by the people doing the work and it is paid in the form of extra hours stress and frustration. It does not appear in the balance sheet.
  
• People have gotten so used to these obstacles and inefficiencies. So it seems normal to:
  • Start the week with 30 or more of internal meetings booked in their diaries
  • Check emails after putting the kids or bed or on a Sunday evening.