Productivity - What is it??

Some of you might know that my first job after graduation was with the Productivity and Standards Board or PSB for short (now known as SPRING Singapore).

Reason why I got hired was because my Master thesis was on measuring productivity using Econometrics modeling. During that time, there was an on-going debate by Alwyn Young and Paul Krugman about the productivity, or lack of, in Singapore's manufacturing sector compared to the other Asian 'dragons', such as Hong Kong and Taiwan.

Now, with productivity back in the headlines it is a question I ask myself if I should dust off my thesis and look for relevant learning points or is this productivity a really different one?

After much thoughts, I reckon that while the computation of productivity is still valid, the variables and coefficients are now very different.

Let me illustrate. In the past, we determine how productive we are through the use of labor and capital in an optimal fashion and in the most effective and efficient way. Therefore, two firms with the same quality and quantity of labor and capital used in the same combination should produce identical outputs. However if one firm manages to outdo the other, then in comparison it is more productive.

In this new economy, using the same quality and quantity of labor and capital in the same combination will not yield the same output. And this is because of one key differentiating factor. And if this factor is harnessed to the max and properly nurtured (note: not managed) it will bring about extensive competitive advantage.

This differenting factor is 'ideas'. And I believe ideas is something that requires an elegant expression of calculus to capture, which then allow us to solve and hence seek solutions in the process.

To help us learn how to nurture ideas in our workplace, we suggest the 4E Framework and with it a four-step process in nurturing ideas.

Explore: this is simply to encourage our people to ask questions, challenge assumptions, think "what if we can ...", and see things from different perspectives. At this stage, it is important that we really explore all areas to see how we can better ourselves.

Experiment: here, we provide seed funds for projects that were explored in the first phase. Individuals are encouraged to be creative and innovative in their ways to solve the areas identified in the explore phase.

Expand: once the experiments are completed it is essential to see how it would contribute to the organizational goals. This is where we determine which ideas are given an expanded lease of life.

Excellence: implementation at the macro level may not be as smooth as implementation at the controlled level. Therefore at this phase, a close assessment and review process must be employed to refine the ideas further in order to experience excellence.

Research and real-life stories have shown that the above process brings about significant productivity gains for organizations. Do you have some form of framework and/or process that mirrors that of the 4Es described above?

Please share with us. Thank you.

Your friend,
Melvyn
(Posted from my iPhone)