The evolution of productivity

Lydia Dishman wrote an article for Fast Company outlining steps taken over time to improve productivity – it’s not comprehensive but interesting nevertheless

According to her, there’s no definitive source for the start of productivity improvement efforts but there are historical mentions of it in Wealth of Nations by Adam Smith (1776).

Smith contended that there were two kinds of labour – productive and unproductive viz:

‘There is one sort of labour which adds to the value of the subject upon which it is bestowed; there is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labour. Thus the labour of a manufacturer adds, generally, to the value of the materials which he works upon, that of his own maintenance, and of his master’s profit. The labour of a menial servant, on the contrary, adds to the value of nothing . . . A man grows rich by employing a multitude of manufacturers; he grows poor by maintaining a multitude of menial servants. The labour of the latter, however, has its value, and deserves its reward as well’.

Benjamin Franklin, a contemporary of the Scottish economist, had a simple way of assessing productivity – ‘start the day asking what good shall be done, and at the end of the day evaluate based on what was accomplished’. Lofty, to be sure, but an interesting measure nevertheless.

THE ABUSES OF LABOUR IN THE NAME OF PRODUCTIVITY

A milestone advancing  productivity occurred in the USA during the same era when Eli Whitney invented the cotton gin in 1793. This impacted the U.S. economy, particularly in Southern states where cotton was grown and picked by slaves. Of course, slave labor was free, and abuse of slaves was rampant, yet the landowners got an additional boost to their bottom lines by implementing a machine that increased their production 25-fold.

The cotton gin wasn’t the only technological advancement to grow out of the early days of the Industrial Revolution. Other machines– from steamboats to sewing machines, light bulbs to telephones – that moved production from handmade in the home to factories sprung up across the country during the late 18th and early 19th century and the frenzy with producing more goods more quickly became something of a national pastime.

Slavery was thankfully abolished after the Civil War, but low-wage factory workers (many of whom were children) continued to toil in unsafe conditions for decades, all in the name of increasing productivity. It took years, but eventually, the organisation of labour unions put measures in place to protect workers from the excesses of the push for productivity.

THE BIRTH OF  CONSULTANTS

Although the 20th century was rocked by two World Wars and the Great Depression, productivity was a focal point for manufacturing goods needed to support military efforts and later, to satisfy the demands of the growing middle class.

So it was ripe for the rise of the earliest efficiency expert, an industrial engineer from Philadelphia named Frederick Winslow Taylor. Nicknamed Speedy Taylor, he would get himself a consulting gig with a company, observe its workers, and calculate how they could do their jobs faster – and then charge a hefty sum for the report.

Peers Frank and Lillian Gilbreth were mining a similar productivity vein by dividing human action into 17 motions and then determining which was the most efficient and effective way to do any task.

From these somewhat ignominious beginnings (Taylor was believed to be a liar who fudged his numbers, and Frank was famous for saying postpartum bedrest was a waste of time–prompting Lillian to keep working after the birth of each of her 15 children) grew a sizeable industry of management consultants who aimed to tackle the productivity problem from every possible angle.

THEN CAME THE PRODUCTIVITY GURUS

Among the more recognisable players is Tom Peters, whose book In Search of Excellence chronicles the productivity practices of “America’s best-run companies.”

Michael Porter wrote Competitive Advantages, also exalting the leadership of productive management practices.

And Bill Smith, an engineer at Motorola, introduced Six Sigma in 1986 as “a disciplined, data-driven approach and methodology for eliminating defects in any process – from manufacturing to transactional, and from product to service.”

According to Six Sigma, “Productivity is much more important than revenues and profits of the organisation because profits only reflect the end result, whereas productivity reflects the increased efficiency as well as effectiveness of business policies and processes. Moreover, it enables a business to find out its strengths and weaknesses. It also lets the business easily identify threats as well as opportunities that prevail in the market as a result of competition and changes in business environment.”

THE CURRENT STATE OF PRODUCTIVITY AND WHAT’S NEXT

The thing is that in the frenzy to be more productive, we as a nation have become a little less so.

Economist Robert Gordon of Northwestern University chalks this up to the fact that we are using methods and procedures that are over a decade old. He told the Atlantic, “We had a great revolution in the 1980s and ’90s as businesses transitioned from paper, typewriters, filing cabinets to personal computers with spreadsheets, word-processing software. And then that revolution was accompanied in the 1990s by the internet, by free information through search engines, through e-commerce, and doing away with paper.” Until we start incorporating more robots and AI to take over our rote tasks, this downward trend will continue.

WORK SMARTER, NOT HARDER

The other obsession with productivity is entwined with a false belief that we need to be working all the time to be our most productive selves. And that’s simply not true.

As Leila Hock, a career coach, points out: “It’s not hard work – work is work, and yes, some work requires more brain power, but most of us smart people like that and want more of it, so let’s stop calling it hard. Let’s call it productive. Effective. Valuable. Anything that speaks to nature over quantity, because that’s what we need more of.”

So maybe Ben Franklin’s to-do list had it right all along.

Work and assess what good was accomplished that day – then the most productive day will have the most good attached to it.

A famous fire that changed workers’ rights

The following are extracts from a publication by the AFL-CIO, America’s Unions

On Saturday, March 25, 1911, a fire broke out on the top floors of the Triangle Shirtwaist factory in New York

Firefighters arrived at the scene, but their ladders weren’t tall enough to reach the upper floors of the 10-story building. Trapped inside because the owners had locked the fire escape exit doors, workers jumped to their deaths. In a half an hour, the fire was over, and 146 of the 500 workers—mostly young women—were dead.

The fire alone wasn’t what made the shirtwaist makers such a focal point for worker safety. In fact, workplace deaths weren’t uncommon then. It is estimated that more than 100 workers died every day on the job around 1911.

What it did do was bring attention to the events leading up to the fire which, after the fire, inspired hundreds of activists across the state and the nation to push for fundamental reforms.

The Life of a Shirtwaist Maker:

The shirtwaist makers, as young as age 15, worked seven days a week, from 7 a.m. to 8 p.m. with a half-hour lunch break. During the busy season, the work was nearly non-stop. They were paid about $6 per week. In some cases, they were required to use their own needles, thread, irons and occasionally their own sewing machines. The factories also were unsanitary, or as a young striker explained, “unsanitary—that’s the word that is generally used, but there ought to be a worse one used.” At the Triangle factory, women had to leave the building to use the bathroom, so management began locking the steel exit doors to prevent the “interruption of work” and only the foreman had the key.

The “shirtwaist”—a woman’s blouse—was one of the country’s first fashion statements that crossed class lines. The booming ready-made clothing industry made the stylish shirtwaist affordable even for working women. Worn with an ankle-length skirt, the shirtwaist was appropriate for any occasion—from work to play—and was more comfortable and practical than fashion that preceded it, like corsets and hoops.

Clara Lemlich:

Years before the Triangle fire, garment workers actively sought to improve their working conditions that led to the deaths at Triangle.

In 1909, as factory owners pressed shirtwaist makers to work longer hours for less money, several hundred workers went on strike.

On Nov. 22, a section (Local 25) of the International Ladies’ Garment Workers’ Union (ILGWU) convened a meeting to discuss a general strike. Thousands of workers packed the hall.

Nineteen-year-old Clara Lemlich was sitting in the crowd listening to the speakers—mostly men—caution against striking. Clara was one of the founders of Local 25, whose membership numbered only a few hundred, mostly female, shirtwaist and dressmakers. A few months earlier, hired thugs had beaten her savagely for her union involvement, breaking ribs.

When the meeting’s star attraction, the American Federation of Labor President Samuel Gompers, spoke, the crowd went wild. After he finished, Clara expected a strike vote. Instead, yet another speaker went to the podium. Tired of hearing speakers for more than two hours, Clara made her way to the stage, shouting, “I want to say a few words!” – once she got to the podium, she continued, “I have no further patience for talk as I am one of those who feels and suffers from the things pictured. I move that we go on a general strike…now!”

The audience rose to their feet and cheered, then voted for a strike.

The Uprising of 20,000:

The next morning, throughout New York’s garment district, more than 15,000 shirtwaist makers walked out.

They demanded a 20% pay raise, a 52-hour workweek and extra pay for overtime.

The local union, along with the Women’s Trade Union League, held meetings at dozens of halls to discuss plans for picketing. When picketing began the following day, more than 20,000 workers from 500 factories had walked out. More than 70 of the smaller factories agreed to the union’s demands within the first 48 hours.

Meanwhile, the fiercely anti-union owners of the Triangle factory met with owners of the 20 largest factories to form a manufacturing association. Many of the strike leaders worked there, and the Triangle owners wanted to make sure other factory owners were committed to doing whatever it took—from using physical force (by hiring thugs to beat up strikers) to political pressure (which got the police on their side)—to not back down.

Soon after, police officers began arresting strikers, and judges fined them and sentenced some to labor camps. One judge, while sentencing a picketer for “incitement,” explained, “You are striking against God and Nature, whose law is that man shall earn his bread by the sweat of his brow. You are on strike against God!”

The struggle and spirit of the women strikers caught the attention of suffragists. Wealthy progressive women like Anne Morgan (daughter of J.P. Morgan) and Alva Belmont (whose first husband was William Vanderbilt) believed that all women—rich and poor—would be treated better if women had the right to vote. Alva saw the labor uprising as an opportunity to move the women strikers’ concerns into a broader feminist struggle. She arranged huge rallies, fund-raising events and even spent nights in court paying the fines for arrested strikers.

The coalition of the wealthy suffragists and shirtwaist strikers quickly gained momentum and favorable publicity. Fifteen thousand shirtwaist makers in Philadelphia went on strike, and even replacement workers at the Triangle factory joined the strike—shutting it down.

A month into the strike, most of the small and mid-sized factories settled with the strikers, who then returned to work. The large factories, which were the holdouts, knew they had lost the war of public opinion and were finally ready to negotiate. They agreed to higher pay and shorter hours but refused even to discuss a closed shop (where factories would hire only union members and treat union and nonunion workers equally in hiring and pay decisions).

At a series of mass meetings, thousands of strikers voted unanimously to reject the factory owners’ proposal. They insisted on a closed shop provision in which all employees at a worksite were members of a union. For these young women workers, the strike had become more than taking a stand for a pay raise and reduced work hours. They wanted to create a union with real power and solidarity.

While a closed shop became standard practice in later decades, at the time, their insistence seemed radical. The issue unraveled the alliance between the union and the wealthy progressive women. But by then, only a few thousand workers were still on strike, from the largest, most unyielding companies—including Triangle.

  • In February 1910, the strike finally was settledThe few remaining factories rehired the strikers, agreed to higher wages and shorter hours and recognized the union in name only, resisting a closed shop.
  • Local 25, which prior to the strike represented only a few hundred members, now had more than 20,000.
  • However, workers at Triangle went back to work without a union agreement. Management never addressed their demands, including unlocked doors in the factory and fire escapes that functioned.

 

The Legacy of the Shirtwaist Makers:

A week after the fire, Anne Morgan and Alva Belmont hosted a meeting at the Metropolitan Opera House to demand action on fire safety, and people of all backgrounds packed the hall.

A few days later, more than 350,000 people participated in a funeral march for the Triangle dead.

Three months later, after pressure from activists, New York’s governor signed a law creating the Factory Investigating Commission, which had unprecedented powers – they first enacted laws covering fire safety, factory inspections and sanitation and employment rules for women and children – then entirely rewrote New York State’s labor laws and helped create the nation’s most sweeping worker protections.

Target setting

Targets are needed to bring meaning to any performance measure

They enable one to quantify scope for improvement, performance gaps to be closed and urgency for change

Told your ‘bad’ cholesterol level is 8.6 and most would ask ‘so what?’ – told that good health requires the level to be below 5 and a course of statins is needed pronto

At work, all teams need to fully understand how they are being measured – and be provided with rapid feedback on actual performance levels whilst their efforts are still fresh in their memories

However, targets vary over time viz:

  • Budget targets = Short term – one year ahead:

    • Usually set by taking last year’s results and adding a small % to them so they’re not too difficult to meet

    • However, if and when they are met, most managers either don’t try to do any better (i.e. they put a brake on progress) or they don’t let it show in their results in order to get a flying start for the next year

    • In the public sector, it’s often worse – a culture of ‘use it or lose it’ is widespread – any manager who spends less than his budget in one year would expect to have it reduced in the next, so he makes sure he spends the lot

    • In addition, budgets, whatever the sector, can lock in considerable waste – if last year’s budget funded a 30% waste of resources, as many do, then adding say 5% to the total not only perpetuates current waste but adds to it

    • So always ask of any budget, ‘how wasteful?’ and ‘how stretching?’

  • Best practice (BP) targets = Medium term – two to three years ahead:

    • Internal BPs – they provide worthy targets, at least to start with – first identify best performances recently achieved by your own team, then other in-house teams working on similar work – then ask why your team does not achieve these BPs all the time – it’s much like an athlete constantly comparing his latest performances with his PB (Personal Best)

    • External BPs – by non-competitors who are leading lights in specific fields – some are happy to publicise their better ways of doing things, and the lessons learned from mistakes made

    • External BPs – by competitors – if there’s a significant performance gap between you and the best in your sector, your very existence is under threat so action is needed to close the gap – however, beware copying what others do for it may not suit your circumstances and abilities – it’s much like watching Rory McIlroy play golf but never being able to play like him – instead, it’s often better to study your own working methods and improve them in your own way

  • Goals = Long term – five years ahead:

    • Goals are aspirational targets i.e. dreams that just might become reality

    • Most global winners possessed ambitions out of all proportion to their resources and capabilities when they started out

Given these options, beware the following:

  • Many targets are set arbitrarily by back-room bureaucrats who lack a good understanding of what managers need to focus on in order to keep their customers happy and their units performing well:

    • The latest example is the decade-long campaign for normal (gold standard) rather than caesarean (systemic failure) births despite the danger and psychological damage done to mothers and their babies

    • Hospitals were assessed accordingly, even ‘congratulated for having done only natural deliveries over eight months’ according to The Times

  • Other targets are always raised every year:

    • A ‘puissance problem’ is the result

    • Managers keep ‘raising the bar’ regardless of how high it was last time so, eventually, it can become too difficult to meet

    • Teams then either give up trying and / or become demotivated, and so fail miserably, especially if there are no extra carrots on offer

Overall, target setting is thus not a quick, back-of-envelope exercise but one which must be carefully considered

For positive results, targets MUST be seen by those who have to reach them as realistic, stretching but fair – otherwise, only negative results will follow

Waste makes productivity dead in the water

 A post by author Charles Hugh Smith hits the nail on the head about the ‘productivity puzzle’ – rising waste in all sectors, hardly mentioned by the experts, is mostly to blame

Productivity in the U.S. has been declining since the early 2000s. This trend mystifies economists, as the tremendous investments in software, robotics, networks and mobile computing would be expected to boost productivity, as these tools enable every individual who knows how to use them to produce more value.

One theory holds that the workforce has not yet learned how to use these tools, an idea that arose in the 1980s to explain the decline in productivity even as personal computers, desktop publishing, etc. entered the mainstream.

A related explanation holds that institutions and corporations are not deploying the new technologies very effectively for a variety of reasons: the cost of integrating legacy systems, insufficient training of their workforce, and hasty, ill-planned investments in mobile platforms that don’t actually yield higher productivity.

Productivity matters because producing more value with every unit of energy, every tool and every hour of labor is the foundation of higher wages, profits, taxes and general prosperity.

I have four theories about the secular decline in productivity, and all are difficult to model and back up with data, as they are inherently ambiguous and hard to quantify:

1. Mobile telephony and social media distract workers so significantly and ubiquitously that the work being produced has declined per worker/per hour of paid labo

2. Public and private institutions have become grossly inefficient and ineffective, soaking up any gains in productivity via their wasteful processes and institutionalized incompetence.

3. Our institutions have substituted signaling and compliance for productivity

4. The financial elites at the top of our neo-feudal economy have optimised protecting their skims and scams above all else; their focus is rigging the system in their favor and so productivity is of no concern to them.

Other commentators have noted the drain on productivity as workers constantly check their mobile phones and social media accounts–up to 400 times a day is average for many people.

“Addicted” is a loaded word, so let’s simply note the enormous “able-to-focus-without-interruptions” gap between those who only answer phone calls and limit social media to a few minutes per day in the evening during off-work time, and those who are distracted hundreds of times throughout the day.

Some tasks can be interrupted without much loss of productivity, but most knowledge-worker type tasks are decimated by this sort of constant distraction – even though the distracted worker will naturally claim that their productivity is unharmed.

The list of public institutions that now demand absurd wait times for minimal or even defective service keeps growing:

  •  The California Dept. of Motor Vehicles (DMV) now soaks up to eight hours of waiting to complete mundane tasks. Employees have been caught napping for hours, and customers waiting for service note the lines finally start moving in the last half-hour of the day when the employees are motivated to process the people in line so they can go home.

  • Other public-sector systems are equally Kafkaesque – building permits that once took hours to process now take months

  • In the private sector, it’s becoming increasingly difficult to fix problems created by the corporations themselves – multiple phone calls, long wait times, etc.

The core dynamic is that public institutions and corporate cartels lack any mechanisms to enforce transparency and accountability

There is no competitive pressure on the DMV or courts, and essentially zero competitive pressure on monopolies such as Facebook and Google and cartels such as the big healthcare insurers.

The only possible output of this system is extortion as a way of life:

  • We make you wait

  • We make you pay more for a poor quality service

  • We make you comply with useless regulations

  • We make you use buggy, bloated software, and so on.

Quasi-monopolies like Microsoft and Apple force tens of millions of users to re-learn new versions of software, detracting from productivity rather than enhancing it, despite their claims.

Other types of planned obsolescence are equally destructive.

With no mechanisms in place to enforce accountability and efficiency, there is no accountability or efficiency – so these monopolies and cartels can be as wasteful, inefficient and unaccountable as they want.

Compliance is a productivity killer – doctors and nurses no longer have enough time to serve patients because compliance now soaks up so much of their time.

Signaling, like compliance, is a productivity killer – the entire trillion-dollar system of higher education doesn’t measure or reward learning or the acquisition of knowledge; the diploma / credential signals that the student dutifully navigated the bureaucracy and is ready to be a corporate/government drone in another bureaucracy. That they learned next to nothing is of no concern to the system. If learning was the goal, we’d accredit the student, not the institution.

If we look at the economy as a whole, we find it is dominated by monopolies and cartels, public and private.

No wonder overall productivity is declining: there are no feedback loops or mechanisms to enforce transparency, accountability or pressures to improve efficiency and productivity gains on these neofeudal, extortionist structures.

For more, see ‘The Nearly Free University and the Emerging Economy’ ($2.99 Kindle, $15 print)

Misleading research metrics

In an article entitled ‘Capitalism is ruining science’, Meagan Day (for www.jacobinmag.com) points out that universities existed before capitalism and pursued not profit but truth and knowledge

But no longer

The modern university has become increasingly subservient to the imperatives of capitalism i.e. competition, profit maximisation and increasing labour productivity

In academia, this manifests itself as ‘publish or perish, funding or famine’

Without public investment, universities are compelled to play by private sector rules i.e. to operate like businesses, focus on their bottom line and constantly evaluate their inputs and outputs

Hence, according to researchers Marc Edwards and Siddhartha Roy, they have introduced new performance metrics which govern almost everything researchers do, including:

  • Publication counts

  • Citations

  • Journal impact factors

  • Total research dollars

  • Total patents

These metrics now dominate decision-making in faculty hiring, promotion and tenure, and awards – so academic scientists are increasingly driven to get their research published and cited – scientific output as measured by cited work has doubled every nine years since WW2, they say

But quantity does not equate to quality:

  • Rewards for publication volumes have resulted in scientific papers becoming shorter and less comprehensive, ‘boasting poor methods and an increase in false discovery rates’

  • The growing emphasis on work citations has resulted in reference lists becoming bloated to meet career needs due to peer reviewers requesting their own work be cited as a condition of publication

Meanwhile, because increased grant funding also includes more professional opportunities, scientists spend an outsize amount of time writing grant proposals and overselling the positive results of research to catch the attention of funders – and lose opportunities for careful contemplation and deep exploration, which are vital if they are to uncover complex truths

Sadly, the combination of perverse incentives and decreased funding increases pressures which can lead to unethical behaviour – and if a critical mass of scientists become untrustworthy, a tipping point may be reached where scientists are thought to be corrupt, and public trust is lost

Peter Higgs, the British theoretical physicist who, in 1964, predicted the existence of the Higgs boson particle, said he would never have been able to make his breakthrough in the current academic environment:

  • “It’s difficult to imagine how I would ever have enough peace and quiet in the present climate to do what I did in 1964

  • Today, I wouldn’t get an academic job – it’s as simple as that – I don’t think I would be regarded as productive enough

  • I became an embarrassment to the physics department at Edinburgh University when they did research assessment exercises – they would send around a message saying ‘please give us a list of your recent publications’

  • I would send back a statement – ‘None’

  • I was kept around, despite this, solely in the hope that I would win the Nobel Prize which would be a boon to the university

The noble purpose of any science academy is to provide the resources and encouragement for people to carry out rigorous experiments that will enhance collective knowledge about the world we live in

At present, those aspirations suffer when (US) austerity-minded administrations stem the tide of federal funding and institutions change their business models to suit