Updated Productivity Measures at long last

The following article from the News Team at ‘Fortune Herald’ is well worth reading.

For too long, most ‘economic experts’ have relied on basic measures of productivity, both at national and organisational levels, to underpin their action plans and/ or news articles.

However, most know such measures are either out of date and/ or flawed – mostly relevant to the good ol’ days when manufacturing dominated developed economies – labour numbers/ hours dominated inputs – production volumes were the most important outputs – customers for cars were thus offered ‘any colour so long as it’s black –  but those days are long departed.

Services now comprise some 80% of those same economies, and it’s their quality of outcomes that is usually far more important than their output volumes. However, outcome quality is not included in productivity calculations – only by implication for the private sector and rarely for the public sector.

But enough said.

Read on, consider its relevance to your sector and see if you agree with what the News Team say. 

‘FORTUNE HERALD’ ARTICLE

• I was in a meeting with engineering leads not long ago, and we were discussing whether or not the person who closed the most tickets was actually productive.
• Half of the group argued, “Yes, obviously!” while the other half questioned if the exercises actually advanced anything.
• The argument felt strangely philosophical.
• I remember that moment because it showed that we were all still living from an outdated script, not because of the drama.
• That script has been subtly altered over the last several years.
• Hours worked, tasks finished, and lines of code pushed are examples of traditional productivity metrics that are rapidly becoming obsolete.
• The emergence of outcome-driven cultures, hybrid work settings, and generative AI has made us re-evaluate what we’re actually evaluating.

• Generative AI did more than simply speed up work – it confused the reasoning behind a lot of well-known measurements.
• How can we measure productivity when an AI agent can generate a complete project brief, draft emails, or even code modules in a matter of seconds?
• When it may be produced indefinitely, quantity loses all meaning.
• Instead, the emphasis turns to value:
  • Was the code correct?
  • Was a nuanced thought reflected in the brief?
  • Did the work cut down on future rework?
• The “rework rate”—the frequency with which something needs to be fixed, modified, or redone—is currently being assessed by many teams as a crucial metric.
• It’s a noticeably better method of measuring accuracy than volume.
• Essentially, it encourages careful execution rather than merely quick results.
• This change has only been hastened by remote and hybrid work settings.
• In the past, physical presence—who showed up early, stayed late, and kept their screen lit—was a stand-in for participation.
• But as offices were silent, those optics vanished.
• These days, some businesses still attempt to keep an eye on their workers using webcam or keyboard activity monitors.
• The result?
• Employees manage the appearance of work while feigning to work in a bizarre performance theater.
• It’s a strategy that undermines trust, encourages burnout, and diverts attention from the important things.

• High-performing teams now focus on evaluating the efficacy of systems rather than just individuals.
• They examine the efficiency with which work moves from conception to completion.
• They examine the areas where bottlenecks are caused by handoffs.
• They inquire as to whether work that affects customers is getting into production fast and remaining steady after it does.
• This systemic approach has shown great effectiveness, particularly in intricate, team-based settings.

• A team I recently encountered used DORA (Digital Operational Resilience Act) metrics, emphasizing (sic) lead time, recovery time, change failure rate, and deployment frequency.
• The terms seem technical on the surface.
• However, the effect was strikingly obvious.
• The developer who produced the most lines of code was no longer honoured.
• The team that produced the most dependable code, with fewer errors and quicker repairs, was honoured.

• That change was especially welcome to me.
• False incentives were frequently produced by outdated measurements.
• Measuring “tickets closed,” for instance, may lead teams to divide labour into small, low-value tasks.
• On paper, it seems fruitful, yet it only produces mediocre results.
• On the other hand, results that truly matter are produced by concentrating on meaningful outcomes, such as system resilience, customer satisfaction, or commercial impact.

• Even big businesses are starting to realise this.
• More forward-looking metrics like “decision velocity” or “strategic alignment” are replacing traditional KPIs like “utilisation rate” or “cost-per-head.”
• Better questions are raised by these new metrics:
  • Are we making the right decisions fast enough?
  • Are we moving closer to the future we desire as a result of our work?
• The fact that contented teams are more productive teams is also becoming more well recognized.
• By concentrating on employee satisfaction, Hitachi, for example, witnessed a notable improvement in performance.
• They observed how personal motivation, psychological safety, and objective clarity increased call center sales and retail earnings.
• The experiment’s ability to gauge the human element of performance was remarkably successful.

• Things get really intriguing at this point.
• Because sustainability is more important to actual productivity than output alone.
• Even while they might meet deadlines today, burned-out workers will cost the business a lot of money tomorrow.
• Indicators like “developer joy,” “team flow,” and even real-time psychological safety scores are now part of contemporary metrics because of this.
• Although it may sound gentle, the reasoning is really obvious: people perform at their highest level when they feel trusted and supported.
• And that labor endures.
• Static performance measurements degrade when work becomes increasingly project-based, cross-functional, and fluid.
• Nowadays, teams develop strategies on the fly, influenced by feedback loops and in-the-moment experimentation, rather than having them dictated to them.
• In that situation, dynamic tools are necessary for measuring progress.

• Scorecards that evaluate cycle time, issue response, and value realisation throughout delivery — rather than simply after — are being tested by more businesses these days.
• This change is cultural in nature rather than merely technological.
• It reflects an increasing conviction that momentum, rather than motion, is the best way to judge achievement.
• Employees hardly ever mention task counts or time trackers when asked what motivates them to be productive.
• They discuss making actual progress, resolving a challenging issue, supporting a colleague, or ultimately delivering a feature to users.
• They understand what it’s like to do good work.
• Finally, the metrics are catching up now.