Productivity measurement

• In practice, productivity measurement is not straightforward

• How would you measure the productivity of a hospital, fund manager, police force, government ministry, bank or PR firm?

• At organisational level, there’s no one meaningful total productivity measure available because of the complicated mix of processes and tasks, or outputs and inputs involved – and most organisations offer more than one product or service and each one may require a very different mix of resources

• But, at process or task level, there are many partial productivity measures possible

• Some focus on just one output from just one input to a whole process or task – for example:

               Mortgages approved in a week     or      Tins produced in a shift

                   Staff employed in a branch                               Canning line

• They measure what’s got out of the input resource paid for and whether the trends are in the right direction or not

• Partial measures let you compare actual with past performance levels in-house or best practices outside – and they raise alarms if and when things start to go wrong

• Each individual manager should have at least one partial productivity measure – ones which focus his team members on their most important outputs and most costly inputs

• Thousands of partial productivity ratios are possible

• Perm any one output with any one input in any organisation and one can soon see the blizzards of ratios possible

• However, most of them would be irrelevant to most managers – hence the need to focus only on the important outputs and inputs for each team

• The few ratios that managers need will cover some 90% of their teams’  productivity picture