What is productivity?
Productivity is simply how much output can be produced from a given set of inputs. A simple definition yet it involves a complex inter-dependent web of contingencies such as skills, infrastructure, government policy, capital and others.
Amongst all the factors, technology is often observed as the catalyst for increased productivity given its ability to radically change the way we work and live - think of the industrial revolutions created by the steam engine, and the internet etc.
The impact of technology
New technologies have democratised further technological innovations. Gone are the days that technological revolutions were the exclusive purview of big industrial organisations.
Innovations in technology have enabled further technological innovations to be created by individuals (e.g. apps) or collaboratively (e.g. opensource).
New technologies are being developed on top of another at a rapid rate. Technological innovations beget technological innovations, but do they result in productivity? It seems not as the productivity paradox suggest.
The productivity paradox
The productivity paradox refers to the situation where rapid advances in technology and innovation do not seem to translate into equally strong growth in productivity at the level of firms, industries, or whole economies.
This may be why Australia is still struggling with productivity. One would assume that we, being a rich country, means we can buy all the latest-and-greatest tech and, voila, we will be a highly productive nation. Not quite.
The puzzle is more puzzling as we have access to some of the best innovative technologies in Artificial Intelligence, the Internet of Things, Virtual and Augmented Reality, Quantum Computing, and 5G and Next-Generation Connectivity - but yet we our productivity is nowhere near where we should be (the threshold of what is considered 'productive' is a whole debate in itself).
So, what is missing and where do go from here? An important part of the jigsaw is 'people'.
The power of people
Like the notion of productivity, the solution of people is simple yet complex. We need people with the right skills to not just create and use technological innovations but to also build infrastructure, and to develop the right policies.
But it is not just about these directly related skills, it is also about how we lead, manage, develop and engage others.
First, in their own organisations, leaders and managers need to look at the 'big picture' i.e. business model, to see where are the opportunities to create value and unlock efficiencies and prioritise them.
Second, they need to revisit processes (internal workflows and external supply chains) that drive the value creation. But these processes need to be examined together with people (including external partners), technology and other complementary assets e.g. infrastructure, to optimise gains.
As part of this, it is important to establish metrics, so we know our starting point that allows us to gauge future improvements.
Like the adage goes; "you can't manage what you can't measure" - but a balanced perspective is needed as another 'counter' adage goes, "what counts does not always matter, and what matters cannot always be counted". Which leads me to my last points; people, specifically, capability and culture is crucial.
Productivity can only be achieved if we have laser-focus on skills development in equipping people with digital and analytical (data) skills.
Adaptive capabilities are also required as increasing productivity and employing new technologies ultimately means change.
Leaders and managers also need to create an environment of psychological safety and engagement by encouraging their colleagues to experiment, learn, and suggest improvements without fear.
Leaders and managers can reinforce the change by cultivating a culture that is premised on trust and empowerment that promotes continuous improvement, and to signal that productivity gains are shared with everyone through work-life balance, especially if they emphasise that productivity is about working smarter, not just "doing more."
