Productivity measures the relationship between the amount of output and the amount of input. Increasing productivity means increasing the amount of output faster than the amount of input. The output quantity can mean anything from the number of products made over the number of customers served to the number of donors treated or the number of work passes produced. The entry usually summarizes all the resources needed to do this, from raw materials to equipment to labor hours.
How is it possible to increase productivity? One way seems to be obvious: we have to work faster to get more done in the same time. Although this request might have been correct 30 years ago, it is highly inappropriate today and would create even more frustration among people who are already overworked. It’s not about HOW FAST we work. It’s about HOW we do our job. It’s about the process, rather than the people.
Running a process very fast does not necessarily mean that the process runs very productively. Although we have introduced IT support to all sorts of processes over the last 40 years with the effect of speeding up some processes, overall productivity hasn’t shown the same amount of boost. The productivity of a process can be increased by reducing the input, that is, the amount of raw material or labor deployed to generate the output.
Therefore, the efficiency of a process is a good indicator of opportunities to increase productivity. There are many ways to achieve this – small changes and small gains can be expected through Kaizen, WITS or Quality Circles. The downside of these small changes is very often that they are not sustainable due to the reversible nature of the improvements. Greater impact can only be achieved through process improvement or process redesign.
An insurance company in Singapore facing multiple complaints every day about long wait times is looking for ways to increase customer satisfaction and hopefully the number of renewals on a given insurance plan without increasing headcount. This seems impossible as the team is already overworked, turnover is high, and morale is low. However, the CEO is eager to try something new: Lean Six Sigma. After analyzing the process using simple tools like Value-Stream-Mapping, the team discovered some very interesting insights:
1. Customers wait up to three weeks for their renewal even though the actual renewal usually takes only 15 minutes.
2. The renewal team spends a significant amount of time on secondary activities, such as answering calls from customers who don’t understand the confusing renewal notice.
3. “Old clothes” prevent the process from running smoothly. Some team members, for example, batch their work, meaning they wait until Friday to work on a certain stack of customer requests. Some team members are very busy, others are not. They work in different customer segments and therefore “can’t” help each other.
It doesn’t take long for the process stakeholder team to come up with simple yet powerful improvement suggestions:
1. Reinvent the renewal notice with customers in mind.
2. Redesign the process by minimizing secondary activities and focusing on value-added steps.
3. Increase workforce flexibility through cross-training and job redesign, as well as incentives for staff willing to “upgrade” their skills.
A year later, the same staff can handle a 35% increase in volume through a higher turnover rate. As a side effect, by leading this improvement effort, the team leader has gained enough self-confidence to be promoted to the management team.
conclusion
Increased productivity can be achieved in multiple ways. The myth of implementing IT support as a panacea for productivity problems has generally been proven wrong. Sometimes IT is used to speed up broken processes… to bring up the same old problems, but faster. Focusing on process, rethinking the way work gets done, redesigning and improving the flow of activities across all sorts of functions will likely produce results. As a side effect, it will contribute to staff development and reinforce leadership.