The Real Definition of Productivity = physical output that has resale value? 1

[vonsteimel]

Greetings,
I Would like to get some input on this subject.

Here at my work, the terminology is a bit askew.
Its is assumed that the definition of productivity is "physical output that has (or increases) resale value" --- and thus meetings, discussions & much "office work" is therefore unproductive.
inefficient productivity is physical output that is less or equal to the value of input required to create it.
efficient productivity is physical output that exceeds the value of input required to create it.

I do not agree with this definition, as there is a significant amount of "unproductive" work that is essential to creating an efficient factory. In my opinion most managers would be unproductive, yet play some of the most vital roles to an efficient business or factory.


What is your definition of productivity? (and I'm not talking about the definition from dictionary.com .etc)

How can a meeting be productive if it produces nothing physical? and how can one measure or acknowledge non-physical productivity, and its worth?

What is a correct term for "physical output that has resale value"?

Your input will be greatly appreciated!
Thanks,

VS

 

[IRstuff]

Why is productivity so narrowly defined? Writing MMO software produces no physical output. If your lawyer got you out of paying a $10M penalty, was he not productive, unless you count the physical sheet of paper that the judgement was printed on as the physical output?

By that narrow definition, almost all engineering design and analysis is non-productive, and can be eliminated; would that really be the desirable outcome?

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[MikeHalloran]

Most meetings are not productive.

A meeting is potentially productive if it results in accurate minutes of who was there and what was discussed. If nobody wrote it down, it didn't happen.

A meeting is actually productive if it produces change, e.g. action items that are actually acted upon, reported, and recorded.

Chances are that your outfit does not conduct meetings that are productive even in the limited sense outlined above.
... and you are still trying to dig a posthole in a beach, so to speak.

Put another way, productivity is whatever The Big Boss says it is. Let the Wookie win.


Mike Halloran
Pembroke Pines, FL, USA

 

[KENAT]

I think the key is to understand what (or increases) value means, and how many steps down in the process counts toward being productive.

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[JohnRBaker]

I agree. Often 'productivity' is confused with 'performance'. People can often see 'performance' when it's happening and even measure it, often with a stopwatch, literally. This goes back to the late 19th century when people like Frederick Taylor introduced the first 'time studies' (here's where the stopwatches come out) and a few years later, the Gilbreth's added to this by developing what's become known as 'Time & Motion Studies' but again, they were measuring and observing things and events which could be seen and timed, usually with a stopwatch. Now I'm not saying that this work didn't lead to improvements in productivity, I'm sure that it did, but it did tend to get management to focus on what could be seen and observed and not what was actually happening in an organization as a whole.

In my humble opinion, this comes down to that if you true goal is to measure 'productivity' then you need to put away the stopwatches and start looking at calendars.

In our business, we sell software to engineers which helps them to become more productive. Granted, years ago when the use of computers and software was limited and confined to what we called 'islands of automation', the tendency was to look at each solution only based on what could readily measured, again often with a stopwatch, and I guess that was justified since the technology was very expensive and it's impacts limited so management needed to identify stuff which would have an immediate effect on their business processes and in our case, that meant the Design and Manufacturing workflow of products. But even then (I'm talking back in the early 80's), some of us were starting to see that the real issue was going to be the improvements in the 'productivity' of the entire enterprise but it was hard to sell that idea back then because again we were 'marooned' as it were on these 'islands of automation', disjoint pieces not connected or even aware of each others existence.

But over time that has changed. The cost of the 'seat' where a worker accesses an enterprise's data has dropped to the point where it's often no longer even an issue of "do we implement some new technology or not". Also the 'islands' were getting connected together, first with highspeed local networks linking systems in one building or on one 'campus' but eventually with the worldwide net, entire enterprises, including their suppliers and even their customers, are now linked to together to the point where distance is no longer an issue with respect to it being a constraint on doing business. In fact, some organizations are now leveraging the fact that the workday actually can be seen as moving with the Sun, from continent to continent. Standards have emerged where data, even from system developed by different vendors, can still exchange information without any loss of quality or fedelity. And speaking of vendors, like in any maturing industry, over time Darwinism has had its effect reducing the number of different technologies and products helping to eliminate the need for more exchange standards or the fear of data incompatibility as the few big players that are left work out how to share the wealth while still bringing innovation and value to the marketplace.

What these all means is that view of 'performance', that you measured with a stopwatch because you could see something happening, has given way to the more appropriate appreaciation that at the end of the day, it's 'productivity', which is measured using a calendar, is what pays the bills.

Now I know that this doesn't really meet your criteria of stating exactly what 'productivity' is or even how does onw actually measure it in a meaningful way, but I do think that it provides some insight into the fact that you have to look at the entire enterprise looking for how the pieces fit together and where does the data/service/products flow in an organization for which they are collecting money from their customers. And as been previously stated, you have to be careful because often what looks like as being non-productive behavior may be critical to the overall efficiency of a company but it's often only noticed when it's removed from the equation.

Take for example something that many people pay little attention to despite the obvious issues involved. And that's paid vacation time. Now for anyone reading this from somewhere other than the US, there are NO laws in this country mandating that a) companies even provide vacation days, paid or otherwise, and b) even if they do, there is no expectation that people will even take all of them each year. And in most states (there are only two exceptions that I'm aware of) you are likely to automatically lose any unused vacations days at the end of each year. Americans leave on the table millions of hours of vacation time each year and no one seems to think much of that since many in management considers time off for vacation as being nonproductive and therefore something which should be kept to a minimum, hence the reason WHY there are no national laws mandating vacation time. But yet study after study has shown that time off from work, particularly paid time off, enhances the overall productivity of almost any organization. This is NOT 'rocket science' yet Americans are taking off less time now than ever in the history of the country even when they have a fully paid vacation benefit. And the reasons given for not taking vacation, as stated by both employees and employers, is that they think that this helps to make companies more profitable and thus making their jobs more secure. But if productivity is really harmed by this, then these views are a myth and could actually, in the long run, harm a companies prospects of optimal success.

Now for the record, I work in one of those states, California (the other is Illinois) where a worker's unused vacation is considered as deferred compensation and therefore cannot be taken away or at least any limitation placed on 'banking' your unused days must be reasonable and fair. Note that companies can either pay employees for their unused days or they can allow them to accumulate, within some reasonable guidelines. Note that our company allows you to accumulate, IF YOU LIVE AND WORK IN CALIFORNIA OR ILLINOIS, approximately two full years of back vacation before you're forced to start using it or risk losing it. Note that I currently have just over 39 days, or nearly 8 weeks, worth of vacation 'in the bank' and I earn 30 new days each year. My goal is that when I reach the point when I plan on retiring, that I'll have my 'two years worth of vacation' in the bank which means that either I'll get a nice 'severance' check at the end or else I can just go home and continue to collect a regular paycheck, with all the other benefits, for another 10-12 weeks before my actual retirement date would officially arrive (I guees one could say that I'm a 'poster child' for why Americans take so little vacations, but at least in my case, I'm not giving it away each year).

Anyway, it will be interesting to see what other comments posted in this thread concerning what is and how one measures productivity and how companies rationalize the so-called non-productive activities.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

 

[GregLocock]

This bloke seems to write a lot about it.

http://www.gilb.com/blogpost9-Engin...ow-to-measure-it-and-manage-it-ten-principles

My comment, what is the productivity of an engineer who attempts to kill a 700 million dollar program before KO with a carefully thought out position paper demonstrating the huge problems with implementing it in time and at reasonable cost and with a reasonable payback time?

Equally what is the productivity of the product planner who succesfully promotes a program that produces a car that gains 60% market share and wins accolades right left and centre?

What if they are the same project?




Cheers

Greg Locock


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[IRstuff]

In a general sense, productivity is tied to "billable hours" If what you're doing is billable AND it's value-added AND it's profitable to the company, then you are surely productive. If you give foot massages that get the programmers to program 20% more code per hour, then you contribute to the productivity

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[urgross]

Ask a pimp.

 

[Compositepro]

The "big picture" definition of productivity in an economy is dollars generated per man-hour worked. This is an average of all workers and is not very meaningful for an individual. The biggest mistake that companies make is to always seek the highest local optimum based on measurable goals. An a example is a salesman who is compensated on monthly sales. He will make sales that are not profitable because he is not measured on profit. Productive work is anything that adds to the long term profitability of the company. Sweeping the floor is to some extent productive, but after a certain point is unproductive. Finding the right measurements and balances is what make some companies more successful than others.

 

[JohnRBaker]

We used to base sales people's compensation on what the customer was billed for even if the deal was 90% hardware which carried only a 10% to 15% margin while the software portion was technically 100% margin, it was hard to stay profitable. Most of our customers could have probably gotten as good or better deal by buying the hardware directly from the OEM, but our people would go out of their way making promises and offering freebies to get that hardware business because they got paid on the invoiced amount. When we switched them over to a higher percentage, but only basing it on the actual margin generated by the sale, all of our problems took care of themselves.

Sales people are easiest people to get to do what YOU want them to do, just show them how doing what YOU want will allow THEM to earn the more money and you'll never have to fight with them again.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

 

[Compositepro]

That works for everyone. The trick is how to implement a measurement and compensation system that actually does improve productivity. I've known a great many disgruntled salesmen as well as other types of employees. The absolutely sure way to improve productivity, in the short term, is head count reduction.

 

[Ron]

Accountants running a technical organization again!

When you think you have to define productivity to a professional, you have the wrong business focus. Flogging will continue until morale improves.

 

[berkshire]

"" The absolutely sure way to improve productivity, in the short term, is head count reduction. ""
This only works in certain situations.
I have had people as a job was coming to a close ,prolong the work to avoid the RIF..
B.E.

You are judged not by what you know, but by what you can do.

 

[IRstuff]

We had a Black Tuesday once, right before Thanksgiving, I think. We arrived at work, and meeting notices were posted on the doors to go to another division's meeting rooms. Got there, and we were split into 3 groups: those leaving within the hour, those leaving after they completed their projects, and those that got to stay. Natch, those in the middle prolonged the inevitable as long as possible, but, the inevitable eventually came...

TTFN
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[JohnRBaker]

I experienced one of those 'Black Tuesdays' only in our case I think it was a Thursday (this was in a past life back in Michigan).

In our case, if you were NOT asked to a meeting, you were OK. Eventually they got around to talking to each one of us, but I fooled them. When it came time for my boss to explain what was going on and he told me who had been RIF'd and who was being moved to other departments and how this was going to effect our current programs (I was a project engineer working in R&D) I informed him that I was QUITTING, which I think was that last thing he ever expected. I had seen the writing on the wall, and had started to look around and found a job with the organization that I'm currently with (note that this was almost exactly 34 years ago this week) and while I had been given a verbal offer over the phone, I was planning on waiting until I saw it in writing before I sat down with my management to give them a chance to make a counter-offer. But when I realized what was happening, and particularly when my boss tried to explain what motivated the layoffs, I decided that I had no need to wait so I made the decision right there in his office to take the new job. Of course, this was NOT what they had planned for and while they technically never made me a counteroffer, until ONE DAY BEFORE I LEFT, they insisted that I stay and complete my current project despite the fact that the layoffs/transfers had just cost me half the staff that was assigned to my project. They figured it would take 12 to 15 weeks to get it to where I could handed it off to some yet to be identified 'project engineer'. I agreed to 5 weeks as that was the latest that I could wait and still get my family moved and the kids into their new schools (we were moving from Michigan to SoCal) before the fall semester. And as I said, the day before my last day they asked me to change my mind because there was something 'BIG' that was going to happen and they had just assumed that I would be around to help them with whatever was going to happen and that they were planning for me to play a big role in wharever it was (I had been with the company 14 years) but that was about all the details that I got. I said thanks but no thanks and never looked back.

Well, nine months later they announced that they were pulling-up stakes and moving the entire company to North Carolina, a 'right to work for less' state. Eventually they had to move half the company back to Michigan as they could not find the skilled labor or technical staff to develop, build and support our more complex product lines. As one of my old supervisors wrote me a year or so after he made the move to NC, "Remember when we worried about hiring people who could read a blueprint? Well now we worry about whether we can hire people who can READ!".

I'm so glad I did what I did that dark day in July, 1980.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

 

[IRstuff]

Yeah, that's humorous story on my side as well; when I decided to leave that company, the group VP asked to see me and waxed on about stock options and the LBO they were planning. Exactly one month after I left, the Board rejected the LBO in favor of a cash/stock offer from a competitor for less than half of what the LBO offered.

My theory is that the Board couldn't be convinced that the bozos that couldn't make a profit when they were working for the Board, would make a profit as an independent entity that would already owe the Board more than half the value of the LBO. Those guys in France were smarter than I thought they were, given that they bought our company which had zero in common with the core business of the parent company.

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[MikeHalloran]

A former employer once moved an important operation from Connecticut to North Carolina because labor was so much cheaper there.

Illiteracy was only a minor problem for them. What drove them nuts was that nobody showed up on the first day of trout season, the first day of deer season, the first day of grouse season, ... and the first day of every regulated hunting period, of which there were many.

The radius of their orbit around the drain reached zero a while ago....





Mike Halloran
Pembroke Pines, FL, USA

 

[Compositepro]

"" The absolutely sure way to improve productivity, in the short term, is head count reduction. "
This only works in certain situations."

I did not intend this to mean that lay-offs will terrorize the remaining employees to work harder. Productivity is a simple mathematical ratio of company income divided by payroll man-hours. Reducing the payroll will immediately reduce the denominator of the equation. Company income, the numerator, will generally not be immediately affected by lay-offs. So productivity does increase. If this productivity increase can be sustained by the company, then head-count reduction was the right thing to do from almost any perspective.

 

[IRstuff]

"then head-count reduction was the right thing to do from almost any perspective"

If everyone got a 20% increase in workload, they could sustain that for some, non-zero time, but a sizable portion of them will soon bail. So, just dumping extra work on everyone is not the right thing to do from that perspective.

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