This is how I see Organisation Design efforts playing their game, in trying to optimise conditions to ensure the level of Productivity increases constantly. How? Right-sizing jobs, having proper communication systems, providing suitable competency models, adequate reward mechanisms, the appropriate service levels, etc. Work-Design becomes particularly powerful in this context, as it allows the creation of a framework for reaching increased productivity levels. If the level of P increases, I can also increase the level of Inputs, still gaining more outputs.
The Role of Performance
Here comes the concept of Performance, which looks not just at efficiency but especially at effectiveness in reaching a result. The individuals can get results within the productivity framework we have created. Thus, through individual and team performance, the system’s Productivity is achieved.
Let’s give an example. Imagine Organisation Alfa having two teams of software developers. Both have the same number of people and cost the same to the company. They are responsible for two distinct product lines. Team A is thoroughly optimised in working; members rarely work overtime. They always respect deadlines, with great respect for internal processes, delivering results fully in line with the expected outcome.
Instead, Team B is more creative and less organised; they sometimes end up doing long hours of work debating the best solution to the problem, often missing interim deadlines, and delivering their project at the last minute. Usually, they do, however, over-deliver, often with one or two features not initially requested but that made sense during the path of work.
How do we evaluate Team A and Team B in terms of Productivity? If we look at money as the input, their Productivity is probably the same. However, let’s look at the time spent. It might be that the productivity level of Team B could be slightly lower (especially if the additional features presented cannot be “estimated” in terms of impact on the outcome).
What about Performance? Both teams perform well, in line with objectives, with the second one probably ending being more effective than efficient.
Now the question is, do you want to have more Teams A or Teams B?
Not an easy answer
When I have posed the question, I tend to receive different answers depending on personality. For example, team B seems more energetic from the description, so it captures the fantasy of more creative people. On the other hand, team A attracts more those with a process-oriented approach. Some also have the feeling that Team A is focused on completing its tasks, whereas Team B can go beyond the goal assigned.
The reality is that teams rarely hit precisely the same results. A strict focus on traditional Productivity tends to stifle innovation, lower creativity and, over time, might create issues with the underlying Performance.
Adopting the more intentional approach to Productivity already raises benefits because you create an organisation where increased Performance is seen as a positive feature of the system itself.
But how do you then create an organisation that genuinely promotes Performance and not just Productivity? This is the conundrum of most discussions on Performance Management Systems and Processes that exist, as they often mix the two concepts. I will come back to this in the next issue of this newsletter.
Both Performance and Productivity need to be on the agenda of OD experts. I’m sure some of you have noticed that I have been speaking of Productivity at the organisation level and Performance talking about individuals and teams. It was not an incident. The reason is that I’m also referring to two different groups of reasoning from a system analysis perspective.
Should we be interested also in individual Productivity? Taylor tried to break up tasks in the most minute action to increase personal Productivity. But with intellectual activity, this is simply impossible. Thus it doesn’t make sense to work in that direction.
Should we then look at the organisation’s overall performance
? This sounds like a more exciting endeavour, but it is more complex. Why? Because it drives the need to investigate the concept of Value
that the organisation needs to define for itself. A topic we have seen as part of the definition of the Organisation Evolution Framework
definition. And a case for another chapter in this fascinating journey.