Productivity as Differentiator

In today's marketplace, productivity is the true competitive advantage.

With that one profoundly clear and true statement, Peter F. Drucker, the indisputable dean of modern management thinking, sums up the challenge that strikes waves of terror into most every manager's heart.

In a world where information and technology are universally available, virtually every business struggles to justify its existence in an overly commoditized marketplace.

Got a claim to a competitive advantage? It is viable only for so long as it takes to replicate and supersede it—which in today's world happens nearly instantly. And that, of course, is why virtually every industry has been imploding as former competitors meld into singular monoliths amid admissions that they really have no basis by which to compete with one another.

Humanity as Differentiator

So in this strictly me-too environment for products and services, the old saw that people are a company's most important asset rings truer than ever. But, and this is a gargantuan caveat, only if you can leverage your human assets in a way that truly make a perceptible and valued difference in the minds of your customers—allowing you to truly differentiate your company's offerings from similar ones.

Enter productivity. You can define it in terms of the volume of raw output, the efficiency and quality of production, or perhaps in terms of innovation. But it always translates into a very basic measure: Are your customers willing to pay for what it costs you to produce what you want them to buy?

By maximizing productivity, you gain an edge in the value equation. Either by charging lower prices for a perceived commodity, or by justifying higher prices for innovative or superior performance.

Managing for Productivity

That output/cost ratio is why so many leaders and managers have become nearly possessed with enhancing productivity. And why employee motivation and, what Human Resource professionals call, performance management has moved front and center for management attention.

Being aware of productivity's vital import isn't enough. And implementing even elaborate programs to affect employees' productivity may not do much to improve actual output or efficiency. They may actually hurt productivity.

"All too often, [corporate performance management systems] have met resistance, produced invalid data, and proved to be more of a bureaucratic process than an effective driver of improved organizational performance," claims the Center for Effective Organizations at the University of Southern California's Marshall School of Business.

Assessing Your Productivity Commitment

So how do you know if you are managing effectively for productivity? Take this simple seven question test. If you can't honestly, without reservation, answer Yes to each question, you most likely are not maximizing your associates' productivity. (You probably aren't even affecting it in a meaningful way.)

1) Do you have a systematized process for accurately matching people's talent and disposition with their work and your organization?

2) Does each of your associates know what the most valuable part of their job is?

3) Do you insist on high quality output (defined and measurable) for all associates?

4) Do you provide adequate tools, systems, training, and managerial support to help every employee deliver their personal best—aimed squarely at your mission—day in and day out?

5) Do you regularly assess each employee's performance—against clear, specific, and meaningful criteria, as well as valid, objective measures?

6) Do you have—and routinely apply—meaningful consequences for both outstanding and unacceptable performance by your colleagues?

7) Can you provide ample, documented proof to support your claim to any Yes responses to the preceding questions?

Productivity, the not-so-secret and critically important ingredient in business success today, is the natural byproduct of clear design, faithful adherence to process, and managerial commitment to humanely getting as much leverage as possible from every dollar invested in the payroll.

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Don Blohowiak, a management consultant and popular conference speaker, is the author of several business books. The executive director of the Lead Well® Institute in Princeton, NJ, he may be reached at http://www.LeadWell.com/.

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